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Typically at such companies you have to be at the very top of the hierarchy to be able to buy in and get a slice of the profits. It is very unlikely that rank a
by paxys 3y ago
Typically at such companies you have to be at the very top of the hierarchy to be able to buy in and get a slice of the profits. It is very unlikely that rank and file employees are able to participate, at least at a scale larger than, say, a Google employee buying some extra shares.
- alxhill 3y agoFor what it's worth, a friend of mine is a lawyer in a well-known hedge fund and he gets access to their funds too (funds that would not otherwise be accessible without making a substantially larger investment I believe).
- robertlagrant 3y agoIf you can afford to buy in to a company that valuable then you probably aren't a regular employee, yes.
- ethbr1 3y agoAfaik (not my field, but well-docunented) prop shops like Jane Street don't take outside money. So they're incentivized to allow as many of their employees to invest as possible.
- robertlagrant 3y agoI've no idea if they feel they need this or not. But I do know that if you want to buy a significant chunk of JS (which is the context of this) then you'll need to have a lot of money to do so.
- ethbr1 3y agoThey typical reason hedge funds set minimums (aside from regulatory restrictions) is that they don't like dealing with a ton of small investors. It's easier to deal with fewer, larger ones. In contrast, if you're a prop shop that only accepts employee money, you're already dealing with your employees. So there's no real reason for JS et al. to set large minimums, in contrast to non-prop hedge funds.
- __oh_es 3y ago$100k buy in at the hedgefund I know. Its a big figure for most but starting salaries, friends & family, and personal loans will get you there. >20% return is quite easy to justify. You're also looking at a 50%-200% annual bonus, mostly leaning to the higher end of the range. Its a very different world!
- mywittyname 3y agoI would think JS pays most of their employees well enough that the buy in can be waived, or as part of total comp that vests over some years.
- Scoundreller 3y agoBig Canadian bank I know had something like a requirement to own $450k of shares to be a board member. But they sliding scale exempted you for your first 5 years and gave you $90k in shares each year, so as long as number go up, there was no actual outlay.
- barneygale 3y ago> $100k buy in at the hedgefund I know. Its a big figure for most but starting salaries, friends & family, and personal loans will get you there. Surely this is a HN culture bubble? Very few people can borrow tens of thousands of dollars from family and friends to lend to a hedge fund. Not only would I be refused, I'd damage friendships by exposing the moral vacuum at my core.
- govg 3y agoIt has more to do with the nature of the industry and firm. If your TC yearly is all cash and exceeds 500k, asking 100k of that as buy in is not too different from being granted stock options as an outcome. They could just reduce your TC by 100k one year and replace it with equity in the pool.
- caddemon 3y agoBeing able to borrow that amount might be a bubble, but depending on the fund I don't think it would damage friendships at all. If you had access to the internal Renaissance fund for example I think your friends would be happy to get in on that.