portfolio manager vs md (ibd) salary

diamond's picture
Rank: Monkey | banana points 57

wouldn't a portfolio manager funning a fund at a bank make more than a MD in investment banking?

comparing a goldman fund vs goldman md or William Blair (for mm) fund mangaer vs blair md

Comments (27)

Mar 8, 2011

It's a lot more variable for the fund manager. When Mark McGoldrick was running SSG at GS, he made 70MM the year he quit. He quit because he thought he deserved 200MM. Don't think any IBD MD would break 6-7MM EVER.

-MBP

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Mar 9, 2011
manbearpig:

Don't think any IBD MD would break 6-7MM EVER.

false. i've worked for IBD MDs making more than 6-7M.

for an extreme example, google Frank Quattrone.

Mar 9, 2011
bankbank:
manbearpig:

Don't think any IBD MD would break 6-7MM EVER.

false. i've worked for IBD MDs making more than 6-7M.

for an extreme example, google Frank Quattrone.

I stand corrected. Thanks for the info.

-MBP

Mar 8, 2011

portfolio managers make a shit load of money. the compensation model is ridiculous.

what an MD makes is peanuts compared to what portfolio managers make, though it does depend how good the fund is

Mar 8, 2011

Portfolio Manager's is where the real money is made....lets be serious ridiculous sums of money are made there.

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Mar 8, 2011

the "average [asset management] pm" does not make what an ibd md makes. a hedge fund or prop book pm, which is what everyone above seems to be referring to is extremely variable BUT the best pm>best banker.

Mar 8, 2011

Funning a fund sounds much funner than IBD

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Mar 8, 2011

youngibd, that's just plain false. portfolio managers always make more money than an MD - your job as a PM is to oversee a huge sum of assets and you get compensated a lot for it. this has been widely published in the news and on the CFA website

also, "average" portfolio manager? can you give us an example? do you mean by AUM? keep in mind, AUM have to be large enough to be considered a legitimate fund.

...but most BB AM groups are also FoF so that argument just doesn't work.

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Mar 8, 2011
lifesgreatmystery:

youngibd, that's just plain false. portfolio managers always make more money than an MD - your job as a PM is to oversee a huge sum of assets and you get compensated a lot for it. this has been widely published in the news and on the CFA website

also, "average" portfolio manager? can you give us an example? do you mean by AUM? keep in mind, AUM have to be large enough to be considered a legitimate fund.

...but most BB AM groups are also FoF so that argument just doesn't work.

You are wrong about so many points I will just address the latter:

Example: GSAM/JPAM/LAM all run strategies that invest directly in equities which is the core of their businesses. Small-cap growth, large-cap value, commodites....the funds that institutions invest in. I fucking hate trolls like you who are still in HS, went to a non-target, or currently working a bullshit job. Peace

Mar 8, 2011

It is nothing short of ludicrous to say that all, or even most, PM's make more than an MD at an IB, without defining the sample set. I spent 4 years of my life talking to PM's at funds ranging from 100mm to 100b and PM is a title that is used far more liberally than MD is used at an IB, with compensation all over the map. PM can be a guy running the entire fund, everyone who isn't a trader or in ops, or the more traditional title of a person or persons responsible for a single strategy, sector, etc.

And the assets under management do not tell the whole story either. I know of a very well known fund that managed maybe 50b at the peak, and maybe 25b today. At the peak, its PM's were not making 1mm a year, bonus inclusive.

Pay and title assignment are are both highly variable and very dependent on the proclivities of the head or heads of the fund.

Mar 8, 2011
Cartwright:

It is nothing short of ludicrous to say that all, or even most, PM's make more than an MD at an IB, without defining the sample set. I spent 4 years of my life talking to PM's at funds ranging from 100mm to 100b and PM is a title that is used far more liberally than MD is used at an IB, with compensation all over the map. PM can be a guy running the entire fund, everyone who isn't a trader or in ops, or the more traditional title of a person or persons responsible for a single strategy, sector, etc.

And the assets under management do not tell the whole story either. I know of a very well known fund that managed maybe 50b at the peak, and maybe 25b today. At the peak, its PM's were not making 1mm a year, bonus inclusive.

