Is HF worth the risk if making 7 figs in SS ER?
As title says, been thinking more about buyside lately from a risk/reward perspective. All the biotech analysts I know do pretty well in ER and mentors tell me SS can be pretty comfortable with a steady high salary vs buyside comp being much more radical. Buyside friends also telling me making it to PM is a very “dreamy” scenario and not that realistic given industry headwinds, etc.
Anyone want to do HF from SS but change their mind and stuck with the Analyst route? I feel I’d have regrets not at least trying the public space since I’m pretty passionate about markets (and biotech).
You live in candyland. Sellside ER will not net you 7figs a yr—if somehow it will in your specific position then it’s literally a no brainer.
The volatility surrounding the buyside is mostly 7figs at the top end (assuming make it to PM which already ambitious) and mid/low 6figs on the bottom end (before you ppl come after me and say 8figs is upside that literally applies to top 5-10% of PMs—p much 25 ppl in total across all the major shops in equities).
A lot of misinformation, or at the very least selection bias, happens in this thread regarding HF comp. The industry has changed from what it was 10-15 years ago when everyone was getting rich quick, nowadays you actually have to be really f—ing good if you want to get filthy rich working in l/s investing.
Biotech comp is completely different than other sectors. I have multiple datapoints. You’re in IB - how would u know?
Don’t believe me, ask your banks biotech associates how much their analysts pull..
dude fine then do ER. If that’s the case there’s literally no question here. Exactly what I said to start my post.
You’re right I know nothing about biotech ER but might need to get smart on it if every biotech analyst on the street is a gazillionaire
Plus good analysts don’t always make great PMs. You can be great at knowing what’s good/bad, but be terrible with risk management and bet size allocation.
If you plan on giving billions of dollars to this stock jockey, ask him this: How he's codified the behavioral heuristics at his firm from stock selection to position sizing to market timing to risk management. He hasn't because his decision-flow process is Google, Exxon and Proctor & Gamble.
Ignore intern in IB, they’ll probably be working for some nontarget in corp dev in 2 years. Its entirely possible for covering SS ER analysts in most sectors to pull in >7 figs, with varying degrees of tenure. The notion that research is underpaid is very outdated. Biotech is by far the highest paying sector because of scarcity of talent, the number of folks that end up moving to the buyside, and the intensity of the job. There’s nothing chill about working SS biotech ER. The hours are equal to ir greater than buyside biotech and you are client facing. Its also no cakewalk securing a covering analyst seat. Those seats rarely turnover and the competition for them is intense.
Thanks for the color!
Are you in the biotech space? If so, open to a chat? I can DM if that’s okay with you.
Adjacent. Post here so others can benefit from the convo
Become Umer Raffat first, and then ask the question
This site is filled with a bunch of straight up cretins. moron who said anything about being the top paid - I’m giving a fair average I know from the Street
Your question is just objectively worded in a very poor way. You quote the upside case in SS ER as a given if the buyside doesn’t work out. Sounds like top analysts make a lot, but the presupposition that it’s a given u will get to that level, and then comparing to the “risky” buyside, is an analysis which does not make sense.
There is not a universe in which over 1mm United States Dollars in total comp per year is somehow the “base case” in sell side equity research, irrespective of industry coverage. Yes you may have datapoints pointing to 7fig compensation, but analogously on the buyside if I only quote Jack Woodruff and Matt Simon’s comp as PMs then yes obviously u will want to be a PM.
And if it is somehow true that random biotech analysts are pulling this money, congratulations—you’ve found the promised land and you can continue calling all of us cretins.
highly likely you won't get the Josh Schimmer package
how much is his package?
$42 million over 5 years
It really depends on your risk profile. Which is more important to you? Upside potential? Or downside protection? If the former, go into HF. If the latter, stay in SS ER or go to a LO. I have been in HF for 10+ years and most people that I know who went into HF did so because of the upside potential.
I don’t know why people assume it’s so easy to move up in SS ER. There are like 10-20 banks that matter and each of them have 1-2 lead analysts at most across 7-8 sectors (maybe a few more sub-sector specialists). That’s like less than 200 “lead analysts” across the industry and a bunch of people below them that make <$500K at most. Also lead analysts are typically super tenured so a lot of them have been in the seat for 10+ years. That’s why you have so many people leaving for corporate roles because there just isn’t a way up unless your analyst retires or leaves. All of that leads to it being much more difficult to get to >$1M in earnings so in what world would you optimize your career for this path.
You ain’t Mike Yee… but maybe one day
I could tell ur new to the field. Mike Yee is great for Corp access and yea he’s pretty plugged in for knowing what’s going on/parroting buyside chatter to other buyside folks, etc. He’s not good at calling stocks, however.
Ohhh ok… it’s my first year man. Who’s objectively a good stock picker in biotech SS ER? Is it Akash? Is it Josh Schimmer?
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