Bonuses fucked?
Are bonuses fucked for this year ? Work at a MF if it makes any difference.
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Truly depends on your company. We have already heard comments like "Record Q2 and Q3 numbers, but things look rough for 2023 so we will have to sharpen our pencils moving forward..." I think it probably also depends on exactly what space you operate in and how well equipped the organization is to withstand a downturn.
Depends if your firm is "mgmt. fee" driven or "capital event fee" driven. Lot's of fund managers are sitting on record fund sizes, so they are able to clip fees, pay their people and wait out the storm. Syndicators/family offices that pay their staff via acquisition or dispo fees may have trouble.
At one of the national brokerages: Head of Production just said bonuses may be “less than expected”. If they’re not at target, I’ll be moving onto the principal side
Generally buyside bonuses are conditional on 1. prior year/period profitability and 2. firm financial condition/outlook... if either is shitty, expect lower bonuses that normal (I'm guessing bonus metrics are not explicit at your firm, like their is a lot of management discretion). There is a third factor (more relevant at junior than senior levels), and that is personal performance.... meaning sometimes there is discretion for super stars/people they don't want to lose.
So.... those are some tools to try and figure out what your firm is likely to do. If you are at a "mega fund" then it may come down a lot to your team/business unit's profitability and partly on overall parent firm (this is where a lot of pay variance comes from after all). So, is your team/fund/etc. having a good or bad year? Making targets for returns, fund raising, profitability, etc? If your firm is publicly traded, as many "MFs" are, then the stock price and quarterly reports/calls may give you some insight. If not, go read any communications with investors.
Hope this helps, but as others have said, don't expect any broadly applicable rule/wisdom to come. It will be different firm by firm and even business line and team within firms I'd guess.
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