What should one expect for base salary at a MM HF as a junior analyst / associate (2-3 YOE) in todays market? Assuming small team just PM and one analyst. How does PnL get broken down also typically for bonuses? Does comp scale or stay flat?
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Based on the most helpful WSO content, compensation for a junior analyst or associate at a MM HF can vary greatly depending on the fund's performance, the individual's experience, and the specific role they play within the team.
As for the bonus, it's typically tied to the performance of the fund and the individual's contribution to that performance. The PM usually gets a significant portion of the PnL, especially if the book is successful.
In terms of how compensation scales, it's not a straightforward answer. In some cases, if the fund consistently generates high returns, there might be potential for the analyst to make consistent 7 figures and even 2-3m. However, this is not the norm and doesn't apply to all funds.
Remember, the HF industry is quite volatile and compensation can fluctuate greatly. It's also important to note that the real money follows if you're good at what you do. So focus on gaining experience and becoming a better investor.
Sources: https://www.wallstreetoasis.com/forums/mm-analyst-comp?customgpt=1, 8 figures for late 20s/early 30s HF employees, base/bonus 1st year analyst at HF
Bump
Base between 125-175. Total comp depends on performance of the team. If you don't make money TC=Base=Fired. Otherwise would expect anywhere from 250-400 year one. It goes up with time as a function of team performance + perceived contribution.
If you do well in year 1 but mess up year 2 are you fired - if you do well year 1,2,3 but then horrible year 4 are you fired ?
Depends on the firm even within the 4 main MMs. Have seen first one more often than second but that’s just because less ppl have 3 good yrs in a row so that excludes them from meeting your second criteria already.
I'd expect anywhere between 150-200k. Base salaries don't increase with seniority.
do any first years make 500k+?
Yes if you have experience/value that is worth 500+ yes. Someone who has sat in an analyst seat before can be worth well more in guarantee. If you are hired as a junior and you slam it out of the park you can get paid more than 500 as well.
How likely is a 0 bonus in MM pod shops? What if pod does mediocre would PM take all economics?
It's generally the reverse. The higher the bonus pool, the higher % goes to the PM. But in a soft year where the bonus pool is say $500k, the PM might well take a zero so the 2-3 analysts can have something.
Indeed, PM is running a business at the end of the day. Just one they do not need to raise capital or talk to shareholders. Investing in the future is a business decision.
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