In 2025 the 25 best-paid hedge fund managers earned 36.6 billion dollars between them, a record. Chris Hohn of TCI Fund Management made 4.9 billion dollars on his own. In the same industry, a graduate joining Point72's analyst program starts on a base salary of 125,000 dollars.
Where a person's pay falls between the two depends on three things more than on job title: the size of the fund, whether it made money that year, and how directly a person's own decisions show up in the profit and loss.
Hedge fund pay by level in 2025
The figures below come from a compensation survey and published job postings. They cover 2025 pay before tax in the main financial centers, including New York, London, Singapore and Hong Kong, and total compensation includes the year's bonus.
| Role | Base salary | Total compensation | Source |
|---|---|---|---|
| Graduate analyst program | 125,000 | Base plus discretionary bonus | Point72 job posting |
| Analyst or associate | Not broken out | 227,000 average | eFinancialCareers survey |
| Quant researcher, new hire | 300,000 | Base plus discretionary bonus | Jane Street job posting |
| Vice president or director | Up to about 300,000 | More than 3 times the analyst average | eFinancialCareers survey |
| Senior analyst at a multi-manager fund | Up to about 300,000 | 1 to 3 million in a normal year | eFinancialCareers survey |
| Managing director | Up to about 300,000 | 2.2 million average | eFinancialCareers survey |
| Portfolio manager at a multi-manager fund | Varies | 12% to 25% of the profit they generate | eFinancialCareers survey |
The survey is the eFinancialCareers Compensation and Lifestyle Report 2026, based on about 3,000 respondents and published in August 2026. The quant figure is from a Jane Street New York posting. Jane Street is a proprietary trading firm, and it competes for the same researchers as quantitative hedge funds.
Look at the base salary column. It barely moves. Base pay rarely rises above 300,000 dollars at any level, so everything above that is bonus or a share of profits.
Where the bonus money comes from
A hedge fund's revenue is its two fees. The management fee is a percentage of assets and arrives in good and bad years. The incentive fee is a share of profits and arrives only when the fund makes money above its previous peak. In the first quarter of 2026 the industry averaged a 1.32% management fee and a 15.78% incentive fee.
Take a single-manager fund with 1 billion dollars of assets at those averages:
- A 10% gross year. The management fee brings in 13.2 million dollars. The incentive fee takes 15.78% of the remaining 86.8 million dollars of profit, another 13.7 million. Revenue is about 26.9 million dollars.
- A flat year. Revenue is the 13.2 million dollar management fee and nothing else.
- A year spent recovering a loss. Revenue is again 13.2 million dollars, because no incentive fee is paid until the fund climbs back above its high-water mark.
Rent, data, technology, lawyers, auditors and salaries come out of that revenue first. The bonus pool is what remains, split between the founders and the staff at the founder's discretion. Halve the revenue and the bonus pool can fall by far more than half, because the fixed costs stay the same.
The recovery case is common. After the 2022 losses, about a third of hedge funds were still below their high-water marks in mid-2024, including 45% of discretionary macro funds and 47% of systematic macro funds. Long/short equity funds in that position needed an average gain of 20.2% just to get back to where incentive fees resume. Our article on hedge fund fees explains how the high-water mark and hurdle rates are calculated.
How pod shops pay portfolio managers
Multi-manager funds, often called pod shops, pay by formula. Citadel, Millennium, Point72 and Balyasny split their capital among dozens or hundreds of teams. Each portfolio manager negotiates a payout, a fixed share of the profit their book generates after costs, typically between 12% and 25%.
Suppose a portfolio manager runs a 1 billion dollar allocation, makes 6% after costs, and has a 15% payout. The team's bonus pool is 9 million dollars. The portfolio manager decides how to split it, keeping most and paying analysts according to their contribution. At junior levels the split is discretionary.
The same formula works in reverse. At Millennium, a manager who loses 5% of allocated capital sees that allocation reduced, and a 7.5% loss generally means leaving. On a 1 billion dollar book, that is a 75 million dollar loss, possibly in a few weeks.
Most portfolio managers run far less than 1 billion dollars. Many are former graduate hires running sleeves of around 30 million dollars, and on a book that size even a 10% profit rarely produces a bonus above 500,000 dollars. At the other end, firms bid for proven managers with hiring packages. Millennium reportedly paid up to 100 million dollars to hire Stephen Schurr from Balyasny, where he had made about 400 million dollars of profit over two years, and other managers running strategies of a similar size have been offered packages of 50 million dollars. Packages are sized on the manager's profitability, the size of the book and the deferred bonuses they would forfeit by leaving.
