Short Selling Focused Hedge Funds
It seems there is limited information about this topic on WSO. I would like to understand what it is like to work at a short-seller activist fund or a short-focused research firm such as Spruce Point or Muddy Waters. Would this type of role provide a good experience if the goal is to transition into a traditional L/S hedge fund or a multi-strategy platform/pod?
What are the typical day-to-day responsibilities in these roles?
They do not have to file 13F for the short positions, so it would be awesome if someone knows the returns and performance for these funds.
I would appreciate any insights from those with experience in this area.
Bump, interested
While these places have done well for themselves and certainly have made their mark on social media platforms, they are barely large enough to be relevant in the hedge fund world. Muddy Waters and Spruce Point both run just a few hundred sticks. $300M really ain’t shit, and that’s the cold hard truth in this business
Personally I think if you want to do deep fundamental / investigative short work - you’re still better off doing that at a traditional L/S fund. You can always share the these with activists and if it’s compelling maybe they’ll publish on the name
A long time back I met a guy at a L/S tech focused fund and he was their dedicated short guy who would help reduce their net exposure with half a dozen positions. He was always looking for reporting irregularities in the small/mid-cap space since that's where he found more discrepancies. The issue is that his book was never that big and he'd have a 6 month position at the longest and then be hunting for more.
I actually interviewed with him and he was bringing on an analyst but I took one look at that structure and noped out. I'm too optimistic to mine shorts all day.
someone just watched industry
I worked at a top short only fund and now in the activist space. It’s still somewhat respected depending who you ask, but passive shorting is really hard.
If you want to be a good trader and stock analyst work at a short only fund and you will learn a lot. If I was a PM at Citadel and you worked as a short only fund and you did well I’d give you a job. You will be trading everyday with a book and make money on your PnL.
Activists shorting is more common now because the positions are quicker to exist and some companies are clearly frauds. It’s much more research oriented than trading, but that’s a part of it too.
It’s a pretty niche space and still growing.
Shameless plug: If anyone interested in allocating money in an SMA let me know, min is $100k.
Gotham City? BOC?
Heard SternTao based in London is up and coming. Set to interview there next week
Steve Schurr runs a short focused pod at millennium now
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