Question: Am I pigeonholing myself by going to a due dilligence role at a BB Hedge Fund of Fund group? Is there exit opps outside of fofs? Also, any idea compensation here for junior roles and up? (GS Hedge Fund Strategies, DB Advisors Fund of Funds, JPM Alternative Asset Management)
Thanks for any input/insight you can provide.
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What experience do you have. Are you an undergrad still? Fund of funds doesn't give you that good of experience. Your doing the due diligence on fund managers, not securities. So unless you want to stay there forever, don't do it. You do make ALOT of connections though, obviously.
Best rgs
Thanks, that's exactly what I was worried about. Well, I'm a jr and will likely get an offer for a summer position, but I don't know if I should do this for the summer as opposed to a boutique m&a shop. I don't really think I want investment banking, but I also don't want to pigeonhole myself. How promising is a career in FOF investing at the BBs. As I mentioned this is a top BB, and probably would be my only way into one as Ive struck out with ibanking/am interviews. Anyone have a clue about comp? Thank you.
Maybe theRe is potential to switch to other AM areas down the road?
Its possible to switch to the direct side if you focus on Global Macro or something similar, but if you focus on L/S Equity, Merg Arbitrage etc pretty much no chance i.e. you will be pigeonholed to FoF type work
^^ Why is this? Do you know anyone who has made the transition?
Maybe this role is not a bad position to be in, but I would like some more input from people with experience. I need some guidance here.
Well, with something like Global Macro, its easier to make your case for a switch to the direct side, not so much with L/S Equity, relative arb, merg arb etc. Yes, I do know someone who made the transition, but its rare so take it with a grain of salt, he's much pretty much the only person I know who's made such a transition.
That being said, FoF itself is not so bad, 4-5 years of experience, you can pull in a good base and bonus (150K+) with a relatively low-stress job.
In my experience, fund of funds invest in hedge funds after they sport record returns and pull their funds if the hedge fund is below what they feel the benchmark return should have been. To me this seems somewhat irrational due to the variance in returns from different pm's investment strategies and ideologies throughout market cycles. Due to the fund of funds "chasing returns" hedge fund pm's and analysts alike don't typically foster the faceless relationships they have with fund of fund employees, due to the aforementioned investment philosophy as well as the conflict of interest and breach of fiduciary duty if a hedge fund was to "entertain" fund of fund employees who are investing their CLIENTS's wealth as opposed a wealthy individual directly investing THEIR own money. As a disclaimer I will acknowledge there are multi-strategy funds which produce a more "normalized level" of returns though out the market cycle as well as the the diversification/protection fund of funds provide to investors. I'm not sure what your educational background is or how confident you are in your other job prospects, but if you were to take this job I would suggest trying to foster as many relationships as possible for a year or two then applying to a masters in financial engineering/applied mathematics or simply a MS fin program, the CFA would be another potential opportunity that could lead to a mutual fund or something of that nature.
I mean big name says a lot but I think I'd go with the boutique. Are they a good firm?
Comp is prob 55-60k with smaller bonuses obviously than banking. Are they potentially going to give you an offer end of summer? If they are I might take it cus you'll be at a BB and it's only a 2-year program. GS/JPM will get you into a great B-school which then can get u into great IB/PE/HF. Question is, are you going to get EXPERIENCE...
The boutique is not a reputable one and has only been around a few years. On comp, would they really pay less than traditional AM at the firm. I thought comp was 70k across the board?
I appreciate the thoughtful response, No Leverage. I'm a junior econ major at at a semi-target exploring my options for the summer. I interned in investment banking, but found it flat out boring. This is why I am open to exploring new options.
I think the two/three years will not be enough for business school. This means that I may have to work elsewhere for a year or two, so exit options should probably be a consideration.
Ok, understood. I sort of feel the same way about doing it for a career (low stress, good comp, pretty interesting) but would love to hear from people in the industry.
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