Curious if anyone has seen US hedge funds hiring analysts from lower cost-of-living countries. Compensation would be a fraction of US levels. do you worry this could mirror the outsourcing trend in software engineering?
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No real place to outsource it to. Particularly when the richest and most liquid market by far is domestic, and being in the country helps significantly.
Also, outside of other western countries, critical thinking isn’t emphasised as significantly in education.
What is likely, particularly as political instability grows and/or AI slows and European nations look to build domestic capacity in defence and tech, is we see incremental capital flows moving outside of the US as more opportunities and alpha is harvestable at scale outside.
Anecdotally we’re seeing some of this; significant investment from hedge funds to build out a UAE base, mainly for EMEA investing, but also seeing big names deploy more capital in Europe/asia. I have heard that a big name PM joining my firm (large MM) is deploying meaningful capital in Europe too, moreso than any other US Sr PM has done before
Pinch of salt
The bigger risk is being replaced by AI, rather than by another human overseas.
As mentioned. The AI agent is your competition. Modeling work has been outsourced to India for a decade+ at some firms and it hasn't mattered. Good luck!
Agree on the AI agent part. These days an AI agent can do a lot of basic grunt work that is on par with what a junior analyst can do at much faster speed, although a human junior analyst is still much more versatile (i.e. can attend physical meetings and take notes etc.) The biggest risk is to junior analysts who haven't had much industry experience unfortunately.
bump
Not concerned. A solid analyst (not a model monkey) at a sizable fund has a base salary that is negligible to the profit pool. The costs of intl flights for mgmt meetings, risk of IP theft & general headaches of outsourcing don’t make sense. Generally, hedge funds already maximize Alpha contribution and it’s a fairly efficient market for those who are in top quintile. Even today few funds will allow remote work preferring to sponsor a visa / pay a moving stipend / etc
If the analyst's only purpose is modeling, earnings updates, etc. then sure, this is at risk. I have seen some funds outsource that work to India or have an "analyst" based in India.
But a good analyst should obviously be doing more than that.
bump
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