WSO Community - long time lurker here and thank you in advance for your help. 2+2 banking & PE and recently received an offer to join a L/S equity fund. Want to see if you can share your thoughts on standard non-compete & deferred comp (& vesting schedule) for junior HF employee. Any suggestions on how I should negotiate the numbers down?
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18 months non-compete…tf??
Is this one of those mega-elite funds that people talk about? If you can be certain of clearing a stick, might still be worth it.
But otherwise, these terms seem highly off-market.
It's up to 18 months, so ultimately at the PM's discretion how long / if he wants me to be on their payroll. What's market for non-compete now? 2+2 position so junior analyst (non-risk taking position)
I’ve seen fundamental analyst non-competes from 1 month to 6 months, sometimes a 3+3 combo of 3 month notice and 3 month non-compete.
But this is crazy…unless you can get a high guarantee on paper (although this doesn’t sound like the fund to merit that), you should explore more options.
Unless you have another offer you have no leverage so it comes down to (i) how badly you want to leave PE, and (ii) how easily do you think you can land another HF offer. Did you go through a recruiter or by yourself for this position, and are you in a large market with lots of funds or not? Junior guys should get paid mostly in cash as you are viewed as a cost any way and the non-compete seems too long for a non-quant position in my view.
Also at an UMM. Can I PM you about your switch? Have a question about stock pitches in interviews. Would also ask here but don't want to hijack your thread.
Go for it
Large amount deferred is not common for junior positions, but I guess it depends on your comp (how junior?). I normally see vesting and deferred around $500-600k and even then it is usually a small amount (20% or so). That non compete is also long (for no quant).
Are there any protections in place during your non compete? What about around your deferred (you get fired what happens)?
As someone else pointed out, you don’t have a lot of leverage, but I haven’t seen offers like this.
Thanks! how long is market for non compete for L/S Equity these days? I will be paid at base salary during my non compete, but as mentioned in the post above it's ultimately up to the PM to decide how long I need to be on bench; when I leave the unvested portion is forfeited. What is the standard term on this?
Well getting paid at base isn’t all that great if the majority of your comp is deferred.
I would say 3-6m is pretty normal.
Also, some places have protections against getting fired (your deferred vests) but that isn’t very common.
Standard non compete for an analyst is 3 months.
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