Competition Drives Hedge Fund Salaries Higher
Increased competition among hedge funds is driving salary and bonus packages for staffers with the right set of skills and experience.
Not only are hedge funds competing among themselves for top talent, they're lining up against private equity funds and leveraged buyout firms as well.
"Everyone wants to manage their own P&L and become a profit maker, but those kinds of people are few and far between," says Marc Wiener, a principal at the New York recruiter Mercury Partners.
"The majority of the roles I am seeking (for hedge fund clients) are senior analysts," he says, adding that, "Depending on the pedigree of the firm and/or candidates, guarantees are put into place" based on the candidate's history.
"I just placed someone who made $500,000 last year, so going in he has a $200,000 base and a $300,000 bonus guarantee, plus percentage points based on the performance of the portfolio." Wiener expects that particular placement to "make at least $800,000 this year, if not more."
Can every candidate expect that lofty level of compensation? Wiener says the premium hedge fund operators will pay usually include a high base salary - generally in the $150,000 to $250,000 range - a bonus (contingent upon the candidate's work history), and a management or appreciation fee. Those fees are usually based on a formula, as opposed to being discretionary, Weiner says.
The variables considered for a bonus usually include the candidate's experience and background, previous compensation and whether or not the candidate has an MBA and industry exposure.