So I am from a non-target and have the chance to join a small, 5 year old Commodity Trading Advisor which is organized as a hedge fund straight out of undergrad. When I mean small, I mean very small. The AUM are $50 million and there are only 5 guys total at the shop. However, both the principals are extremely bright (think top 5 MBA grads) and the other two employees also went to very top schools, so in terms of networking and learning it could be great. Furthermore, the hedge fund is in expansion mode and is looking to hire more research analysts as well as traders while increasing their assets under management.
I would be trading futures on the European and Asian markets during overnight market hours from 7:00 pm to 4:30 a.m. utilizing an algorithm that was developed by one of the principals that basically tells me when to execute a trade. The returns for the 2005 - 2008 averaged 16% which is good considering the market collapse at the end of 2008.
It seems like a great opportunity to join the buy-side straight out of undergrad, but I'm worried the pay would be less than street because the firm is so small; At the same time, it is the chance to join a hedge fund straight out of undergrad and if the firm is successful in expanding and growing its assets under management, I could be in a very favorable position for MBA programs/future employment opportunities at larger hedge funds or in trading positions at investment banks.
The only other alternative I have is interviews with a top proprietary equity trading shop (think Trillium, Susquehanna, First New York)
Any suggestions?
Any chance you have to join an entrepreneurial start-up in its early stages is great because there is tremendous potential upside assuming you are able to demonstrate your value to the group. With only 5 guys and limited overhead there should be enough money to go around.
How is this a real dilemma? You have interviews with other firms as your current other option.
Second jbs though - sounds like a great opportunity. Screw the money, it's irrelevant.
Where can I sign up for this job?
But seriously, it sounds like an awesome opportunity.
Don't worry about the money, if the company grows from $50 mln to a couple hundred million, you will be rich. Take it, but not for the money.
I'm definitely going to accept the position. Thanks for your input guys.
I have a very good feeling about this. I think the company has a bright future ahead of it and I can make a big impact on the growth.
Definitely would accept, sounds like a great opportunity. Coming out of this downturn having averaged 16% returns, the fund could very well be poised to explode. I'd go for it.
My only concern is working the Asian and European market hours. This would mean that I would work from 7:00 p.m. to 4:30 a.m. which sucks. I think I could adjust as I'm used to staying up until around 2-3 a.m. as it is.
I wanted to know what type of compensation could I expect for such a position? I would think that I would receive a bit more than normal because I would work the evening and overnight hours alone instead of your regular U.S. market hours with other people at the office. Would Street base of $60K be appropriate plus some kind of performance bonus?
Furthermore, one of the traders currently at the fund said that he got depressed after a few months of working alone at night.
The algorithm employed by this fund is very complex and creates negative correlation on down days along with smaller drawdowns. It really is a great systematic approach that has worked fabulously for as they have seen returns of 20%, 14% and 13% in 2006, 2007, and 2008 respectively.
I could see how night would be a concern, but remember you are only working 9.5 hours trading. You said you were excited by the networking opportunities - I would suggest you maybe grab some sleep from 5-11, and then head back in to talk with and learn from the guys running the fund. Obviously you're adding to your hours, but it is a startup and that is how you're going to get accepted, get ahead and be liked.
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