Asset Management Salary and Lifestyle
Hi, I am soon to finish up my undergrad studies and am trying to choose a profession for myself. My interests tend to shift over time but currently I am strongly considering a career in Asset Management and had some questions about that field.
1) I am looking for an occupation with a decent work-life balance. I don't need to work 9-5 but I want to have time during evenings and weekends to enjoy life (family, movies, sports, exercise...) and don't only want to focus on my profession (although I am willing to work very very hard for the first 5-10 years). Is this possible in asset management? Can one become a portfolio manager in a mutual fund (I understand that HF's tend to have longer hours), for example, and work regular and normal hours? Are their any other asset management roles that you think would be a good fit for me?
2) What is the compensation like in asset management for your typical successful professional, who has a decent MBA? I am not looking to know the salary for the super successful financiers (which can be in the billions) nor for an unsuccessful uncommitted person, but rather, again, for a successful, hard working individual. I saw some figures in the 500,000 range (for mid-career), but also figures substantially higher and lower. What do you say?
Thanks!
Asset Management Salary And Lifestyle
People working towards a career in asset management or considering it are often in the dark about the pay and workload. They are aware that the compensation is good, but they are unaware of the salary of an asset manager. They know you have to work hard, but can you do the 9-5 or are the days long and hard? The answers vary, but there is a general trend that we can cover.
Asset Management Salary
Asset Manager salaries are a little tamer and less varied than a many other jobs in finance.
At bulge bracket investment banks, user @joshuagoodwin0" said:
I think at JPM starting is 70k first 2 years, 80k third, 90K 4th, this is in NYC
In other locations though it can be as much as 30% less, obviously the difference is purely numerical because the cost of living is lower.
And while user @Tulip" agreed on the salary and progression, they elaborated with:
You see your annual "raise" in your bonus increases, and your bonus will depend a ton on which group you get placed in.
At a traditional asset management firm you will make a little less in bonuses, but you will have much better hours.
Asset Management Lifestyle
Asset managers often make a little less than investment bankers, but they also work less.
User @urmomgostocollege" said:
Same base as banking, with 30% less bonus and at least 30% less hours worked.
Portfolio managers will make quite a bit more money. Even in small companies.
In the words of user @TheBig":
I'm not 100% sure as far as progression goes, but here's the rough idea of the salaries the PMs at the IMD firm I intern at make. $4B AUM, only 18 people in the firm.
CIO & President (2) = $3,500,000+
Senior PM (2) = $2,000,000+
PM (2) = $1,000,000+
As you can see, asset managers start off with a lower salary and a lower workload, but with hard work and a knack for it you can move up to the same astronomical numbers that highly successful investment bankers see.
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Comments (47)
You're not going to make the big bucks with a 9-5 job, that's for damn sure. In terms of hours input / pay output ratio in AM, I'm not too sure, However, asset management tends to have a better work life balance than the investment banking side. Most of my clients in AM get in early, and leave around 5ish, which isn't bad time wise. You can easily make a decent living doing AM.
I have a friend who is about to start year 2 at HBS and got an offer at of fund of hedge funds that pays ~$275k starting, all in. She said she arrived around 7am and left between 5-6pm weekdays and never worked weekends when she interned there this past summer.
Hope this helps
The $275K is just base salary and signing bonus? So basically guaranteed first-year compensation? If so, that's definitely one of the highest full-time offers coming out of any b-school. I'm pretty sure not even paulson or citadel offers that much in base+signing for someone just coming out of an MBA program.
I think she meant $275k including the "average" year-end bonus. She didn't break down the pay structure, so not sure what the base salary is
I was talking to a guy who used to work at PIMCO, and he said most portfolio managers who've been there for at least a few years were making $500K+. But the real big money went to like the top 5 or so guys, who were easily making eight figures. And of course, gross and el-erian are making a lot more than that.
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Learn moreAny decent portfolio manager will be working hard and have an irregular lifestyle. They have to travel around doing research and meeting with clients, so it comes with the territory. I don't know why people on this board seem to get the impression that mutual fund companies are tame beasts compared to those wild hedge fund cowboys. Most of the time, they really aren't all that different.
Thanks for the responses. If anybody has any further information please post it.
Typically mutual fund managers have over 8 years experience, they tend to promote from within.
Long story short career path is Analyst >>> Portfolio Manager.
Pay for Portfolio Managers are based on their track record i.e. returns vs. benchmark, tracking error, AUMs, etc.
http://www.wallstreetoasis.com/forums/am-portfolio-manager-career-path#…
This guy put it better.
Thanks for the responses. I am, however, mostly looking for information about salary and lifestyle and am not yet ready to explore the career path in much depth.
