What firms are worth leaving blue chip PE for?
I started getting at this in another thread but curious what firms you would leave a blue chip UMM PE firm for. I'm not Apollo by any means but more like Berkshire / Hellman & Friedman / Francisco Partners kind of place.
So far I'm hearing SM is good for people who are generally risk averse, places like Tiger Global and Coatue. I recently saw Melvin, Maverick, and D1.
Viking and Lone Pine were also suggested but I hear that seats there are next to impossible to come by.
What do you think about leaving the kind of place I described for something like Balyasny? They are a MM so I suspect a bit more misaligned?
I like investing, I like long hold, I want to start thinking about markets and trends and not just financial engineering, and I hate process work. Maybe Abdiel?
I will gladly SB any good answers and reciprocate in any way possible. Thank you very much and hope you all had a very happy Thanksgiving. God bless.
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Seats at all the SMs you listed are extremely difficult to land.
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If you’re at Hellman and Friedman, don’t leave.
Curious about why they shouldn't leave. Is H&F more of a career PE place?
Top tier PE form that will make you an incredible investor. Plus the brand name you have with it on your resume.
I used to work there. Have a lot of respect for the place but at some point you have to ask yourself if you want to have a garbage lifestyle for the rest of your life
What was your lifestyle like there?
Seeing your list there makes me think you are at BX. Statistically you'll end up at a $3.5B MM PE after 2yrs bro.
Hahaha oh man! I'm not at BX but the general sentiment is so true! Ugh!
BX is MF I thought
First of all I think the decision to leave PE for HF has less to do with prestige but more to do with long-term fit and alignment in terms of skillset/passion. I think HF is a much more risky / entrepreneurial career where you're really betting on yourself - with potentially massive payoffs whilst being challenging to exit outside othe HF class once you go in. Not going to speculate on the future of the HF industry as there are pundits here who likely know far more than me as to the future of HFs, but at the same time, I don't think PE is an asset class that is going to disappear anytime soon.
For sure don't go to a MM if you're risk averse though is what I do have to add
Is this an actual viewpoint people have, that a large sm like the ones mentioned are more "presitigous" than umm/mf pe?
Some people do think that, probably because it's a 'next step' from PE and probably 'harder' to get because there are so many fewer seats, but I think anyone who really knows what they're talking about realize that MF PE and a large SM hedge fund are both incredibly prestigious roles and at that point it's more about fit/career path than prestige.
Your thoughts are pretty off-base. Leaving a good PE firm for a good SM or other prestigious HF isn't the best move for most people who were never interested in public markets. These seats are often volatile in that attrition can generally be fairly high given the nature of the job so generalizing about a HF seat is just wrong as being the only role "worth" leaving a PE seat for. After PE, or right before you're leaving, you need to really assess what you're interested in and make a move accordingly
Maybe, maybe not. I enjoy the investing aspect but hate the process work. I also know that it's very risky to join HFs that aren't top quartile (similar to VC...). I also know there's more inherent risk in MMs, hence why I am here asking about Tiger Global, Coatue, Melvin, Maverick, D1, et al. I am risk averse, so I've assessed myself right to this thread.
If you’re risk averse, HF probably not for you. Smart ladder climber works in PE, but in HF at some point you need to take risk successfully. That is literally the job, so of you don’t like laying it on the line, you probably shouldn’t enter the industry. Not just because even the big firms introduce dramatically more career risk than PE, but because you won’t be a good stock picker over time if you don’t love risk.
This is exactly right.
btw, coatue has very high turnover. But in general, none of the top tier firms that you mention will keep you on unless you are able to consistently be taking risk
Say I am interested in learning more about this (I am not averse to public markets, I am just ignorant right now) to evaluate whether or not this would be a better fit for me than my current situation. What would you recommend reading?
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Shorter version is if you like trading up to more and more prestigious (but ultimately safe) affiliations, HF is not for you. Maybe somehow you get to lone pine and hide for a few years before they realize you don’t have ‘it’, but it won’t be a career. You gotta love living with risk and uncertainty and gotta love shooting the ball to make a good career in HFs.
And shooting the ball isn’t about investing without formal IC memos or whatever. You’ll probably find you’d be willing to write war and peace or engage in any annoying ‘process’ (data scraping whatever) to generate alpha if you could once you’re in the seat if it would work, it just doesn’t (in the case of long IC memos negotiating purchase agreements or doing legal diligence). It’s about owning risk with your reputation and constantly seeing hundreds of millions of dollars voting on whether you’re right or wrong and having nowhere to hide. Not a sane thing to want to live with, and treading type A conformist finance path probably selects in favor of intellectual horsepower that is useful to HFs, but against the personality required to do it well. Which is why 80% of people should stay in PE and ‘less process’ is definitely not the reason to switch.
Similar to the sentiment expressed by others on this thread, I'm skeptical that you're a good fit for public markets. However, reading a book won't be a great litmus test for you. I would recommend you stay put in your current job and invest on your own for a year (or more) - preferably with real money but with a paper portfolio if necessary. Come up with an investment thesis, buy/sell the stock, and track it daily. One of two things will happen over time: 1) your intellectual curiosity will take over as you try to figure out what is driving the stocks you own, and this will snowball over time, or 2) you will think this is a waste of time and possibly have an emotional reaction to gains and losses. This process will be insightful and is low risk, at least as far as your career is concerned.
One last comment is that if you do ultimately decide to pursue public markets, you may be a better fit for a MF than a HF. MFs will invest with a long-term horizon (at least some of them), think more like owners of a business, and have more career stability versus HFs.
Start your own thing if you don't alreayd have a family. You'll never make as much working for someone else.
Who the fuck is going to give me money to start a fund
Not sure. Had a VP in banking leave with another VP from M&A group and started a search fund. Last i talked with him a few months ago they seem to have been killing it. They'll pull more than their VP and principal counterparts in multiples
Again, unsure where they got the funds for the search fund but i know it was LMM.
I mean if you really want to do public markets I would think any SM with a reasonable AUM ($2bn+) and a good track record would be worth leaving for
One of the top long only / mutual funds like Capital Group. Know a couple people who did UMM/MF PE into HBS/GSB and then made that pivot. It seems like a pretty amazing job
For sure CG or RCG are two places I would probably drop what I'm doing and run to given the opportunity.
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