elite HF -> mega-fund PE

Just as some background, I did 2 years of banking then did 2 years at a elite hedge fund. I'm contemplating becoming an associate at a mega-fund PE firm, but I know this is an uncommon career choice. Would any of you consider leaving an elite hedge fund role to work at a mega-fund (like at Carlyle, KKR, Blackstone)? Why or why not? (I know "elite hedge fund" is fairly unclear here, but I mean more specifically the sort of HF role that pays in the Apollo range without the insane work hours.)

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Comments (7)

Sep 10, 2019 - 12:03pm

Single manager

reasons:

1) no idea what job I will find - there's not many good hedge fund seats out there.

2) PE funds are far better at training junior folks that HFs.

3) I have an industry focus that happens to have very few seats either in PE or HF. this specific PE fund is very successful in this industry vertical and it would be hard to find an equally good HF seat focused on this vertical.

Most Helpful
Sep 10, 2019 - 6:12pm

Some things to consider:

1) Do you prefer the daily volatility of public markets (daily mark-to-market) or slower paced and less liquid private markets? Can you handle the stress of seeing your positions marked daily?

2) How risk averse are you? In the hedge fund world you're only as good as your last year and you can be pushed out at any moment. There is little to no job security. The plus side is that comp, at the right shop (York, Elliott, Citadel etc.) can be fantastic (7 figures and more) in a good year if you're good. In the PE world you have greater career stability but the real comp is tied up in carry and will depend a lot on the state of the market when it comes time to exit the fund's investments.

3) Hours/lifestyle. Depends on the strategy but I think public markets roles tend to have better hours than deal making roles. Not so much in the sense of hours but in the sense that you don't need to be chained to your desk in the HF world.

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Apr 17, 2021 - 8:06am

BobbybananamA

Just as some background, I did 2 years of banking then did 2 years at a elite hedge fund. I'm contemplating becoming an associate at a mega-fund PE firm, but I know this is an uncommon career choice. Would any of you consider leaving an elite hedge fund role to work at a mega-fund (like at Carlyle, KKR, Blackstone)? Why or why not? (I know "elite hedge fund" is fairly unclear here, but I mean more specifically the sort of HF role that pays in the Apollo range without the insane work hours.)

It really depends what the "elite hedge fund" means. Comp and work hours is not what defines the quality of a seat. The real value is PV earnings of reasonably expected path.

The elite HF when I think of the category are Lone Pine, Tiger Global, Pershing, maybe 1 or 2 others. If you're there, you're going to get really really rich and you'd have to be stupid to quit to go to PE.

If your idea of an elite HF is Citadel or other MM, or any single mgr fund with less than $10bn aum (and prob a bunch with more) than it's really a toss up and more of a personal choice.

A solid PE seat is hard to beat in terms of risk adjusted career earnings. But you won't feel cash rich until you're in your mid-30s.

It also heavily depends on the type of work you enjoy. I would say people often make the mistake of switching jobs because of the type of work you're doing now, not appreciating that in 1-3 years you'll graduate out of that responsibility anyway. You need to focus on the longer-term demands of the job. Not what you're doing for a 1-3 year period, because that will pass. Silly to make a long-term decisions based on a short-term transient circumstance.

For example Leaving PE because you hate the modeling and data room trudging would be dumb, because you're only nuts deep in model and data room as an associate and a bit as a VP. So if you hate it, there's 2 exit paths: 1- go to Hf, 2- get promoted in PE.

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