Hey guys, quick question on lateraling between hedge funds -- I used the search function but didn't find much, and there is too much information on the web for this subject, so I am hoping someone can help me focus my efforts.
After careful consideration, I'm ready to start looking for a new analyst role at another hedge fund after bonus season. I'm currently a senior analyst at a top L/S value fund and would like to find a similar role at a similar fund.
Profile:
- ~6 years of experience
- BA top 10 public school; CFA
- Would relocate anywhere for the right fit
So what would be the best way to make the switch excluding b-school? I've been on both sides of the hiring table and have been universally disappointed with recruiters in general. Are there recruiters that people would recommend? Are there recommended hedge-specific job boards or hedge fund communities beyond Albourne Village?
The fund I work for went through a round of hiring this year, and I was heavily involved in the process, interviewing >40 candidates with blue chip background (top UGs, top MBAs, etc.) that are around my age. Although I don't have the blue chip background, I realized I have a very legit skill set and could add a lot of value to a fund if they're willing to give me a chance despite no MBA and no Harvard / Wharton / Goldman Sachs, etc. on my resume.
The challenge is that I don't have a big network, and don't fit the "standard" hedgie profile, so I would appreciate any suggestions as to how I might make a decent lateral move (b-school is off the table). I thought about asking the PM to help me make a change, but he doesn't know I'm looking and I think he would be pissed.
Thanks.
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Generally speaking, the investing profession is a small, relationship-driven industry. As your own experience indicates, there's not necessarily a "standard" profile for success in the business, but you do have to develop your network. After 6 years, you should probably know that....
If you want to work for another fund, you're going to have to meet people at another fund first. The best way to do that if you don't know people directly is to go through someone you trust who does. Recruiters can be marginally helpful. But ideally you'd turn to a mentor or trusted colleague with a wider network of contacts. That could include colleagues at your current firm, but you should be careful as you don't want to burn bridges -- there's a good chance your PM will know whomever you end up working for next.
You sounds like you're at the point where you could have a conversation with your PM about your career prospects within your current firm. If there's not a path to your eventual advancement, maybe he would be more inclined to help you find your next gig.
Good luck!
^^^ I agree with the above.
Thanks, I didn't give as much background as I could have in order to keep the post readable. Of course it is about networking. I went to a non-target and didn't major in finance, so I have no network there. I broke into the industry, more or less accidentally and started working at a small regional sell side firm before this job -- think Roth / Baird / etc. so I don't have a large professional network either. I've done things like attend CFA seminars, etc. but those aren't that helpful. And since I work in a small finance market (non-NYC) it isn't necessarily that easy to just go out and meet people.
In terms of the PM, we have had this conversation already and he obviously wants me to stay and grow with the firm. The problem is the opportunity has materially changed over the last 12+ months, as the PM has literally stopped coming to work. Initially it was because of some family issues that he needed to take care of, but now he has just dropped off the face of the earth. He doesn't answer his phone at all and rarely responds to emails, and I see him about once a quarter. In the mean time, I'm basically running the research effort for the office, sending him new ideas and updates on stocks we own, but rarely hear anything in return. In a way it's great to have so much responsibility, but the situation sucks because I feel stranded. He knows everyone in the industry but is unlikely to place me with one of his friends because he would be SOL if I left. So I have to do it the old fashioned way, and was looking for suggestions on where to start looking in the absence of a strong network.
You honestly have a lot of bargaining power in this situation.
I would sit down with your PM, make him sit down and speak with you, and use your importance to him and the fund as a leverage for a raise. From the way it sounds, you're basically buying this guy's lunch. I would make sure that I am properly compensated.
That feeling of being stranded can probably be taken care of by making some more money. At least, in my case it would. Especially, if you're already at a top fund like you say.
Put a little pressure on the guy, get what you want and stay put.
Why do you want to leave anyway? Is it just because you feel stranded by your boss?
It's not really about the money. I guess, in one sense, it's always about the money, but for me, I want to learn and grow in this industry. I genuinely enjoy the work and want to make a solid run at having my own, hopefully highly successful, firm. The best way to learn the business is to work with other people better than yourself and benefit from their expertise. The PM here is a monster and I could learn a lot from him, but the current situation makes that nearly impossible. I see the bargaining power as well, but really, my goal is to move up the curve as fast as possible, and I assume the money will take care of itself later on down the road. I don't want to make it sound as though I am working for free... but the fact is I am not maximizing my return on time, and this is about the least fun place to work that I could possibly imagine. We have some elite quantitative systems here for stock screening and analysis, but other than that and the fact that he pays me, it's functionally no different from sitting at home teaching myself, which is lame. Since I don't see any end in sight or any reasonable way to correct the situation, it's time to leave.
One of the best pieces of advice I ever received about this industry was this: "It's impossible to break in, but once you're in, it's impossible to break out" -- i.e., once you have the skill to make money at will in the market, you can do whatever you want whenever you want. I would obviously rather get paid more than less, but any short-term increase in compensation is a rounding error compared to the value of the experience I would get working with someone who can teach me the game. I want to leave for a firm where that would happen.
