Join startup HF or pursue MBA? Seeking advice..
Hi guys - trying to make a decision. I potentially have the opportunity to join a recently launched L/S HF. Guys have good backgrounds and all seem very thoughtful and would be enjoyable to work with. Lean team with ~$300-400mm in AUM currently. Little more background on me - top 25 undergrad (non-business major, 3.5 GPA), IBD 2-3 years, now public equities at a very large fund the last 3+ years. Upward mobility at my current firm is extremely tough (say 10-20% probability at best the next 1-2 years - its a one shot thing, so after that you either stay in your position or leave). I definitely want to do public investing for the rest of my career.
On its face, the opportunity seems great to me - great guys, i like the strategy/sector focus, similar bottoms up research process that I do now but with a little more responsibility, opportunity to move up, in the city I prefer (not NYC), and good comp.
Here is what I worry about. Maybe these are just things I need to be comfortable with, but want to start a discussion and get your guys' advice:
1) am I going to regret getting an MBA 5-10 years down the line? This is pretty much the final window, because if I were to take this job b-school is off the table most likely. I guess this is a question of how much I value the degree - which I don't really, but some people who would hire me in the future definitely do
2) if the fund doesn't do so well, do I become a HF "hop-around?". Probably my biggest worry and being out of a job in 1-4 years and having to settle
3) also struggle with public equities in general, industry is changing (fees, regulation, etc.), is it good to have an MBA to make a shift if necessary, have that insurance policy, etc.
**Look fwd to hearing your guys' thoughts. Thank you very much in advance.
**
FYI - my GMAT is weak, 660, taken it 4x, and the only reason I would get into a top 5 program (HBS/Chicago/Columbia/Wharton) is due to very strong recommendations.
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You're reading my mind..
All i can say is even with stellar recommendations that gmat score is going to be tough to get into T7. Might have to look at Yale/Duke/Dartmouth etc.
Thanks I understand but let's just assume I could get into to one of these because of very very strong recs...
Let's assume you get in and play this out. If I saw your profile where you have 2 years IBD + 3+ years HF + MBA + let's assume 3 more years of post-MBA HF before you exit the industry, it's pretty clear that an MBA will not help diversify your profile. In your case, the only way an MBA will help you is if you use it to exit the industry. However, that said, an MBA might give you some time to reorient your thinking in terms of what you want to do long term (and there is a lot of value in that).
However, if you know that HF is what you want to do, then the question is how do you minimize career risk. I come across a lot of resumes where people seem to switch funds every 2-3 years. I personally think it looks bad and is a red flag, but I think people are more forgiving in a bull market environment. I would try to minimize the number of times you move around voluntarily, unless the opportunity is a no brainer to take. The reason is that everyone only gets so many swings at the ball, and it is only a matter of time before you will be forced to switch jobs for reasons out of your control (e.g., bad economy, bad fund performance, bad personal performance). Bear in mind that you will also be bearing a lot of risk by joining a recently launched fund, so you will have to figure out if the incremental benefits from joining are sufficient to compensate you for assuming this level of risk (e.g., larger role, more money, upward mobility). If not, then I would be a little hesitant to join because these types of opportunities are a dime a dozen for someone with your profile.
quick bump just to see if anyone else has any thoughts.. thanks all
If you like the team, like the strategy, and you think the AUM is high-quality, go for it. Career risk can be somewhat mitigated if the senior people have strong pedigree / track records.
Don't see how MBA is helpful unless you have a strong preference towards a backup career outside of public equities.
Understood
Not quite the no-brainer that people make it seem. I would apply to bschool regardless, but probably join the HF.
If you get into H/S there's an argument for going there instead of joining the HF. The best/most selective HFs in the world recruit from these places, and it might be your only shot at getting into the Vikings/Lone Pines/ career-makers of the world.
If you need to make the decision before you know what schools you've gotten into I'd certainly join the fund. If you end up getting into a top school you can defer it for a year or two in case the fund situation unravels quickly.
As to places other than H/S/W, I generally wouldn't bother. In this difficult environment I know people (that I think are pretty sharp) from even Wharton that are having trouble finding post grad employment.
Good luck man
Thanks and makes sense
Why are you juggling this decision if you haven't been admitted yet? Just leave if you get into a top school
Hypothetically recs wouldn't be as good if I left current firm. So I think scenario analysis is good in this situation
I would be more concerned about the quality of the AUM personally. If I were evaluating a start up fund opportunity I would want to know how the fund was seeded, how concentrated the AUM is, things like that. A start up fund probably has a shorter leash for poor performance than a more established fund with a long track record. If you have a couple bad years and 100M of that 400M is with one investor who pulls their money, what does that mean for the fund and more importantly for your job security? How are the other investors going to react if 100M leaves the fund especially if there is a high concentration of HNW individuals who might not have the highest risk tolerance? That would be my primary concern. Kind of parallels with how risky is the strategy these guys are running? With that low of an AUM, there isn't a lot of room to lose money via poor returns or redemptions.
As far as getting an MBA, it's only going to expand your options and personal network. The experience you already have should be decent enough to open doors outside of the hedge fund space if it came to that, especially with an MBA and an alumni network to fall back on. I would think that post MBA you would have opportunities at larger more established funds as well. I would personally go for the MBA if you are able to get into a top 10 program. Wish you luck either way, not an easy decision.
Thanks, appreciate it.
Would note here that "Top 10" is meaningless in the context of getting quality hedge fund jobs. Anything outside of the top ~6 and its basically on you to network your way there (e.g. there was no point going in the first place). Like I said above, H/S would take some serious thinking and maybe W/C too. Other than that pass on the MBA
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