From the category archives:


One sees the adjective happy, in daily use, in many contexts. It may characterize a feeling, causing a sense of satisfaction, a willingness to perform a task, an unexpected pleasure, a greeting, and even a description of slight intoxication.

The connotation most appropriate to describing one’s job in the hedge fund industry encompasses all these, except the last two.

Happiness Is a Universal Goal

Happiness is important, so much so, that it appears in the Declaration of Independence as one of three principal inalienable rights. After all, who doesn’t want to be happy in their chosen profession, their life and their relationships?

Unfortunately, happiness is a subjective term and, more to the point, the definition of happiness varies from one person to another, much like the idiom “one man’s trash is another man’s treasure”.

Fortunately, the 2018 Hedge Fund Compensation Report has real insights into the illusive state of happiness, and what factors are most likely to engender it, at least among hedge fund professionals.

What the Report Reveals 

As stated earlier, the concept of happiness has multiple contexts. Happiness, in terms of a feeling, is addressed in the report by asking participants how they view their work/life balance.

As we see in the chart below, 80 percent of hedge fund professionals view their feelings regarding work/life balance as average to excellent, while just one in five regard their experience as below average to poor.

This result suggests a generally positive sentiment with regard to the influence of work on familial and other interpersonal relationships.

Job Security

It is impossible to imagine that one could be happy in a job that may end at any moment. The 2018 Hedge Fund Compensation Report has polled its participants in this regard with the following results.

As the chart demonstrates, less than 10 percent of hedge professionals express serious concerns with regard to job security. While one must concede that this is not a measure of happiness, it must also be agreed that job insecurity is not a source of happiness, but rather, an impediment to said happiness.


This brings us to the “holy grail” of happiness—money! Revealed in the chart below is the fact that less than one-half, in fact, just 4 in 10 hedge fund professionals are satisfied with the level of total compensation they receive. But honestly, would you expect any other result from hedge fund professionals?

To most in the industry, satisfaction is synonymous with complacency. For this reason, we see the above result. No hedge fund investor wants to bet his financial future on a complacent firm. Investors want firms that strive to achieve the highest possible gains within the risk model to which they have agreed.

It follows that those hedge fund professionals exhibiting the will to achieve the best possible gains for their investors will also want the highest possible compensation for their efforts.

Final Thoughts

In the 2018 Hedge Fund Compensation Report there are additional charts clearly showing that the level of compensation satisfaction rises in direct proportion to the level of overall compensation, proving once again that cash is king.

However, the level of happiness one achieves as a hedge fund professional depends on how much weight one places on work/life balance, job security and, of course, compensation.


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Hedge funds begin a new year on the heels of a performance record  not matched since 2013. Gains will undoubtedly reach 8 percent or better, and assets under management stand at an all-time high.

While these statistics are inspiring, the question on the lips of the aspiring hedge fund professional is what does this mean for bonus and base pay? The best source for answers is the 2018 Hedge Fund Compensation Report.

Base Pay

According to the report, an average $0.38 of each dollar in compensation paid to hedge fund professionals came in the form of base pay, down from $0.41 last year. However, the highest earners, those earning in excess of $1 million, relied substantially less on their base pay, with only $0.17 of every dollar in total compensation coming in the form of base pay. In sharp contrast, those on the lowest rung of the earnings ladder saw base pay account for $0.76 of every dollar earned.

Bonus Pay

The principal driver for bonus pay is performance. Said performance may be defined as personal performance, fund performance, firm performance or a combination of any of the above. These variables make a direct comparison of one’s total compensation to the overall industry’s performance impossible. For this reason, one of the Hedge Fund Compensation Report segments displays results based upon fund performance.

As  we see in the breakdown above, bonus expectations for funds with positive gains increase as anticipated gains rise. The obvious exceptions are found with those working in funds that expect to break even or to experience negative gains.

Bonus expectations are lower, but, nonetheless, they are anticipating bonuses. While this result is counter-intuitive to many, one must consider the methodology by which individual firms calculate bonus pay. For example, bonuses that are based on personal performance can be paid regardless of firm or fund performance when those personal benchmarks are met or exceeded.

The takeaway from this graph is that in 2017, bonus expectations for hedge fund professionals whose funds were performing in positive territory were substantially in line with gains.

Other Factors

Only two factors affecting bonus pay and/or total compensation have been analyzed here. There are many other factors, all of which are available in detail in the 2018 Hedge fund Compensation Report. For example, such variables as firm size, fund size, working group size, method of bonus calculation, fund strategy, and equity sharing, to name a few.

What About Hedge Fund Jobs?

The uptick of overall performance, combined with growing assets under management, can only be viewed as a positive for employment opportunities. However, it is essential that hedge fund job seekers optimize their understanding of hedge fund compensation. This enables job seekers to target firms that present the highest compensation opportunities in line with their skills, experience, educational background and expectations.

At the same time, those responsible for hedge fund hiring will benefit from the report by minimizing lost recruiting opportunities. Having access to the detailed information the 2018 Hedge Fund Compensation Report provides, gives hiring managers the facts needed to make competitive job offers.

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NYC Job Seekers Need to Prepare for a Change in the Law

October 2, 2017

Have you heard? In an effort to close the wage-gap between men and women in the workplace, New York City Mayor Bill de Blasio (D) signed an amendment to the New York City Human Rights Law. This law takes effect on Halloween. Commencing October 31, no employer may inquire into the salary history of prospective […]

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Hedge Fund Numbers Shrink as Assets Under Management Soar

March 20, 2017

The suggestion that assets under management are soaring is admittedly a bit Trumpian, but the fact is that the number of hedge funds shrank to 9,803 (including funds of funds) while 2016 industry assets under management climbed to just over $3 trillion according to the HFR Market Microstructure Report. What Can Be Inferred From the […]

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What Was Under Last Year’s Tree for Hedge Fund Professionals?

January 23, 2017

For starters, around three-quarters of hedge fund professionals will not receive their bonuses until the first quarter of 2017, according to the  Hedge Fund Compensation Report, so, if there was nothing under the tree, no worries, it is coming. What Will Bonuses Look Like This Year? Although the financial media has painted a bleak picture […]

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I Got the Offer – Now What?

November 14, 2016

Everyone that breaks into the hedge fund industry asks themselves that question. The education, the experience, the network of contacts, the untold hours spent writing and re-writing resumes/CVs and cover letters, interviews – it ultimately ends with the negotiation of a compensation package. Prior to the finalization of this key hiring element all one has […]

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Equity Shares Shown to Have Declined in 2015

April 4, 2016

Equity sharing is an important variable to consider in determining the level of total compensation an individual will receive from his hedge fund firm. While equity or upside sharing is not a topic typically perceived as applicable to those just beginning a career in the hedge fund field, it ultimately becomes incredibly important to the […]

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