Ratio of hedge funds hiring traders vs Outsourcing to Execution Shops?

Like the title says - trying to understand the relationship btw many HFs and execution traders.

More specifically:

1) Typically what strategies and what AUM scales require HFs to hire separate traders vs. handing off to execution shops? (small L/S equity shops probably don't need traders but if you're a mega-fund AM than you do... but what's the typical AUM size?)

2) Are there other specific reasons why a fund would hire their own traders vs. outsourcing to execution shops?


3) Do funds hire their own traders while also giving orders to execution shops? Like internal traders figuring out what to do with the algo wheel kinda deal that brokerages offer?

1 Comments
 

Eaque asperiores cupiditate qui deserunt ipsum voluptatem non sequi. Deserunt deserunt ullam ut veniam sed ea itaque. Alias vitae dicta adipisci voluptatum.

Rerum eligendi aut est odit. Laborum et dolore in qui. Tenetur ipsum quisquam eligendi omnis quis sed nesciunt. Magni non facere praesentium. Autem laudantium ipsum fugiat aperiam non. Animi fuga quidem asperiores et et dolorum ducimus.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

October 2026 Hedge Fund

  • Point72 99.0%
  • D.E. Shaw 98.0%
  • AQR Capital Management 97.0%
  • Citadel Investment Group 96.0%
  • Magnetar Capital 95.0%

Overall Employee Satisfaction

October 2026 Hedge Fund

  • Magnetar Capital 99.0%
  • D.E. Shaw 98.0%
  • Blackstone Group 97.0%
  • Citadel Investment Group 96.0%
  • Two Sigma Investments 94.9%

Professional Growth Opportunities

October 2026 Hedge Fund

  • AQR Capital Management 99.0%
  • Point72 98.0%
  • D.E. Shaw 97.1%
  • Citadel Investment Group 96.1%
  • Magnetar Capital 95.1%

Total Avg Compensation

October 2026 Hedge Fund

  • Portfolio Manager (9) $1,648
  • Vice President (27) $464
  • Director/MD (12) $355
  • NA (9) $320
  • Engineer/Quant (83) $287
  • 3rd+ Year Associate (26) $284
  • Manager (4) $282
  • 2nd Year Associate (32) $253
  • 1st Year Associate (76) $193
  • Analysts (235) $177
  • Intern/Summer Associate (29) $145
  • Junior Trader (5) $102
  • Intern/Summer Analyst (276) $95
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Secyh62's picture
Secyh62
99.0
4
kanon's picture
kanon
99.0
5
DrApeman's picture
DrApeman
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
Betsy Massar's picture
Betsy Massar
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”