Hedge Fund Analyst Compensation Varies Wildly

Jan 26 2015 | 12:14pm ET

How much you earn as a hedge fund analyst can vary wildly—and experience is not the only determining factor, according to new research from SumZero.

The data provider drew on its 2,500-entry compensation database to determine what hedge fund analysts really make—with the caveat that the base skews toward New York-based employees, towards hedge fund employees and towards younger employees; and that the provision of information is on a voluntary basis.

Those disclaimers aside, the data, which consists of median compensation values (rather than average, which doesn't sufficiently account for outliers) for 2012-2013 provides some interesting insights.

SumZero noted that salary ranges widen as careers progress, noting that “the difference in between the 25th and 75th compensation percentiles for first year analysts is about $120,000 while at 20-25 years' experience the difference is $475,000..."

”SumZero's research also suggests there is “high variability” in compensation—especially among more experienced earners. “Some earn astronomical sums, yes. Many more are compensated in ways that mirror highly-educated professionals in other, well-paying fields.”

The data provider also found that 99th percentile earners saw their compensation grow at a far greater annual rate than did those in lower percentiles. In absolute terms, financial professionals in the 99th percentile saw their earnings grow on average by $465,000 per year, compared to $10,000 for those in the 25th percentile—and $80,000 for those in the 95th percentile.

As for fund size, SumZero found that, on an experience-adjusted basis, “earners don't make a statistically significant amount more or less based on AUM unless the fund is very small or (with less certainty) very large.

The firm also discovered that survey participants focused on secured debt make about $50,000 more than those focused on equities, although the latter still account for the “vast majority” of SumZero users.

And finally, comparing analyst median pay by city, SumZero found that although London claimed the number one spot in the list, American cities dominated with New York, Los Angeles, San Francisco, Greenwich, Boston, Washington, Atlanta and Chicago all ranking among the top 13. Hong Kong, Toronto and Singapore rounded out the list.

In Depth

Q&A: Portfolio Advisors' Brian Murphy On The Advantages of A Private Markets Platform

Jan 2 2018 | 11:05am ET

Most private markets firms reference their platforms as a source of competitive...


CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: The Top Hedge Fund Industry Trends for 2018

Jan 2 2018 | 12:22pm ET

Each year, Don Steinbrugge’s Agecroft Partners compiles the insights gained...