Help us determine a fair compensation structure and non-competes for a new HF
Your feedback will be critical in determining some key points our build out of aHF. I'll be showing this to the largest owner of the GP.
TLDR：
1. What is the lead PM (design, trade, manage, research, and market) portion of a 20% performance fee for a high return/high vol but with a very attractive sharpe ratio HF? I've seen numbers such as half (50% of the total performance fee, or 10% of the excess performance for a 2&20).
2. What is the typical length of a non-compete is such a scenario, and what pay should be provided during the non-compete period?
故事：
I currently am a portfolio manager at a small asset manager (about $1B, but growing fast). We manage a few equity mutual funds (average about 4.5 stars). It's a quant/fundamental mix and there are a few PMs named on each fund (I am one of them, owner/CIO another, and one more PM). We also do some basic asset allocation strategies for some clients (I primarily built the AA process). I'm paid base + bonus I have no problems with my firm and I'm currently quite happy.
I've been here 3+ years, but I have 13 years total in some form of a PM role in asset management. Part of my background pre-joining this firm is in building/designing/trading quantitative tactical strategies. In this case it was all in long onlyETF, so it wasn't a hedge fund. Last year we had a client that had a need for such a strategy so I built something for him that fit his long only parameters.
我看到了一个企业家的机会，所以我对此大大扩展并建立了潜力HF(primarily using futures) to pitch to the owner/CIO. At a high level think various interconnected/independent risk on/off signals tied to factors, technicals, economics, some additional quant techniques etc. Arguably 100% of the design and coding was solely done by myself (technically I bounced a couple ideas around, so you can round it down to 99%). I pitched the idea last year, got good interest, but nothing imminent. After all it was just a great backtest, so it is reasonable to be skeptical. I've been running it live on 'paper' this year, and it is up around 80% YTD (this is not my long-term expectation). Regardless a month or two ago the decision was made to launch. All the paperwork/legal/ops are getting finalized. We are expecting somewhere in the $30-$50m range to start with. It will be 2% and 20%.
我的角色是设计/编码整个策略（已经完成），每天进行管理，继续研究，每天（如果需要）进行交易，并为其创建任何营销材料。其他一些铅PM（所有者/CIO，再加上另一个密钥PM）将被动地介入，请考虑公司水平的监督。如果我被公交车打击，通常仍然会自动运行（因为它是量子的），但是它们可能会损失我只能做的20％。如果我被公共汽车撞到，并且代码中的某些东西破裂了，他们真的很难修复它（但可能）。我当然会对其进行训练，但是关键人物的风险总是会在某种程度上存在。
首先，我说我在这里很高兴，我认为我们俩（我本人和所有者/CIO）都希望我们有长期的快乐业务关系。因此，这是提出公平且类似市场的事情的问题。我们只是新手HFworld.
1.因此，谈判的第一部分与赔偿有关。请记住，我已经获得了支付基础 +奖金来运行共同基金。我的研究表明，这类角色的主要对冲基金PM通常获得绩效费的50％（或2和20的总体超额绩效的10％）。我认为，那是接近市场速度加上HFdoesn't have to pay me a base (since I already get it). I recognize my research in this case could be wrong (hence why I'm posting here!).
所有者/CIO来自较低的跟踪错误/较少关键人物的共同基金世界，其中奖金更加可支配，但与绩效息息相关。无论哪种方式，对他来说似乎都很高。他的另一点是我已经在为公司“工作”（尽管我目前的职位与设计，管理，交易，营销HF没有任何关系），但现实是它已经建立了。另外，他还提供OPS，为法律和所有设立支付，并建立了初始资本的联系。所有公平点。
因此，我认为我应该签订绩效费的50％的合同（即使没有更多的工作）来管理该策略。如果我需要雇用任何帮助，他们的奖金将来自我的50％。最坏的情况将是我酌情决定的额外奖金。另一个重要的说明是我将成为GP的一部分（约5％至10％）。虽然这很好，但我对此表示感谢，但我显然正在研究总包装。
在这种非常独特的情况下，什么类型的基于绩效的补偿是公平的（忘记GP中的单位，我可以将其缩小以使其等效）？如果有人被招募来管理这样的HF，则“市场”费用是多少？
2.接下来的非竞争呢？I fully expect that I'll be expected to sign one, especially as part of the GP. I have no problems with this, provided the comp is fair. Worst case scenario would be an awful comp package plus a long non-compete, but as I said before I do think we want to come up with something fair and market like. What is the typical length of a non-compete? During the non-compete period does the firm typically pay the (former) employee? If so, how much? Is there any relationship between the length of the non-compete and the compensation package?
我确实计划向他展示此主题的答复，因为我认为我们想要一些公平的东西，但是我们对新人的了解使他感到困扰HFworld. So your responses can be quite critical in us coming to a fair agreement.
