Joining a HF that refuses to fundraise on principle?
I have an offer from a mid/large sized SM. The fund has practically not raised since inception due to a philosophical focus on returns rather than asset gathering. They have a strong track record and returns have been great, almost all of the current AUM has been generated in the fund, and LP’s are all locked in and loyal. Yet I am wondering if it is a negative for a fund to refuse to fundraise from a fund economics perspective as an employee. FWIW, the comp is well above market even for hedge funds and have many datapoints confirming that the economics are generous.
Bump
What’s AUM or AUM/IP? Easy to be arrogant about fundraising if already 5bn and lean. But if LPs leave and/or performance suffers, they will most likely revisit.
AUM/IP is 700-1000m/IP and fund size is in the low-mid billions.
Personally think it's a good sign, assuming their AUM is 1b or more. Shows to me that they have a very strong understanding of their strategies/alpha and the market opportunity for those strategies.
If their AUM is much smaller than that, then it's probably a very niche strategy, for which a long-term future is unlikely if history is anything to go by. Likely avoid in this case.
AUM is well above 1b. It is a multiple of that number.
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