Hi all - been a while since I authored a post, but I am at a turning point of sorts in my career and seeking advice. For background, I spent 2 years in banking and am currently an associate at a megafund (would prefer not say much more to preserve anonymity). I am in a few processes with hedge funds and was hoping to get some thoughts and feedback on how I am thinking about each opportunity, in addition to answering some miscellaneous questions.
Why I am considering leaving PE / what I am solving for: main thing is that I simply don't enjoy PE. Neither deal sprints nor working with portcos excite me, making it tough to feel motivated on the job. Culture and hours have been fine; obviously deal sprints are intense, but these factors are not contributing to my interest in leaving. Based on some undergrad experiences, reflections on my time in banking, and knowing myself and how I think, I believe public markets will be a better fit.
Yes, I know that of course I need to convert one of these to an offer, but I am seeking input on the below to help guide me as I navigate processes and continue my search.
1) Activist Fund (probably one of the first 3 names that come to mind)
- Pros:
- Brand strength
- Compensation
- Good place to learn from top investors
- Cons:
- Most similar to private equity - this is where I am most interested in getting thoughts
2) Two Tiger cubs (both considered 'top' funds and frequently discussed on WSO)
- Pros:
- Brand strength
- Compensation
- Good place to learn from top investors
- Transferability of skills to other public markets roles
- Cons:
- Culture (have heard pretty poor things)
- Work / life balance and overall stress
- Job security
3) $2-5bn AUM SM
- Pros:
- Culture (to be diligenced)
- Work / life balance (to be diligenced)
- Part of a lean team and able to contribute day one
- Cons:
- Transferability of brand in case things don't work out (it's far from a household name, but seems to be well-respected in the HF community, so maybe I am overestimating this concern?)
Miscellaneous questions:
- Is it crazy to think that the smaller SM (and similar opportunities) might be the best fit? I have a gut feeling that the role is one where I could thrive, be a real contributor and capture upside (both via compensation and via learning the most without undue pressure)
- Not that I am necessarily pursuing this route, but I noticed that recruiters have not come to me with any MM roles. Do they recruit differently, or do I need to explicitly ask recruiters for MM opportunities?
- How well-covered are the smaller SMs via recruiters? Are there good opportunities I could be missing by relying on the recruiters?
Thanks in advance for any and all input!
Go with the highest prestige, marginal differences in comp doesn't matter
MM roles very easy to come by, can just reach out to HH or bizdev at the firms directly and you’ll have a bunch of so so PM’s hiring.
These roles less so
Thanks - out of curiosity, for those sorts of MM openings, is there a meaningful risk of ending up in a mediocre seat and possibly joining a pod only for the team to be cut shortly after joining?
Yes that what pod life is
In all cases, you’re probably 3-4 years out of college hovering into your late 20s so a lot of your job satisfaction also comes down to how you want work life balance to progress.
Thanks - this is very helpful and generally aligns with my current thinking. On (3), what's the right approach to tease out returns / culture / process? Is it appropriate to ask about returns during the interview process?
This is where you have to be very honest with yourself (i.e. take things for what it is vs. what you want it to be). Instead of finding reasons for why something happened, take it at face value or else you end up getting disappointed once at the firm. I usually ask about returns once you are close to the offer or have it in hand. Some firms are sensitive about this, but once you have the offer, you can really ask for anything (investor letters, fundraising decks, etc.)
For example, if AUM has fallen meaningfully over the last 3-5 years, that likely means redemptions have hit the firm hard given relative strength in equity markets. If there has been a lot of turnover, employees likely aren’t as happy about culture, performance, comp, upward mobility, etc. People in this industry generally don’t move away from good seats. What types of people are they hiring? Pedigree alone obviously doesn’t indicate capability, but it does mean the firm has the ability to attract talent that seemingly has other options. These are all important things to consider given this business is as much about perception of being smart to LPs as it is to generate returns.
It's a big mistake to just rely on recruiters. No one has all the mandates and a recruiter will pick and choose what opportunities to show you. Lot of hiring takes place within network, so get to know people. In other words, yes you are missing good opportunities by relying on recruiters to do the search for you
Thank you - that's very helpful to know.
All sound like objectively “good” roles, so congrats on putting yourself in that position. If optionality is what you’re playing for, take biggest brand. But really, you should be clear about what you like and what you want to do. Sounds like you’re young but not a baby analyst so make a bet on yourself and where you’d like to be. You prob get a freebie too if you join firm X and really don’t like it, esp w your bio. Side note. Multi bb aum SM seat is not exactly tiny. Agree w posters above tho > do your DD to make sure your expectations are realistic before hopping over. Best of luck!
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Nice
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