What happened to young people founding hedge funds?
Back in the day, ambitious 20-somethings wanting to get rich would start hedge funds. Ken Griffin founded Citadel from his dorm room at 19.
But now, they’re all starting fintech companies. The Collison brothers (Stripe) are billionaires. Revolut founders are billionaires. Even crypto companies. But nobody’s founding hedge funds anymore. When’s the last time you heard about a young hedge fund founder making it big?
What changed? Why did all the ambitious young finance talent shift to fintech/tech instead of traditional asset management?
The market got more mature. When that happens the low hanging fruit dries up and allocators get more discerning/risk averse when making funding decisions. That means they are more wary of managers that just got lucky vs. those that have a repeatable process. A main component of proving out the latter is building a consistent track record.
Flip to crypto, an industry that's been around for a decade, and there are plenty of young people that got super lucky and turned that luck into an edge over time. It's a new asset class with a lot of dumb money that can be taken advantage of.
There are definitely young smart people who like investing. They may be running money, you just don’t know about it. By the way, are u insinuating that young, smart people were not drawn to Silicon Valley in the past?
I think your premise is incorrect.
The youngest person to ever launch a $1bn+ HF launched it in the past year. Pods allow young investors to “launch” without all of the headache and uncertainty of raising capital, while maintaining optionality to launch independently later.
The cadre of investors you cited all started small - with tens of millions in capital - and took decades to become billionaires.
If the capital isn't yours, you aren't really a hedge fund founder my guy. Try telling Izzy its your fund and money after being down 10% and see if you still have a job. if someone else is calling the shots at end of day its not yours.
Look at Hayden and Voyager. Founders younger than 35 I believe. It still happens but increasingly the best PMs go to platforms where they don't have to worry about overhead upfront which has gotten more onerous over years.
echo the above. Industry is too mature. Every HF/PE/bank is focused on cost optimization to maximize dollars that accrue to the top. The best and brightest of prior generations have plowed into this field in droves and mined it for everything it had, so nowadays there is little room for innovation, though we can still get creative at the fringe.
Rare are the days of asymmetric financial outcomes for young folks. though sure, you'll see examples of some kid making a few sticks on occasion. That's not to say that some wunderkind won't pop up every 10-15 years but experience matters in this industry and statistically speaking, you are likely not an outlier amongst outliers.
Smartest ones gravitate towards markets/industries where its a young person's game and more wild west.
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