This is a really interesting thread, I'm having a lot of similar thoughts/challenges at the junior analyst level right now as well. Nice to hear some thoughts from a more senior person (besides BondArb, who is always super helpful but whose experience is not necessarily directly applicable to a junior analyst at a fundamental shop).
HF Lateral Moves (Originally Posted: 01/23/2015)
Is it challenging to move around good funds even if they employ similar strategies (for example, very research intensive, bottom-up)? I've seen people move around a fair bit but was curious how difficult it can be and what are the challenges.
If you are a good analyst and know your stuff, no
After you get a few linkedin HF friends you'll see this is very common. At least 3 friends in my network have worked at 3-4 different funds in the past 2 years.
It's a small community, and a senior analyst recently got a HF job by just meeting with the PM since they know friend of friends at other funds. Reference check & discuss ideas over dinner and the guy was hired over dinner (no interview rounds). In summary, it's easy as long as you have a decent reputation and network of friends.
If anything, talent and getting a good HF analyst with prior HF experience is rare, so most funds would love to have one (a lot of HFs have trouble hiring talent, why do you think they pay headhunters so much).
Moving from small macro HF to big (Originally Posted: 05/08/2009)
Hi- After working for a BB bank for a few years, I left to co-found a small hedge fund with two partners in early 2008. We have grown it over the past year 16 months from ~2mm to our present NAV of ~$15mm, and have enjoyed fairly good returns over this turbulent period. In a better fundraising environment, I believe we would be at ~100mm by now, but such is life. Although I have enjoyed building something entrepreneurial, I do miss the collegial atmosphere and resources of a big firm, and am thinking of selling my original stake back to my partners if I can find a good seat at a top-tier macro shop.
I'm wondering - how difficult is it to move from GP at small firm to a PM at a top-20 HF? Does this happen often? Do you have to return to the research for a year or so before trading? I have a track record, but it is comingled with the fund's pnl. Would this matter? What would I need to demonstrate my capability as a trader/pm?
Any input would be appreciated. Have not tried to interview since college, so am fresh to the process these days. Thanks
Don't do it. If you've got the returns and confidence in your partners/process, you'll only kick yourself in the ass in 5 years.
You've only been at this for 16 months, and you're already at 15 mm. Sure, it's not as great as being at 100 mm. But if you've actually got the returns, in another 5 years you'll definitely be 100 mm+ or very likely in the billions.
WHy would you trade a stake in a growing hf for a mere salary in a bigger one? Partner at small is more impressive than analysts at big.
...the reason why one would make this switch is that you might be able to run more money and therefore make more at a big shop. I dont think he wants to switch to become an analyst unless i misunderstood. Problem is that right now running 15mm bucks and doing well on it isnt nearly enuff to get a deal someplace good in the current enviornment...a few years ago u'd have had a shot but now there are just way to many people out there with track records/resumes more impressive then yours. For example, all the PM's hired at the fund i work at recently either ran prop desks at well-known banks or ran money at other "big name" hedge funds. My suggestion is you keep trying to put returns on the money you have and then revisit the idea when the enviornment is better.
Seperately, as someone who works at one of the biggest macro funds in the world i will also tell you that there is no "collegial atmosphere" at any of the top shops that i have heard of. The general atmosphere is more like a shark tank then someplace where everyone gets along and "pulls on the same side of the rope". I would only leave your current situation if ur deal is financially better because I am willing to bet that your work environment will not be. In fact, the idea that one would leave a small, self-made firm to come work at a big hedge fund like Brevan, Millenium, etc. for the work environment is enough to make me chuckle...
I'm aware of one (not "top-20", however you're defining it) fund that only interviews PMs who have run $250mm+ for the last 2 years. I think you'll have a lot of difficulty finding a PM type job with your current resume, regardless of track record. Personally, I'd stay where you are.
dude your situation is super unique no one here is experienced enough to be able to predict your job prospects... anyway why would you wanna quit your fund right now if it's growing that quick during this terrible environment?
total side question, but how you get yourself paid with 16M AUM...
Besides, don't think funds of that size gets recognized.
That seems like substantial growth for that amount of time and for the period in which it was achieve. KEEP YOUR STAKE!!!!!
Moving Between Hedge Funds (Originally Posted: 05/19/2011)
How easy is it to move around between hedge funds at the junior level? For example, if you are working as a junior analyst at a fundamental large long / short equities fund in a specific industry group that has a 1 year time horizon for investments, is it possible to make the jump to another long / short fund that might have a somewhat different strategy like really long-term focused value investing? I'm just wondering how easy it is to move around between funds, or does the initial strategy and industry of the fund you first join kind of dictate / constrict your ability to move around going forward.
I'm asking because I'm wondering if staying in banking as an analyst / associate gives you the most optionality to enter hedge funds since you haven't been "influenced" by the style of a PM, or if jumping into the HF industry at the junior level in a fundamental long / short fund gives you more experience and therefore the ability to better move around between other long / short funds.
