Hedge Fund Exit Opps
Hey everyone,
After a few years of banking (covered TMT) and some years at a smaller l/s fund, I am starting to realize that maybe I am in the wrong career path. I love reading about companies, am intellectually curious (maybe not as much as others in this industry), am in a good seat at a l/s fund that performs well. My role is mostly supporting the research process of a PM and senior analyst. I am not the best at idea generation but I do a decent job evaluating companies. Wondering if anyone is in the same spot where they are reflecting on potential next steps / has anyone left the industry due to a feeling of stagnation? What other choices are there for someone in my position?
Yes, same boat as you. The idea generation process is not something I enjoy. I understand the principles of investing but don't get excited by the actual mechanics of the work. I personally find it repetitive after a while, and am stagnating in both learning and comp. The autonomy and intellectual freedom you get to study businesses is great, but I don't really find my knowledge compounding. Maybe i'm just doing it wrong, or haven't been sticking at it long enough for the compounding to be visible.
I'm looking for corp dev and strategy roles at tech companies. I would have to take a pay cut, but I'm making little enough ($300k all in) at my current role that it would be merely painful, not impossible. For a senior analyst like yourself I'm guessing you're at $500k+ which might be a tougher pill to swallow.
I look at it like a DCF. Right now I can clip the coupon at my current role for maybe another 5 years but don't see much runway beyond that, plus lots of vol. Labor market in our industry is heavily stacked against us in my view. Switching to something in tech would give more visibility on growth runway 5+ years out, plus optionality from getting to know the product side and hopping to new/interesting ventures that pop up. I just think that the intrinsic value of the skills I've developed (and can hope to develop) in this industry aren't compounding over time - actually, they are probably declining in value as more of the process aspects of the job get automated. Whereas a more versatile skill set from switching to tech will increase in intrinsic value.
I think you describe many people in the industry. The good news it that you are still early in your career. When I was in bschool (a while ago at this point), I had a bunch of friends who were at HFs before school but realized that they didn't have a passion for, felt they were just OK at it, or just felt that they didn't want to spend the rest of their lives picking stocks. All of them were able to successfully transition out and are now highly successful in their current jobs. Last I checked, one went into the endowments/foundations world investing in HFs, others went to FAANG and other startups in business roles that were completely unrelated to what they were doing before, another went back into HF but on the business side as COO, another guy who was at a tech HF went to a VC/growth fund, another guy went back into banking, etc. I think most career paths are still open to you at this point -- it's just a matter of you picking what you want to do. But every year you wait, the more difficult it becomes.