HF vs. PE
You are given $100mm in growth capital to go out and start your own fund. Would you rather start a HF or PE shop and why. How long would it take you to grow the initial investment to $1B?
You are given $100mm in growth capital to go out and start your own fund. Would you rather start a HF or PE shop and why. How long would it take you to grow the initial investment to $1B?
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Personally, Quantitive Hedge fund to minimize the human aspect of investing as much as possible.
Realistically, there’s so many dated, shit companies ran by old-heads that if you incorporated newer technology into their operations you could turn around extremely quickly. Most upper level management at mid-sized businesses are incompetent and purely there for the paycheck. If you are able to adopt a pure Machiavellian // Sociopathic mindset, you could trim the fat off a shitty company pretty easily, integrate a solid tech stack to streamline operations and 3x the value of the company in a like 15 months. Nowadays, you can easily run a multi-billion dollar business with a team of 60 or so competent and passionate people. Granted, taking this approach would probably ruin some peoples livelihood, but if the goal is to strictly turn $100m into a B, this would probably be the most viable approach. Personally, I’d probably forego profits as well, and significantly lower the price of whatever product // service was being offered. Profits should always come second to growth in my opinion because in the modern world, popularity // clout is the most valuable currency there is. Ideally, this would artificially inflate the value of the company, and allow for a clean exit with juicy profit margins.
That’s not at all what a Quantitative Hedge Fund does but your point is true of LMM PE
Ah, the life at a quantitative hedge fund
Applies across all sizes.
As a rule of thumb, even the best run businesses are likely going to have at least 5% of fat on them. You can also work on capital/resource allocation, since that's also a major source of waste.
Staying unemployed for 12 weeks making 50% of their normal paycheck + benefits if they're a senior employee isn't going to ruin anyone's livelihood.
Commodi inventore aut ut at facere. Alias facere illo autem repellat. Quas reprehenderit magni vel at autem.
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