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Hedge Fund Analysts Salaries Soar

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Jul 05 2007 12:00am EDT

Hedge Fund Analysts' Salaries Soar

Mark Malyszko of Institutional Investor says that pay at hedge funds is through the roof:

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.

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