There's a big tendency on WSO to gravitate towards the most visible, well-branded and prestigious opportunities. Everyone knows about the big guys.
How do you all go about diligencing opportunities at less well-known funds, especially if there's little to no info on WSO? Also, if a fund hasn't been discussed on WSO, is that a red flag? There are lots of opportunities that fly under the radar but I've found WSO to be pretty comprehensive.
Track record of the founders. That will tell you all you need to know.
Plenty of good guys running smaller places.
Happens for a variety of reasons. I would guess the top 2 reasons why guys don’t run big funds is the founder suffers from two issues 1). Not a salesman to raise funds - which is incredibly common 2). Not good at managing people. Again common. 3). Dislikes running a larger organization. Potentially because they like investing/trading more than managing an organization.
It's going to be easier to open your own shop if you come from a well-renowned megafund for two reasons:
You normally have access to clients who are bigger. If you build a good relationship with them you might open up your own shop, primarily with this clients/clients network of money. If your PM is managing his own money or family money, then you opening your own fund will be mutually exclusive. That's not the case if you work for 200 investors.
A strong brand name is important in the initial funding rounds. It's easier to back someone who's a Tiger cub or who "worked directly under Steve Cohen" in NY/Greenwich than someone who worked for a small no-name fund in Houston under Dill McOilson. That is not to say that it's impossible to find funding, but it makes it quite a lot harder in a, already very competitive, market.
Great questions.
1: You're not getting out of the contractual obligation regardless of the size, unless you're working with amateurs. Even small hedge funds will have long NDAs and restrictions on who and when you can approach former clients.
2: Agreed, but that is only if you work at a large quant fund. Most HFs are not primarily quant and if you work closely with PM in an event-driven, L/S, or any other strat you will gain a good understanding of how they build the investment thesis and the case.
2a: Again, this is a double-edged sword. It might be harder to show your actual PnL contribution, but you're still part of a winning team. It's the same reasoning on why certain groups within IB is favoured over others for HF recruiting. Everyone knows that the analyst from GS TMT didn't source all the deals him/herself, but if you're part of a winning team it's easier to justify hiring you. As an investor you're (usually) given limited information about the actual strategy and the workings of it. The difference between a good or absolute shit fund raising can sometimes boil down to the PMs resume.
I don't have experience in the space myself, but I've worked in institutional sales and my former roommate works at a tiger cub fund.
I think you're logic is correct and it's probably the reason why so few quants break out to launch their own fund. The quant space is also heavily saturated these days and differentiating yourself from the megafunds is incredibly hard. Positioning yourself to be a HF PM is something I wouldn't care about too much. If you're successful enough you'll get your chance - but personally I think most people in here have a better shot at participating in the Olympics. Unless you're family is UHNW - in that case, anything is possible.
https://www.theringer.com/olympics/2018/2/21/17033340/winter-olympics-r…
lmfao