Hedge fund CEO paying interns $25k a month says he was paid nothing for his first year

52-year-old Dmitry Balynasy, the founder of multistrategy hedge fund Balyasny Asset Management, is a wealthy man. A Google search suggests he is a billionaire. And yet, he has never earned a salary.

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Speaking to David Rubenstein, Balyasny said yesterday that throughout his career he has effectively been paid on commission. This included when he was starting out as a trader.

Balyasny's first job in hedge funds involved training with Schonfeld, the equities-focused hedge fund that last year was nearly subsumed by Millennium. It was 1994 and at that time, Balyasny said Schonfeld only paid a percentage of PnL and no salary. Unfortunately, he didn't generate any PnL for a year and so earned nothing, despite having a wife and child. "It was a tough period," he acknowledged.

Balyasny also had a tough childhood. He moved with his parents (a university professor and an engineer) from Kyiv to Chicago aged seven, and in the year before they moved they had no income because the Soviet regime prevented people requesting to emigrate from working. When he arrived in the US, none of his family spoke English. Balyasny was a door-to-door salesman from the age of 12-13.

At Schonfeld, he worked his way up and started earning money based on his profits. Balyasny Asset Management was founded by Dmitry, and seeded by Schonfeld, in 2001. 

He told Rubenstein that being a trader isn't easy as you get older: "Ever decade it gets harder and harder." Being the CEO of a hedge fund has more longevity.

Balyasny Asset Management manages $20bn in AUM and employs 2,000 staff, which is around 150 more than it had at the end of last year. Balyasny says it currently has 170 teams, each working on a different strategy: “We try to put together lots of uncorrelated P&L streams run by different specialist teams." It has 20 partners who help spread the management load and Dmitry said he expects there to be "many more" by the time he's 20 years older. 

If you want to do well as a trader, Balyasny says you need to avoid simply chasing returns. It's about diversification, being cognisant of leverage and making money in all contexts. 

Balyasny Asset Management has 150 interns this year. Dmitry says investing is hard: if you want to go into the industry just for money, you're doing it wrong. You need to be trading in your spare time even if you don't make money. Fortunately, though, BAM doesn't only pay its interns on commission. They receive salaries too: the highest BAM interns get $25k a month, plus a $25k signing bonus. 

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