More than ten years ago, to be a hedge fund manager didn’t necessarily imply that you attended an Ivy school or that you cut your teeth in banking. Quite often, managers of the near past simply found a niche and became really good at exploiting their market; just look at Ken Griffen, David Tepper, and Ken Fisher as a few examples.
However, as the Hedge Fund industry has started to mature, a much more cookie cutter “path” to becoming a hedge fund manager has emerged which often involves some time in banking followed by an MBA.
But does this recruiting model produce the best hedge fund analysts and to-be hedge fund managers?
To be a good hedge manager, you need to be extremely versatile and creative – two things that are beaten out of you during banking and B-School. After being accepted to HBS, Paul Tudor Jones said that it would be “crazy because for what I am doing here, they are not going to teach me anything. This skill set is not something that they teach in business school!”
More importantly, you need access to capital and credibility. Just because you have outperformed the market for fifteen consecutive years on your e-trade account, doesn’t mean that you can become a full-time money manager.
One needs to look no further than legendary manager Julian Robertson to find examples of successfully trained hedge fund managers. Robertson is known to have spun off more than 35 hedge funds, known as tiger cubs, several of which went on to become vastly successful.
Before seeding funds, Roberson puts potential managers through a series of tests to determine their honesty, intelligence, and competitiveness. Once seeded, tiger cubs receive office space, back-office support, and on-going mentorship. So has Julian cracked the code in terms of identifying hedge fund talent? Roberson says that the two most important factors are honestly and ability to get along with other equally intelligent and competitive people.
So, there may in fact be a valid way to learn the tricks of the trade, but with all the plagiarism and senseless work that goes on at banks, it is hard to stand firm behind this model.
On the other hand, banking does tend to attract some of the most intelligent and competitive people who prove that they can also work hard. Most importantly though is that there is really no better alternative to finding top talent.
If you were a hedge fund manager, how would you recruit new hedge fund analysts? Do you think you would be able to teach them to be hedge fund managers?
No, this isn't the only way or necessarily the best way. It is the way things are.
I don't think banking necessarily produces the best hedge fund managers, but it provides a good talent pool from which to recruit from, and you know what you're getting in terms of modeling knowledge and how to value a business. It's not like that's all you need to be a successful manager, but it's a great foundation if you're trying to train someone on how to be a great analyst.
Hard Work ! Intelligence ! Team Work !
Haven't you read the guide to becoming a super HF manager?
Anyone can be anything they want to be. Sometimes.
this article is better than the last one op wrote
a career in bloomberg may be a great fit
All the white kids who can't play sports wanna be HF managers nowadays...
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