Hedge Fund Salary

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PtrainerNY

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Hedge fund analyst with 300 million under assets. What is the average salary + bonus to expect for an analyst working directly with the PM?
 
Are there no right wing articles with this topic you can cut and paste here?
 
Could vary quite a bit depending on fund’s performance, how many work there, etc… but below is a guideline for salary that could be all over the map:
In this environment, for NYC, my guess would be:
BASE SALARY:
$90-120k for 3-4 years exp.
$60-90k for analyst 2-3 years exp
$40-60k for analyst
BONUS:
Typically more experienced analyst get paid on fund performance, which can be $$$ if the fund performs. Also depends on how many others are working there….
Assume that you will be one of two analyst and there is 1 PM and 2 traders and your fund is above high water mark:
20%-30% return expect $150k - $200k bonus (could be more up to $300k+ possibly if fund is 50%+ and you significantly contributed to that performance)
10-20%: $75k - $150k
0-10%: $25k- $75k
 
ConvertArb - how does that payscale change with the size of a fund?
Say you are the only analyst working in a start up boutique fund working with one fund manager. AUM $10m.
Could a fund that small even support two staff?
I’d be interested to hear your thoughts on the minimum asset base needed for a fund to breakeven and be sustainable. Is there a minimum AUM you would like to see before you would consider working at a fund?
 
ConvertArb’s salary scale is reasonably accurate. I would say though that bonuses are a lot more variable and correlated to more factors than just performance.
 
$10mm will generate $200k in management fees under the standard 2 and 20. After tax, that’s probably not enough to cover renting office space and market data/other misc costs for the year, not to mention paying you and the PM a base salary.
 
The small firm scenario is much more dependent on the partner(s), but would say expect next to nothing for firms
Some partners may try and get cheap work in return for non monetary benefits, mainly the contacts in the industry and the experience. Many top undergrads are willing to work for nothing at any hedge fund just to get the experience under the belt. Don’t expect to get paid out in this scenario if the firm grows.
Q: I’d be interested to hear your thoughts on the minimum asset base needed for a fund to breakeven and be sustainable. Is there a minimum AUM you would like to see before you would consider working at a fund?
That said, it depends on the partner and their contacts and experience. If a big shot trader/PM from a large HF (Citadel, Highbridge, Ren Fund etc) with industry contacts wants to get a track record and throws in $10MM of his own money, not raising outside capital but wants to build a track record, then I would be all over it… otherwise some spin-off from an unknown fund with average performance and questionable ethics I would run like hell.
$25MM is what I have seen thrown out as the amount needed to breakeven on a very tight budget.
 
ConvertArb Wrote:
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> $25MM is what I have seen thrown out as the amount
> needed to breakeven on a very tight budget.
Sounds reasonable. I know a couple guys who run about $40M with 2 PMs and no analysts. They run a low vol long-short fund and crank out mid teens returns consistently. We figure after expenses they take home in the mid-6 figures each. So yeah, you could probably get by in that $25MM range .
 
So I got offered a very good base. However they said bonuses and the 401 match as well will be low this year due to reinvestment in the firm.
1. What do you think is a low bonus, like 5-15% of base? I didn’t ask before I figure if I take it and things go good, I will be rewarded. Just want to be prepared.
2. What is the usual career path from Quant analyst in general? I would be reporting right to the PM in a small hedge fund of about 12 people (2 secretaries). would it be PM? I dont have a phd.
 
PtrainerNY Wrote:
——————————————————-
> So I got offered a very good base. However they
> said bonuses and the 401 match as well will be low
> this year due to reinvestment in the firm.
>
> 1. What do you think is a low bonus, like 5-15% of
> base? I didn’t ask before I figure if I take it
> and things go good, I will be rewarded. Just want
> to be prepared.
>
> 2. What is the usual career path from Quant
> analyst in general? I would be reporting right to
> the PM in a small hedge fund of about 12 people (2
> secretaries). would it be PM? I dont have a phd.
1. Bonus is all relative. In the world outside IB/HF, 15% is a great bonus. For HF, I know bonuses that were 10X+ the annual salary… so to say 40% of base would be consider a low bonus in their cases…You should consider your bonus relative to the performance of the fund. That is where you get your measure of how you are paid. If the fund is over high water mark and makes 50% and you only get 25% of base, I would be p!ssed. But if the fund makes 5% and you get 20%, I would be OK with that…
2. Quant can go to a risk officer or quant trader. Then with enough experience under their belt could move to PM. PM is more of title then day to day investments in some (many) cases… they are the face of the fund, but the real work is done by traders and analyst, especially for larger funds.
 
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