Would you quit your Hedge fund gig if your boss has emotional mood swings?
If you were an analyst working at a small fund under one PM at a typical L/S equity hedge fund, you were paid pretty good/hours were good and have the potential to get equity in the fund as You progress contingent on performance , but your boss was erratic and goes through cycles of mood swings because of the performance of the fund, what would you do? In good performance months, he's all happy, takes us out to dinner, etc. but in bad performance swings, he's yelling at his wife over the phone, he starts micro managing in what I'm doing, etc.
What would you do in this case? Just suck it up?
I find it's usually not a good idea to associate yourself with mentally unstable individuals, especially if you're in a position where they have some sort of power over you. At the end of the day, it's your decision to make.
I wouldn't say he's mentally unstable...just angry when things go bad
Yeah, my friend was in this situation a few years ago. We were all in our 20s and he was pretty much the first to land a good hedge fund gig. He pulled in a 7 figure bonus his first year or two as the fund was doing well.
But, he didn't get along with his manager. He got along fine with the head of the company, but his manager drove him crazy. I talked to him about it when he was thinking of quitting. He said he would be happier prop trading with his own capital and that's what he did.
His decision was so crazy to all of us in his circle of friends though. I remember thinking at the time I would deal with almost anything in the office for 100K a month. But, he was not at peace and had to go. Later, the fund kind of went downhill and was never the same. So he left at a good time.
Coping with stress and pressure as a PM can be really hard. Suck it up if you can handle it, otherwise stay until you can find somewhere you could jump. If you are currently been headhunted have a chat with him about it when he is in a good move, if he takes it personally, say yes to the offer from the HH.
Do all hedge fund PMs behave the same way mine does?
Not in HF but my partner in VC can be like this albeit rarely and less extreme
No absolutely not. However, peoples' personalities really come out when their money is on the line. I've seen people like OP's boss who engage in manic depressive behavior. There are PMs who are constantly angry (regardless if they're making money) and shit on their subordinates. Some double down on their losses, others will tighten up when they lose money. My own boss is basically a robot: shows zero emotion no matter what happens. I sit next to the guy, but I've had days where he's spoken 2 sentences to me.
Probably suck it up. Always contingent on your ability to find a better situation though
At times it's great, but at other times I just wanna sock him in the face....
It's like dealing with a hormonal girlfriend
Yep. The unfortunate reality is that the HFs are like every other gig - a lot of the people that make it into senior positions have no business actually managing people. One of the things I've learned over time is that you need to have a high tolerance for management incompetence and (in the HF business especially) childish/ egotistical behavior.
If you're getting paid well and otherwise enjoy the job I'd stay. In any case the most important thing is that you can't leave without guaranteed alternatives (another job locked up) in this nightmare market for Hf analysts.
If the "abuse" stopped at micromanagement, I would stay. Maybe it's because I am not in your position, but I kinda sympathize with the PM when markets are down. Probably insanely stressful, similar to when deals keep dying at an IB. If the abuse increases and borders on harassment, well that's another story.
The micromanagement is basically telling me what to do when things go to shits ...usually I'm autonomous and he doesn't tell me what to do
great traders and investors don't lose their shit when positions go against them...this is a signal that your "boss" has just had a decent amount of luck in his career...and is a also a signal that they will eventually blow up the fund...which will put you out of a job. My advice is to seek employment elsewhere...asap.
We're not anywhere close to "blowing up" lol. My PM is an ex-partner from a value group of a mega fund who decided to start his own fund (the one I am at), so he's not a bad investor lol and I've learned a lot under him during my stay
great traders and investors don't lose their shit when positions go against them...this is a signal that your "boss" has just had a decent amount of luck in his career...and is a also a signal that they will eventually blow up the fund...which will put you out of a job. My advice is to seek employment elsewhere...asap.
+1
The micromanagement likely happens because he wants to respond to trades going against him by exerting some control over his office and employees.
Do you think he's a good investor? Can you learn from him? If so, work hard and suck it up until something better comes along.
+1 I agree on this point, it's likely that when things move against the fund the PM is attempting to correct the course. Don't take it personally and suck it up... try working under a neurotic director in IB -- it'll introduce you to a whole new world of micromanagement that you never thought possible lol
Well yes, he's a great investor but when things go the other way (company we're invested in misallocates capital, bad quarter, etc), he can be quite irritable. We're long term investors, not short term, so I always imagined him being cool with short term adversity and challenges but it hasn't really been that too much.
