LO Compensation: T Rowe, etc.
What is the typical compensation like at large LOs like T Rowe?
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T. Rowe in particular is rather low compared to Asset Managers in areas with a more vibrant finance industry. The only shops in town that are LO are TRP, Brown Advisory, and Brown Capital Mgmt. Otherwise you have to leave for a hedge fund or an RIA. I was a VP at TRP and made under 200k all in, spent ten years there before realizing how the culture of perfectionism and general hubris changed me for the worst. If you want to get paid, TRP is not the answer.
Is this true? Why is the job so hard to get and desirable if that is case?
It's hard to get because of the supply and demand as ppl don't generally leave the seats and the stability itself deserves a big premium, not necessarily it attracts the best talents in the world or a most rewarding job across the industry tbh
Probably because the WLB is favorable for someone on the back end of their career, if you're good at your job you're probably un-fireable. Low stress, semi-interesting work, decent pay, good WLB
It is not true
VP meaning how many YOE in public equity investing? That is shockingly low lol. That is what I would expect a third year research associate to make.
This is not accurate at all
Dude which town are u in lol
Post MBA T Rowe is around $300K cash + an equity grant. Can get to seven figures in 5-10 years. PM pay is all over the place but generally low to mid seven figures with the real superstars in the 8 figures
Other top LOs will be similar but your average LO will be materially lower. Wellington, Capital, and D&C are considered the best paying of the big LOs albeit back loaded given the ownership structures
Is post-MBA pay at Wellington / Capital / D&C at a similar level?
Generally yes though my data points are a bit stale at this point - starting might be closer to 400k, hitting 1M in about 5-6 years. Long term, I would expect those 3 to be higher than T Rowe at the PM level due to private partnership economics, but by how much I don't know.
How does this compare to slugging it out at a Tiger cub for 7+ years? Would you expect LT comp as a PM / Partner at a sizeable SM L/S fund to be better than large LO?
Yes ofcourse, if you last that long.
This is accurate
Are most senior analysts after 5-6 years post MBA at LOs making 7 figures even when market was down last year?
How many years on average to get to PM?
Regardless of whether it is a "time game" or a "skill game" I'm just curious on average length of time to PM and any guesses on what the range is.
bump
Current LO AM pay is nothing but a lagging indicator because by the time you get hired and climb up to the senior level, it will undoubtedly be lower than what we’re seeing today.
Passive funds / ETFs are continuing to steal capital from the mutual funds. As boomers sell off their assets and retire, the generation with the most capital will be more well-informed to avoid active funds.
Of course, the Wellington’s of the world will live on despite the outflows, but you can bet there will be 1) less seats and 2) much lower comp.
This is the prevailing logic, it makes sense on paper, but is flawed once you peel back the onion. Using Wellington as an example- think about who their clients are. It’s all institutional money (pensions, endowments, foundations, SWFs, etc.). If you think these places are going to chuck all their $ into passive you are clueless. There is an enormous client service aspect to the puzzle given how complex these strategies are. Now add in the fact that contrary to prevailing sentiment on here most of the big LOs have comfortably outperformed the benchmark net of fees over the past 5-10yrs and are diversifying into alts, ESG, etc. What you get is a trickle of outflows, not a stream. And as long as markets go up they’ll grow assets, not shrink. Will seats be next to impossible to get? Yes of course. But will comp go down? Nope- because they can’t afford to lose talent. Now, would I be more worried if I’m highly exposed to mutual funds / retail (eg TROW)? Yes. But still ~50% of boomers have retired and they’ve only grown assets over the last 5yrs…
"contrary to prevailing sentiment on here most of the big LOs have comfortably outperformed the benchmark net of fees over the past 5-10yr"
This is so incredibly not true.
What other LO's aside from Wellington have considerable exposure to institutional clients?
70%-90% of AuM underperforms net of fees over 3Y, depending on strategy - https://www.spglobal.com/spdji/en/research-insights/spiva/
Wait aren't LO typically more retail-heavy (of course, through financial intermediaries) vs institutional, esp compared to HFs??
I thought that was the reason why they were lazy money, bc retail just don't give a sh*t about performance as insto are
Any views on Neuberger Berman, and how it compares to D&C, TRP, and Wellington? It is also privately held and they run ~500b.
curious as well
Not sure for T Rowe, but graduated from college in 2021 and make 200K at a LO after a year of SS
Hours?
7 to 5ish for the most part. No weekend work other than me reading the news and flagging something if I find it important.
Same boat, LO's can pay well
It's certainly worth asking the question, though, of the extent to which one should weigh macro factors (eg, net outflows out of passive) over role-specific factors, such as what one enjoys, what one naturally excels at, etc.
Would you mind sharing how you changed roles after a year? Was it hard? Seems early to be moving
7:30-5ish. It’s usually pretty barren by 6
Buddy of mine joined an 11 figure AUM boutique LO out of undergrad and was comped 150+50 first year
I just received an offer at a small boutique LO for TC of $150-160K after 2 years in SS ER. After reading this, I feel like that's a little low, right?
What is SS?
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