Comments (22)
稍后可能会带来更多详细的响应，但要把一切都带到一粒盐。无法对Lead PM部分发表评论，因为这超出了我的薪水等级，但是在非竞争中，您会看到很多半年交易。认为1年将是残酷和不寻常的，Bwater在巨大的末端击中了2年。通常基本工资是在非竞争中支付的，但有些HFShave been skimping on this if the employee who leaves double dips. so for junior person base of 100-175k depending on seniority is my guess
谢谢回复！
关于非竞争期限的大量信息以及基本工资的支付。
主题评论在这里，但有人知道吗de shaw的长度Non competes (for fundamental group)?
I'm not a tax advisor. Lot to reply to there but I don't know you well enough to opine fully.
我会给您的一件是通过在GP中的投票所有权来获得您的薪水。应该征收优势，使他们更难引导您。
您还应该就拥有该策略的权利进行谈判，或者至少要离开代码副本。
Otherwise you're in a position where they let you build it, grow it and cut you out.
I am sure they are great people. But when the income stream is tens or hundreds of millions (assuming this scales), people behave differently.
All great points. Thanks. Worst case scenario is exactly what you mentioned, especially given it is a quantitative strategy. In fact, this is what is already working against me.
What you mentioned is kind of part of the the owner/CIOs point, I was an employee of the firm when I built it, therefore technically it is the firm's IP. The reality is I've seen people leave many firms and effectively 'recreate' what they had previously (even if there were some protections in place). No matter what they can't own your brain. Obviously I couldn't straight up take the code, but I could recreate, rebuild, and enhance if it came to me doing it on my own or joining another firm. A non-compete is a bigger roadblock IMO. Of course I hope (and I don't think it will) come to that.
Also agree how money can corrupt, which is why it is extra important for me to get this ironed out right now.
Can you expand a bit more on taking pay via GP? At most I'd picture myself with 10% ownership in the GP. Obviously I think themarket valueof what I've done is worth a lot more than 10% of the carry. Could I potentially get more of the carry than what my ownership stake is via the GP?
I was picture a scenario where I would get 40% of the carry as an employee, then split the remaining 60% through the GP (for which I'd get 6% of). Ignoring costs for now. Is it possible to get the full amount straight through the GP?
不是税务顾问。
W2 income is taxed as ordinary income. Carried interest taxed at LTCG.
说基金管理100毫米和智慧提出30%的回报h a 20% incentive to keep it simple. 6mm of revenue to the GP. If you want to capture 50% of that, own 50% of the GP - you get better tax treatment, actually own an asset, etc.
如果您以2毫米的费用我们 - 即收入的1/3作为W2收入，并留下4毫米的GP（您拥有25％的GP），那么您会更糟的是，他们可以解雇您，而您损失了2/3您的上升空间，等等
Not in theHFspace so no clue but curious, if you coded the complete strategy and completely unique to you why would you not toss something in the code to essentially self destruct it if you chose if the firm decided to fuck you over in some way
老实说，我永远不会那样做。如果我最终被剪掉或没有得到公平的摇动，我最终将不得不继续前进。他们将有代码可以做他们想做的任何事情。但是，如果Dev离开Lead Dev，任何做认真的DD的投资者都会有一个危险信号。另外，他们将失去许多正在进行的工作，但我永远不会做一些恶意的事情。实际上这可能是反对的CFAethics (as well as some laws). lol.
Length of non compete is often related to how large and profitable the business is or what your comp is. So if their platform/cap intro allows you to get scale, it should be more expensive for you to spin out than if it doesn't.
另一个因素是是多么容易火you/renegotiate comp. If your equity is less secure, point for point, you need more of it.
Thanks for the reply. Certainly makes sense how they are interrelated.
在Comp方面，假设没有公平性（我可以扩大规模），我应该从中获得多少绩效费的市场价值？像一半？
在这种情况下，您认为什么公平？我承认可能低于市场，但我不确定
Since I started my fund independently I don't have good data on this unfortunately.
我将确保探索任何可能发生交叉销售的领域，或者要提前与同一客户发生冲突，因为我看到在这些情况下变得棘手。
Some data points to consider:
I would try and solve for 20 - 30% of theeconomicshere - ideally you have created unique IP that is accretive to the fund brand, but launching on an established platform is significantly easier than starting fresh. New funds tend to run cash-negative for the first 1-2 years unless they are superstars; after paying for rent and Bloombergs you're in a financial hole.
GP和Perf之间的混合通常是个人选择 - 倾向于GP。这是一个有利可图的，稳定的收入基础。高的策略唐'总是一年四季的表现。尝试获得有关终止的一些阻止或投票权，有趣的事情总是会发生。
For non-competes, 1 year is standard and 2 years is the long end. Typically you are paid a base which would reflect a below-average year but keeps the lights on ($150 - 250k).
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出于兴趣，在资历谱系下端竞选PM的开始AUM或预期的每日风险将是什么？
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如果来自P72的几个“量化”伙伴有一个6-8个月的非竞争者，因为它值得在基本工资中获得全额资金
是的，6到12个月似乎是标准范围，但肯定听到了> 1年的范围。
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