Hi currently a trader at a credit hedge fund (8 yrs of work experience, 5 on buy side / VP level). Getting an offer for a bit more money and responsibility (upside as well) at a large asset manager (think Lord Abbett, Voya, etc) to trade a type of structured product (think RMBS/CMBS/CLO). My current seat allows for investing across the stack, some exposure to be able to go short a credit index, and generally a fair amount of leeway to push book in various directions. New seat at asset manager would be focused on helping manage a much larger, long-only cash bond book (also invests across the stack with more emphasis on IG-level risk). There is no upside at my current HF seat given team structure.
Question - if I were to move to the large asset manager, would it be difficult to return to the hedge fund space if I ever wanted to? My understanding is that when going AM, usually higher floor but lower ceiling vs at hedge fund can have more of a blow-out year. I can wait out other offers at other credit funds but I like the team at the large asset manager.
Based on the most helpful WSO content, transitioning from a credit hedge fund to a large asset manager and then potentially back to the hedge fund space can be challenging, but it's not impossible. Here are some considerations to keep in mind:
Skillset Transferability: Your skills as a trader in structured products are valuable and can be transferred back to the hedge fund space. However, the long-only focus at the asset manager may not align perfectly with the more varied and aggressive strategies employed by hedge funds.
Perception: There's a perception in the industry that the move from a hedge fund to asset management could signal a preference for stability over the higher-risk, higher-reward environment of hedge funds. This could be a hurdle when trying to move back, as hedge funds might question your risk appetite and fit for a more volatile environment.
Network Maintenance: Keep your hedge fund network active while working in asset management. This will be crucial if you decide to return to the hedge fund space.
Story Crafting: Be prepared to craft a compelling narrative about why you moved to asset management and why you want to return to hedge funds. Emphasize the additional responsibilities and skills you acquired.
Market Conditions: The financial market is dynamic, and the demand for certain skills can change. Keep abreast of industry trends and be ready to capitalize on them.
Performance: Demonstrate strong performance at the asset manager. Success there can help mitigate concerns about your ability to perform in the hedge fund space.
Remember, while there may be a higher floor in asset management, the ceiling in hedge funds can indeed be much higher due to performance-based compensation structures. If you're considering the move, weigh the trade-offs between stability and potential upside, and consider where you see your long-term career path leading.
Sources: ''Don't bother joining the hedge fund industry'', Ask me anything - quant/quantamental Hedge fund manager/Consultant - Everything on liquid hedge fund strategies, AM vs HF: The Business of Our Business, Q&A: Former Long/Short Research Analyst at Top HF -> VP of Growth Equities at BB, Asset Management vs Investment Banking for exit opps into value-based hedge funds
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