Hey guys, currently interviewing with a number of LO shops for research associate roles (2 yrs of IB experience) and I'm curious what I should expect in terms of comp?
My current role is paying 90 base + 75 bonus as a second year IB ANL and should increase to 95 + 90 in my third year. Not sure what large LO funds pay their juniors - I'm assuming 125 + 125? How does that scale over time? Funds I'm referring to are Artisan, Allianz, etc.
Assuming I spend a few years here and look to lateral elsewhere, would SM HF opps be on the table, or do L/S SM funds view LO shops negatively?
Thanks!
125 + 125 is highly unlikely for a research associate. I'm guessing you're in SF based on your tech banking background and the firms you listed. I'd use Dodge & Cox numbers as a benchmark. Seems like somewhere between 150 to 200 all-in.
Correct, SF. See my reply below, but the recruiter quoted me ~250 with some variability up or down - sounds like best I’ll get is 225? Seems like a great opportunity though, so as long as they’re coming in with at least 215, I’d take it.
Recruiters exaggerate and oversell all the time. If this is really a "research associate" position at a traditional asset manager, even 215 (assuming a base-case bonus) seems high for someone with ~2 years of work experience.
I work in LO after doing a stint in IB. That said, I worked in IB at two EBs in NYC for two summers and ended up joining LO out of college.
At my company, total comp is usually around $115k in out of college roles, but after about 4-5 years gets to close to $180k. That's close to what you would be making. My company is also on the lower paying side due to being located in a lower cost of living area. Personally, I think that this is a great place to work after some time in IB, and even with the compensation being a bit lower, you still have decent places to go.
I do not believe that L/S SM or MM shops look negatively on LO shops at all. In fact paired with IB, this could set you apart since you have both IB and investing experience. I know many people who have gone from LO to the HF space and they did not think they had some uphill battle coming from LO.
Very good to know - appreciate the color. It would be hard for me to take this if they came in at 180, as that’d be less than I’d make as a third year analyst all in. 215 is probably my floor.
No problem! Admittedly, I bet you most LO shops would pay you below $215k, likely at around $200k with maybe a few pushing to $225.
Again, I'd bet my shop would pay you around the $160k-$180k range, which is lower than most LO firms would pay. This is considerably below your floor. This is justified by my company for increased work-life balance, as well as other perks like reduced rent at some of the best nearby apartments (I get my first month free and a 10% discount) or access to private clubs in the area.
Most people coming from IB are prepared for a bit of sticker-shock when changing to LO, since they pretty badly want a "lifestyle change" (as it is said at my company). That said, comp progression in LO can be pretty good, so long as you are able to be promoted quickly. Make it to Portfolio Manager, and your comp will probably dwarf your friends at the VP level in PE.
depends heavily on whether they are standalone hedge fund structure/private equity spinout or large asset manager, the former will usually pay more but less stable
examples of the former are stockbridge abdiel sequoia public equities etc.
Large asset manager. I interviewed with the public equities arm of a PE shop (Vista) and was quoted 115 + 115.
I'm surprised Vista Public Strategies is only ~$230k all-in, given that it is L/S.
Do you know how much an Abdiel or Stockbridge pays as base?
Any color on the sort of numbers at those standalone funds? Several of them recruit at my school
From my experience LO won’t pay that much ($250k all in), I would guess more around $200 with your experience. They tend to be a fair bit lower than HFs (a lot less vol at least). Maybe some of the top shops will be closer to that, but like I said they tend to have more structure comp and smaller increases.
Thanks, this is helpful. The recruiter quoted me a range with $250 as the median so it sounds like $225 is a best case scenario. Would probably take it if they came in at 215 given the opportunity to get some investing exp before transitioning to a l/s fund.
What are LO pay ranges like for more experienced hires with 5+ years of experience?
Generally need an MBA to get in after that much experience. In my experience, most AM research depts. have two to three levels. In order of ascending seniority, associates do a lot of the “digging” and tenures last in the ballpark range of 2-5 years. Next up the food chain are analysts, who are usually (emphasis on the usually) MBA hires. They are more responsible for the idea generation and true analysis, which is often times mixed in with the digging. Then you have the PMs who also have idea generation/analysis responsibilities but are more focused on managing the book naturally. PMs are generally promoted analysts or lateral hires with PM experience.
Most associates don’t get promoted since Analyst/PM turnover is very low, so a lot go to other firms, B school, or pivot their career interests. To circle back to your question, I would say you might be able to get an analyst seat if you have prior relevant experience (buy side), but otherwise B school is the most trodden path to senior AM seats.
Do you guys consider $250k a year a lot? Starting to feel like it's cookie crumbs here
I'm trying to discern the difference in comp between a HF that is LO vs. a LO asset manager.
Sorry, what does LO mean? Can't seem to find an explanation of the acronym anywhere
Update - got dinged in the final round. In the process w/ Capital Group now
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