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Morning Coffee: 30 year-old hedge fund managers’ real pay. Woman reinvents self in hottest role in finance

Hedge fund pay

Hedge funds are not the gateway to riches you think they are

If you thought a move out of trading in an investment bank and into trading in a hedge fund would bring great riches raining down upon your head for all eternity, you were misguided. A new study reveals by just how much.

Hedge fund community Sum Zero has amassed data on median pay in the US hedge fund industry. It’s lower than you might think.

As the chart below shows, Sum Zero’s data suggests that median pay for US hedge fund professionals is ‘just’ $225k (£158k) after three to five years. After five to seven years, when hedge fund professionals might expect to be touching their fourth decade, it’s ‘just’ $270k (£190k).

That’s clearly a lot, but it’s not exactly the enormous pay figures associated with employees at top funds. Moreover, the data suggests that some of the least well remunerated people in hedge funds are ‘only’ earning $200k (£140k) after five years. And it implies that if you linger too long in a hedge fund (more than 20 years), your pay will start to shrink – unless you happen to be in a small group of elite performers.

Separately, in light of the clear and present demand for compliance professionals, you might be wondering how you can reinvent yourself in a role with a compliance orientation. Thankfully, Paula Dominick has shown the way. Just promoted by Bank of America as chief compliance officer for the Americas. Dominick began her career as a credit researcher at Goldman Sachs. She moved to Bank of America as director of global research in 2005. From there. she used a year as chief operating officer to leap into compliance in the investment bank. Dominick has been chief compliance officer for BofA before – she held the role between 2010 and December 2013, but spent the past three years working on Bank of America’s ‘simplification strategy’.

Meanwhile:

Alan Howard of Brevan Howard predicts “exceptional opportunities” to make money in 2016 as monetary policies diverge. (Bloomberg) 

Meet the new generation of poor bankers: ‘Senior bankers say juniors have been citing high rents as a reason they should get bonuses. A banker tenant compiled a spreadsheet purporting to show that he was paying top-decile rent for the area, in the hope of extracting a discount from his journalist landlady…a banker friend could only afford a second-hand Porsche — and that in a rather vulgar shade of yellow.‘ (Financial Times)

Payouts for traders in European power and gas in 2015 will average $437k, about half what they were five years ago. (Bloomberg) 

MiFID II is coming. “If I didn’t have young children, I would retire the day this comes in. It is not going to be pretty. It will undoubtedly affect liquidity.” (Financial Times) 

No more pay rises at HSBC. (WSJ) 

Start-ups are cutting staff too.  (Bloomberg)

How to sleep on a plane. (Quartz)

How to answer the question, ‘How many ways are there to arrange 128 tennis balls.’ (New Scientist) 

If you work in academia you won’t be able to afford a house. (The Times) 

Time to choose a corduroy tie? (Bloomberg) 

One young woman in banking saw her breasts drawn on top of her résumé. (NY Post) 

Be thankful you don’t work in China (QZ)

Photo credit: Levens Hall by Steve Silverman s licensed under CC BY 2.0.

 

 

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