Question on senior HF comp structure
I’m looking to make a move from the long only buy side to a major name hedge fund. Role would be working under a PM helping to come up with ideas and have a direct impact on the portfolio hopefully. Since I’d be new to the HF space, I’m trying to better understand the economics of the position (what’s normal, what I might be able to push for, etc).
For background, I have 15 years experience on the buy side at a name brand asset manager, so I would be coming over as a senior hire, but this is not a PM role.
Questions:
- What are typical salaries for this role/seniority? $250k+ is what I’m reading here
- Initial year comp will be negotiated I assume. Am thinking it should be $1 mil+, but don’t know what’s typical.
- After the first year, I assume I would be paid put of team PnL, but how would this be structured? Is this discretionary from the PM or formulaic? If it’s formula based, what is typical?
- Anything I should push for in my negotiations?
Thanks ahead of time for all those that help with this!
Based on the most helpful WSO content, here’s a breakdown of what you should consider for your move to a major hedge fund as a senior hire under a PM:
1. Typical Salaries for Your Role/Seniority
2. Initial Year Compensation
3. Compensation Structure Post-First Year
4. Negotiation Tips
5. Additional Considerations
By focusing on these elements, you’ll be well-prepared to negotiate a strong compensation package that reflects your experience and the value you bring to the team.
Sources: What I've Learned About Hedge Fund Structure and Compensation, What I've Learned About Hedge Fund Structure and Compensation, Masters for Hedge Fund ???, Compensation Structure at the mid-management level in Corporate Development / Strategy / Finance, Typical HF Compensation Targets for post-"2+2" IB/PE hires?
You'd most likely be joining as a Senior Analyst or an Analyst, if not JPM(Junior PM), and since you said under a PM and giving out ideas.
The Base comp usually remains fixed, can't negotiate about that, but remains in the range of (where I work)
Analyst - $120,000-$180,000
Senior Analyst - $180,000-$300,000
Bonus Comp (Cash+Deferred)
Analyst - 1.50% of PnL
Senior Analyst - 3.00% of PnL
which is like 1/3 is cash and 2/3 is deferred
You can earn more if your PM makes a lot, or you can earn $0 if it's not a good year....
I work for a single Manager Fund, and as a Senior Analyst last year, I got paid
$180,000k base, $250,000 and $500,000 in deferred,
The boss made like $8mill
Now I work as a sector head, and my fixed is now $300,000
It highly depends upon the strategy, the number of people working at the Fund, the fee structure and the returns the Fund is making.... But all in all, a low number of employees gets you a better share of PnL
This is extremely helpful color. I really appreciate you taking the time to provide these details. Thanks!
3% is quite low. 5-10% more common at pods, but many single managers which are ‘discretionary’ end up paying suspiciously close to 5% or alpha pnl.
After I graduated from HBS I worked in the HF space and made $300,000 fixed plus $800K in other comp, now I exited my company
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