Trending Content - Hedge Fund Forum
| +21 | 3x SWE FAANG Intern -> Fundamental Analyst @ HF | 12 | 31m |
| +6 | Fund 1 8%, fund 2 5%, when will fund implode? | 4 | 20h |
| +3 | Castle Hook Partners | 0 | 5d |
| +3 | Disclosed non public fund performance to a headhunter | 2 | 5d |
| +3 | Dragoneer | 1 | 1d |
| +1 | Work-life balance as a junior | 1 | 2h |
Career Resources
The thing is managing larger amounts of capital makes it more difficult to earn consistently high returns. Only so much capital can be allocated to the best idea, so much to the second best, etc. This also assumes the ideas are sound to begin with.
Smaller funds are more nimble but make it difficult to attract talent. The revenue generated from a 100+ AUM fund are pretty small to attract what managers might consider a quality workforce. Let's assume a 15% return (this is being nice nowadays). A 2/20 structure. Based on my knowledge of how this would generate revenue
2% of 100 MM = 2 mm 20% of 15 mm = 3mm
5MM to cover all the expenses for the firm for the year. Assuming no capital inflows/outflows. Established managers aren't going to set up a small shop to deal with that. With several billion dollars in AUM, the management fee generally generates sufficient revenue for the firm while performance fees (highly volatile and can be rewarding) might generate the same amount if lucky.
As far as pedigree is concerned, most managers are from the olden days where only pedigree alone would get you in. Networking capabilities were minimal & left best to schools & family contacts. Nowadays there are many more ways to enter the industry. Profiles of top level managers might not change drastically in the future but there will be much more international presence at the very least.
Besides, if a sophisticated institutional investor places weight in pedigree over performance (doubt many do), they deserve to be taken.
Quia ad voluptate laboriosam at voluptatem facere. Qui nisi consequuntur at est officiis ut. Tenetur est voluptatum aut vel nihil aut velit. Cupiditate eum omnis omnis eaque fugit. Rem nobis ut dolorem adipisci. Facilis voluptatibus optio ut corporis quidem excepturi.
Neque provident optio nostrum. Ut sed perspiciatis perspiciatis placeat quis vel. Voluptatem sapiente qui molestias sed soluta. Qui blanditiis perferendis ut quibusdam ea. Omnis magnam qui est ratione.
Debitis aliquid magni nostrum nesciunt illum. Quos sit qui delectus placeat molestiae non. Aut autem est laudantium repudiandae sed. Deleniti enim recusandae dolorem corporis laboriosam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...