Best path for starting a successful hedge fund in 5 yearsSubscribe
I have an interesting question for you guys and want to hear people's opinion on which path might be better. I have a feeling that everyone will say path 2 but just wanna throw it out there.
The goal is to start a hedge fund in 5 years and lets assume that when I start this fund I will be able to raise $20 million regardless of which path I take.
path 1. Go to a public accounting firm and work until time to start hedge fun. Job would consist of audit and tax work on hedge funds or pe firms the entire time.
path 2. Start off as an analyst at an investment bank. then try to switch to someone else's hedge fund for a few years then start my own.
While I feel like the obvious answer is path 2. The reason I pose this question is because if I take path 1, I feel as if I will get a good understanding of the industry (albeit as an outside) and I know that I will definitely have more free time which I would devote to developing my fund's investing/trading strategy and studying up on the markets so that when time comes I can perform well. Also I will potentially be exposed to different strategies through auditing and doing tax work for the funds that could give me good ideas.
Please remember when answering the question, you are assuming that I will be able to raise the $20 million in 5 years regardless of which path I take. Also I know thats not a huge amount of money in the hedge fund world. But it would be a start and if I charge 1/20 and can make 15-20% returns I could earn $800k to $1mil in my first year.
Now I know this all sounds nice and realize that A) I would have to actually get the money and more importantly that B) I would have to make 15-20%. But since we are disregarding A in this situation, the real question is which of the two paths would give me the best shot of performing the best as trader in 5 years.
Also would your answer change if the analyst position was at BB as opposed to a boutique firm.
Any insight or just general thoughts would be greatly appreciated.