Happy 2018. Going to start it off a bit heavy here.
I think in the last ~5 years things have been getting worse for your typical fund analyst/PM, and I think the trend is only accelerating. When I say getting worse I mean the growth path and (especially) the compensation for your moderately talented hedgie are far worse than they were early in the decade, not even in the same league as in the aughts, and ... well everything was better in the 90s.
The basic issue is an influx of talent (lemmings) into the industry in the aftermath of the GFC, where being aggressively long/strong made a few funds massive and highly visible. The lemmings (MBAs) competed down wages in their pursuit of hedge fund glory, till the point where many analysts are hardly better off (compensation wise) than they would be on the sellside, and a lot of 2+2s are regretting going to the public side. Ever the clever investors, hedge funds (especially the platforms, but increasingly everyone else) began to see analysts/PMs as disposable commodities that could be ditched right before they start demanding partner money/ a share of PnL.
The really great jobs (senior analyst at Pick Your Random Multi $B Tiger Global, Coatue, Viking, Baupost, w/e) remain really great jobs, but other than the signs are not good for this getting better:
- Fewer spots available as decent sized funds shut down (Perry, Passport, Hutchin Hill, Blue Ridge) shut down
- Performance at many decent sized funds (not naming names but acronyms GV, MC, TC, PS) have sucked. As they stare down the abyss hedge funds tend to become more aggressive/ desperate with personnel policies
- Compensation is down across the board, as CIOs/founders/PMs keep a bigger piece of the pie and treat you like the easily replaceable excel jockey you are. I know several 2+2s that are making less than they did (post carry) in their PE jobs a few years into the public transition. I also know several bankers (at non-preftigious groups at non-preftigious banks doing non-preftigious work) that are crushing the buyside guys by virtue of having stayed 6-8 years and gotten rapid promotes to VP/director level.
- The lemmings keep coming. There is a somewhat absurd preference for hiring newly minted MBAs and junior bankers even in a talent-saturated labor market because they are more 'moldable' (LOL). This means the labor pool keeps growing, while the need for (especially) equity analysts really isn't
My recommendation: starry eyed model monkeys should think long and hard before going to the public side. You gotta love the game more, because increasingly it doesn't love you back.