Market Rate for an Analyst at SM

Based on the most helpful WSO content, here's what you need to know:

Market Comp Package for an Analyst at a Single Manager Hedge Fund

General Expectations:

• Base Salary:

  • Given the sub-scale nature of the fund, expect a base salary in the range of $80K to $100K.

• Bonus:

  • All-in compensation (base + bonus) would likely be in the range of $200K to $220K.
  • Bonuses can be volatile and highly dependent on fund performance and individual contribution.

PnL Cut or Formulaic Bonus Calculation:

• PnL Cut:

  • At smaller funds, there is often a higher chance of negotiating a cut of the PnL due to the smaller team size and higher individual impact.
  • If you are heavily involved in the investment process, you should negotiate for a cut of the PnL.

• Formulaic Bonus Calculation:

  • Smaller funds may also use a formulaic approach to bonuses, but this can vary widely.
  • It is reasonable to expect a bonus that is at least 1x your base salary, with potential for more based on performance.

Reasonable Requests:

• Base Salary: Aim for the higher end of the $80K to $100K range, especially given your 6 years of experience and 3 years in PE.
• Bonus Structure: Negotiate for a bonus that is at least 1x your base salary, with potential for higher based on performance.
• PnL Participation: Given the small team size and your significant experience, it is reasonable to ask for a cut of the PnL.

Additional Considerations:

• Growth Potential: Smaller funds often have higher growth potential for employees, as they prefer to grow talent within the firm.
• Risk and Reward: Smaller teams come with higher risks but also higher rewards, so ensure that the compensation package reflects this.

By focusing on these elements, you can better position yourself to negotiate a fair and competitive compensation package.

Sources: base/bonus 1st year analyst at HF, What to pay attention to when signing a contract?, Where is the compensation in banking? Is it worth taking a pay cut for the long-term prospects?, Citadel Equities analyst terms, 2019/2020 Corporate/Commercial Banking Compensation