Want to make a packet as a trader? Join a hedge fund (in New York).
Proprietary traders may be hot property in investment banks, but the latest set of annual pay stats from Trader Monthly magazine suggests traders in hedge funds still get the most scorching pay packets.
A convincing 93 out of 100 traders on the magazine's ranking of the world's top-paid trading talent work for hedge funds. Most are based in the US, where each of the top 10 earners resides. But 27 of the 100 are in London, one's in Hong Kong, one's in Tokyo, and one hops between Norway and Marbella.
Pay for top hedge-fund managers has increased somewhat faster than for the population at large. It's risen nearly 120% over the last four years - to an average of 120m.
So how do you get in on this lucrative game? Hedge funds are still very keen on hiring top traders from investment banks, says Peter Elliott, director of hedge-fund-focused recruiter Emerson Chase City. "Only the very best need apply," he says. "They want a comprehensive track record, coupled with first-class academics."
In practice, this means you'll need around two to three years' experience as a trader in a bank before making the move. Elliott says credit derivatives traders are particularly sought after. Starting pay isn't exactly in the 120m league - a salary of 75k plus an uncapped bonus (which can be many multiples more) is the norm.
And do US hedgies really earn the most? Not according to Elliott and other recruiters in the sector. "Historically it was that way, but the gap's narrowing," says one headhunter. "If there was a gap, it's been closed now," confirms Elliott. "We're seeing a massive increase in the volume of US candidates looking for jobs in London."
The latest info on hedge fund pay follows a study by International Financial Services London, the UK body that promotes the City as a financial services centre. It found that the proportion of global hedge fund asset run by managers in London more than doubled between 2002 and 2006, to 21%.