Looking at a role as a repo trader at a MBS hedge fund. The fund is located in a second rate city (FL), $300-400 AUM, ~8 traders/ investment team, and salary of for the role is roughly 100k before bonus for a junior trader. Curious about upward TC growth.
This would be a lateral move for me coming from physical commodity trading. Given that I don’t have connections in the space to bounce ideas off of I’m curious to know how the career comp trajectory looks on this side of the business at the analyst, associate, VP , and MD level. Also curious how this compares to sell side firms trading the same products.
If we can also discuss how the TC is broken down(salary, bonus, and carry) that would be helpful as well.
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Repo traders are never paid as much as risktakers as it's primarily an execution trading role. There isn't a concept of analyst->associate->vp->md on the buyside so that part of your question isn't applicable. I would expect ~20-50% bonus on top of your base and for the role to cap out around 250k-300k comp as long as you stay in a repo trading role. Perhaps if the firm grows and you move more into managing counterparty relationships/liquidity across the business as opposed to directly trading there's more upside there.
Thank you for the Input. I’m curious to get your take on this: Given that the nature of this role is “a high touch execution trading role” would it be something to stay away from in the event that I wanted to pursue a credit HF (non repo) in the future?
My opinion is that this would relevant experience but coming from the commodity side I’m at an information disadvantage.
What does a repo trader at a fund even do?
Manage financing for levered positions in fixed income cash instruments (bonds/mortgages/loans). Industry is not well automated so it's a high touch execution job that relies on street relationships.
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