Net worth distribution - mid 30s
Using mid 30s as that is when most who have not made it are out of industry but have had a few risk taking years (so excluding those fired in 20s)
Curious what distribution looks like and how skewed is it to outliers that have crushed it
Any estimate of what’s median and what is bottom or top 10th percentile look like
Assuming MM or scaled SM
My impression is there are 3-4 main outcomes:
Ok analyst with 1-2 sitouts
Good analyst comp/perf, good team
Great performance and promoted to PM/Partner and then did well, or big MM guarantee
Based on the most helpful WSO content, here's a breakdown of net worth distribution for professionals in their mid-30s within the hedge fund industry, particularly those in MM (multi-manager) or scaled SM (single-manager) platforms:
Main Outcomes and Net Worth Estimates
Ok Analyst with 1-2 Sitouts
Good Analyst with Solid Comp/Performance
Great Performance, Promoted to PM/Partner, or Big MM Guarantee
Distribution Observations
Skewed to Outliers
The distribution is heavily skewed toward outliers who "crushed it." For example: - A Senior Analyst at a scaled SM with $500M-$1B AUM could make $1M-$2M in a good year and $200k-$400k in a down year. Over a decade, this could translate to significant wealth accumulation. - On the MM side, PMs with a couple of strong years (e.g., $2M-$3M annually) can quickly outpace peers, even if they face setbacks later.
In summary, while the median professional in their mid-30s may have a respectable net worth, the top performers—those who transitioned to PM/Partner roles or had exceptional years—drive the skew in the distribution.
Sources: HF Distribution of outcomes - by mid-30s, Sucessful Senior Banker - Net Worth
Assuming mid 30s = 7-10 years HF experience would guess the following.
Top 1% $25M+
Top 10% $10M+
Top 25% $5M+
Top 50% $2-3M+
Top 25-50% $0.5-$1.5M and mostly barely hanging on to industry
Bottom 25% Out of industry
If you have a 1/4 chance of being worth $5M+ in your mid 30s working at a HF… why does it make sense to do literally any other job on the buyside?
The same top 25% performers in PE who survive into their mid 30s are likely several million below that and sitting on worthless carry that’s life changing only for maybe the 1-10% of people.
This is a genuine question - the numbers I see around HF comp on this forum are absolutely insane.
Because for the generation that hit these payouts, going into HF was the non-obvious choice back then, and the PE payouts looked staggering especially on a risk adjusted basis.
The tables have turned but no guarantee it stays that way
Doesn't seem right to me. I feel like my PE peers are a lot richer.
Sounds like a skill issue.
I wonder how much of making into the top 25/50% bracket is luck (good PM, good strat you’re under, macro, etc.)
Do you wonder for PE and IB and every other industry? If not, you should
This is not skewed enough. More like
1%/10%/25%/50% as $50M/10/5/2
Yeah thats probably true
Would echo this.
Generally 30-40 is where the tails widen both ways in finance.
Speaking from macro fund context, have seen 30-33 yo with 25-50mm NW and those with 1mm NW.
Big picture 5-10 is enough to live a very good life in NYC so there's not too much to lose...
~50th percentile seems too high, it's probably more like ~1-1.5ml for that median
Del
By definition, if you are in a HF seat by mid-30s, you’re probably at least $5M+. You’ve outlasted most peers and still have a job. For some context, I think 70-80% of net worth is generated 30-35. I’ve been in top IB and MF PE seats and now at a SM HF. Currently late 20s with 2-3M. I haven’t had any major payouts yet (just starting to get tied to P&L) so if all goes well, I should be HSD by 35 and more if markets continue to rip. In the worst case scenario and I get let go, 6-7% appreciation on my current liquid net worth should get me close to $4-5M.
On the flip side, if you’re still in a PE seat by 35, you probably have a partner track role. That means you’ll be locked in for a $10M+ net worth in 40s. You may have hated your life from 22-late 30s but you’ll have career stability.
If the goal is make enough money to cruise, the HF job can get you there much faster but clearly that comes with commensurate downside.
That age range for peak income is surprisingly young to me - unique to the HF space?
well it's just a function of everyone but 5% to 10% out by mid-30s
some old guys hang on at reduced roles/comp trajectories when it's pretty clear you have no alternatives / aren't that guy.
I’ll give you my data points as someone who has had a good career at an SM. Around age 35 I was $10-15m net worth, now around 40 I’m at $40-50m.
let me work for u
at ~$1.4M at 30 and feel like shit after reading this haha
In IB or HF?
You should not feel bad. At age 30 I was at around $2m, having spent a year or two in a low-tax jurisdiction. You will be surprised what comp inflection and asset compounding can do for you in the next 10 years.
Ib or hf?
I’ll give another data point: 35 - SM - somewhere between $4-5mm NW ($2mm liquid, rest is privates and equity value of primary residence), not counting carry. Had a net worth close to $0 around 7 years ago when I graduated from MBA. Comp has been very very back end weighted over that period.
Do you think an MBA is worth the cost of attendance these days especially w/ AI’s development pace?
I met my wife and broke into my first choice HF seat. That said, the MBA world seems to have changed and not for the better. The conviction you should have in forecasting anything has fallen precipitously. This is the first time in my career when I felt the rate of change of the world began to exceed the rate of change of our business. I, a non-coder, ship code daily to build new tools that make my process more efficient a I’ll say this: we’re finding incredible new ways to use AI daily, but our staffing and hiring plans have not been affected.
Can add myself to your sample:
31 years old, 9 years in industry, less than 5 on the buyside (not fundamental or L/S equity)
NW 9m
Mostly generated in a pretty uniform pattern over the last 5 years so not because of one blowout year
If I had to guess, I was probably top 1% in my late 20s but will probably drop back to top 25% area by the time I'm mid 30s if my earnings don't skyrocket
You averaged something like 3mm pretax comp over those 5 years?
A bit less on average but not that far off. Saving more than 90% of post-tax income helps with NW accumulation.
I know other PMs mid 30s that didn't make sizable money for most of their early career and then had two great years and clipped 5-10m in each of those years, so NW growth can also come out of nowhere in this business.
Probably follows a power law / Zipf’s law.
That is, the probability of earning / having net worth x being larger than S is given by:
P(S>x) = k x^{-1}. Where k is some constant.
As you would expect; an exponentially increasing difference.
This exponential distribution is empirically observed across earnings in a large number of countries, such as ceo pay distributions as well as wealth distributions following Zipf’s law.
36 recently became a PM. NW $15-$20M
All hail the right tail
32, l/s equity at mm
$16m - had a few good bonus years and just aggressively buy dips in PA
Could you share what this looked like 5 years ago?A few good bonus years... call it 3x $4mm = $6mm after tax. But i guess if you were positioned in semi ETF 1 year ago that is $16mm.
Yup. Basically what you laid out. I graduated with a bunch of student loans so didn’t pocket much of IB bonuses. Started saving/investing with PE bonuses. Then have been doing HF for 7 years or so and had like 3 years in the $3-5m range so far and have timed the AI trade very well in my PA. Makes this job much more fun, much like I imagine you analysts who marry stupid rich girls lol.
What would be the equivalent for the UK?
Are these outliers? I should really move to public equities no shot you see these kind of numbers in PE
It's not but PE is more stable and has a higher floor. But these kinds of numbers aren't really possible unless you are at large cap PE. I think HF is probably more performance based and not as much politics based; so only the mighty survive.
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