MFPE vs Startup Tiger Grandcub HF
I'm a senior at a HYP school and I just finished my summer at a MF, had a decent time, and got a return offer. However, throughout college, I've been interning at a Tiger Cub HF, and one of the partners there recently started their own fund. I've been helping them out on the side for the last few months and was given an offer to join there. I am thinking through the pros and cons of this--I'd be the 4th investor and they do tech public/privates. I have immense respect for everyone on the team and love working with them a lot--super sharp, pedigreed, and contributed greatly to the PnL of the places they worked previously. In an ideal world, I'd join that fund and it'd scale up and I'd spend a good chunk of my career there. I'm also in the process of applying to B school, in case I need that in my back pocket if this gives more color to things. Thoughts on what I should do?
How the hell are you applying to B school when you are a senior at HYP?
Probably one of 2+2 programs
Yeah 2+2, thought it might be good to have the risk protection, kind of a parachute out if things don't go my way
There isn’t a lot of downside in joining. You are young, you have a seat that many ppl in industry would likely jump at (with them taking a lot more risk in doing so). Also if your fund ends up doing well you will have great economics and grow with the fund.
Here comes the army of pod shop analysts and associates.
are they offering you any carry to start (or color on what they might offer in the future)?
What's been discussed is effectively an accelerated track to partner if I and the fund do well. I'd start as an Analyst in title, same way someone who might do PE->HF would, and comp is widely performance dependant. My base is good relative to a banker/PE analyst but nothing super spectacular. Basically same comp as an analyst at most single manager funds with fast progression contingent on my/firm performance (almost the same thing given how low the headcount is)
What’s AUM going to look like to start? If >$500MM then I saw go for it, bit trickier the lower you get (if $100MM then go for PE)
Better risk-adjusted option with long-term optionality is without question the MF offer. If you want fast track to outsized comp and taking on actual risk while managing P&L, the tiger grandcub startup is a once in a lifetime opportunity. Congrats on both, impossible to really make a wrong choice here.
congrats, pros and cons to both. But need to consider the following
- what does partner at tiger cub mean? We talking senior analyst with equity at a decent tiger fund (many of them) or the #2-4 at a lone pine/Viking type place?
- AUM and AUM/head? Where is AUM coming from?
- #4 at a startup isnt necessarily that senior. Some large scales SMs or MM teams only have 5-15 IPs for billions of AUM. #4 is very different from #2 and always a chance more senior ppl get hired and you get more layers between you and founder
- the perks of a top tiger fund (resources, mgmt access) don’t translate to a startup just bc they worked there, though you get access to their network and investment process to an extent
- how much of return at old shop was through stock picking vs got lucky with growth?
- MFPE out of undergrad gets you looks at tiger/lone pine/Viking afterwards which this fund may not get you
Can I ask how you are able to get that HF internship in the first place and what you might recommend to someone in undergrad trying to get an internship at a SM HF. Would appreciate any advice thanks man!
Seconded
I did MF PE analyst and now work at a $25B+ multi-strat fund (think Farallon or Elliott). I recommend MF PE unless the hedge fund is launching with $500m+. Even then, it’s very rare to scale a startup fund to $3bn+, which is when the economics start to become juicy for the investment team. One or two bad years and the startup fund will lose half its assets and never recover.
What did recruiting look like as an MF PE analyst for your current fund (Farallon/Elliott etc.)? Incoming MF PE analyst here, would be much appreciated
If it's for the fund I'm thinking off, take it and don't look back.
What are relevant current tiger world spinoffs this year? Surgo, divya, any others of institutional size?
Roll the damn dice dude. I’m guessing you’ll be bored out of your mind doing MFPE when you really get into it. Sounds like you’ve been doing HF analyst work already so you have an idea of what you’re getting into and having exposure to public/private will allow you to spin your story however you want if it doesn’t work out. If the founders are really pedigreed and good to work for then they’ll most likely be in your corner if the fund fails/it’s not the right fit for you.
You can either go into MFPE and then exit to a similar (likely more stable) HF in 2-3 years or take this now and use those 2-3 years to ride with this fund and be a sr. analyst within 3-4 years. It’s a no-brainer if you want to be at a tech HF assuming these guys are legit.
Yes if these guys are legit then take HF. I’ve been EXTREMELY unimpressed w/ the PE analysts I’ve interviewed— think you’ll be better off with HF and if u don’t like, can likely hop somewhere
Ppl on wso think of PE analyst / associate programs as a guaranteed gateway to top HFs and it couldn’t be further from truth
Yes u will be better public mkts analyst after 2 years at the HF vs 2 years of doing 1 deal at bx…
Seems like a reasonable post lol. I like how you mentioned you are also applying to b-school as a safety net, given you’re a senior in undergrad lol.
There are now programs at H/W/S that you apply to as a senior in college and can get early admission to b-school. You then have to go work for 2-4 years and can then matriculate
This is a more risk averse opinion but have you thought about asking for a 1-2 year out type offer where you go do the MFPE analyst program and then join the HF?
Don’t underestimate the training program that a large cap PE can offer where you’re going to get really good standardized reps in modeling, deal process, etc. No matter how much trust the HF gives you or how technically strong you feel now, nothing compares with an analyst program at a structured place (IB, PE, etc).
My personal view is the risk of a joining a new HF is the team is small and no one has time to focus on training you so you end up doing a bunch of junior type work and then don’t have the baseline technical skills if the HF role doesn’t work out long term.
A friend of mine did the exact same thing as you: interned for a Tiger grand cub during undergrad, liked it, went to work there full time, turning down a top BB. Super sharp guy. Fund shut 3 years after he graduated, now he’s a senior analyst at another $500-1B fund, doing fine, think he’d make 500-700k in a good year with 5-8 years of experience. In a bad year probably 250k.
I went down the MF PE+big HF path and have infinitely more optionality than him. I’m sure he enjoyed his first two years more than me, though.
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