Comments (30)

 
Aug 8, 2020 - 7:37pm

Just way too many variables. Depends on the fund, depends on the team within the fund, depends on the performance during those years, depends on how well the individual performs at their own job, you get the picture. I would assume, by early 30s, an average analyst at an average fund could have $500k - $1mm saved if they’re conservative. A good analyst on a good team that’s had a good run, $1 - $5mm. A superstar who probably already was promoted to PM or is on the path to that (if at a MM) or has contributed exceptionally well at his or her single manager - idk $10mm+? A bad analyst won’t make it multiple years

 
  • Associate 2 in PE - LBOs
Aug 15, 2020 - 5:22pm

How often do analysts/jr PMs save $10+ mm by early 30s? Also - is "early 30s" 30-31 or 33-34? Matters bc those 3-4 years are usually when one should see an inflection in their comp as they start taking risk or putting up numbers.

Array
 
Aug 27, 2020 - 6:55am

It's definitely possible but maybe in the context of 5-10 people each class year of analysts across the street.  It's probably a lot more difficult than professional sports just numbers wise.  There are orders of magnitudes more athletes than there are finance guys making that by 30ish.

I think that really puts things in perspective if we can agree how difficult that feat is in sports. 

 

 
  • Research Associate in HF - Event
Aug 8, 2020 - 10:31pm

2 years banking you should have $100-150 saved up. 6 years at a a "good HF" you could save $100-200 each year in the first two years, $150-300 next two and $200-400 the last two, so I'd say $1 million by age 30 is attainable without being a true superstar hotshot PM.

 
Most Helpful
Aug 15, 2020 - 6:26pm

By early 30s, a lot depends on your investment decisions: are you willing to be all-in on stocks, or not? And if your fund allows you to pick individual stocks, are you a good stock picker in your PA? It can actually matter more than your pay.

But I'll give you some very rough pay numbers. I might be a bit off on some of these, as it's been a minute since I was a junior analyst, and my sample set for more senior people is smaller and less reliable. But this will be ballpark accurate. Starting with a junior analyst who starts a buyside job at age 23, below are some pay range estimates, presented as Base/Bear/Bull, but with no outlier cases. Think 50th, 30th, 85th percentile. No one getting fired. No one having an insane career path. All numbers assume you're at a reputable fund with significant scale. A sub-scale or under-performing fund won't look like this.

Year 1 (age 23): $160/120/200
Year 2: $200/150/250
Year 3: $275/$200/$375
Year 4: $350/$250/$450
Year 5: $425/$300/$550
Year 6: $500/$375/$650
Year 7: $575/$450/$750
Year 8 (age 30): $700/$525/$1,000

Cumulative gross: $3,190/$2,370/$4230

Net of ~40% tax in NYC: $1,910/$1,420/$2,540

Net of annual living expenses at ~$100k/year, or $800k cumulative, though this can vary quite a bit up or down: $1,110k/$620k/$1,740k

So that's a decent range for what you could have saved by 30 if you had your assets in cash. If you invested well, you could have a fair bit more. If life throws you a curveball (your fund gives 0 bonuses one year, you lose your job, your investments lose money etc.), it could be a fair bit less.

 
Aug 18, 2020 - 10:51am

these numbers are absurdly high. is it for multi strat mega fund? i work in a mega fund (think citadel / mlp / p72 ), i can tell you for sure most of my colleagues around age 30 or even 40 total compensation is around $200k to $350k.
nowadays you don't just get paid for pnl cut, firm will also consider how your idea is different from other research analyst's idea. they don't want to hire two analysts find similar alpha. they want everyone's alpha is unique from others. for some sectors like TMT, where picks are overcrowded, nobody get paid big in the end.

i heard smaller funds (less than 100 people) will pay you much more. like 8% of pnl cut, is it true? i found it's every hard to find funds pay decent pnl cut nowadays as many of these funds don't feel the need of hiring. so if you already get a job then that's good in one of those funds but if u didn't , very hard to break in.

i do see more people around me choose to open their own mini fund. they raised one or two million dollars from family and friends and invest discretionarily. they are easily to get triple digit return within a year and grow fast given their portfolio is not that big. they get 30% pnl cut so roughly 300k to 600k a year with s-corp tax bracket. given it is harder and harder to find a job in funds that pay well, and hedge fund industries are cutting fees (google bloomberg article), do you think the new trend is for hedge fund professionals manage their own money (or money for family and friends)? will this be the new exit option for hedge fund research analyst & pm if they failed to find job they pay them well?

