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Private Equity vs. Venture Capital vs. Hedge Funds: Which Pays Better?

Nimble structures, better hours, less political, more personal impact.. Whatever your motivations, moving from a large institution to a hedge / private equity fund is a move which needs careful planning and consideration. We look at compensation across the sector, and comes across a few surprises along the way.

If you are starting out, pick Private Equity or Venture Capital

Private Equity/VC, firms pay better that hedge funds at all levels but the gap is especially noticeable at Analyst and Associate level, with as much as a 30% pay on hedge fund professionals.

A good spot to start a career, and clearly a good idea to stick with it, compensation in Private Equity firms takes a leap forward at VP and Director levels, as it does for hedge fund employees, to a lesser degree.

Private Equity and Venture Capital: also a sweetspot for senior executives

With a USD 110,000 differential to hedge funds, on average at Director level, Private Equity come up trumps once again for its senior employees. And this does not even take into account carried interest and co-investments which are an extra element of pay available to more senior PE/VC professionals.

But it is not all sweetness and light, with a more demanding work load at PE/VC firms. Staff tend to work longer hours on a similar basis to Advisory and M&A professionals, while hedge fund employees are generally tied to market hours, as they usually invest in more liquid, tradeable securities.

The hedge fund industry has tended to attract a lot of publicity for the financial rewards obtained by a minority of very senior level staff. It is perhaps surprising therefore to find that the lower-profile Private Equity and Venture Capital industry can offer even better financial rewards, and at the more junior entry level positions too.



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