High water mark was 1.5x what the current fund is at (back in 2021/22 highs - kind of Whale Rock-y). What should I negotiate for first year comp? Second year? Guarantees from management fees of..? How should I be negotiating this? I like the guys I think they can get back and with my background I'm glad to be getting this role at all.
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When joining an underwater fund, compensation negotiation requires a strategic approach, especially given the high-water mark situation. Based on the most helpful WSO content, here are some key points to consider:
1. First-Year Compensation
2. Second-Year Compensation
3. Guarantees from Management Fees
4. Negotiation Strategy
Additional Considerations
By focusing on a mix of guaranteed compensation and performance-based upside, you can secure a fair package while aligning your incentives with the fund's recovery trajectory.
Sources: Help us determine a fair compensation structure and non-competes for a new HF, base/bonus 1st year analyst at HF, Is this associate compensation competitive?, Should I negotiate my offer? (1st Year Analyst), Okay so I've got an offer. Now how to negotiate a higher offer?
I'll defer to those who know the HF world (my advice could be off) but if you're breaking into a HF with low probability of getting other offers, I'd suggest taking the role and not emphasizing comp. Yes, the [$x] can feel significant now, but once you're in the seat, you can hop around if things don't work out. Also, you can always renegotiate next year if it's all going well.
If you are under 30, I would just negotiate a guarantee for first year (ideally two years).
firms aren't generally going to give you a guarantee unless you have a track record. what's your background?
it's too idiosyncratic to share but no publics and blue chip in tech/tech investing/top schools relevant to AI/tech tec. if that makes sense
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