Career Foundation

You're not wrong-working for a small fund can potentially pigeonhole you and if you decide to leave finance, most people have at least heard of the big banks.

That said, if you're seriously interested in becoming a professional investor and you are confident that you'll get to work closely with the founder on investment ideas/research (it's no good to be his favorite fund accountant), I would take it. Just make sure you're as comfortable as possible with a) your boss (and all the other employees) on a personal level and b) the investment strategy (at least big picture). There's nowhere to run and hide at a small company and if you end up hating your boss you're SOL.

Thanks, KP. PM sent.

Been meaning to respond to this for a while as I've had experience on both sides of the table (having the name brand background and trying to sell my firm against the name brand background).

In a sense, you need to think about having a bulge bracket investment banking (assuming that BB is in IB, S&T, AM, ER, etc.) or an MBB line on your resume like buying a put. You spend 2-3 years of your life to get optionality for a couple years after that to switch careers/industries/roles/etc without too much hassle and cost.

Having a name like Goldman or Lazard or Bain or McKinsey on your resume gives a recruiter a chance to backwards justify your experience as "the Goldman guy who went and went into hedge funds but wants to go into Corp Dev." as opposed to "the hedge fund guy who wants to move over to Corp Dev." The former is a much stronger pitch than the latter and can bail you out if you find yourself hating your career.

HOWEVER, it isn't a costless option, particularly with regards to getting into the hedge fund world. When entering a fund for the first time, you're pretty much useless regardless of the level of experience you have. Hedge funds have radically different incentives than consulting and investment banking firms, so the way that you think. Even traditional asset managers like mutual funds are much more concerned with risk mitigation and asset gathering than alpha generation.

I remember once talking to a guy out of HBS who was choosing between an offer at BCG and an offer with my firm. My advice to him was the same as my advice to you. If you are at all uncertain about being an investment manager (and there are very good reasons to be, it doesn't suit most people), then take the name over the industry. If you are passionate about investing and truly want to make a career out of it, then don't waste three years outside the industry trying to figure that out. In experienced based businesses like this one, having more at-bats vastly improves your chances of getting hits later on. Best to start early if you can.

One last point....the quality of the manager you're following is incredibly important. Pedigree is important, but performance and personality are the key. I think we've all seen big fund alumni flame out and explode once they got their hands on the wheel. KP, CFA is absolutely correct...you need to be very comfortable with the manager and how they work. If not, it can get real painful, real quick.

PennTeller & KP are right on the money on this one in my view. My sense is that very few buy side places (even the larger ones) have much of a reputation outside the financial world compared to a GS or MBB. I am less than certain that the traditional finance exits are really open to you if it's the bulk of your CV.

That said, I also think (though I am not the best person to ask on this board) that the best preparation for working at any given HF is working at a similar HF before. The second best preparation for working at a HF is working at a different type of HF. Traditional path jobs are a distant third.

Ok, so that last bit is a little bit of a lie. The "traditional" path jobs may make it easier to find a job because the path is more established, and I realize there are tons of counter examples (HFT to L\S equity, not so much...you'd definitely rather have a banker), but the point I'm trying to communicate is that HFs are different from other sorts of firms in finance. The class of HFs is wildly disparate but also has some things in common that very few non HFs have at all.

I'd also be happy to discuss via PM if you like.