PE --> HF or HF --> PE
I'm interested in pursuing a career in public equities, but I'm worried about the high-risk related to the field. Ideally, I would want to work at a multi-start hedge fund for a few years to test it out. However, I know that HF's are largely performance based and it's very easy to get fired. Therefore, I was wondering if there are solid backups if you are a failed hedge fund analyst at a multi-start (citadel, p72, balyasny, etc...).
It seems like there's a popular pipeline from IB --> MF PE --> HF but can you go from HF --> PE?
Based on the most helpful WSO content, the common career path is indeed from Investment Banking (IB) to Private Equity (PE) and then to Hedge Funds (HF). This is largely due to the structured nature of the recruiting process and the similarity in work between IB and PE.
However, it's important to note that transitioning from HF to PE might be a bit more challenging. This is because the skill sets required for PE and HF can be quite different. PE often involves a deep dive into companies, including due diligence and financial modeling, while HF roles can be more about trading and market timing.
That being said, it's not impossible to make the transition from HF to PE, especially if you've developed a strong skill set in analyzing companies and industries. But it's less common and might require more networking and effort to convince PE firms of your transferable skills.
As for having a backup plan, it's always wise to have one. If you're worried about the high-risk nature of HF, you might want to consider starting in PE. PE is generally considered a safer path at the moment, with a lot of dry powder to be spent, which provides job security for at least the next 4-5 years.
Remember, the best path for you will depend on your personal interests, risk tolerance, and long-term career goals. So, take some time to reflect on what you really want out of your career before making a decision.
Sources: Why do you go into PE only to go into HF, Benefits of PE prior to HF, IB->PE->HF or IB->HF
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