AM to HF advice

I have about 3 years of work experience, 2 on the sell side and 1 in AM. I have a generalist focus. I’m wanting to make the move to a HF, preferably SM HF. I like the long term focus of long only funds but don’t like the fact that you’re benchmarking and honestly not that great at generating alpha (slow execution, regulatory constraints, no shorting, “required” exposure to stocks that are in the benchmark, and so on).

Is the smart move for me to wait a little bit and apply to senior analyst roles or is it better to try to jump ship as soon as possible?

7 Comments
 

Based on the most helpful WSO content, here are some insights for your situation:

  1. Timing Your Move:

    • It's generally advisable to wait until you have more experience before making the jump to a hedge fund (HF). This is because hedge funds often look for candidates with a solid track record and more extensive experience.
    • Specifically, waiting until you have around 18 months to 2 years of experience in your current role can be beneficial. This allows you to build a stronger case for your skills and experience.
  2. Building Skills:

    • Focus on acquiring the necessary skills in your current role. This includes honing your ability to generate alpha, improving your execution speed, and understanding regulatory constraints.
    • Patience is key. Take your time to develop these skills thoroughly before making a move.
  3. Avoiding Job Hopping:

    • Avoid being perceived as a job hopper. Frequent moves can be a red flag for potential employers, as they may question your commitment and stability.
    • It's better to excel in your current role and make a well-timed, strategic move rather than jumping ship too soon.
  4. Networking and Preparation:

    • Start networking and preparing for the move well in advance. This includes reaching out to contacts in the hedge fund industry and staying updated on job openings.
    • Consider looking for opportunities around 6 months before you are ready to leave. This gives you ample time to find the right fit and make a smooth transition.
  5. Long-Term Focus:

    • If you prefer the long-term focus of long-only funds but are frustrated with the constraints, a single manager (SM) hedge fund might be a good fit. These funds often offer more flexibility and the ability to short stocks, which aligns with your interests.

In summary, it's generally smarter to wait a bit longer, build your skills, and avoid job hopping. Start preparing and networking early, and aim for a strategic move to a single manager hedge fund when you have a stronger track record.

Sources: Life decisions...buy-side equity analyst, When to jump - Advice on switching jobs, careers, and fields, Q&A: Former Long/Short Research Analyst at Top HF -> VP of Growth Equities at BB, I'm a Senior Sell-Side Research Associate, Q&A, No deal experience after 3 years

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

I am sure you are intelligent. But sometimes you have to take a step down, to go two steps up. It is hard to be a generalist, specialize in a sector with a well ranked analyst, then recruit to a HF - it's easier. You will already have the investing experience, specialization in a sector, etc. Good luck. 

 
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