Mark Malyszko of Institutional Investor says that pay at hedge funds is through
A senior analyst with three to four years experience at an investment bank
can earn an average $1 million – $1.5 million at a hedge fund, compared with
an average across various sectors of $800,000-$850,000 at a Wall Street firm…
A senior hedge fund analyst with three to six years of investing experience
in the distressed debt sector can receive up to $2 million a year.
I have a feeling this is not going to last. Right now, everybody agrees that
there are too many hedge funds. As a result, they’re all chasing analysts in
a desperate search for ideas and alpha. But most of the smaller funds will fail
– not because they implode, but rather just because they can’t provide
the risk-adjusted returns that investors are looking for, and what investors
they do have will withdraw their funds. When that happens, hedge-fund salaries
are likely to come back down.
For the time being, however, this seems like a once-in-a-lifetime opportunity
to make a vast amount of money quickly. As blogger Under
the Counter says,
Would you rather work at a bureaucratic bank with over draconian compliance
issues pulling down 800k, or a freewheeling shop where they give you the ball
and pay you twice as much?
That is a no-brainer.
Especially if you know you can always return to the bank if and when things
don’t work out at the fund.