Short Selling Role
What do you think the career implications would be of taking a role on a short-only desk at a larger hedge fund? (focused on alpha-generating shorts, not hedges)
Do you think the skill-set you will develop would be fundamentally different than what you would in a position exposed to long and short selling? Do you think it would pigeon-hole you moving forward or somehow narrow the opportunity set of funds were you to move on?
Curious on the thoughts here, thanks in advance
yes you will get pigeon holed. People will say, "oh that person can only short", which means you will have a much harder time every launching your own L/S product down the road.
Disagree. Among l/s managers, real skill at short selling is much rarer than the ability to pick stocks that go up. Few people do both well, but many feel it's the short side that justifies the incentive fees. If you're doing it right as a short seller you'll be a much better long investor (skeptical, attuned to risks, etc.) as a result. You can get pigeonholed in any role, but being short-only within a long/short context is not the same as being at a short-only fund. It's certainly better than long-only!
That said the value of the role in developing your broader investment approach and skillset will depend a lot on the fund's approach and how silo'ed you'd be.
I wouldn't stay in a short only role for more than a few years, but I think getting that experience would be extremely valuable. Coming from an LP, tempaccount is right that we pay higher fees for the short side; we fire people who say they are L/S but are essentially long only. The worst case scenario for a L/S fund is losing money on shorts.
Like I said, you will get pigeonholed if you stay in the role for a long period of time. But if you can get a few years of experience on the short side and then get into a more generalist role you'll be in a good spot long term.
Echo the guys who say that being able to effectively short is valued much more than just being able to go long (and in most cases underperform anyway). Being an effective short-seller is much much harder than being a long-only guy since markets always go up in the long-run, not to mention that you have everything stacked against you (i.e. management being hateful towards you, the sell-side being incredibly bullish at all times etc etc.).
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