Advice: Moving from MF PE to SM HF (London)

I've been at MF PE in London for a few years but now have the opportunity to join a SM L/S HF with good track record and size. Would love to get opinions on either side if this is a great opportunity or huge risk.

On the one hand I'm excited for the opportunity for more intellectually involved work and being the actual investor vs. process management, being able to invest across a wider risk/return spectrum and ability to go short. I have a passion for markets and can see myself doing research intensive work independently.

On the other side, I can't help thinking this would be taking a huge risk with no guarantee of success. I would giving up a reasonably stable PE career that isn't the most exciting to me but most people would give an arm and a leg for.

Comments (8)

  • Investment Analyst in AM - Equities

Hate to be that guy but we just had 15 different threads about this... look at any thread that mentions anything about working in PE over the last 2 months and the thread will be a huge debate of uninformed (+ some well informed people) about the differences in career paths. The actual advice is to be as objective as possible and determine what you enjoy the most and think you will excel in the most as that will drive your success and longevity in either role. Otherwise I think it is stupid to optimize for average career earnings or some bullshit. 

ricejeb854, what's your opinion? Comment below:

Thank you for your reply - I think this is sound advice and helps put more structure to my question. You outline the right objective - "determine what you will enjoy the most and think you will excel in the most" but the question is how do you determine that only having seen one side of the coin?

I agree that you shouldn't just optimize just for average career earnings but I think it would be foolish not to evaluate the expected utility (earnings, comp, whatever else...) and variance around that expected utility (risk).

To me the HF gig has greater utility but very high risk as it is impossible to know if I will succeed. The PE gig has lower utility but very low risk. The utility point is clear to me and will be individual to each person - I'm not looking for advantages / disadvantages of HF vs. PE. The key perspective I would love some insight into is the risk.

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  • Investment Analyst in AM - Equities

I get what you are saying here (even if you mostly just reworded the initial question - I still can't really tell what "utility" means here), but I still think it is the wrong way to go about this. If your primary concern is utility and keeping options open, the obvious answer is stay in PE as "exit options" tend to be wider for other corporate jobs. That being said, I think people overly play up the "risk" portion between the two paths, with the key difference being that in PE you can stick around moderately longer without adding value, but at the end of the day you will still plateau / burn out into something else just like a HF analyst gets axed and needs to jump ship if they are not excelling or adding value (it just happens quicker).

Its not like you just ride it out to partner at a PE fund with average effort/performance in, or likewise, fall back asswards into a senior position in corporate america just by being a VP at a good fund. HFs will accelerate the timeline of whether you are "making it" or not, but it really shouldn't be that different with PE of whether or not you will advance far - with the added benefit that there tends to be a wider range of corporate career options for those who did work in PE and want to leave investing. 

If you aren't sure you like hedge fund work, spend some time coming up with public market pitches. If that sounds boring/like a chore, than you definitely should not look to make the move. If you are still unsure of what you enjoy doing the most in your life / what kind of work you tend to really excel/add value with, then definitely do not move.

I might be slightly exaggerating for a point ( Yes PE will almost always offer you more career flexibility if you eventually decide to quit buyside investing), but I just don't think it is a very productive way to look at things to measure the "utility" of your job. My original recommendation stands - 1) find out what you enjoy 2) where do you really add value 3) where do those two intersect 4) how can you take steps to get there in 1,3,5,10 years?

Others may have different recommendations 


  • Research Analyst in AM - Equities

Do it if you feel like you are making too much money currently and would like to contribute to income equality

  • Investment Analyst in HF - EquityHedge

What is the HF size? If $3bn+, esp. long biased, you should be well compensated next 3-5yrs at least, with not so much risk involved (prob. a solid capital base). Turnover within UK funds is quite low also. Also moving back to PE in London is easier vs. US

If 1b- then you got some risk

  • Associate 2 in PE - LBOs

Feels like limited number of long-only hedge funds with $3bn+ AUM (excluding funds with long-only and long / short) outside of well known ones like Soroban, TCI, Pershing,etc.

sa-jue, what's your opinion? Comment below:

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