Hedge Fund Traders Wall Street
Hedge Funds Attract Billion Dollar Traders from Wall Street
Wall Street's top firms used to have little difficulty retaining top traders but now the inevitability that the best traders would call Morgan Stanley or Barclay's home is being challenged. Hedge funds are offering competitive, often superior compensation packages to the top billion dollar traders in order to lure them off traditional Wall Street. Unlike many investment banks, hedge funds are not restricted in their compensation and bonuses and are taking full advantage of this disparity with highly lucrative offers.
Hedge funds are offering managing director-level traders salaries of about $200,000 to $250,000, said Michael Karp, managing partner at New York executive recruiter Options Group. Some of the largest hedge funds may pay bonuses of as much as 12 percent of traders’ profits, or an even bigger percentage of their earnings after the firm takes a 2 percent cut, according to Options Group.
Unlike the banks, the funds typically pay 50 percent or more of bonuses to their highest earners in cash, according to New York-based compensation consulting firm Johnson Associates Inc. The rest may be locked up in funds the firms manage.
“It’s a buyer’s market” for the hedge funds, Karp said. “People are figuring out how to trade in this new world.”
Silvetz’s departure from Deutsche Bank followed those of Prakash Narayanan and Thomas Curran, who together made more than $1 billion for Germany’s biggest bank in 2009 and 2010, the people with direct knowledge of the situation said. Silvetz, Narayanan and Curran declined to comment. Source
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