Sorry if this has been asked before, but I have one empirical question. Assuming you are:
- An MD at a well recognized BB (whether in S&T or IBD) or equivalent position in a hedge fund / buy side
- ABOVE-average performer among your peers (i.e. other MDs) but NOT a superstar either
- You cover a growing/"hot" sector/area during your career (e.g. emerging markets teams these days, or MBS structuring/sales/trading desks prior to the credit crunch)
- You eventually progress to head up one of the larger groups (e.g. think head of global structuring, or head of European/Asian/Americas sales etc.)
What is a peak salary + bonus (in one year) should one expect if she/he is good enough to attain such a career trajectory?
Very importantly, how much in total should one expect such person to make over their career as an MD or a PM in a hedge fund before they retire?
To emphasize, I am talking about above-average performers but not "superstars". To give you a university grading analogy, lets focus on magna rather than summa cum laudes (for Brits, focus on second class honors rather than first-class honors) in professional sense.
Any input by experienced and knowledgeable people would be greatly appreciated.
Your loyal monkey.
bump
how can you be head of a group if you are not a superstar?
10 years ago, $50-75MM, peak above $5MM.
Today, $30-45MM, peak above $3MM.
Thanks for your input Dabanabo. Would the above be disposable "accumulation" i.e. after-tax?
bump
Lifetime earnings in IB (Originally Posted: 08/26/2015)
How much on average should the person expect to earn in IB over a whole career and how does it compare to different industries inside finance?
Depends if you manage to move up to executive positions or stay at MD (or even get to MD)... If your goal is only lifetime earnings, look to buy-side.
Actually, a number of people in a range of roles (importantly, inc. Seniors) have told me that the "average" MD in IB will often earn more over a career than the "average" partner on the buy side. Consensus seems to be you give up some in terms of lifestyle but receive higher comp. Obviously varies and notable exceptions for big dogs on the buy side vs. big dogs on the sell side, but buy side for earnings only is a risky bet.
Well, I would plan to stay in the business as long as it takes to earn some considerable ammount and maybe even longer. So you are saying that buy side offers chances for bigger earnings? I wouldn't actually expect to get into executive position, though it would be great I actually doubt that I'll happen as I think its reserved for an extremely tight number of people.
Say an MD working at bulge bracket or middle market bank should expect to have net worth of how much? Considering he doesn't throw his money left and right and is mindfull about spending, and how does it compare to buy side.
You can pretty much model this out yourself, gather the average salary of MDs at BB, calculate necessary expenses/investments over the years.
How many MDs do you think post on WSO?
By the way you phrased the thread it sounds like you A. haven't worked in finance and B. once you do, will burn out incredibly fast. Compensation can vary greatly even in IB depending on group, deals closed that year, how the economy is doing, etc. Comparing absolute figures across finance doesn't mean shit--- completely different business models and the risk-reward theory still applies.
not enough
Bringing in business or AUM gets you paid.
PMs / PE Partners make much more than MDs in IBD. They have to be compensated for risk and are actually (hopefully) generating returns. In banking you bring people together - buyers and sellers either in M&A or capital raising. IBD is a service to help facilitate the buyside.
Also, the glory days of banking where MDs are pulling in $10+mm /yr are over. Could say the same for HFs and PE to an extent given lower historical returns and fact it's harder to raise enough money from your LPs for a 2/20 model.
Tons of moving parts but would say HF>PE/VC>banking w/ buyside equivalent to MD making 2-3x / year but without the job security. Risk adjusted salaries.
..
This is inaccurate in so many places. Some banking mds are still making 10+ and even more regularly - the real rainmakers. Md in banking is not a job with a lot of security...last couple of years have probably been tougher than usual to make money at hedge funds, at least at the average fund. No way average pe guy is making a multiple of banking equivalent, especially given dry powder levels and competitiom for deals and the fact that so many pe shops out there are small and the partners there do not necessarily make the money you assume they do. Etc etc etc. Not sure what your sources are but you have been fed a bunch of misinformation, at least seems that way based on what you have shared.
If we are talking averages, JackandDaniels can't be right... MDs make mid-single digit millions per year at the good bulges, more if you're a hitter and even more if you're a hitter at a boutique. You're telling me that the AVERAGE PE partner and HF PM makes $10 - $15mm per year? Average? No way...
The top PMs and partners, no doubt they can make that and much more. But not on average. I've heard exactly what notthehospitalER mentioned above.
Zero. When you die, you can't take it with you.
Same applies in most divorce settlements.
Hypothetical lifetime earnings question (Originally Posted: 06/17/2015)
Hypothetical question--
Say you progressed slightly above average.
-Got into a solid MBA program - Went and worked for a regional boutique Asset Management or Wealth Management firm - Stayed at relatively successful regional firms throughout your career - Progressed through the hierarchy as expected but never became CEO just Director/VP
Basically, with all things consider (kids, car payments, college loans, mortgage etc. regular lifetime expenses) what would your hypothetical career earnings be based on average salary?
Hard question in a way but maybe someone with first hand experience can talk on financial status to expect that were involved in this type of career path?
Hypothetically the same as a piper Jaffries analyst ...hypothetical that is
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