I can't help but feel that I am missing context when reading about base-case outcomes of hedge fund careers, especially when reading through threads on WSO. Can you all help me wrap my head around this? I've read some helpful threads on here about this, although a lot of them were focused on earnings outcomes. I am more concerned with employability.
I know the general consensus is that unless you are extremally confident in you ability to consistently outperform, you are likely better suited for a career at a LO AM firm, pension fund, family office, etc...but there also seems to be so much doom & gloom surrounding the mid-level hedge funders who blow up, get pushed out, or burn out.
Especially the part about struggling to get other seats, or even corporate jobs. I get this is a humbling industry, but is it really as tough as some people have let on in regards to employability after a bad stint? Lets say you join a SM L/S fund after a stint in equity research/S&T/Junior LO Analyst, and have moderate success for a solid 3-5 years. Why wouldn't a family office/pension fund/LO AM take a chance on you, assuming the HF you joined had a similar strat, time horizon, and style?
I've been tapping my network a little bit and been on the phone with a few head hunters, and want to make sure I know what i'm getting into. One of my theories is that the base case outcome individuals are probably less likely to share there experience on a forum than the two tail ends, but I would love some guys with some skin in the game to tell me if they think they would be able to transfer to a family office/pension fund/LO AM after a few years into there hedge fund careers.
For reference, I do not anticipate moving to Baupost or Bridgewater, more like a solid performing $600-$1.5B single manger focused on equities. Thanks guys
The short answer is human beings are very tribal. If you have been to enough analyst days or sell-side events where HF and LO people sit at the same table, they are different in personality and dress code. Humans like to hire ones who are in the mold and narrative. I suspect there is some of that when you want to move across.
Can you elaborate on how they are different?
Slow vs Fast money: chill / mellow vs ultra competitive. Then it projects into firm culture and the juniors. You get the point.
Not gonna go into who is better or worse: different products, different mandates, different LPs. I don't need clueless college kids pile on here on how great pod shop is and sht like that.
Appreciate that. That’s more encouraging to hear than something like “bad marketability” on a fund pitch book or something like that
Oh, there is some of that too, but it's way less than the "tribal mindset" piece imo.
How different in personality/dress code?
I am sure a GS IBD / KKR PE can't do well at AM or MM HF. It would be too difficult, the learning curve would be too hard. - Sarcasm btw
How different in personality/dress code?
It’s the other way around. Having been at a HF and then considering a move to a LO or otherwise is in my view harder as the move comes with 1) a massive paycut assuming you performed previously and 2) a cultural shock and for larger instos playing the politics violine. Moving into the HF after a couple of years buyside is much harder than moving out of a HF.
what's "playing the politics violine"
i’m confused, you said moving to a LO from HF is harder in your first sentence, and then the next you say it’s harder to move from LO to HF?
Key is to join hybrid hedge fund / long only funds. Lifestyle and day-to-day (without the bureaucracy of being at a Capital, D&C, etc.) are similar to long only but you get paid as if you’re at a hedge fund. Basically getting paid performance fees above the S&P 500 on the long only product is key while having steady management fee stream.
Like the idea but you essentially mean a LO HF that charges 1&10? Not a lot around, sounds like a sweet gig though. Unless you mean something else entirely. Another analogue I can think of is a crossover type model where can charge on the privates and make something but not a lot off the LO product.
Would you mind naming a few of these shops?
All the big quant places are like this, the line between quant HF and LO is blurry. The fee structure is important though, only places with performance fees will pay well.
Just commenting and being part of this thread as I started one on exits after MMHF careers but there wasn't any traction (mainly because I was asking in an Asian context too).
But aside from maybe Investor Relations roles, is it even possible to make the jump to PE or other LO funds or even corp dev? It seems a bit off especially as you have stacked and even over-qualfied bankers who are more suited to such roles gunning for it.
Meanwhile if your pod blows up or you get cut cause you aren't good... can't be bouncing around other pod shops forever right?
Appreciate it - how did you overcome the lack of traction? Maybe it just took time?
following here
Bump
I know one guy who ran a small HF, then blew up, then ended up with a bounty on his head by his investors (think HNW investors but operate in grey areas, rich but dangerous type of guys).
There’s tons of options out there… know at least 10 ppl that left for Millennium and Balyasny. Some even went Point72 and a few landed Citadel after their stint
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