Leaving a firm to start a firm
How often do analyst leave a firm to start their own firms? What's the best way to go about your career planning if this is your goal eventually?
It seems that most of the hedge fund and private equity giants (carl Icahn,Steve cohen, Steve scharzman, Henry kravis) all left their firms between the ages of 25-32.
I understand there is no formula per se, but there has to be approaches one could take to make this type of move. In my opinion (that could be wrong) starting a career on the buy side as early as possible will best benefit starting your own firm.
If you're good you should be off the ground when you're 15.
Student here so I'm not going to give you groundbreaking advice and take what I say with a grain of salt. But from conversations I've had (at least on HF side, never really thought about PE honestly) going out on your own [at any age] is substantially more difficult today than it was 20+ years ago, and so past history is probably not a good indicator of what's realistic now. Way more competition today in both PE and HF as well as much tougher regulation/compliance issues that I've heard can really eat up a small fund's revenue. And going on your own at age 25-30 is likely impossible unless you are in a rare situation where you've managed capital directly and hence can show your performance track record.
Personally, for me running a HF/AM firm or otherwise being in an investing capacity is the dream, and it sounds like that's the case for you as well. But I'm just taking it one step at a time and that's all you can do. I think in the long run I'll be best off if I spend a long time learning under people in the business who have been successful. Earlier is not necessarily better. One thing I have heard from a few people is that it's a good idea to work at a firm where analysts are responsible for some idea-generation if you want to be a PM in the long-term, which makes sense to me.
Check it out. This isn't for me in particular, but still a good read.
Good luck!
//www.wallstreetoasis.com/blog/why-i-left-a-seemingly-perfect-megafund-pe-gig-for-a-guaranteed-salary-of-000
There is really no set way. I work on an institutional sales desk for a boutique firm and we work with a lot of small hedge funds/asset managers. A lot of these guys saw an opportunity and just went out on their own, they werent planning on starting a fund, just saw an opportunity in the market they thought they could exploit.
Having a big network or people who really like you helps. I know one guy who started his hedge fund by getting a large initial investment from an UHNW individual.
Unless you have a dad or an uncle who can write you a $25 million check the day you launch, you should dash this from your mind. You will probably never run a hedge fund at 2/20 with a sufficient amount of assets to generate an attractive risk/reward career for yourself. Not at 25, not at 30, not at 40. thx
Just to play devils advocate a little. Couldn't you provide a 5 year strong track record then attract institutional funds? With focus you could save 100k, trade that successfully a few years then attract funds. This is the way I in vision it happening.
The answer to your question is: no f'ing way will this give you any traction to speak of with any sort of institution. They won't even return your calls/emails. Also, the probability of you saving 100k, then compounding it at an attractive and scalable rate, all while working a full time job and supporting yourself, all prior to the age of 25-30, is substantially zero. But again, even if you did, nobody cares and nobody is going to give you money.
84% of sub-25 year olds plan to grow up to be a 26 year old hedge fund manager. The dream will come true for ~0 of them.
this kind of goes along with your argument //www.wallstreetoasis.com/forums/ho-hum-to-hedge-fund#comment-655119
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