$100k/yr for analyst working from some small town in Pennsylvania or even Albany and talking via Skype and sending reports via e-mail or scan. Works just fine and sturdy. If needed, he/she can always take a short flight for some presentation to clients or paperwork etc.
Unlike the mythical world of ET where people manage to make millions after reading some books on technical analysis, an analyst (quant or fundamental) is formed primarily by his experience. Education and talent help too, but it's the years of industry experience that make or break you (especially for fundamental analysts). People with experience are usually found in places where that experience comes from - the sell-side institutions (aka banks) or other funds. That's why nobody goes recruiting stock analysts in St. Paul, MN or Albany, NY.
There are, indeed, people at hedge funds who work remotely most of the time. Those people make the same salary as they would if they worked in the office.
While I am not a long/short PM, I know a little about that business. Analysts are definitely not making 100/year - most of them come from the sell-side and have years of experience. Maybe we are talking about some junior monkeys? Not sure.
$1M per year is more than enough to run a decent HF shop.
As I said, that's not true. Between legal, admin fees, office space, compliance officer (even if you outsource it) and other crap, that million dollars will not go very far.
@truetype would have a better handle on the numbers, I merely work for a fund and have never ran a fund myself
Just get to the point, the real challenge of HF business is a) to raise AUM b) perform with numbers.
Indeed. However, expenses matter more than people think. It adds up quickly. I get charged 100+k a year for "compliance services", and that's considering that I share that with some 30 other PMs.
PS. I am hoping that you don't think I am being condescending - I simply happen to work in this business in a reasonably senior role
That's fine, you can believe whatever you want.
