Mutual Funds (GAMCO/PIMCO/BlackRock) vs. Hedge Funds
How does the prestige of Mario Gabelli's Asset Management Company (GAMCO), PIMCO, and BlackRock stack up against hedge funds?
In general hedge funds>>>>mutual funds but I feel as though Mario Gabelli, Bill Gross, and Larry Fink all carry weight.
1) Are these three places seen as prestigious?
2) I am interested in being an investor. Activist hedge fund could be really cool. I am a junior at a non-target and I have gotten offers/have been invited to interview at the following places/have been told via networking I will get an interview for the following internships. Which one of these internships would best set me up for the future? Summer Portfolio Analyst at PIMCO, Fixed Income Summer Analyst at BlackRock, Equity Research Summer Analyst at Gabelli (maybe working somewhat close to Gabelli-met him at a conference last year and kept in touch actually-but remember i'd be doing sell-side ER for a value investor) vs. Goldman Investment Research, GS S&T, Citi S&T, JPM S&T?
i do not have all of these offers but I want to know where the former 3 stack up. Or should I just shoot for banking?
3) I know PIMCO and BlackRock pay well-but Glassdoor Salaries says Research Analyst at GAMCO's salary ranges from 55k to 125k. 55k seems super low? a) could this be pre-bonus and b) if not should I not do this?
I'm aware I could be being a stingy douche right now in terms of pay..
Posts like this is proof that the quality of WSO has deteriorated precipitously.
It's tough to compare the "prestige" of hedge funds vs mutual funds. Depends on the fund in question and your role. Generally speaking, working for a top long-short equity/special situations/activist/distressed debt fund such as Baupost, Greenlight, Pershing Square, Paulson, York, etc., is more prestigious than working for a mutual fund simply because it's tougher to get the job. But as I said it's hard to make a sweeping statement either way. This isn't like consulting where you can categorically state that MBB is more prestigious than Deloitte.
Regarding your question, it ultimately boils down to what you want to do. If you are passionate about accounting and valuation and love doing fundamental research on stocks and learning about a company's business line, GAMCO or sellside ER makes sense while PIMCO and BlackRock do not. On the other hand, if you prefer macro products, multi-asset class research, portfolio construction, etc., then PIMCO and BlackRock make more sense. Let's say you prefer the latter and are deciding between PIMCO and say Goldman rates S&T. That's a serious decision you have to make, and in such a case I would tell you to look carefully at what each role entails. From my understanding, portfolio analyst at PIMCO is sort of glorified middle office; the name brand looks good, but you will learn more at Goldman S&T since you will get direct exposure to products and doing flow trading for major buyside clients.
if I want to go to a Third Point, Greenlight, Pershing Square at some point-then what's my best bet between Goldman Investment Research and Gabelli ER? Or would banking be better to get to those funds?
If that's your goal, a top banking group is by far your best bet. Nearly impossible to get into those funds without it.
Or for like a greenlight-why wouldnt working with gabelli be beneficial compared to IBD at MS M&A?
The fact is that elite funds hire more banking analysts than research analysts or S&T analysts; the debate over why and if it's "right" is happening elsewhere as we speak, and like attack ships burning off the shoulder of Orion, will be lost, like tears in the rain.
To your original question, allow me to paraphrase a man who like myself wears pince-nez sunglasses and alligator trench coats indoors: "What if I told you that everything you knew was wrong?"
All of those places are considered very prestigious (though Gabelli seems like a strange choice to include), but your reason for thinking they may or may not be and how it affects you is reflective of the actual underlying questions you SHOULD be asking. In fact all three of your examples perfectly frame why you're asking the wrong questions, because all three of those firms manage hedge funds as well as mutual funds (to wit, GAMCO also operates a broker-dealer and employs what would be properly termed sell-side research analysts, as you seem to be aware).
So let me make a couple of related statements/suggestions: a) I would wager that less than 10% of the posters on this board could tell me the actual differences between a hedge fund and a mutual fund and even fewer knew that PIMCO, BlackRock, and GAMCO operate hedge funds, even though all that information is easily available through the SEC and those company's websites.
b) Brand name matters to a point, but it only takes you so far. At the large, well-known fund I work for, we interview people from basically every bank you've ever heard of, but we're much more likely to interview someone from UBS equity research than Blackstone fund of funds (and more likely to interview someone from MS M&A than either).
c) Stop worrying about working for Greenlight (or anywhere else for that matter). Just put it entirely out of your mind. The top 10 names that appear on this board (setting aside some large multi-manager operations) probably employ less than 500 investment professionals under 35. You could be a Wharton grad going to an elite banking group and the odds of you working there would STILL be incredibly low. The odds of you working SOMEWHERE where you can learn to be an investor and get paid are pretty damn good.
d) As a follow-on to C, I would also recommend that other than in general terms ("I want to work in PE, I want to work in public markets, I like credit, I like equities"), you should try to spend as little time as possible thinking about your next job and as much time as possible learning and thinking about what you're actually interested in/any good at.
e) Don't worry too much about pay at this point.
Honestly, those mutual fund companies are probably great firms to work for, for 2 years, and exit to a HF after. No one will give you shits for working for PIMCO or Fidelity than moving to a hedge fund.
KP crushed this thread, good work. Very fundamental misunderstanding of what matters and what does not.
I just hope some day soon all the college kids can hop off Greenlight's D and realize there's more out there than the handful of funds people seem to care for and love so much. What do you even know about Greenlight, Pershing Square, Third Point? Any idea what the work environment is like? Any idea how difficult it is to work with Dan Loeb on a daily basis? Any idea how much of a grunt you might actually be for the guy getting headlines and even if you do happen to source a huge position, that credit is not only going to be taken from you, but the blame will be put entirely on you if it blows up? (Sorry to pick on you Shane, you deserve better, but...) Do you think the guy who did the real legwork on HLF is going to end up getting a hugely disproportionate amount of the spoils from that home run if it ever ends up working out for Ackman?