Pay and title assignment are are both highly variable and very dependent on the proclivities of the head or heads of the fund.

^Bump. +1

Mar 8, 2011

It depends. At hedge funds where PMs make a percentage of earnings comp is obviously highly variable and all over the map. Within the same multi-manager fund one guy can manage 100MM, make only a couple of million in PnL in a year and take home 200K while a guy sitting on the same desk runs 1bn, makes 25% in a given year and ends up taking home somewhere in the area of 30MM personally. The guy who makes 30MM may end up making 100k the next year if he doesnt make any money...and in fact if he hasnt earned that 100k it will be deducted from the next year's pay. When you are hired you get a contract that defines what percentage of your PnL you keep, whether some is deferred, whether you have any clawbacks on drawdowns, etc...form there its on you to decide your pay or lack thereof through performance.

At money management/asset management firms that do not collect performance fees the compensation for a PM is much less and the term is used much more broadly. ie a "portfolio manager" might be a guy who just adjusts some portfolio once a month to match an index or makes very small changes to a long-only portfolio.

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Mar 8, 2011

There are many different classes of portfolio manager.

David Tepper, John Paulson, George Soros, Jim Rogers, and Steven Cohen as a group probably made more than all of the MD's at many bulge bracket banks combined last year.

The original question made the fair distinction of a Goldman IBD MD vs. a Goldman portfolio manager. I am almost positive the MD in IBD makes more than a PM in GSAM. Partially because GSAM has fared relatively poorly the past few years and the IBD is so consistently strong. Across all firms, I would say that the head of a certain fund or strategy at the big firms would probably make in the same ballpark as an MD in banking, but slightly less. Even the pm's at the huge banks struggle to generate risk adjusted results significantly different from the market so its tough to justify 5-6mm payouts.

I would venture that the pm's of the largest funds at places like Fidelity/Wellington/MFS, etc probably do just as well as an MD in banking. They are running huge amounts of money (but again, struggling to present materially different results).

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Mar 9, 2011

i agree with last three posts about how PM applies to very different roles within a company.

i guess when i was using the term "portfolio manager", i was obviously referring to the person MANAGING the fund. i think if you talk about "portfolio managers" to anyone on the buy-side, people aren't going to say "WELL do you mean a BB portfolio manager for GSAM?" no. no one gives a fuck about GSAM. in the buyside world you follow the known mutual funds/hedge fund managers, period.

youngibd, we can all tell from your post how much you love your job in IBD. keep editing those pitchbooks bro, sorry you couldn't make it to the buyside

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Mar 9, 2011
lifesgreatmystery:

i agree with last three posts about how PM applies to very different roles within a company.

i guess when i was using the term "portfolio manager", i was obviously referring to the person MANAGING the fund. i think if you talk about "portfolio managers" to anyone on the buy-side, people aren't going to say "WELL do you mean a BB portfolio manager for GSAM?" no. no one gives a fuck about GSAM. in the buyside world you follow the known mutual funds/hedge fund managers, period.

youngibd, we can all tell from your post how much you love your job in IBD. keep editing those pitchbooks bro, sorry you couldn't make it to the buyside

LOL. Troll

Mar 9, 2011
lifesgreatmystery:

i guess when i was using the term "portfolio manager", i was obviously referring to the person MANAGING the fund.

I apologize for failing to realize that, when you used the term "portfolio manager", you were not including the vast majority of those who hold the title of "portfolio manager".

I just don't where my head is today.

Mar 9, 2011

GSAM has $735b aum across its funds...you are sooooooooo right..."no one gives a fuck about GSAM"

http://www2.goldmansachs.com/mutualfunds/checkinve...
I cannot stand trolls like this guy. And it's an IBD board, dude.

Mar 9, 2011

you can always tell the ones that got made fun of when they were young.

