The Elite Event Driven Multi-Strat Hedge Funds (Elliott, DK, Farallon)
Wanted to start a thread regarding recruiting and working for specifically Elliott, DK, Farallon, I cannot find much info on these funds at all and have not been able to get looks with anyone there. I am currently at a MFPE and was at a top BB before and am HYSPM, I've gotten looks and offers from all the pods (great teams), a few elite SM and other HF, I have path to promotion at my MF likely as well.
By far the smartest peers a few years above me went to these Multi Strats and are clipping unbelievable numbers and have incredible work life somehow. Are these not the pinnacle seats, can do publics and privates, distressed, activism etc. Although it seems like Merger arb and Converts pay insane too??? (one of the peers in questions works in one of these groups and just bought a known brownstone in the upper east...cash).
I would love to know more about these funds, comp at these places, which groups are the best? How to angle myself to get into one of these places?
Bump
Bump
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Retired now but can comment on this.
A large portion of the wealth creation at these firms comes from the deferred reinvestment into the fund. This is mandated over certain thresholds ie. 1Million + bonus is X% deferred (can be held in the fund fee free or Tbills). There are then preferential kickers, points and attribution at certain stages. Truth is that these firms do not lose money and I am very specifically talking about Davidson Kempner, Elliott and Farallon like you are mentioning in your post, the returns post fee are typically high MSD. Comp here is different then pods and SM I cannot comment since I was quite senior and imagine its different from shop to shop. I will say however, you will be paid significantly more than your MFPE counterparts, also the wine & dine + expensing policies are incredible.
All three of these firms are private and owned by everyone who works there (varying degrees), they also pass through much more than you would expect to LP's
The compounding effect is pretty incredible when you have full confidence you wont lose money and get 12% come hell or high water ;)
Wealth creation at these firms has minted more than a dozen billionaires, Tony was an intern at DK and is now a multibillionaire, Michael Herzog at DK was recently ousted and in the court documents you can infer out he is a billionaire, there are 3 others here. Paul and the 6 other equity partners at Elliott are billionaires, many chose to start their own shops and have done very well. Nicolas Giauque and the founders of Farallon are billionaires and a dozen of the seniors are close.
You are completely off on the return stream of at least Elliott and Farallon
Care to elaborate
What do you mena returns post-fee are typically high MSD?
After reaching the hurdle, the net returns to these funds are high mid-single-digits (so 6-9%)? Implying whatever the asset base is, multiply by that percent and those are the net proceeds divvied up into the firm?
How quickly does pay scale at junior levels too? I know you said you were a junior at these firms, but once you're ~4 YOE, is it high 6-figures?
bump
All I can do is share my experience with them. It basically was like dating/marriage. Hiring at junior levels is basically seeing who they want as their son / son-in-law to bless with a cushy job and a path to make or take over the management of large wealth. To me personally it felt like if you want to marry their daughter / make their employees your new family and brothers then go ahead. Otherwise, it’s just someone else’s empire and wealth that they’ll manage. Paul Singer will be running Elliot from the grave. The people next in line are his right hand men and will do things as he wanted. I figure the same with DK and others in that private HF world.
Good luck
Not really the case with Farallon tough. Steyer really did step down and not kept all the economics to himself
Thanks
I’ll take the under on Tony at multibillion and Michael at one.
OP thinks everyone and their mother is a billionaire
Think you can run the math on Tony, public ownership puts him over one (you can google this), private partnership unvalued likely pushes to multi. In regards to Michael math below totals him at or around 1B no?
"Herzog claimed he decided to leave in late 2024. Instead of retiring with the benefits that he expected, he said he was forced to redeem his interest in the fund. Davidson Kempner has so far kept 10% of this redemption, which totals $80 million, he alleged." - Bloomberg
DK is not in the same league as Elliott and Farallon. Those who are actually in the industry will know.
Are there strategies where DK actually shines?
College students giving MS haven’t seen DK returns lately and don’t realize the pay gap between DK and the other two. Ask around.
Could u give any data points for comp at dk/elliot/farallon?
LT returns of all 3 funds are in the mid/high single digits with not a massive difference between them. They are absolute returns funds focused on capital preservation
On DK specifically, they run more credit I believe vs the other two having more equity exposure. Not sure what you mean about returns - DK posted double digit returns in the last few years
Work(ed) at one of these places and can tell you it’s not some fairy dust, Neverland seat.
Just to dispel some myths, none of the people below super senior level really just get to do “whatever they want”. All these firms have grown to have hyper specialised teams that work on specific products and strategies. Sure at the top from the firm level, people are comping publics to distressed to activism, but individually you will most certainly not be doing all those strategies nowadays. All these SMs are sprawling, large, >100 investment staffs firms that behave increasingly like large alts and banks than the nimble funds they were 20+ years ago.
Typically hiring is done on a team/strategy basis, so there isn’t necessarily a fixed recruiting window and is largely needs based (besides some MBA pipeline at some of these places). Your experience and pay potential will also be very tied to the performance of the team you ultimately join.
The best things about these seats at the more junior end are lower volatility (vs MM) and shorter duration (vs PE) for payouts. I think there are far fewer true right tail outcomes of insanely high cash payouts early on in your career such as your buddy than if you were at MMHFs tbh (so I personally would fact check your friend) but you also won’t get fired immediately if performance of your team / the fund is poor. How you perform from there on is really up to you with some big element of luck and political jockeying given progression and payout isn’t necessarily entirely P&L based once you get to the size of these SMs.
Don’t get me wrong, I still think these are amazing seats. But it’s just a job at the end of the day and most of us are just clipping pay checks with a little more convexity than others.
Headcount issue is true for Elliott/DK but doesn’t Fara only have 30-40 globally for the hedge fund? Most of the headcount is from the private and real estate side, which also has a considerably smaller share of AUM
That reply from 23 mins ago nails it. People hear 'Elliott' or 'DK' and think they'll be jumping between distressed, activism, and privates every day. In reality, you're just highly siloed on a specific team. Still an amazing seat with great upside, but definitely not the Neverland OP is dreaming of
Across the last +/- 5 years good friends of mine at each of Farallon/Elliott have been crushing it..would not be surprised if they are near hwm for comp although small ss. Lifestyle..seems intense, not easy but more academic from what i’ve gathered - could see why both are selective beyond just pedigree. DK unfortunately cannot speak to
What does HWM mean (with regards to comp)? And small ss?
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Uncle worked at DK for 11 years…has a PJ now.
So many lies in the first 2 paragraphs, it's not worth responding.
you must be talking about Elliott based on your description, fwiw I know people there and at DK/F, and some mid levels from Elliott have interviewed at my fund.
these all seem very crowded at the mid levels. if you get the path to partner at any of these seats yeah it’s great but that’s like 5% odds and takes a lot of political luck (is your boss liker but the brass?)
Farallon probably seems best of the three but still deals with these issues.
also it’s hard to judge a firm based on a home purchase dude …. the guy could come from money or something.
My 2c
A good pod is far more lucrative as you actually get paid formulaicly. I know multiple people under 30 yo who’ve made msd millions in a year or on a buyout.
Seat at a top L/S SM is also like this.
Elliott is like a bank now, a very interesting one nonetheless. They had consultants come in and the fund is now v bureaucratic with lagging returns. Also, quite crowded so joining now is nothing like joining in 2016. My understanding is analysts clip $1m with low risk and long hours.
Farallon closer to a top L/S. Much leaner and less bureaucratic, more ability to take risk.
Also, risk taking in all the above frameworks is very different so think about whether you like changing your mind quickly and spreading your bets, or betting your career on 1-2 longer term bets.
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