Don't you want to consider becoming a trader rather than managing others account?
Why dangle the banana that not all monkeys get to play with?
Hi Sellena,
Well what exactly does a trader do? Also what is the lifestyle (ie. hours worked) and salary of a trader like?
bump
the salary straight out of college up to business school is no different from our investment banking counterparts. lifestyle is a tad bit lenient in terms of work-life balance but dont count on it
How about life style/hours for west coast AM firms? Any truth to getting in at 4am leaving at 2pm or something close? Thanks.
.
My best friend works in a west coast AM firm. In at 4am, out at 5-5:30pm, M-F. I never see him/her anymore.
I'm at an AM firm on the west coast- hours are 5:30 to around 4-4:30. sometimes 3:30. I think my firm's culture is very chill compared to what I've read about others though.
Asset Management Salary Progression (Originally Posted: 03/23/2013)
I was hoping someone might be able to elaborate on the typical salary progression for an asset management employee straight out of undergrad at a BB or traditional manager or both if its the same. For example:
Analyst: 1,000,000
2nd year analyst: 1.2 million
Associate, vp, etc..(with more realistic numbers of course)
Thanks in advance
P.s. I tried using the search function already, if you can find a good thread, touché please share the link
Depends on location and the BB
I think at JPM starting is 70k first 2 years, 80k third, 90K 4th, this is in NYC
In other locations though it can be as much as 30% less, obviously the difference is purely numerical because the cost of living is lower.
It's pretty much all the same for each bank. In that, you won't make any less in base salary if you're in a satellite office or something. All BB banks are starting analysts at 70k + bonus (I think some of the boutiques are more though). You see your annual "raise" in your bonus increases, and your bonus will depend a ton on which group you get placed in.
I have no idea about the AM analyst's salary though. It is probably around the same with a little less bonus and a lot less hours worked, depending on the firm and group.
Yes, I was asking about NYC- should have mentioned that in the first place.
Tulip is spot on. Same base as banking, with 30% less bonus and at least 30% less hours worked.
Agree. If you leave BB land, the number fluctuate...
I'm not 100% sure as far as progression goes, but here's the rough idea of the salaries the PMs at the IMD firm I intern at make. $4B AUM, only 18 people in the firm.
CIO & President (2) = $3,500,000+
Senior PM (2) = $2,000,000+
PM (2) = $1,000,000+
That's all they have on the advisory team. They have a handful of traders and people in their ops department who I think are all between $75,000 - $150,000. Compliance doesn't go higher than $60,000.
Rest goes towards travel budget.
You intern there? How in the hell do you know the compensation of anyone there? When I mention any comp numbers (which is either extremely rarely or never, I can't remember) it's because I knew the comp of people at my firm, because I was in management there. I have never heard of a VP knowing the comp of the PMs, let alone an intern.
Everybody listen up, there is a huge amount of misinformation when you hear anecdotal stories about comp on this site and this is exactly why. Interns do not know the comp of the guy three or four levels up from them.
Not to mention there are a lot of other costs in running this business besides the 'travel budget'.
No offense kid, but this is fucking irritating that you are saying this and you have no idea if it's true or not.
Interesting, do you know how old the PM's are?
I'm in AM and I make
....about tree fiddy :O
How much does post MBA Blackrock asset allocation make?
I'd say your outlook on life and career will evolve... it better. I'm having a good day and needed a break so here are my thoughts...
I've never had a 9-5 job because I've always liked what I've done and half my work life has been outside the finance industry. The more relevant question is whether this is a job you can turn your brain off after work? That's what you are looking for and sorry, you can't if you want to be good at what your are doing; I think that's true or most professions. There is too much information flow in AM that you need to follow. Let me give you an idea of my typical day after some comment on pay.
Your pay is a function of a lot of variables. The most important is the assets under management. More you manage the more you will be paid; which oddly means more work since you start to bleed time away from research to marketing. Performance is next. If you have a few bad years the assets fall, your pay falls, eventually your fired. Hedge funds, mutual funds, portfolios are all similar with respect to those items. Factors like a speciality can help as well, but can hurt in challenging markets (AUM reduction). Equity vs fixed income is also a factor. As a PM your paid more then analysts on your team but you are also paid to take the stress and blows that come with that position. Expect $150,000 for fixed income and over $250,000 for equity (base).
I manage about USD 250mm in global energy assets (mainly equity, all long only). Been doing this for years. I love what I do, but it takes a toll on your physical health.
I arrive at work 8-9am (ET) leave 4-5pm. Sounds nice doesn't it? ...
I'm awake at 5-5:30 spending an hour to work before the family wakes up; this is when I trying to find out if something went wrong with holdings in Asia, Middle East and early morning in Europe. Then I review any relevant news.
