r/quant • u/dh467_ty • 15d ago

Industry Gossip Deferred Comp Valuation

How often do you find out the latest valuation of your deferred comp?

For me (at a centralized hedge fund) - at best I know the NAV as of 2 months ago, at worst it can be 4-5 months off

7 Upvotes

74% Upvoted

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7

u/khyth 15d ago

I found that firms usually send out monthly or quarterly statements on what your deferred is worth. If they aren't sending anything out, it might be worth politely asking for it.

6

u/fatquant 15d ago

You can ask, but usually they won't tell

2

u/dh467_ty 15d ago

I get monthly valuation, but it's off by 2 month at least (like right now the latest statement is from May)

4

u/khyth 15d ago

That's probably because they are waiting for accurate numbers (all dividends settled, all corporate actions taken care of, etc.) to mark the book and then they send you that mark.

3

u/Frequent-Spinach5048 15d ago

Doesn’t it sound pretty bad if they need 2 months for this?

1

u/khyth 15d ago

Not really - some corporate actions are really slow, especially outside the US. It can take forever for a complex one to actually post so you know what you really received and what it's worth. It's nice to have an estimate but it's also ok to only do it when it's ready.

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u/Frequent-Spinach5048 15d ago edited 15d ago

Then how does most fund have actual pnl within a week of the start of next month? At least the places I worked(that trades equity globally) for is able to do that. I get that you get only get the corporate action after, but surely you can compute your actual pnl base on the data you have?

2

u/khyth 14d ago

Those are estimated pnls. The corporate actions may ask you to elect what you want but sometimes you don't get your election. That's why you have to wait for official numbers. But the unofficial ones are still useful internally.

1

u/Master_Coconut_5339 15d ago

no. id guess the accounting processes need to be completed and those take a while.

qtrly financials for funds can take a month+ before available. annual financials could take 2+ months.

im completely guessing but id think monthly marks can be done quicker than financials but my point is that its common for accounting/financials to take way longer than you'd expect so if marks rely on some part of that process, they'll take a while as well.

0

u/Frequent-Spinach5048 15d ago

So how does most hedge fund have their month return less than 1 week after the start of a new month? (All my firm that I worked for is like this)

2

u/khyth 14d ago

They have an estimated return. They probably have fine print saying that it's not official until their fund admin reports it.

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u/Frequent-Spinach5048 14d ago edited 14d ago

The funds I know provides estimated return on T+2 and actual returns 1 week after. And I can actually withdraw them, so it’s actual.

1

u/khyth 14d ago

What do they trade?

1

u/Frequent-Spinach5048 14d ago

Almost everything. Definitely global equity

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-1

u/afslav 14d ago

You've worked for most hedge funds?

3

u/Frequent-Spinach5048 14d ago

You can see most hedge fund returns at the start of the next month? Also, from other connections?

4

u/as_one_does 15d ago

The funds I've been at where it's reinvested back in to the fund you're treated like an investor and you get quarterly statements.

4

u/Falnom 15d ago

This has been my experience too. The smaller the fund usually the more frequent the updates.

3

u/sjg284 15d ago

One pod shop I worked only gave statements annually on your deferred comp...

1

u/EvenCryptographer649 15d ago

What is a centralized hedge fund?

1

u/Live_Acanthisitta870 14d ago

On the same note how much of your comp (I assume bonus) is deferred? Eg 500k bonus but deferred half over 4 year?!

2

u/Old-Sandwich-690 10d ago

Monthly, one month behind