Some First-Year Hedge Funders Would Top The Best Paid Jobs List
American Apparel CEO Paula Schneider earned $600,000 for reforming the beleaguered retailer in 2015.
But consider this comparison.
A first-year hedge funder working as a modeler or researcher earned anything between $125,000 to $643,000 a year in base salary plus bonuses in 2015—with the higher end of the spectrum matching the Schneider’s base pay. The amount they earn depends on the size of the hedge fund, the employee’s performance, and the fund’s performance—which varies from year to year.
Granted, Schneider’s base pay is just a fraction of her total compensation, which will be tabulated later this year. The total will depend on her performance in 2015. She has the opportunity to earn a $100,000 bonus if her performance is satisfactory, along with other incentives totaling 50% to 75% of her base pay, the Wall Street Journal reported.
Base salaries for a first-year hedge funder can range from $80,000 at a low-performing hedge fund, small hedge fund, those with $500 million under management or less, to $250,000 at a top-performing, large hedge fund, which has $500 million or more under management.
Those numbers also beats out the pay for many investment banking positions—which is famously known for it’s top pay.
The lowest average first-year hedge funder’s base salary is comparable to the average base salary of a investment banking analyst: $80,000. The highest hedge funder’s base pay average also compares to the $250,000 earned by directors in investment banks, according to salary benchmarking website, emoulument.com. That position takes about nine or more years to achieve.
On top of base salaries, hedge funders also receive a hefty bonus ranging form $45,000 at a small, low performing hedge fund to $393,000 at a large, top-performing hedge fund. In general, larger hedge funds pay the most.
In contrast, two of America’s best paying jobs, anesthesiologist, jobs numbers one and five on the list of best paying jobs according to the Bureau of Labor Statistics, reap in a cool $246,320 and $201,030 respectively in 2014.
The rumor on the street used to be that hedge funds only pulled recruits from investment banks—but that’s not the case any more. Increasingly, hedge funds are flagging down hires straight out of college in the hopes of training them from scratch, and molding them to the culture. Look to Steven Cohen’s Point72 Academy.
But the hedge fund space has had a rough year, with industry-wide losses extending from 2015 into January, according to Hedge Fund Research. Several hedge funds have also liquidated, though hiring is still happening.