Private Arms of Elite Hedge Funds
Hi all,
Currently a 1st year analyst at a top EB (CVP / EVR / MOE) and am interested in making the jump to the buyside. I am curious in learning more about the (newer) private equity branches of traditionally public equities focused hedge funds. Top shops such as Baupost, Elliot, etc, now have their own buyout teams. How do these groups compare to their flagship investing strategy divisions, and how do they compare to MFPEs that are known for buyout strategies. Curious about this from all dimensions. Thanks in advance.
Based on the most helpful WSO content, the private equity arms of elite hedge funds, such as those at Baupost and Elliott, are indeed an interesting development in the investment world. Here's how they generally compare to their flagship public equities strategies and traditional mega-fund private equity (MFPE) firms:
Investment Focus: While the flagship strategies of these hedge funds are typically focused on public equities, their private equity arms are more about direct investments into private companies, often with a longer-term horizon.
Operational Involvement: Similar to traditional private equity, these private arms may take a more hands-on approach with portfolio companies, potentially involving operational improvements and strategic guidance.
Team Structure: The teams in these private arms might be smaller and more nimble compared to their public investing counterparts. They may also have different compensation structures and investment processes.
Comparison to MFPE: The private equity branches of hedge funds may have more flexibility in their investment mandates compared to traditional MFPEs. They might also leverage the public markets expertise of their parent hedge funds for unique insights into their private investments.
Career Path and Skills: A move to the private side of a hedge fund could offer a blend of the analytical rigor found in public markets investing with the deal-making and operational focus of private equity. It could be a unique opportunity to develop a diverse skill set.
Networking and Learning: If you're considering such a move, it's crucial to network with professionals in those groups to understand the nuances of their investment approach and culture. Also, consider the potential for learning and growth within those teams compared to more established MFPE paths.
Remember, each fund's private arm will have its own unique characteristics, so it's important to do thorough research and networking to understand the specific opportunities and challenges they present.
Sources: HFs are less snobbish than PEs, Why do you think public equity is more interesting than private equity?, https://www.wallstreetoasis.com/forum/private-equity/where-is-the-industry-going-for-young-professionals?customgpt=1, Credit Hedge Fund opportunities, Private Equity vs Megafund Credit
Curious too, understand that even the MM players have their own private arms. From Citadel to P72 Ventures (seems to be relatively new?), would be good to learn more about them.
Do they tend to hire internally? Like people burned out of public markets and would fit better in private? Or the typical recruiting from your IBs/sell side shops.
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