If you're a junior in a hedge fund, you're not going to get paid on a par with the actual portfolio managers, but you'll still be paid well. As large funds increasingly hiring students straight from university, they've trying to become more appealing. And that's meant hiking pay. A new report suggests hedge fund juniors earn more than bankers and more than people in private equity.
Analysts in hedge funds bring in an average of $149k in the U.S., according to new figures from Wall Street Oasis. By comparison, analysts in investment banks earn entry-level compensation of just $102k, rising to $145k after three years.
Entry-level private equity pay comes in at $102k and increases to $146k after three years, according to comparible figures from WSO.
Nor do hedge funds simply pay the most to recent graduates: they keep on paying up all the way through. Wall Street Oasis says associates in hedge funds earn up to $242k, compared to a maximum of $179k at banks. Mid-ranking hedge fund people earn $510k, largely thanks to an average bonus of $261k.
Naturally, there's a downside. Moving into a hedge fund role is riskier than it used to be: record numbers of hedge funds have been closing and assets have been shifting to quantitative strategies.
Nonetheless, if you're a junior at least, hedge funds now need you. With banks no longer gestating proprietary traders, funds like CQS, BlueBay Asset Management, Man Group, Bridgewater Associates and D.E. Shaw all have graduate training programs of their own.
WSO's research suggested that AQR Asset Management and D.E. Shaw is the toughest hedge fund to break into, with 98% and 96% of respondents respectively saying that the firms had the hardest interview. It might be worth it, however, as D.E. Shaw also came top for employee satisfaction and second for career opportunities.
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