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Salary of a Hedge Fund Analyst

Salary of a Hedge Fund Analyst thumbnail
Most hedge fund analysts also earn annual bonuses, depending on their performance.

The salary of a hedge fund analyst can range between $40,000 to over a million dollars, depending on factors like qualifications, success of investment strategy and coverage, experience and the hedge fund the analyst works for. The average salary of a hedge fund analyst is around $70,000 as of 2008, according to The Bureau of Labor Statistics (BLS). Many hedge fund analysts are also referred to as portfolio managers as they move into more senior level positions.

  1. Qualifications

    • Qualifications of hedge fund analysts impact salary because the job is based upon analysis of the market, economics, risk management, knowledge of financial instruments and statistics, according to the BLS. Hedge fund analysts are also called buy side analysts. Their job is to come up with an investment strategy that will maximize an investor's return on the money he puts into the hedge fund. A hedge fund analyst must have a bachelor's degree and often a master's degree in business administration. In addition, hedge fund analysts may decide to be licensed by The Financial Industry Regulatory Authority (FINRA) or Chartered Financial Analyst (CFA) designation. CFAs can earn between $60,000 to $90,000, according to CFA Careers. An MBA can earn an analyst more. According to CNNMoney.com, in 2010 a Wharton MBA started a hedge fund job in London with a base salary of $420,000.

    Experience

    • Years of experience also play a large factor in a hedge fund analyst's salary. According to an article by Institutional Investor News, a senior analyst at a hedge fund with three to six years of experience can earn up to $2 million a year. The reason is that hedge fund managers often develop better strategies for investing money over time. On average, junior hedge fund analysts earn $266,000 a year, while senior analysts earn about $750,000 a year, according to a survey by Institutional Investor News. A low salary for a junior hedge fund analyst is about $88,000 and a low salary for a senior hedge fund manager is $178,000, according to Careers-in-Finance.

    Coverage

    • The more successful the hedge fund analyst's investment strategy is, the more he will be compensated for it because he is contributing to the overall success of the hedge fund. The analysts that cover the most unpredictable areas to invest in, mergers and acquisitions or corporate finance, can earn more than analysts that cover other sectors because of the demand for good investment managers in these areas, according to Institutional Investor News. Hedge fund managers that specialize in areas such as distressed debt can also earn more.

    Company

    • The salary range will also depend on which hedge fund an analyst works for, according to Mergers and Inquisitions. Many hedge fund analysts are poached from investment banks, where the pay is less. Depending on which hedge fund they choose to work for, they could make from $200,000 to over $8 million in salary and bonus during a year, according to Careers-In-Finance.

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