JAT shutting down
Thaler announced he's shutting down his fund. Any thoughts? Does this happen enough for new analysts to worry about when joining a fund?
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-If you get a job at a place like this, the fund shutting down is not the end of the world. I'm sure all of his employees will be taken care of in some form. People will need to be retained to run the family office, salaries will be paid after the fees stop rolling in the door, and there is a huge network to tap for people that want to move someplace new. -4.6% net of fees 2007-2015 seems about in line with the S&P 500. I'm guessing the TMT space has done better as a whole. -I'd be happy to walk away in my 30s with probably a 10% of what his family office will run at inception.
Makes sense Gray Fox. But surprised they only compounded at ~5% net of fees p.a.
Ehhh I dunno. I interviewed a guy a couple months ago at a fund similar to this that also recently shut down and as far as I can tell he's still looking for a job. If you are an analyst at a single PM fund like this and the PM quits, I don't think it's as much of a non-event for the analyst's career as you are making it out to be. A lot of times the PMs are out for themselves, and if they weren't paying you phenomenally well while you were an analyst there's no reason I'd think that they automatically will do so with severance. And maybe you have a really easy time getting a new job...but maybe you don't. It's a real consideration when you join a fund...enough of these 1-3bn shops have shut down in the past few years that it'd be crazy not to consider that risk.
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Ehhh I dunno. I interviewed a guy a couple months ago at a fund similar to this that also recently shut down and as far as I can tell he's still looking for a job. If you are an analyst at a single PM fund like this and the PM quits, I don't think it's as much of a non-event for the analyst's career as you are making it out to be. A lot of times the PMs are out for themselves, and if they weren't paying you phenomenally well while you were an analyst there's no reason I'd think that they automatically will do so with severance. And maybe you have a really easy time getting a new job...but maybe you don't. It's a real consideration when you join a fund...enough of these 1-3bn shops have shut down in the past few years that it'd be crazy not to consider that risk.
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I'm probably giving too much credit to the fact that JAT was started with seed money from Shumway when he gave back outside money. I agree that it can be a big event for the analysts, particularly if they aren't that senior and have a network of their own.
Question: I'm guessing PMs at multi-managers leave with some frequency. What do their analysts normally do? Leave with them to the new shop? What if the PM retires, do they stay on for a different PM?
Thanks in advance.
http://www.wsj.com/articles/jat-capital-management-returning-investor-m…
"A representative for JAT said the firm’s performance last year 'is not the reason for this decision.'"
Read into it what you will.
Ah thanks for the article. That makes a lot more sense now. For some reason I thought they were doing much better. If you work for a fund with a name like JAT but with mediocre returns, is there sort of a stigma associated if you try to go to other funds?
I'd fold up shop and just convert into a family office too. I didn't see a horrible last year, but he's down >11% so to make any real money from outside investors he has to get back to his high water mark, in the past few years the HF world has had much more regulation put in place (making it not as easy or fun with much more liability involved) and his returns haven't been spectacular. He's less than 40 and I'm assuming he's worth a few hundred million. Not a bad place to be. He can not deal with the headache and litigious nature of investors and do whatever he wants with his money. Lower his headcount and simplify his life because he wouldn't have to manage as many people while still having a large enough portfolio to have enough talent to do interesting things. And if he was really interested, he could go all cash or simpl short term liquid and safe shit and go on vacation for six months.
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