I work an hour or more each evening, sometimes I'm in the office for calls between 1-4am (once a month perhaps twice). I'll take the odd Saturday off i.e. I don't do anything more then review news alerts and emails) and maybe Sunday. I try to never miss an important family event and I make sure my team is the same. If something blows up all bets are off. I rarely find time to exercise. Weight gain is an inverse correlation with relative performance. Lately I've put on a few pounds...
Vacations are mandatory but I put in 1-3 hours a day working while on vacations. This can be as simple as keeping up on news to having to adjusting the portfolio.
I find it impossible to take too much time off, there is always something to learn or verify. I can take a week away from my desk, two weeks at a time would be almost impossible unless I'm killing it on performance.
I try to avoid travel since it kills my time but I try to meet management teams once a year. This usually means 5-7 days on the road in a year. With sales and marketing trips maybe 15 days out of the office. A colleague spends about 30-45 days marketing a year (this mainly includes meeting key outside clients).
When things are going well you can relax more and turn off your brain; at least it feels that way. Your stress moves with relative performance. When things suck and your are underperforming you can't turn off your brain and your stress rockets higher. Losing other peoples money sucks and physically hurts as stress piles up and sleep deteriorates. I usually get 5-6 hours sleep a night. There are times I miss being "just an analyst".
Being a hard worker is irrelevant. It's about good security selection and risk management. Both require a constant attention to the flow of information.
Asset management of institutional funds is by its nature very stressful; whether or not you deal with having a mutual fund class. You won't will all the time, just want more wins then loses. You need to be able to handle periods of significant stress in the portfolio. This you can learn overtime.
You can always tell when a PM is having a bad year, it's all over our faces and waists. We can't hide it no matter how hard we try, even if it's sitting alone at a bar with the glow of a Bloomberg mobile app on our face hoping something doesn't blow up. If you don't want this, don't pursue the path.
If your a closet index fund it is likely a good gig, or maybe a fund of funds. Perhaps that life is more relaxing, but I can't comment on that.
Forgive and typos but the markets are calling me...
I'm a senior analyst at a large NYC AM firm. On a portfolio team that runs fairly concentrated (~35 names) w/ low turnover (~25%).
Lifestyle - hours are VERY SEASONAL... it starts w/ earnings season, which is obviously 4x per year. There's a cycle to earnings. It starts w/ earnings prep/previews (are there any actions you want to take BEFORE earnings), then earnings itself (which is working around the clock, usually including at least one weekend day), then post-earnings catch-up (catching up on whatever you missed during earnings and prioritizing research after any surprises).
Your life will revolve around the earnings cycle. Most of your work will be a lot of maintenance. Even though our turnover is low (~25%) there's usually a fair amount of maintenance work on names. You never want to be blindsided. In between earnings your time is mostly prospecting. The hours are a lot less than earnings season unless you're traveling. If you're traveling to conferences, there's a ton of meeting prep. There's no point in traveling to a conference and getting time with a CEO/CFO if you don't have a ton of very specific questions that only they can answer. Conferences and travel is very seasonal too. It's almost always outside of earnings, and the busiest periods are at the beginning of the year (when companies are giving guidance and faster-money players are positioning their book for the year) and after labor day (where companies often update guidance into year-end and fast-money is repositioning their portfolio to either protect gains or catch-up on returns before year-end). Volatility is biggest early year and end of year, consistent with that seasonality. Things slow down A LOT in the summer and it's the best time of year, so enjoy it. It used to be that December was a calm month too, but over the past ~5 years more and more companies have started doing investor day's and other activities in December because it was an open part of the calendar. Initially it was the first week of December, now the second week is pretty busy too. But the last two weeks are usually empty, which is great. Enjoy it while it lasts. Things rush back to a start in January.
Here's the thing on lifestyle... ultimately, it's up to you. Early on (like in any field on WSO) you should work around the clock in order to advance your skills and establish a lead on other analysts in your group. Over your first decade it's all about advancing your skills and gaining experience. After that first 7-10 years or so you'll have the skills/experience you need and then you have to master the mental game and manage yourself. Getting breaks is key to managing your energy levels and productivity. At this point in your career, managing yourself becomes very important.
My lifestyle (before COVID WFH) - morning routine has been the same for 10-15 years... Up at 5am, very quick workout (20-25 min), catch train to city 6am, at desk 7:15-7:30. My evening routine has steadily evolved... when I was on the sell side I worked until 10pm+ M-Th. When I went to the buy-side I started leaving at 9pm and every 1-2 years it moved down about an hour from 9pm to 8pm to 7pm to 6pm. Now, to beat the rush, I leave 4:55pm, but work religiously on the train ride (>1 hour) and sometimes may need to dial-in from home afterwards. I try to only work weekends during earnings season. It's a real drain on productivity. You can't burn the candle from both ends forever.
