Switch from S&T to Hedge Fund
I’m very comfortable in my current role at an investment bank (trading). I’m good at and enjoy my work + I like the people I work with.
Is there any reason to move to a hedge fund? Or prop shop? I don’t see any reasons other than: better tech, better pay early on, no red tape, etc etc.
Anyone make the jump and regretted it?
Based on the most helpful WSO content, here are some key considerations for switching from S&T to a hedge fund or prop shop:
Better Pay and Performance-Based Compensation: Hedge funds and prop shops often offer higher pay, especially if you're consistently profitable. Performance-based compensation can be a significant motivator if you trust your skills and results.
Technology and Resources: Prop shops and hedge funds tend to have cutting-edge technology and fewer bureaucratic hurdles compared to banks. This can make your work more efficient and enjoyable.
Job Security and Stability: While hedge funds and prop shops can offer lucrative opportunities, they often come with less job security compared to a bank. Banks provide a structured ladder and management framework, which can be more stable in the long term.
Cultural Fit and Work Environment: Hedge funds and prop shops often have a more entrepreneurial and less hierarchical culture. However, this can also mean less formalized learning and mentorship compared to a bank.
Career Mobility: Moving to a hedge fund or prop shop can open doors to the buy-side, but it depends on your performance and network. Some traders find it easier to transition back to banking or other roles if needed, while others may find the move limiting.
Regret Factor: Based on WSO threads, many who made the jump to hedge funds or prop shops did not regret it, provided they were confident in their skills and enjoyed the work. However, some miss the stability and camaraderie of a bank's trading floor.
Ultimately, the decision depends on your long-term goals, risk tolerance, and what you value most in your career. If you're happy and thriving in your current role, there's no rush to make a move unless the opportunity aligns perfectly with your aspirations.
Sources: Q&A: ex-bank trader now running crypto hedge fund. questions?, Any career regrets after moving from PE to public markets?, Sales and Trading - A Comprehensive Guide, Why pick S&T over Prop trading?, Hedge Fund is Paradise
Grass is not always greener
If better pay, better tech, and less red tape doesn’t motivate you to move, then yeah, stay in your comfortable seat… for most people (much) better pay is enough. Also I’d add in general work is more interesting relative to collecting spread in a bank, but to each their own.
better tech, better pay early on, no red tape --> you just stated every single reason to mpve on lol
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