PE vs HF in London, pros & cons
Most of WSO articles about the topic are America-centric, so I'm looking for London answers.
Is the job security in HF inferior to Banking & PE? How frequent is it to get fired due to poor earnings by the HF or it's shutting down (compared to PE & banking)?
Is the comp ceiling in HF significantly higher than PE? What is the probability of getting to that peak of the HF career associated with the ceiling (as compared to PE partner and banking MD). How does the most common long-term comp NPV for HF compare to the career NPV of PE comp
How commonly do the owners of a HF get generous enough to significantly share the spoils of a good year with mid-level staff? How frequent are the good years?
Not a lot of HFs in london anyway tbh. Interning at one of the MMs (citadel/Point72) so can try take a stab at it.
HF comp ceiling is higher but unless you live and breathe markets (ie comp is somewhat an afterthought) you’re probs not getting to that level so average risk adjusted career earnings is higher in PE & banking.
job security sucks, as I said not many big HFs hiring in London and small ones closedown all the time. At the Podshops, churn is notoriously bad; career tenure is like 1-3 years on average.
Yeah this is a decent comment, especially re living and breath markets. I think most people at Hedge Funds, myself included, don't really view a lot of the work as work. I literally have nothing to do all day but play around with data, read/create research, and monitor the markets I trade. I'd do 50% of this stuff anyway if I was unemployed, so it's not much of a burden. If you're not passionate about markets though, forget about it.
I'd also add that while career tenure is pretty brutal (1-3 years), the ability to bounce around is high. The HF game is very mercantile and lots of PMs will be at 2-3 shops over a decade horizon. It's not as black and white as if you fail at fund 1, your career is over. Go on linkedin and look at any established PM, their job history will include a lot more firms than you're average banker. There's also decent exit opportunities back at banks, insurers, and asset managers. Most people won't hold giving the HF job a swing (even if you blow up spectactularly) against you.
Also re comp unless your at a single manager almost all PMs have direct payouts, so there's no need for founder generosity. You eat what you kill. Compared to banking/PE comp the median is lower but the average is higher