I'm going to go against the grain here. The negative energy of people who can't control their emotions can seep into you and impact your soul + how you treat others in the future. Sure the money can be there but is it worth the price on your well being and character? There is something to be said about being able to deal with difficult personalities sure but really assess if that difficulty has something good to be taken away from it or not.
I've met more than my fair share of people who have left lucrative roles over toxic people and 90% never regret it because once they're out the rabbit hole they realize how much mental poison they were intaking.
Are most hedge fund PMs the same way as mine?
Based on personal contacts, yours is not uncommon but also not the norm. I know someone at a fund whose PM would yell and insult his analysts everyday as a way to take out his frustration (ironically family office backed). Hedge fund PM personalities are on a whole spectrum but the constant stream of information and transparency of performance can make some of them very neurotic and crazy.
+1
I don't know. This sounds kinda normal... it's probably some pressures outside work also getting to him. Just trudge along, and then leave when you can
It's honestly the same way at most funds.
In what way?
The emotional mood swings.
Most HF's are offering monthly liquidity to investors which means that your fund is, in theory, only a month away from losing its AUM. One fund I worked at went from 3bn down to 700m in 3 months during the financial crisis. There is a huge amount of pressure to perform on a monthly basis these days which creates a huge amount of pressure on the PMs. I think this type of behavior is quite common in the industry and there are a lot of PMs who go through massive mood swings. One thing I have noticed is that PMs with big spending habits and who need the money tend to experience more volatile mood swings compared to PMs with less expensive lifestyles. Either way, if you enjoy the work and are getting paid well, I would just put up with it and accept it as part of the industry. Also, unless you've personally managed money professionally, you can't really judge these guys as you haven't been under the same pressure and don't know how you would react if in their shoes.
So ur basically saying that this is what most analysts deal with on the buy side at smaller funds where the livelihood of the PM depends on the fund performance
Very simple and from my hedge fund experience (do not understand why ppl comment who do not even work in the industry): if he/she sucks at the job, leave. It is more about the track record and what you learn. I would not work for anyone who does not know what he/she is doing and that includes a poor track record over time.
Luckily for me this isn't the case, he's pretty darn good and I've learned a lot
Takes a long track record to verify "skill" in stock picking.
You can make argument that lucky survivors outperform and raise AUM in L/S game...but eventually, like all runs on the roulette table...it ends.
I'd say the volatile personal behavior results in "poor" stock picks sooner rather than later. Would try moving to an investment fund with a better culture. Preferably one that isn't L/S also.
Is it just LS analyst recruiting thats bad or is it across the board of HF strategies?
Hi, With the limited analysis of the situation, I would suggest as long as the micro management stays in the limits, I would rather just that you persist and should look at your job as an opportunity to learn about the different personalities that your field has and also try to grasp what your boss does wrong and avoid it doing yourself if you were to start your own hedge fund and mange people. Also there is great potential to grow as you are closely working with a PM as it's a small fund.
You’ll have bosses who are erratic and have moods swings when things go against them working in a shop. dazedmonk is spot on, the finance industry is made up of non-leaders and overpaid middle managers. They get paid like they’re a main market CEO but barely have the leadership skills to run a food truck.
If you’re good the right fit will find you. It’s also likely everyone else thinks the same about him as you do.
My manager who doesn't teach/want you to learn by yourself and expect you to make no mistakes. When things don't go his way (if it's a preference thing or actual mistake), he will explode. It is an open floor setting - so yelling makes it more embarrassing. I've started to build high level of anxiety. It has made me to think maybe the industry is not a good fir for me..
I can totally relate to this because I was in the same situation. I was working for a hedge fund / prop trading firm and the guy who ran the shop was absolutely insane. There were times I went to my car after work and screamed from frustration after being yelled or treated like shit, being threatened of losing my job or scolding me in front of everyone for losing small amounts of money and telling me that I suc. I learned a lot but I knew I had to get out of there. As much as I wanted to stick around, I'm glad I got let go and shortly afterwards, they went belly up.
My advice... he won't change. I promise you. That's his personality. Learn as much as you can, soak up everything and look for a new job ASAP. If you don't learn anything and leave, you wasted your time being there. FYI, I'm not talking about just doing the job and doing it but the flow and why you're doing what your doing so you can share your learning for your new job
Another FYI,
If you can handle it emotionally, stick it out. If you're stressing the fuck out and you're crying over this shit, leave but don't leave if you don't have anything secured. Go to the gym and release that shit. Sometimes, being stressed out is good for you because it pushes you to work harder and to actually fucking learn.
The answer is yes. Stop thinking about it
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