13 Comment(s)

1. On Apr 9, 2007, bsd said:

   no way those carry payments are per annum - at least not for the non-partners.

2. On Apr 10, 2007, IB Analyst said:

   What are people hearing for 2007 analyst bonuses?

   I’m hearing numbers as high as 105K, 125K, 155K for top-ranked 1st, 2nd and 3rd year analysts. Personally, that seems pretty high since last year was 80K, 100K, 120K here.

   Any reasonable estimates?

3. On Apr 10, 2007, gg said:

   i wonder what they’re defining as senior associate. none of my PE friends are making 1-4M in performance fees and they are 2 years post-mba. maybe they just suck.

4. On Apr 10, 2007, josh said:

   bsd,
   dont h8

5. On Apr 11, 2007, bsd said:

   certainly not hating. take your typical 2.0 B fund, assume a gross 2.5x return (easy top quartile). 20% of the 3.0B profit = $600M. Assume this is spread over a 10 yr term (its not, but im annualizing this for comparative purposes) and you have $60M of carry / annum for the entire GP. i know for a fact that your typical sr assoc (who has maybe 0.75% of the carry if he is lucky) is not pulling down 1 - 4mm / yr. do the math bro!

6. On Apr 12, 2007, jack meoff said:

   I don’t know much about PE fund comp, but i can share my hedge fund experience based on the above example…

   A 3rd or 4th year senior associate (that’s 3-4 years out of bschool) who performed well (i.e contributed to the P/L) at a hedge fund that had $60M bonus pool — and say 15-20 investment professionals for 2B AUM — should have total comp close to $1M. potentially more depending on the P/L he generated.

   That’s not outlandish since a bulge bracket banker with equivalent experience, who performed well, should be pulling in $450-$650k. A 2x risk premium is not unreasonable.

   the above graph suggested $1.4-4.4M, which seems high. that’s more like VP or SVP level.

7. On Apr 14, 2007, meandjoemoomoo said:

   as a former pe senior associate at a very top tier firm and now a senior analysts at a hedge fund, those senior associate numbers are high but don’t forget about the illiquidity issue: PV(2-4mm) + 400k cash comp is far and away less than the 1mm +/- cash in your hand at FYE Dec 31,200x. I was unfortunate enough to take a knee capping to get access to my carried piece as i was leaving PE never to return. HF comp at the non partner level is far superior to PE at similiar level. that said,the risk profile is completely different. while i used to lunch fairly leisurely and travel a bit, i now just work my balls off from 6:30am to 7pm m-f and if i don’t perform now, i am out of a job.

8. On Apr 16, 2007, yo said:

   you’re working harder at a hedge fund than you did at PE? interesting, i would have though it was the reverse.

9. On Apr 19, 2007, blingbling said:

   http://www.portfolio.com/views/blogs/daily-brief/2007/04/18/boom-times-for-analyst-bonuses

10. On Apr 23, 2007, SleepyHedgie said:

    jack meoff’s numbers for the hedge fund world look pretty accurate, someone 3-4 years out of bschool at a big or fairly big and well performing fund would be pushing the 1mm mark if they were a core part of the investment team. Those bonuses at that level are still pretty few and far between. The media always gets the numbers wrong, usually exaggerate way more than reality. Virtually everyone I know is an i-banker, hedgie, or in PE. Most at top brand places, most doing better than the rest of their “class” and still they are making less than those numbers. If you go by that list pretty much anyone in their early 30s and definitely mid-30s would be making well above a 1mm and that just isn’t true.

11. On Apr 25, 2007, meandjoemoomoo said:

    definitely worked more in PE bc of travel but the hours of the day mean more in hedge world. faster decisions, more of your scrotum on the table, as it were (and it was)

12. On Jun 4, 2007, ProneToStrike said:

    jackmeoff those numbers you state are pretty high. Unless you’re at one of the few funds that doesn’t need to market the fee structure isn’t as simple as 2 and 20. That may be the standard fee but typically for your larger investors you give a considerable fee break. The largest hedge fund investors as a policy don’t pay 2 and 20, a lot of them will only pay 1% mgmt and 10-20% perf over a hurdle. For a 2bn hedge fund that grosses 20% (assume the fund was 2bn avg for the year) under a standard 2 and 20 formula the gross fees would be $40MM mgmt + $80mm perf = $120MM. But in reality, and I see the real fees for a ton of funds (I work for a fund administrator) there would be a lot of fee break which would reduce that number by at least 1/3rd if not more. So saying $80MM gross is probably more accurate. Then the operating costs for a fund are big than most people expect, a single piece of software can cost several hundred thousand per year. Since most funds I deal with are around $1bn with $10mm in operating costs I think it’s fair to say around $20mm of costs for the 2bn fund. That brings net revenue down to $60MM. Most of that goes to the top guy(s) who own the firm. Bonuses are on average 20-40% of the net so up to $12-$24MM to be split up for bonuses.

13. On Oct 28, 2007, Matt said:

    Wow PE guys make a lot of $.

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