Why Did You Choose AM Over HF?
Hi guys,
If we compare AM to Hedge funds, how does compensation structure, as well as compensation potential, differ between these two groups?
Which role is easier to maintain? Does stress differ much between the two?
Your views on the longevity of each role in the next 10/20 years..
What about AM enticed you to choose it over HF? All I would like are some opinions and experiences.
I've worked at a $5B+ HF and a $500B+ MF...
Comp potential is higher at most HFs but so is comp volatility. MF comp is more based on multi-year alpha generation rather than that year's performance.
The MF role is easier to maintain and generally lower stress. I also believe that a large MF will present superior longevity versus most HFs.
I chose MF over HF because of the investment philosophy which promotes thinking more like a long-term owner of a business. Rather than trying to find stocks that will go up next week, I try to find companies and management teams that can allocate capital in a way that can compound value over 5-10 years.
If you mean long-onlys (though MFs start to have L/S products), AM firms are much more stable. HF is such a broad term that is hard to generalize. Some HFs are just structured that way but really employ long-term oriented philosophy that focuses on quality of a business and buy it at a reasonable while on the other extreme, the multi-managers all think alike and trade around the quarters based on their view of any rate of change / events.
AM people tend to be nicer and more humble (because of the long-term orientation) while some HFs are filled with ex-Ivy League athletes who have not even seen one bear market and think they rule the world. HFs compensation definitely has higher upside.
HFs tend to overperform AM firms in bear markets, so your comment about the bear markets is misleading.
Clearly you have a trauma with HFs. Did a HF employee fuck your mummy?
Monkeys - this is Exhibit A of an HF asshole ;)
Sadly yes, that employee is my dad.