Business

Hedge Fund Vs Private Equity Salaries In London

London is one of the most expensive cities in the world to live in, but if you are employed in the financial industry and can hang on for a few years, you will certainly be able to afford the high rent and expensive entertainment.

According a recent survey from salary benchmarking firm Emolument.com, young professionals in the financial industry in London can expect to earn a very good compensation. Entry-level hedge fund analysts are grossing close to £75,000 (including bonus), whereas entry-level analysts at private equity firms are only taking home around £60,000 due to smaller bonuses.

Private Equity vs Hedge Funds

Breakdown of hedge funds vs private equity salaries in London

The Emolument.com report notes that although both industries work hard to recruit high profiles in the best MBAs in the world, hedge funds are typically willing to pay a higher total compensation to entry-level analysts than private equity firms.

The survey also shows that even though bonuses are typically bigger for more senior hedge fund employees, the base salary is notably more substantial for private equity VPs, directors and managing directors.

At the most senior levels, however, it is clear that hedge fund executives make considerably more overall than their private equity counterparts. The survey notes that with an average bonus of £336,000, hedge fund MDs bring home a good bit more in total than private equity senior execs do.

Private Equity vs Hedge Funds

Statement from Emolument.com CEO

Thomas Drewry, the CEO at Emolument.com commented on the results of this year’s survey: “In the last couple of years specifically, banks have had fierce competition in retaining talent from leaving for hedge funds and private equity firms. With similar skill sets required in both environments, bankers are often confronted with a career choice as to which to pick. At least they now have a better idea of what it entails in terms of compensation throughout their career: more stable revenue profiles from Private Equity firms but higher absolute returns from Hedge Funds.”