My money says all these kids asking questions like this would be a whole lot more excited about working at Glenview, Brave Warrior, Lone Pine, Viking, Chieftain, Trian, TPG-Axon, Coatue, Eton Park, Slate Path, etc. but simply by virtue of being great funds that don't need to be as loud to absolutely crush it and raise capital, the masses aren't going to fall in love with them the way they do with the usual suspects WSO loves to talk about.
P.S. I excluded Appaloosa from this list because even I can only dream of working there someday. That being said, I have no clue what it's like over there but I'd really love to touch Tepper's balls one day. (Feel free to take that out of context... maybe)
I just want to second this.It's especially something to consider when you are evaluating the offer at Gabelli. Have you talked to anyone there about what it is like? Mario Gabelli might be a really smart man and an incredibly successful investor but that doesn't make him a great boss. I've seen how he treats his analysts in public so I can only imagine how bad it must be in private. Only you can decide how you would handle getting shit every day for the next few years and obviously you can put up with a lot if you just plan on doing it for 2 years. However since you have multiple choices fit should be a consideration.
You'll notice that the undergrads here only talk about prestige. They want the most prestigious job at the most prestigious firm so their e-penis on WSO can grow a couple inches. The people who have actually worked for a few years will talk about fit and culture. It really does make a huge difference. I had a job where I traveled a ton, worked crazy hours and got shitty pay (~$55k and no bonuses) but I loved it. I worked with great people and enjoyed what I was doing. Then I got promoted, had better pay and easy hours(if I was in the office 50 hours it was a bad week) yet I was miserable. I worked with a group of idiots I couldn't stand and spending 8 hours a day with people you don't like is much harder than 12 hours a day with people you enjoy. Obviously it is hard to really know about the culture before joining an organization but there are definitely red flags you can look out for.
A fucking + post. I loled at the Tepper's balls part. Also Andreas is a straight up boss. Super nice, wicked smart, and doesn't jerk around in the media. However, I can think of a dozen more funds similar (not that your list was meant to be exhaustive) to Viking/Lone Pine where it would be more enjoyable to work and run by a manager that doesn't show up in the news everyday. Although Chase is in between, but I think that's a product of being so young?
Oops, I fucked up trying to edit my post...
FWIW, I'd give Glenn the right to name my first born son if it meant I'd get to work at Brave Warrior (for many reasons, least of which is the badass name). Same can be said for Stephen, Andreas, and probably Philippe (even though he's my least favorite Cub). Hell, I might as well throw in Chase and Lee too.
Bump
Great thread.
One comment, even among those firms you listed (coatue, etc) they're still very much brand names.
Even those you've "never heard of" can still be very legitimate, but they're tough to diligence because so few "former" associates and lack of reputation.
equity research: mutual fund vs HFs (Originally Posted: 09/07/2015)
Before posting I tried to read as much as possible on the topic (and, to this regard, there was a post from BlackHat which was incredibly useful and Comprehensive) but I still feel somewhat confused as to the real differences (PM route aside):
here I am referring to Europe (NOT the US):
1) the work on the surface does seem very similar (I mean i) in depth fundamental research on the company and ii) sensitivities to this/that/that other one iii) exposures to country / trend / etc iv) catalysts v) scenarios) so why hedge fund guys are sort of biased should they want to go to a MF later in their careers? I mean yes HFs is absolute performance whereas MFs is relative and time horizons can be different but the large bulk of skillset does overlap.
2) whereas it's true that job security may be a bit better on the MF side (true that the blowup risk is real but I doubt you'll last long you keep making mistakes), it is hard for me to imagine a strong "plus" to be on a mutual fund is job security since you are paid to be right in a front office role.
3) pay: the lack of data adjusted by skills and CVs proves this observation very easily challengeable but; "it seems that the difference, especially at junior levels, between a mid sized hedge fund and a top asset manager, seems very small"
I understand some of these might look as trivial questions for those of you who managed to break into the industry but I still cannot wrap my head around those.
bump. if the questions are that misconceived, I'd jkindly ask someone to say so and I'll move on.
MFund ER Vs. HFund ER Vs.Sellside ER (Originally Posted: 05/08/2007)
I'm really excited to have found this site. I've read some really useful threads on ER and was hoping someone could answer my questions.
First here's my b/fround...Did two years of Corp. Finance BulgeBracket IBanking in the TMT space, now with a specialized Telecom strategy and ops consulting company. Three years experience in all. I'm interested in ER and specifically in 3 positions which fit well with my experience: 1. Big MF fund family - ER Associate working with 2 Research Analysts (tech focus) 2. Telecom ER Hedge Fund 3. BBracket Technology ER Associate
Here are my questions: 1. How do the three stack up in terms of pay/ intensity/ hours...i've seen discussion on sellside vs. buyside on this but have not come across any data on HFs vs. MFs. especially on pay and hrs 2. Job security/ exit ops....My plan is to get an MBA in 2yrs. Can a MF job (since it is likely to be the least intense...and I'm definetely leaning towards MFs) position me for let's say VC/ HFunds/ PE post-MBA.
Your comments and opinions are much appreciated.
wow everything is so specific; so yea im still in HS and all i know i want 2 start in ibanking; so wat exactly is Equity Research?? is that like a division in IB like M&A and good ? about MF VS HF because i havent heard 2 many peopple talking about MFs either
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