Lost job at L/S HF - looking for advice
It is quite a feeling having to push a reset button on my career, especially after having achieved some relative degree of success so far (~5 years in finance - banking + buyside). Wanted to know if any one else in the HF world on WSO has experienced losing their job and what the path froward was for you... I like stocks + the markets and I want to be able to bounce back from this but am taking a few moments to reflect on what I actually want at this inflection point.
Curious what other's experiences were like + if anyone would be willing to chat directly (can give more details at that point)... approaching this with humility and an open mind as I think through next steps
EDIT: This is the most MS I've gotten. Current net worth is very relevant to the decision to get an MBA. I was trying to help out and give advice
Lol. This guy is down on his luck, and you're just a rubber necking, asking to see his dick.
This is a tough period, so stay strong. It's more common than you realize, and many people go through a couple of these periods in their market careers. Others are luckier.
First, ask yourself, how much do you love the game? For some, they can't see themselves doing anything else. You have to be hungry to get through this time and to see long-term success in this business. If you can see yourself doing tech or medicine or whatever, then maybe this isn't for you.
If you decide you're in, then network is key. Hit everyone and see what shakes out. Many of the high quality seats come and go through relationships. Don't rely on headhunters. Referrals are so much more valuable. If you don't have a network, start building one. If you stay in the business, befriend more senior people down the road to talk ideas and help in times like this.
Plan to be out for 6 - 12 months and budget your lifestyle accordingly.
Prepare materials on several ideas to pitch. Write-ups, presentations, whatever your style is, start working on those and go hard on them. People are hungry out there and so you need to show you want it - 20 pagers, primary research, differentiated. You have the time now to frontload this. If you have some experience, the expectation is probably going to be higher than for a junior banker.
Take every call. Practice interviewing. Your story is key initially, and your ability to sell your intelligence and experience. Talk the talk, don't be shy. Make sure the pitches are tight - succint and with edge.
If / when you get to case rounds, you need to put in 80 - 100 hour weeks and you need to go above and beyond. Be resourceful in getting info. Show you want it, because if you don't someone else will.
Stay physically healthy - exercise regularly, eat well, sleep more, drink less. Stay mentally strong - you are not the first and you will not be the last to experience this (even Dan Loeb lost his hedge fund job, couldn't find another hedge fund job, and went back to the sell-side before founding Third Point). Tough times don't last, tough people do. Go hard - you only have one life to live, do or die.
Had this happen to me a few times. Comes with the territory.
Keep in touch with your network, especially the sell-side. Equity sales guys always know who's hiring, who's on the way out, who's joining new shop. I had referrals and got in touch with incoming PMs during their garden leaves, 6 months before they even started the new role. That puts you way ahead of the competition.
One voluntary, the other a team blow-up. First time I thought it's end of the world, now I look forward (mostly joking here) to it so I can get paid during garden. I just hope it's not this year because Americans can't travel so I'd get bored.
Contrary to popular opinion, I actually think MM HF are fine. If u look at who's getting inflows, big MM are getting most and that's if they want it...many aren't taking new capital right now. At current interest rates , why not tighten risk and just lever up a turn instead, if necessary? There's plenty of idle cash right now. They'll always be hiring because institutional investors love the risk mgmt. At least in the near future.
My personal view is than single manager funds are the ones in more trouble, but others would know better. I don't follow those guys as closely and only talk to a couple people at those funds.
i was in your shoes as well and given the responses on the board it's far more common than you would think. it sucks, but keep your chin up.
1) perspective - you got paid partially in a year where there's a global pandemic and hundreds of thousands of people are dead. that puts you in the top 10% of reality at least.
2) be antifragile. great advice on the top to work your network as much as possible. i ended up back on the sell side after a few goes at the startup HF route didn't work out (after the banking, PE shuffle) and have been biding my time since. just as with investing/trading/gambling - a career is about risk-reward; and there's times to be aggressive and not depending on your own personal risk tolerance and life stage/goals.
3) flexibility. stay focused for a while but don't be afraid to open your paths after some time bashing your head against the wall and if nothing gives. so many ex hedgies have found success in other aspects in life - the fact you got to where you are already shows you're either hungry or lucky, both of which work out in the long run more often than not. the ones who have fallen by the wayside are the ones who think they're entitled to/too good for a certain type of role or job.
3b) just because there's a 'defined path to success at the junior to mid level' doesn't mean anything's set. look at any number of senior seats on the street that still pay a boatload of cash. Mark Mahaney or Eric Sheridan (sell side analysts pulling in more money than most HF PMs) did their time in Galleon / Baron and that didn't work out for them. i know a few ex hedgies who have made their way to CFO positions of small and large sized companies after spectacular flameouts. my personal hero is Salman Khan of Khan academy - if 2020 has anything at all to teach us is that a lot of people in this industry have an overinflated sense of importance of the work that you do and how it matters in the world. which brings me back to point (1); perspective.
when you goto those interviews, and they ask "describe your research and stock picking approach" you should just talk about the results, rather than the IP used to get there.
"we use a process of elimination that creates a portfolio of securities with better a better risk vs reward profile on the portfolio than most other funds...combined with a particularly clever trading strategy that improves portfolio performance...the actual implementation details are confidential and i cannot divulge classified info in a setting like this, but as you can see from our consistent fund returns and outperformance of our peers, this strategy has been quite successful, and i expect it to continue to do so...the strategy makes sense"