Investors pay for this model through pass-through fees. Instead of a fixed management fee, many multi-manager funds charge investors their actual costs, including staff pay and bonuses, office space, recruiting and travel. In 2023, multi-strategy funds retained an average of 59% of every dollar of gross profit. Balyasny's Atlas Enhanced fund returned 15.2% gross that year and 2.8% to investors after fees. The large pay packages at these firms are funded by that gap.
What founders earn
The Rich List numbers belong to founders of very large funds. Behind Hohn came Steve Cohen of Point72 at 4 billion dollars and Israel Englander of Millennium at 3.5 billion dollars. Earnings on that scale include returns on the founders' own capital in their funds, so large personal stakes push managers up the list. Earning at least 470 million dollars was the cut-off for 2025.
A new fund with 50 million dollars at the average management fee collects 660,000 dollars a year. That has to pay a fund administrator, an auditor, lawyers, compliance, market data, trading systems and at least one or two employees before the founder takes anything. Incentive fees on a small fund are also small: a 10% net gain on 50 million dollars, at 15.78%, is about 790,000 dollars.
Closures are frequent. In 2025, 561 hedge funds launched and 287 liquidated, and 129 more closed in the first quarter of 2026 alone. Our guide to starting a hedge fund covers what a launch costs.
Quant researchers and traders
Jane Street posts a 300,000 dollar base salary for quantitative researchers in New York, before bonus. Systematic hedge funds recruit PhDs in mathematics, physics, statistics and computer science against those offers. Top quant researchers at hedge funds can make around 800,000 dollars in total compensation.
What published accounts show at Citadel and Balyasny
Hedge funds do not publish pay, but their UK entities file annual accounts at Companies House, including headcount, staff costs and profits shared among partners. The 2025 filings give some of the few audited figures in the industry.
Citadel's London entity that employs investment staff paid about 2 million dollars a head in 2025, and its administrative arm nearly 600,000 dollars a head. Both are averages across everyone in the entity. The 24 London partners shared 337 million dollars of profit, 14 million dollars each, down from 21 million dollars each in 2024. The drop followed a 29% fall in UK operating profit, which the firm put down to lower performance-based revenues. Citadel returned 10.2% in 2025, against 15.1% in 2024.
Balyasny employed 502 people across three UK entities. In the partnership that houses its portfolio managers and investment staff, pay averaged 1.53 million pounds in 2025, up from 1.46 million pounds. In its two support companies, which employ 325 people, averages were 334,000 pounds and 320,000 pounds.
Partner pay at Citadel fell by a third in a year when the firm still returned 10.2%, because performance-based revenue fell with the return.
Pay outside the investment team
Senior technologists at hedge funds can earn packages of about 700,000 dollars, and risk professionals up to 500,000 dollars. Averages at Balyasny's UK support companies, above 300,000 pounds a head, and at Citadel's administrative arm, near 600,000 dollars, give the same picture from audited accounts.
Hedge fund pay against official salary statistics
The US Bureau of Labor Statistics puts the median wage for financial and investment analysts at 102,740 dollars in May 2025, and at 124,370 dollars in the securities and investments industry. In the New York metro area the median was 128,930 dollars and the 90th percentile 225,390 dollars.
Those figures cover every analyst at every bank, insurer, corporate treasury and asset manager, and they count wages only. A hedge fund analyst's 227,000 dollar average sits around the 90th percentile of all New York analysts, and the multi-million dollar packages sit far above anything the statistics show. Until May 2025, BLS also capped its published wage percentiles at 239,200 dollars a year, so older articles quoting BLS data for top earners are working from truncated numbers.
Bonuses in 2025 and 2026
Johnson Associates, a compensation consultancy that publishes projections for the financial industry each quarter, projected hedge fund incentives for 2025 up 2.5% to more than 10% on 2024, with wide variation. Multi-strategy funds were subdued after a strong 2024, and proprietary trading firms led.
For 2026, its August projection is higher, with incentives up 5% to 15% on 2025, citing the strongest quarterly inflows to hedge funds in two decades.
