Worst Paying Investment Banks for Future Hedge Fund Managers

Yesterday we told you about a hedge fund study by Nicolas A. Papageorgiou, Jerry T. Parwada, and Kian M. Tan. They analyzed the relationship between hedge fund managers’ performance and the places where they previously worked. Below we presented a summary table showing the list of firms where hedge fund managers used to work. Here is a brief description of the table:

The sample consists of hedge funds listed in HFR and Lipper TASS during the period 1994 to 2009. We traced the last employer of each hedge fund whose managers are identified based primarily on biographies listed in the BarclayHedge Hedge Fund Directory. Panel A lists all firms that produced more than five individuals who went on to manage hedge funds in the sample period 1994 to 2009.


Hedge fund managers may decide to launch their own fund if they believe their pay/responsibilities don’t match their skills. Billionaire hedge fund manager David Tepper used to work at Goldman Sachs and started his own fund after being passed over for partner not once but twice. So we believe our list shows the worst paying investment banks for future hedge fund managers. One might argue that these are fine institutions with strong training programs that can produce future hedge fund managers. That still doesn’t change the fact that they underpaid these future hedge fund managers. Deutsche Bank and Merrill Lynch is at the top of our list. Here is the rest: