The Salary is less than important than the bonuses:
Hedge funds are all about making money on the market place. To motivate their employees to do that, they paid them according to their performances and the quality of their decisions. That’s the reason why bonuses represent a larger part of the entire compensation than just the salary.
The salary depends on the firm
Some company, like Renaissance Technologies, use collective bonuses. Employees get paid based on the profits of the entire firm. The idea is to promote horizontal organization and ideas sharing.
Not all managers earn millions
We’ve all heard about fortunes made in the hedge fund industry. For example, George Soros net worth is 14.2 billions dollars, John Paulson earned 5 billions in 2010. However, don’t think every job is paid the same. Soros and Paulson are also the founders of their funds that’s why they get the lion’s share. To give you an idea of what a beginner in the industry can make the average salary of a junior analyst is 300k.
Patience is rewarded
Like in every business, the more experienced the fund’s employee is the more he gets paid. However, because of the compensation structure you can start with 300k a year and 5-10 years later earning millions. Also accomplished managers can start their own hedge funds and earn a lot more. Usually, the seed capital they need to raise is a few millions. To convince investors they usually have a large personal stake in the fund. After that, they can start making millions or billions for the most successful.Mail this post