How hedge fund pay is taxed in the US
Salary and bonus paid to employees are wages, taxed as ordinary income with payroll taxes withheld. The founders' share works differently. Their incentive fee is usually structured as an incentive allocation to the fund's general partner, which is a share of the partnership's income. Under section 702(b) of the tax code, that income keeps the character it had in the fund: interest and short-term gains are ordinary income, and long-term gains are taxed at capital gains rates.
Two rules limit the benefit:
- The three-year rule. Section 1061 requires a three-year holding period, instead of one year, for carried interest gains to count as long-term. A hedge fund's incentive allocation is set each year on the whole portfolio, so gains on positions held between one and three years are treated as short-term. The 2025 tax law, the One Big Beautiful Bill Act, left this rule unchanged.
- No offshore deferral. Until 2008, managers of offshore funds could defer their fees for years and let them grow untaxed inside the fund. Section 457A ended that for services performed after December 31, 2008, and required old deferrals to be brought into income by 2017.
Deferred bonuses, non-competes and garden leave
Many hedge funds pay part of each bonus later. Deferred amounts vest over time and are lost on leaving early, unless a new employer buys them out, and at some firms they are invested in the fund in the meantime. A manager with several years of unvested bonuses has a strong financial reason to stay.
Citadel now sets non-competes of at least 12 months for analysts and up to 24 months for its best-paid portfolio managers and analysts, with the length tied to pay. Rival multi-manager firms typically use 9 to 12 months for analysts. During this garden leave the employee keeps a salary and benefits but no bonus, so a two-year non-compete can cost far more than two years of base pay.
No federal ban applies. The Federal Trade Commission's 2024 rule was struck down in court, and in September 2025 the FTC voted to drop its appeals, leaving enforcement to state law.
Fund size, fund type and the other factors that set pay
- Fund size
- Larger funds collect larger management fees, which cover fixed costs sooner and leave more for bonuses in flat years.
- Fund type
- Multi-manager firms pay a formula share of profit, with fast promotion and fast exits. Single-manager funds pay at the founder's discretion, out of whatever the fees produced.
- Distance from the profit and loss
- A portfolio manager's pay is the P&L times a percentage. An analyst's is a share of a pool that the portfolio manager or founder divides.
- The year
- In a flat year or a year below the high-water mark, the incentive fee is zero and the bonus pool shrinks to what the management fee leaves after costs.
Our guide on how to become a hedge fund manager covers the routes into these jobs, and our comparison of hedge funds and mutual funds includes how pay differs at a large asset manager.
Frequently asked questions
How much does a first-year hedge fund analyst make?
Point72's 2026 to 2027 Investment Analyst Program lists a 125,000 dollar base salary in the US before a discretionary bonus. Across analysts and associates, total pay averaged 227,000 dollars in 2025 in the eFinancialCareers survey, with the bonus making up a large part of that figure and varying with the fund's results.
Why are hedge fund managers so rich?
Because they are paid a percentage of assets and a percentage of profits, and because many keep a large share of their own wealth in their funds. A founder managing 20 billion dollars at the 2026 average fees of 1.32% and 15.78% collects 264 million dollars in management fees before a single dollar of profit, then a share of every gain. The top 25 earners on Institutional Investor's Rich List made 36.6 billion dollars between them in 2025.
Is a hedge fund a good career?
It pays more than most of finance and carries more risk. Analysts and associates averaged 227,000 dollars in total pay in 2025 and managing directors 2.2 million dollars, against a 102,740 dollar median for all US financial analysts. In exchange, bonuses fall to little or nothing in a losing year, portfolio managers can lose their jobs after a 7.5% loss at firms such as Millennium, and non-competes of 12 to 24 months can keep people away from rival firms for a year or two after they leave.
Is working at a hedge fund stressful?
Usually, because pay and job security follow results measured daily. At Millennium, a portfolio manager who loses 5% of allocated capital has that capital cut, and a loss of 7.5% generally means leaving the firm. Analysts carry less direct risk, but their bonus comes from the same pool and shrinks when the fund or the team loses money.
Is it hard to get a job at a hedge fund?
Yes. Hedge funds hire in small numbers and most want two to four years of experience in investment banking, equity research or another fund first. The large multi-manager firms run structured programs for graduates, such as Point72's Academy, but places are limited. Our guide on how to become a hedge fund manager covers the usual routes in.