Hi all- Have any of you lived through a fund shutting down? I'm at a L/S single manager and performance hasn't been great last couple of years. My questions are: Is it harder to find a seat after it shuts down vs. leaving now? Was it obvious or did it come as a surprise? Did you still get paid out in the last year as a way to end things on a good note?

I don't want to give too specific advice as it could be counterproductive without knowing the whole situation. But, I can tell you that I interviewed an exec level candidate from a big well known firm and our team was relatively much lesser known. But at that point you have to put food on the table. It was a dramatic fall from grace. So don't expect 'prestige' to save you. In this field people only care about one thing. First question is, how confident are you that its sinking? If this is temporary or you think they can make back the losses then be more discrete.

I've seen funds shut down before as well as seen funds turn into "zombie" funds which end up just managing a small amount of partner capital (probably due to the partners ego not wanting to shut it down). There are some tell tale signs which you probably already have noticed All of the good people are leaving for better opportunities. Especially a red flag if you are at a place that has typically had very low turnover and now all of a sudden has a lot of attrition. Don't be the last one to leave. Bad performance. You don't need to blow up to get shut down.

Fund shutting down

Ovechkin08

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1) Show no loyalty. When the ship starts sinking it will be every man for himself and the higher ups will make sure they take all the life boats and leave you screwed (no bonuses or severance as why would they bother given there is no incentive to retain you).

2) Start looking now as it is always easier to find a job when you are in a job.

3) Be prepared for management to say nothing until the very last minute. Keep an eye out for an increase in "closed-door" meetings between higher ups or Board meetings if your fund has a Board.

4) Do not bad mouth your current employer during your job search. This looks bad on you. Just explain that performance has been poor (PM gets the blame as it is their name on the strategy) and that you are worried about AUM outflows. Leave it at that and don't talk about your PM being a bad investor or anything else that might make people reluctant to hire you.

5) Watch out for Hitler syndrome. If the PM's start talking about grand ideas like launching new funds/products or expanding into new markets it is usually a ploy to keep people from jumping ship. Kind of like Hitler sitting in his bunker in Berlin during the final days of the war dreaming up new super weapons when the Russian tanks were breaking into Berlin and all was lost.

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Fund shutting down

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