I've just started a new role as a research analyst at a hedge fund (250M AUM).
My understanding is that in order to build a long-term career in finance, I'll need to put in a few years in another area like IB or S&T at a name-brand bank/firm to add more credibility to my resume.
Given my unusual path, what are some potential exit opps that I should look for down the line apart from B school?
Hey HFanalyst83, I'm the WSO Monkey Bot and I am sad to say, but this thread is lonely, so thought I'd post in here to try and help out. Some potential topics that might help:
More suggestions...
Hope that helps.
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Currently looking to go to HF. Do you feel given your experience that it is better to start at an MM and then move down market? Could you also weigh in on comp (I know its highly variable but generally) between pods and SMs?
It can sometimes be difficult for MM analysts to move to SMs due to the stigma of being a "pod monkey." Not always true, but it's not necessarily easy.
In terms of risk-adjusted expected return for SM vs. MM - I would say they're approximately the same with MMs having a wider distribution and SMs having a narrower distribution. SMs tend to underpay until you get to a more senior level with direct P&L tie, but pods tend to blow out every so often, so it roughly balances out on the comp side.
If you're looking for the least risky move, IMO it's to go IB -> PE --> SM HF --> MM HF. That way you maximize your skillset surface area and may have an easier time getting back into a SM if your pod blows out (plus you'll have 6-7 years of experience by that point).
However, if you are the risk-taking type, and you're absolutely certain you're ok with the MM lifestyle, there's nothing necessarily wrong with doing IB --> MM HF. Just make sure that you're very careful choosing your PM - as your future career will depend on his trading and mentoring ability (the first couple years will probably make or break your career). The skillset you build in PE/SM HFs won't always necessarily translate to MM HFs because the investment style is completely different ("trading" as opposed to "investing").
Thank you very much for weighing in. I think for me personally I am willing to take the MM route because I enjoy the swing trading element, have the risk tolerance and also feel that MMs from my view are a bit more consistent in terms of development for new analysts and willingness to promote top talent.
I have a vague understanding of the "MM lifestyle" but what makes it significantly worse than SMs? Is it just the added risk of a blowout + slightly more lonely?
I wouldn't necessarily say it's worse, it's just different and whether that lifestyle is better/worse for you depends on how you are as a person. If you're more OK with training yourself, handling P&L stress, being independent, etc. then maybe the MM lifestyle would be a far better fit and working at a SM would be frustrating. When you work at a MM, you're really betting on first and foremost, your PM, and secondly, yourself.
I think people who go into IB for the most part tend to be fairly risk-averse (in general) and often try to maximize for the highest probability of becoming moderately wealthy with the least probability of failure, over a reasonable time horizon. I suspect many aren't really confident in their own ability and IB --> PE --> SM offers you a lot of time to develop confidence in your own judgments with a somewhat larger safety net. After all, it's not like IB/PE reward independent thinking...
IMO, it's better to rip the band aid off earlier and practice developing your own ideas/views (+ testing them against the market) because if you really want to be good at this game, you're going to have to do this eventually (whether in PE, or as a SM/MM PM).
I really cannot thank you enough for this insight. People like you are the reason why this forum can be so valuable.
I totally get your point on risk aversion in classical banker / pe types. I believe I am cut out for the MM path as I have a slightly more diverse background and am willing to trade tepid yet well paying mediocrity for risk and uncertainty.
Title says 100, body says 250. If it’s a 250 start up from a PM who came from a good name fund, should be able to move up market but judge if there is aum growth potentially on the horizon. Otherwise, dunno
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