 
  • Investment Manager in HF - Other
Aug 18, 2020 - 11:46am

If you are at a mega fund and your 30-40 year old colleagues are making 200-350k they are either severely underperforming or lying to you. That is “getting fired” territory or “I’m going to take advantage of you because you can’t negotiate a reasonable pay”.

New hires (mostly in quant space) at the large funds make $200-300k first year. The ceiling for “fine” performers is $500-600k and the top performers make multiples of that.

I agree with your comments around funds wanting diversifying ideas and not pay two people to do the same thing, but your comments on comp are far off (unless these aren’t “front office” roles or are severe under performers).

The numbers listed above are about right for a good person who has PnL. In silo’d quant funds the ceiling will come sooner. The “top” performers will be 2-3x of the numbers above (without getting into crazy outlier territory).

Array
 
Aug 18, 2020 - 1:58pm

Yeah, ahsnaf, your figures are way off... no one makes $250-300k at age 30-40 at a large multi-manager fund, unless they've had a year with 0 or negative PnL but just barely avoided getting fired; it would be an anomaly. I don't think you work at such a firm, at least not in an investment role.

 
Aug 23, 2020 - 3:29pm

ahsnaf

these numbers are absurdly high. is it for multi strat mega fund? i work in a mega fund (think citadel / mlp / p72 ), i can tell you for sure most of my colleagues around age 30 or even 40 total compensation is around $200k to $350k.
nowadays you don't just get paid for pnl cut, firm will also consider how your idea is different from other research analyst's idea. they don't want to hire two analysts find similar alpha. they want everyone's alpha is unique from others. for some sectors like TMT, where picks are overcrowded, nobody get paid big in the end.

i heard smaller funds (less than 100 people) will pay you much more. like 8% of pnl cut, is it true? i found it's every hard to find funds pay decent pnl cut nowadays as many of these funds don't feel the need of hiring. so if you already get a job then that's good in one of those funds but if u didn't , very hard to break in.

i do see more people around me choose to open their own mini fund. they raised one or two million dollars from family and friends and invest discretionarily. they are easily to get triple digit return within a year and grow fast given their portfolio is not that big. they get 30% pnl cut so roughly 300k to 600k a year with s-corp tax bracket. given it is harder and harder to find a job in funds that pay well, and hedge fund industries are cutting fees (google bloomberg article), do you think the new trend is for hedge fund professionals manage their own money (or money for family and friends)? will this be the new exit option for hedge fund research analyst & pm if they failed to find job they pay them well?

This is not even remotely true. Base salaries at those funds are $200k+. I think someone is lying to you. 

 
Aug 15, 2020 - 6:52pm

Agree with all other posts, would also add that the AUM matters a lot.

If you're looking for higher growth and more optimal R/R sticking to sub $500m shops is a must due to the nature of the fund being able to be more nimble and play more exotic strats.

Also worth noting that depends very much on YoY vol levels and area of focus. Generally new bankers or people from PE aren't working on macro side and instead focus on areas like debt (Oaktrees of the world).

 
Aug 15, 2020 - 10:03pm

"Savings from working at a Fortune 500 company". This would sound like a silly question, and it is no different when applying it to HFs. Anyone making career decisions based on these "averages" just doesn't get it.

Finally, on the comment above on "these are the numbers assuming life throws you no curve balls i.e. zero bonus years, lose your job etc". Dude, that is not a curve ball, in the HF world it is the freaking NORM. For every guy that's had 10 succesful steady years at the same shop, there's another 9 that are stumbling along, changing jobs every couple years, not getting paid, or suffering from other types of bad luck. If you are looking for a steady career with reliable annual "average" income, this is not the industry.

 
Funniest
Aug 16, 2020 - 6:42am

Just wait until that cute chick you met at the bar and have been banging for a year wants a ring and a kid or two haha. Then comes the expensive wedding, the honeymoon, and the need to drop a fat deposit on a decent place to raise kids (likely a few million in NYC/London). Then the private school rat race starts and little Tobias needs an army of tutors and Cathy has figure skating lessons and needs a private coach. Then you have the "I deserve this" devil sitting on your shoulder telling you "hey, you work hard, you deserve that 20K vacation with the family and you should be driving a Mercedes SUV because everyone else on your team has one and you don't want to stick out like a sore thumb." Very few people in our industry are doing FIRE and you would be surprised how many guys have little to no savings or dreadful money management skills in their own personal finances.

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