Are you *expected* to be a great stock trader for a hedge fund role?
I know that hedge funds are pretty clear in terms of they just want pure results, doesn't matter how.
But if I take an opportunity where I work a couple years on the multi-asset investing side of things at a reputable firm, would that open up opportunities to a hedge fund? If so in terms of staying in, should you be a really good stock trader firsr in order to even want to consider such a path?
Because if you can't handle and make tons of money on your own, why should a hedge fund trust you with millions of dollars to handle theirs? Is that how it works?
Welll you on your own don’t have the same resources right? Like I’m talking quant traders, risk management, research, etc etc. So not really comparable imo.
It’s like saying if you haven’t been a CEO why should a startup hire you
correct, but then why would any hf hire if you cant prove to yourself you can generate returns on your own money?
bc they generate returns from leverage, access to alt data, mgmt, etc etc its not like using robinhood to invest
The answer is no. Next question
could someone elaborate?
It depends on where you're starting from. If you're coming from another HF role then yes, you are expected to be somewhat of a good trader. 'Great traders' usually end up becoming PMs, it's not that great traders become PMs but rather knowingly or not, all the good PMs happen to be good traders.
Nobody is out wearing a badge that they're a great trader. What does a great trader even mean? If you're in a L/S seat with risk police & drawdown limits then you have to play within the confines of that game where you might not have the skill. A lot of good analysts/PMs are those who grow into good traders within the constraints of the seat they are in.
You could be a big swinging dck in thematic bets but that wouldn't mean much if you have to post PnL QoQ/MoM consistently within a constraint profile you're not familiar with. Some of the best PMs or 'traders' I know are those who grew up in the model they're excelling at.
If you're recruiting fresh then no. You'll always start at the ground level unless you become so coveted and post huge PnLs in multi-asset and become a celebrity, you'll have to start buyside from day 1, no shortcuts to it.
Thank you so much. So for someone fresh out of school or someone wanting to come from another background like corp fin or big4, what do they need to show hedge funds that they are worthy of a shot at working there?
I don't know. I've very rarely seen people from corpfin or big4 get into buyside. Corpfin is an exit for those covering equities in some capacity be it buyside or sell-side, don't think anyone would leave corpfin for a buyside seat and doubt that seat even exists unless you're like Mag7 corpfin.
The only folks I know who made it to HFs from big4 did so decades ago, I do not think that pipeline exists anymore tbh. Buyside recruiting has gotten way more institutionalized, used to be anyone could get a seat but now too many constraints.
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