Successful spin offs from Capital/Wellington
Have there been sizeable successful spin offs out of Capital/Wellington and the likes in equities?
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Yes - not a lot recently that I know though. PRIMECap was a capital group spin years ago I think.
Unlike at HFs there’s much less of an incentive to leave if you’re a PM at one of those funds. LO shops also have better processes for moving from one generation of PMs to the next without the old guys taking an unfair cut. So whereas a PM/senior analyst at a HF might be getting comped unfairly relative to the founder who is taking all the economics, PMs at LOs are generally compensated relatively proportionately to the actual fees they are generating/managing.
A PM at Wellington or Capital Group (which are private so have the best economics in LO world) running a scaled, multibillion dollar per IP fund is probably making high 7-8 figures. Would need to raise substantial AUM at their own shop in order to be earning more than that, which is very difficult given the current LO active management environment. Whereas someone at, say, Tiger or Viking might get better economics setting up their own shop even if AUM is substantially smaller because of the carry component/how fees are split with the founder.
How does this work?
This implies PMs or senior analyst at Tiger or Viking get paid less than similar role at Wellington or Capital?
or you meant the spinco of Tiger / Viking ppl get better economics because it's a hedge fund?
I'm not sure what you mean? Tiger/Viking senior analysts/PMs likely earn more than their equivalents at Wellington/Cap Group. I'm just saying that at a HF a disproportionate amount of the fund economics generally flows to a few people at the very top vs. a LO structure where comp is generally split more fairly at the PM level so there's less incentive to split off and launch your own fund.
Above post was spot on. Fidelity has had a couple spin-offs (e.g. Atreides) because their comp and culture are worse than Capital/Wellington.
Echo comment on Fidelity has bad culture.
Which fidelity and what strategy?
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