Thanks.
I'm not in the industry, but I can tell you that going from one L/S to another L/S shouldn't be a problem at all. It's the same strategy obviously, even if each fund has a special tweak to it.
I think going from L/S Equity to Macro would be much more difficult. Think about the analysis you do and how it would overlap on the junior level. Macro is much different than ss/event driven, l/s equity, etc.
It depends on the situation. Going L/S to L/S with different strategies but with similar investment processes is certainly possible and common.
Going L/S to distressed debt or credit or global macro is going to be more difficult.
Over time you will get stuck in your niche ... not necessarily a bad thing, but just choose wisely at the start.
Ability to Move Between Hedge Fund Types (Originally Posted: 10/08/2014)
In general, how much ability is there to move between hedge funds with different strategies or between strategies at a multi-strat early in one's career?
For example, is it common/possible to move from L/S equity at Citadel right out of undergrad to distressed debt at Centerbridge etc. Maybe this is too broad a question and it depends on the specific strategies, but any input would be great.
A liquid markets L/S equity fund and a distressed debt fund have almost nothing in common. Much more likely to move around between similar strategies, but people get specialized pretty quickly
Would actually like to hear more about this from others. My experience has been that it is a challenge moving to a different strat (and tbh even moving to another sector in the same strat) in a multi-strat fund. I can't imagine how much harder it must be to change strats AND funds at the same time. My fund (maybe buyside in general?) is just not huge on internal mobility the same way a big bank would be.
I'm interested in this topic as well. I got into a L/S deep value fund through mostly luck and networking but office is shutting down and so am looking to jump to another fund. The thing is I'm in Asia and most funds are pretty growth oriented / chasing the latest tech/consumer stocks, whereas our fund has a 5-7 year investment horizon and looks at stuff trading below book value, net cash, etc.
We barely do any modeling given that we think it's silly to project earnings five years out and do DCFs in Asia where it's so volatile. More asset-based valuation. Nor do we really try to understand our industries inside and out since we're generalists and don't have time to do channel checks, interview suppliers/customers, read all of the annual filings dating back five years, etc. Generally at most I'll read the latest annual report, a few sell side reports, and browse recent news articles and then do a quick 1-2 page write up and move on to the next company. But we only really invest in companies that we think are at least 50% undervalued so that even if we don't know all of the details we're still going to make money because of the large margin of safety. Strategy is deep value as our founder's grandpa used to work for Benjamin Graham.
It's great for work/life balance, partly because we have such low portfolio turnover (20% annually) and don't have to generate ideas everyday, but bad in that not many funds have this type of strategy and it might be difficult for me to jump to another fund. There are a lot of event-driven / multi-strat funds starting up in HK and will be looking to hire towards the beginning of next year. The competition looks fierce but there aren't as many IB analysts looking to jump to HFs as there are in new york, since most of them here in Asia stay in IB or go to PE instead.
I believe event driven is pretty heavy on modeling and multi strats typically have a much shorter term horizon than you're used to (just because of how aggressively they manage drawdowns, you have to be right and you have to be right NOW). You might not have enough modeling skills for event driven and might not like how much more work/stress it is at a shorter term horizon place.
You might be able to earlier on or maybe if you went to business school. But in general I agree that it's very tough for multiple reasons - 1. Different strategies require different skill sets/methods of thinking and even within the same strategy skill sets are different. I think being able to do most of everything is key here. For example: I can make three statement models but my fund generally just tries to get to what we think is true FCF.
Related to above - if you were previously doing growth why do you suddenly want to do value?
They usually want you for what you're good at not what you're interested in. If you know the financials in and out but really want to do technology good luck. They'd rather take someone who has a track record picking tech over someone who hasn't spent much time in tech before.
Work in buyside long enough and you're going to get pigeonholed. When it comes to next steps (assuming you don't like your current situation) you'll probably take 1 of 2 paths.
1) You like your pigeonhole - You will try to join a fund where you can continue to do the same thing (aka you continue to get paid for the skills you currently have/offer) but with more responsibility (maybe you want more PM responsibilities, etc.) or complementary strategies (i.e. you're long only but want to gain exposure to shorting, you're event driven but want to do some activism, you're domestic but want to invest international, move from large caps to mid caps, etc.).
2) You hate your pigeonhole - You will try to join a fund where they value your skill set (you continue to get paid) but seek a situation with a broader mandate (go from industry specialist to generalist role, move from distressed debt to deep value, etc.). Odds are the fund that hires you wants some level of exposure to the area you specialize in but run a lean operation so you'll also need to be able/willing to handle other responsibilities.
Very rarely do you go from one specialty to a completely different one, and headhunters aren't going to waste their time trying to help you transition. You could make that move (I've seen it happen) but it's a hard transition and something that tends to happen under opportunistic circumstances (previous relationships, networks, etc.). In other words, it just happens and not something you actively try to do or pursue.
holy shit the legend returns. have an sb on me. your old posts have been huge for my development curve.
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