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They almost universally pluck from PE/ those who did the "golden path" (i.e. GM/MS/JPM > MF PE > H/S/W). Turnover at these places is extremely low, so there are few seats ever available, and they can have their pick of the litter. Usually, if you have a multi-manager HF name (Citadel, Millennium, P72, etc.) on your resume they won't even look at you. Don't expect to go there from IB.
do you have any thoughts on Lone Pine? would you include them in the same tier as Tiger and Coatue? have heard Viking is not usually the top choice for MF guys looking to switch to HF
These "prestige" or "tier" questions are pretty stupid, IMO, because they're almost entirely subjective and opinion based, and only start arguments...
That said, broadly speaking, all of the Tiger Cubs & related funds are viewed as being at the top of the HF food chain. Saying Viking isn't a top choice implies those people even have a choice at these places. Again, there are very few seats, and assuming one is fortunate enough to even get an offer, let alone multiple to have a "choice", it's usually taken graciously.
Definitely not great culture. You don’t go to these places for the culture. For culture you can go to Tokyo or maybe Brooklyn. You go work at these places for comp and the possibility of starting your own fund.
You go because these place have a low Julian number (a term I made up) which I define similarly as the Erdos number in mathematics. Among hedge funds, having a holy lineage matters a great deal since skill can’t be measured with a meaningful t-stat (since excess return is small in proportion to variance of idiosyncratic returns). Much of this holy blood is passed from PM to analyst and it is this holy Tiger blood that the finance world worships. If you’d like to start a fund, a Julian number of 1 (you worked for Julian directly) allows it to be on the order of low-$10Bs in size given your closeness to the Divine. If your Julian number is 2 (you worked for someone that worked for Julian), it can be on the order of mid-$1Bs in size. If you work for one of these funds you’ll have a Julian of 3, which (given the relation I am describing) is much better than a Julian of 4 because you are closer to the divine. As you can see, the Tiger blood is diluted by an order of magnitude for each 1 increment in Julian number; this is why it pays to work for the best and fuck the rest.
LOL. I've never heard Coatue and low turnover ever mentioned together
LOL. Probably why I didn't mention any fund by name and instead spoke more broadly of Tiger Cubs. Why does everyone on this site seem to have extremely sub-par reading comprehension skills, even amongst Certified Users? I thought that was a pretty important skill in finance...
They have exceptional performance. but this is primarily explained by sector / factor exposure rather than stock selection. Institutional investors love to dismiss retail investor performance as primarily explained by "stonk factor" outperformance; if they think this, why do they not dismiss long tech/short retail-driven outperformance that we see with "elite" hedge funds? Factor hedged / hedged to relevant sector indices, these funds are not clear outperformers for the last 5 years. These funds make it look like they outperform through a variety of parlor tricks like showing cumulative lifetime returns, showing incorrect benchmarks and using cherry-picked dates to assess drawdowns. the prestige of these funds is explained primarily by sociological factors, not performance.
it's important to remember that not long ago people accepted that their monarchs had divine inspiration that granted them legitimate authority. this wasn't even that long ago! this divinity was passed from generation to generation - from father to son. today, i think a similar mindset explains the large assets controlled by tiger funds; divine inspiration is passed from PM to analyst. it is divine tiger blood and a certain mythology accepted on wall street that helps grant authority over assets, not skill.
That said, in the early years many of these funds did quite well. This is because it is easy to outperform when your AUM is small. These funds like to show their cumulative lifetime returns since it allows them to make it seem like their strategy still works on large AUMs (maybe it does, but it isn't obviously difference from chance imo).
I do not mean to be too harsh. some of these funds probably could have non-negative skill but it’s hard to say.
People are still on the tiger tip? Most Tigers = closet beta that do sellside quality work and claim they are "long-term" which is why most of them have shut down and lost to the multimanager funds. This thread is full of either first year bankers or college kids that are clearly not commercial.
Chase talking sht about platforms is hilarious. Old money kid who grew up knowing Julian, who seeded him with like $25mm at 25. Guy literally had / has every connection to be successful in the business and has literally had it easier than anyone. With that kind of capital it hasn't been particularly difficult to be levered long fang post-08 and still most of them have underperformed. What a joke.
why is it that the same investors who shat on growth funds for investing in tech over the past decade since tech was obviously "overvalued" without actually understanding the unit economics or out year earnings potential of the businesses are now downplaying those same investors after they have succeeded because "FANG was so obvious at the time!" the goal in this business is to make money, not make money once you adjust out every factor. As druckenmiller said "if something needs to be hedged, you shouldn't have a position in it."
The investing world is big. it is is supposed to be fun. it's awesome because there are many ways to make money. maybe you catch inflections in credit card data and trade it pre-Q before others (xyz pod). maybe you identify the next NFLX and size it up (tiger cub/growth fund). maybe you find a cyclical recovery play that is priced as a cheap call option relative to the upswing and make 10x on it (xyz value fund). maybe you own MA MCO TDG and make 15% a year despite being "boring" (large cap growth LOs). you are not better or smarter because you do one vs. the other. if you have been in this business long enough you will realize there are many ways to make (and lose) money. You can respect warren buffet, peter lynch, leon black, ken griffin, and james simons at the same time without saying one is inherently better/worse than the other.
No this doesn’t make sense. the world has changed recently.
you can buy their factor exposure as a product for less than 2 and 20 now. So if you believed in the theses of these funds, you’d be better of buying long internet from a product sold by black rock. These products didn’t exist when the fund managers you listed were around. The reality is these products are basically just better.
Jim simons actually beats the market and so escapes the criticisms in making. Not fair to include St. Simons here.
Long ago in the days of yore hedge funds were actually a growing industry...can you believe that? This was the days when the fund managers you mention actually beat the market. But hedge funds are no longer a growing industry. Why?
you can think what you think but why do you think LPs are slowing taking money away from funds like this? Maybe you should apply the tiger fund lens on the tiger funds themselves. Do you think they are talking to their customers? Have you talked to your customer? If you’ve ever talked to LPs you’ll hear them reject the arguments you’re making and say roughly what I’m saying. I know I sound cynical, but my views are based on just talking to friends that work at fund of funds and pension funds. It’s honestly those conversations that led me to change the direction of my career. LP folk all talk in terms of factor exposure and idiosyncratic returns. It’s a major change in the way value proposition is measured. People today have a full right to be skeptical because the “prestige” funds that pay bank do not seem to be the ones that are listening to their customer and giving them the product they want.