Why are there buyside (hf) on the west coast?
This may be a dumb question, but I still hope someone can shed some light .
I have noticed there are more buyside shops on the west coast than expected: VC in the Bay Area, PE in Hollywood, PIMCO in Newport Beach, and some other hf. I know VC is there for the tech industry. PE is in Hollywood for entertainment business.
But I never really understood why PIMCO and hf located there in the first place.
It's in a different time zone and 3000 miles away from NYC, Chicago, and London.
What advantages am I missing? The weather LOL
Anyway, I want to know your opinion.
Cheers.
Not a stupid qns but one of which theres no real, definite answers.
Usually funds sprout up where there are a cluster of related communities. West coast is one major one just like why are there funds in Fort Worth etc.
Maybe the founder likes it out there...?
Why is PIMCO near the beach, why is Bridgewater in the middle of the woods, why do people working in Stamford reverse commute from NYC...all fascinating questions
A lot of people don't want to be located near the Wall Street group think. Given telecommunications, there is little or no need to be located in NYC.
Buy side firms exist in every major city on the West Coast but are primarily located in the Bay Area and LA. Most of the funds outside of those cities are fairly small / nichey.
Disagree that there is "no need" to be located in NYC as a fund. LPs from all over the country make regular trips to NYC to meet with funds and most investment bankers and corporate lawyers are still based in New York. It's easier to maintain relationships with these contacts when you can ping any one of them at any time for drinks in midtown. Yes, the buyside is still very much a relationship-driven business...and it's like they say, long distance ones just don't work.
And a fund that invests primarily in tech (VC, HF, even some PE [e.g. Silver Lake]) would be best served being in the Bay Area, or one that invests in entertainment / media in LA, or gaming (as in casinos, not ATVI / EA) in Vegas... Per Ravenous' comment, the LPs will come to you, or if you need be, you can occassionally go to them.
The only thing that is a little bizarre to me are hedge funds on the West Coast. Those mornings must be killer.
Its all relative. Think about west coast s&t hours. Sure your getting into the office at 430 am which is a grind but your off at the latest by 430 or 5pm. That's ample time to workout, eat dinner and get things done at home before doing it all over again the next day.
Except, you have to hit the sack by around 8-9pm in order to wake up at 4am the next day. Which, even if you get off at 5 pm, provides only a few hours of free time. Personally, the hours are painful because i'm not much of a morning person but it's definitely doable after adjustment.
Frankly, people who have lived here all their lives just want to stay and enjoy the bay area. That's the simple answer to it.
I'm not sure how it works for PE firms but domestic public market investors based on the West Coast have the most brutal hours... jesus.
Yeah the hours are not for the faint of heart. Only the hardcore survive on the West Coast, none of that pansy shit you guys in New York try to pull :D
LPs are lame dude, working for people so wealthy they can support their own fund structure strictly on their private capital is the NKI
But seriously, if your track record is good, LPs will be dying to meet you regardless of where you are.
If your track record is good, LPs will be willing to meet you, assuming they have the time / are interested in your sector.
You're right. LPs are like, woahhh, look at these guys, they have proven they have the rare ability to consistently make money in the capital markets with low risk and they're actually raising capital right now. Should we go meet them? Nahhh, they're way out in Cali, who works out out of Cali? Let's invest in a worse performing fund instead because Cali is too far away!!!
Yeah, that sounds logical.
If your LPs are forcing you to bend over backwards to work with them, you're probably not adding a lot of value. Think about it.
Fair point
We have offices in both NYC and West Coast. Sometimes I'm jealous I'm not over there chilling on a beach during the trading day or something. Or is that unrealistic?
I think CapRe started in California because the founder cashed out in 1929 and wanted to get away from Wall Street. That's probably part of the rationale for a lot of traditional AM shops.
A lot of HY/debt funds are in LA because their founders worked at Drexel with Milken.
PE in LA has nothing to do with hollywood / entertainment, nor are PE shops even located in Hollywood.
They exist out here for 2 primary reasons. First the guys running the shops want to be in LA, or in the case of PIMCO, Newport. Second there are tons of west coast companies in the middle market that can support PE deal flow. As far and HFs are concerned, its probably just because where people want to live. Its not a strategic value proposition just a lifestyle choice, or as you put it the weather. No joke. Not sure why this is such a difficult concept to understand.
PIMCO was part of pacific life insurance company located in newport beach. paclife created PIMCO which initially managed paclife's employee retirement fund. thats why its there. one of bill gross's first few jobs was managing treasury coupons stored in paclife's vault in los angeles (before paclife moved its office to newport beach). and PIMCO started with just 3 guys including gross
+1
yup beat me to it. PIMCO started as a subsidiary of Pacific Life and was spun off and eventually sold to Allianz. i know this because i did my summer intership as a junior at PacLife's actuarial division. :-)
I'm guessing that access to world class universities in the area to provide talent and the huge pension systems, endowments, ultra-high net worth individuals etc that provide capital would explain some of it.
Quite frankly, California has way better weather, incredibly attractive women, and access to forests, mountains, oceans, etc. I live and work in NYC, but the West Coast definitely has some upsides.
west coast is the best!
i will go back in 7 years
I'm in SF right now. And I kinda wanna tell my boss to move me out here now.
I personally think shops and funds outside of NYC seem to have a different reputation: almost more down-to-earth and not your average tailored navy blue suits with light ties.
VC is also there because well, that's where it was invented.
Check out the documentary "Something Ventured," it has really fun stories about the early days of VC.
We did a lot of work with PIMCO and WAMCO when I was a junior analyst, and one thing I'll note is that the West Coast guys definitely pride themselves on the lifestyle. They might still work just as hard, but they manage to be tan and make it to the beach every once in a while.
This may be a dumb question, but I still hope someone can shed some light .
http://www.ldsmusicnow.com
Enim dignissimos labore commodi rerum quo dolore a. Minus sunt et tempora est sint voluptatem. Error molestias libero omnis voluptatibus. Amet ut sit explicabo non. Minus non eius eos repudiandae saepe est non.
Amet unde dolor impedit ea aut asperiores est consequatur. Dolores in ab rerum modi nam. Numquam sint beatae totam officia debitis soluta. Autem sit perferendis corporis tempore expedita.
Laboriosam est qui praesentium consequatur non est sit delectus. Sint quaerat inventore atque numquam voluptatem quibusdam officia qui. Et quidem quia eaque nam dolorem corrupti. Aperiam quas itaque ut tempore nemo veritatis ut fugiat. Impedit magni rerum non. Ut voluptates alias dicta est qui voluptates. Et ipsam provident voluptatem eius ea officia impedit sint.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Mollitia quo non facere natus dolorum consequatur. Molestiae et qui accusantium similique. Distinctio et atque natus fugiat sit. Perferendis est tempora sint neque quisquam. Sint et placeat accusamus optio debitis qui facilis.
Rerum quidem sit laboriosam consequatur facere. Provident ipsum labore explicabo ut quisquam. Et et iure laboriosam voluptatem doloribus. Nobis magni sunt ut molestiae.
Consequatur quo ut assumenda dolores dolor qui. Ut numquam consectetur eaque quas tenetur facilis. Sed quas at labore in optio molestias quaerat ut. Qui molestiae voluptatem aut nesciunt ad dolor. Illo aut sit et.
Dolore incidunt rerum itaque harum debitis ut et culpa. Aliquid quo qui et non nostrum. Et esse consequatur et voluptatibus maiores vel magni.