Compensation - is really hard to answer because #1 there's a lot of variability by type of firm (i.e. a top 50 asset manager vs. a regional RIA) and #2 it is coming down... AUM is moving to passive and fees are coming down, a double headwind for the industry. You can't take the back office pay down, so this is primarily coming out of the front office jobs. Today's PM's will likely never see the comp that outgoing PM's saw and the same is probably true for analysts. The divide is smaller at the more junior jobs, it's mostly the top end where things are changing. Everything is driven by AUM and fees... you can't change the math. My firm only hires experienced analysts. The initial range is probably $200-350k initially. I'd say senior analyst range is probably $400-800k, though as comp comes down there's a lot fewer seats at the $700-800k level (there used to be $1m+ analyst seats, but they're probably entirely gone now on the long only side). PM comp can be anything, it's just a function of AUM and fees. These pay ranges are probably only accurate for maybe top 100 sized AM firms... I'm guessing the pay may be lower for smaller firms w/ less AUM.
Great insight thanks for posting. How large of an investment team do you have to manage a 35 name portfolio?
Also you mention you only hire experienced analysts, what qualities do you look for in an experienced analyst?
5 people managing ~$5b across 35 names. There's obviously more support staff on the team and we leverage a lot of back office support from the firm, but 5 people picking stocks.
When I say we only hire experienced analysts, I'd say the overwhelming majority have some sell side experience. Maybe they did a year or two of banking before moving to equity research, but nobody comes from banking or PE. Everyone basically come from sell-side equity research or another AM or HF. The hardest thing in AM is just getting your FIRST job since many AM firms are like this.
I've only worked at a couple of firms, but from my experience and many conversations I think it's fair to say that almost no AM shops have any kind of a training program. There's no hand holding, no training, it's more or less sink or swim. Nobody is going to take time from their day to get a new analyst up to speed, so you need to come in with the skill set to do the job already. You need to have the raw skills (modeling, research, writing) day one, but you will evolve as an investor over many many years... so that's not expected day one. It'll evolve a lot over time.
sb'd. few questions:
when you say large AM are you talking like $1T+? can you break down comp at the junior levels (associate-equivalent)? 200k-350k seems like banking figures for a first through third year associate. Would you say your firm's energy/credit/equities teams are paid the same at the junior level, and senior?
Call it the $200-600b AUM range. Not the largest of the large (Fidelity/Wellington/T Rowe), but still a top 50 shop.
I don't know if this is firm specific, but the comp breakdown is very heavy on bonus. I took a sizeable step down in base when I came from the sell-side even though total comp went up. I think the offer was ~$125k base, though I was able to negotiate a little higher since I was coming from $190k base on the sell side. Everything else is a cash bonus and 401k contribution (sizeable at ~$35k or whatever the IRS max is). At this level there's no equity. So, more bonus heavy than the sell side, but the bonuses are a lot more stable than the sell side, especially at the junior level. I'd even say pay is fairly stable even into the sr analyst level. It's the PM's who see the big variability.
I'd say the $200k in the $200-350k range is on the very low end... if you have the kind of experience I mentioned in a previous post (5+years of sell side research, AM or HF) it'll be more like $250-350k starting out and will likely grow annually. Though keep in mind... comp is coming down across the board in AM. Money is going passive and fees keep moving down year after year after year. I think the spread between AM and HF/IB/PE may grow over time if the trend continues.
Comparing it to banking is apples and oranges though, not just because of the lifestyle differences and doing much more interesting work at the junior level in AM... but really it comes down to what do you want to be doing at work??? To be successful in AM you have to be passionate, like reaallllyyy passionate about investing. If you come in thinking I'll either do ER/AM or IB or PE of sales & trading based on wherever I land or whatever pays the best, then that's not going to work out long term. If you don't feel it in your bones that you need to be picking stocks for a living, then don't go into AM/HF. IB offers more career options.
I don't know how comparable these levels are outside of equity. I'd say generally other asset classes seem to make less for comparable titles in AM... in the HF world I believe the gap is smaller or even non-existent, especially when you get into distressed or special sits credit, those guys can make a killing (for investors and themselves) and are often the smartest investors in the room.
Recent grad in AM here. My report is ~50ish hrs/week (8/9am-6/7pm) with 70-80 base plus signing and performance bonuses. Flat increases to base and percentage increases to performance range every year.
IMO, biggest pro of AM is the intellectually stimulating work and amount of responsibility given to juniors. expect to be on calls with sell side and management teams, working on models, and doing a lot of overall information gathering and analysis. Hope that helps
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