Seems that most HF people don't make as steady and as high $$$ compared to IB people right now, assuming non-elite HF and not getting crazy bonus numbers at the fund.
Anybody regret doing so? Or most people are content with where they are right now?
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Last two years were generally pretty good years for HF bonuses as well as IBD for likely a majority of strategies. Comparing 2021 IBD associate TC with 2022 expected HF numbers isn’t apples to apples. 2022 IBD comp should be down as well unless certain groups in Oil and Gas / RX.
No, banking is mindnumbing client work and 75% of people above analyst are insufferable cogs imo. Hedge fund work tends to be creative, fun, mostly self directed - like solving a puzzle or writing a book. Also it’s twice the hours and HF pays more despite lumpiness. I think if you even have to ask this question HF is not for you though. If you like sales and that’s you, you can make a great career in banking. If you think HF is unattractive because you have to take career risk - then you’re probably right (for you). And nothing wrong with that, most of my banking classmates did PE and they’re happy too.
Hi Anchor, appreciate that. We actually exchanged a few comments under a different thread.
Asking this question out of curiosity. Although if 80% of HF people flame out in/after 2 years, then THAT seems to be a bit of an issue.
I'm not really overly worried about the career risk since I have had a rather unorthodox/jumpy career start as a current banker. I've interviewed with a couple of L/S HFs and the vibes resonate well. I have a couple of friends (may not be friends long term) in MF/UMM PE and I don't like their vibes.
A person of similar aptitude will probably have a similar earning distribution to PE imo - HF everything just happens quickly. Once you can take on more name, start taking risk, own more of the process - you can do it or go somewhere that lets you do it with little friction. So there’s less underperformers milking a Junior role for a long time, the winners move up quickly and the rest are gone quickly. Once you have PnL linkage and have made it past model-monkey/liability Junior level, you can have a few shots at the ball if you want them. The big risk is that you work for 3 consecutive blowups in a row at a junior level, none of them long enough to learn much, just ramping up 3 times, and end 6-7 yrs in with 18 mos at three places with 3 garden leaves and less sector knowledge or experience than other 6-7 year deep peers. That’s the unlucky case. The lucky case is obviously incredible. There is material chance that either happens, but not so large you should underwrite either as the base case.
The flipside of MM turnover is that those people have to be replaced so they also hire alot. After 4ish years you’re still gonna be comfortable and have a few shots if you want them.
Finally, agree with other posters - that in a 10 year credit expansion naturally it was a pretty good to be levered long-only mult expansion (PE) or illiquid speculative growth (VC), less so than at a hedge fund where stock picking mattered a lot less and dispersion eroded. This is also why many of the funds praised on here launched long-only funds paid on outperf which are often much larger than their long-short funds, something people don’t seem to understand. That was a good move. If your hedges were really hedges and you’ve done well this year and have the capital to be doing single stock shorts or pairs, I think it’s gonna be a really nice part of the cycle to join a hedge fund esp relative to PE.
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