Frank Quattrone is not even close to being the average ibanker. with the publicity he's gotten, he doesn't typify the average ibanking MD. he could ask for however much $ he wanted. go find the MD of Piper Jaffray and tell me how much he's getting paid... it's peanuts.

anyways, comparing comp of PM and IBD MD is dumb, but for little kids like youngIBD, just to hammer the point home:
https://sites.google.com/a/aimrcfa.com/www/compsurvey
direct quote from the CFA comp survey 3 years ago:

At all levels of experience, U.S. portfolio managers (equities) reported a considerably higher median total compensation ($456,000) than the other occupations.
In the U.S., the three highest compensated positions at all levels of experience are portfolio managers (equities) ($456,000), followed by investment bankers ($275,000) and then sell-side research analysts ($195,000)

surprised its only 50% more, must be all those MD's pulling in their multi-million paychecks while hating their lives

Mar 9, 2011
lifesgreatmystery:

you can always tell the ones that got made fun of when they were young.

Frank Quattrone is not even close to being the average ibanker. with the publicity he's gotten, he doesn't typify the average ibanking MD. he could ask for however much $ he wanted. go find the MD of Piper Jaffray and tell me how much he's getting paid... it's peanuts.

anyways, comparing comp of PM and IBD MD is dumb, but for little kids like youngIBD, just to hammer the point home:
https://sites.google.com/a/aimrcfa.com/www/compsurvey
direct quote from the CFA comp survey 3 years ago:

At all levels of experience, U.S. portfolio managers (equities) reported a considerably higher median total compensation ($456,000) than the other occupations.
In the U.S., the three highest compensated positions at all levels of experience are portfolio managers (equities) ($456,000), followed by investment bankers ($275,000) and then sell-side research analysts ($195,000)

surprised its only 50% more, must be all those MD's pulling in their multi-million paychecks while hating their lives

Good point. Lowly harvard guys like me could learn a thing from smart kids like you.

Mar 9, 2011
lifesgreatmystery:

you can always tell the ones that got made fun of when they were young.

Frank Quattrone is not even close to being the average ibanker. with the publicity he's gotten, he doesn't typify the average ibanking MD. he could ask for however much $ he wanted. go find the MD of Piper Jaffray and tell me how much he's getting paid... it's peanuts.

anyways, comparing comp of PM and IBD MD is dumb, but for little kids like youngIBD, just to hammer the point home:
https://sites.google.com/a/aimrcfa.com/www/compsurvey
direct quote from the CFA comp survey 3 years ago:

At all levels of experience, U.S. portfolio managers (equities) reported a considerably higher median total compensation ($456,000) than the other occupations.
In the U.S., the three highest compensated positions at all levels of experience are portfolio managers (equities) ($456,000), followed by investment bankers ($275,000) and then sell-side research analysts ($195,000)

surprised its only 50% more, must be all those MD's pulling in their multi-million paychecks while hating their lives

this includes all investment bankers no?

The avg MD is probably on atleast 800k a year.

that said if ur good u rape any md in terms of comp, you actually have a life, and your value add doesnt consistent of constantly sucking your clients dick.

Mar 9, 2011

are you really one of those kids thats gonna drop harvard on an internet forum? ...thats just sad

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Mar 9, 2011

good job! you just got rid of one of the more legit posters on this forum. enjoy everyone. im out.

Mar 9, 2011
youngIBD:

good job! you just got rid of one of the more legit posters on this forum. enjoy everyone. im out.

NOOOOOOOOOOOO YOUNGIBD DONT LEAVE US! :'(

Mar 9, 2011

Really, the best of the best PMs are going make more than the best of the best MDs. There's only so many deals an MD can do in a year. That said, an average MD and an average PM are probably making about the same.

lifesgreat, those numbers aren't an accurate representation of how much bankers make vs portfolio managers. Far more portfolio managers have a CFA, IB guys have really no need to get them.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer
"Your grammar made me wish I'd been aborted." -happypantsmcgee

Mar 9, 2011

the term Portfolio Manager is way to nebulous to be compared to the average MD. My guess is that the average PM is way higher then the average MD, but that the median PM is about in-line with the median MD. The top-end PM's skew the average and push it higher while investment banking directors are relatively more clustered with only a few real outliers.

Mar 10, 2011

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