Why don't more hedge funds get established in geographically desirable areas?
Why don't more people set up hedge funds in places like Jackson Hole or Aspen? It's not like PE where you have to go to management meetings all the time so it would be a pain in the ass to live someplace like that. And it's not like IB or Consulting where you have to meet clients all the time. What gives?
I think hedge funds establish themselves in places where the founders are from and where the talent is. So for example; if you're Ray Dalio, you live in New York, so it makes sense to start your hedge fund in New York. Then you wanna move to a rural area to raise your family, so then you move your hedge fund to connecticut.
Top talent is usually also coming from big firms in big cities. So if you want to recruit the best people for your team, you're going to wanna be near New York, Chicago, etc.
I think if you already have an established team, and they're all interested in moving the office to a more unique location, then that would be cool to see. But i also think if you're at banker living in the Upper East Side and someone is trying to recruit you to go to Wyoming, you would probably be hesitant at first.
It's fine to do so if the fund consists of a founder and senior employees who all have settled down with family.
It's not when you need to attract junior talents who want to stay urban (or at least suburbs close to the cities) for some time after graduation.
Thanks, everyone, replies make sense. But maybe I am delusional - you don't think there are tons of EB / BB / MF PE talent who are foaming at the mouth at the chance to work in interesting and desirable destinations? Maybe I'm a bit out of touch?
I'd love to live and work in a place like Aspen. But definitely not in my 20s and not while im single
Point
"It's not like PE where you have to go to management meetings all the time"
Going to management meetings (holdings & ideas you are looking at, plus customers/competitors of these) is a big part of the job for anyone doing fundamental L/S. Harder to do this outside a major financial centre.
For some other types of fund you do see them set up elsewhere. E.g. in the UK several quant funds are based in Oxford & Cambridge - outside of the main 'financial centre' in London but still with access to the type of talent they are looking for.
There are tons of HFs migrating from NYC area to FL right now.
Anything in Mountain/Pacific zone is not great given the need to keep market hours.
How does this work at HFs in SF?
Not uncommon to show up at the office at 5AM local, if not earlier. Doesn't make for a great lifestyle.
umm what happens if a NYC employee doesn't want to move to FL?
Some firms just let go those employees, I think.
Or they will keep you, but I can't imagine how that's positive for your career at the firm when everyone else at your level gets the face time.
this is the real answer. do not want to get up earlier than I have to
NYC, London, SF, etc., are all geographically desirable areas.
You base yourself where the talent is and where the best connectivity is.
If you were a HF based in Jackson, you'd silo yourself to talent from NY/SF who are willing to actually settle in Jackson year-round. And reminder, Jackson's appeal is seasonal, not year-round. Same goes for Aspen.
Why set up shop in a seasonal destination where you'd have to ship out talent and take long flights to meet management teams? Btw HFs meet management teams all the time so it's not like you're resilient from doing that.
Est ea id quis suscipit. Et non occaecati aliquam quos sit officiis. Amet qui odio beatae enim totam ex repudiandae alias. Autem repellendus consectetur deleniti aperiam.
Mollitia qui facilis est id deserunt. Similique aliquam ex nostrum expedita. Totam iste numquam quis et. Rerum animi aperiam ab molestiae nulla accusamus laboriosam.
Ducimus et sed porro id aut. Velit hic ea voluptates eligendi repellendus natus deleniti.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...