Hedge fund to less stressful role - long only? others?
I've been in the L/S fundamental equity hedge fund world for the last 7 years. I'm a senior analyst with a small team under me at a large, well-known hedge fund. I am often recruited by other funds and/or headhunters to either run a book at a platform shop or lateral over as a senior analyst / sector head at other funds, so I'm aware of plenty of other opportunities out there.
However, I'm looking to get out of hedge funds and move into a less stressful and time-consuming role. Also, I'd like something a bit more stable (likely higher base salary, lower ceiling on total comp).
My first thought is a long only shop where this is less of a focus on day-to-day movements in stock prices. A couple questions there for anyone familiar:
- what type of role could someone with my background expect to get at a long only?
- what are the hours, quality of life, and compensation like at that level?
And then, just for curiosity, any other ideas for other "exit opportunities" that would fulfill what I'm looking for?
Thanks in advance for any thoughts.
If you're in a front-office senior analyst/PM role and running a book, you are in the final "exit opportunity"
E&F space?
family offices / mutual funds?
x
Do you have an MBA/CFA? Hedge funds by and large do not care about those designations, but generally LOs definitely do, and if you want to lateral and don't have one or both of those it will be more of a challenge.
In terms of total comp, I've heard that it would be in the 200-500 range for a senior type analyst who is a non-PM (and prob closer to 300-450). My gut is it would be difficult for you to interview for a PM role given that you have not actually run money (and most places like to promote people into the position), but a senior analyst role seems within reach. Many LOs may not be interested in you because of your HF background, but I'm guessing will depend on your current fund's rep.
Hedge fund to less stressful role - long only? other ideas? (Originally Posted: 05/01/2016)
I've been in the L/S fundamental equity hedge fund world for the last 7 years. I'm a senior analyst with a small team under me at a large, well-known hedge fund. I am often recruited by other funds and/or headhunters to either run a book at a platform shop or lateral over as a senior analyst / sector head at other funds, so I'm aware of plenty of other opportunities out there.
However, I'm looking to get out of hedge funds and move into a less stressful and time-consuming role. Also, I'd like something a bit more stable (likely higher base salary, lower ceiling on total comp).
My first thought is a long only shop where this is less of a focus on day-to-day movements in stock prices. A couple questions there for anyone familiar: - what type of role could someone with my background expect to get at a long only? - what are the hours, quality of life, and compensation like at that level?
And then, just for curiosity, any other ideas for other "exit opportunities" that would fulfill what I'm looking for?
Thanks in advance for any thoughts.
he's a senior analyst at a well known fundamental fund and u ask if he has a MBA/CFA... facepalm
And several senior analysts from well-known fundamental funds came from banking/PE and didn't do their CFA.
-A Senior Analyst at a well-known fundamental L/S fund.
IR?
Thanks. Any other ideas?
Also HFoF although that seems to be a dying business
Unfortunately, this is likely not the best avenue for advice. 90% of the people here aspire to be at your level and I think few would have a legitimate view on what the considerations would be at your level, or any visibility on what you could potentially do afterward.
This!
That being said, I've also heard that family offices can be a nice place to take it easy for a while. Most are FOF style but you can find some with more direct approaches.
Full disclosure: I'm going to start at a family office. Doesn't mean much though since it's not like leading others astray through false opinions would accomplish anything...
There are similar roles to what you are currently doing at the big long-only shops. You would likely be interested in a sector team lead or research director position where you would be overseeing 5-15 analysts depending on your background and the sector you cover. I do think this is a pretty tough lateral to be completely honest. Most L/O firms are pretty skeptical of the h/f backgrounds given the (real or perceived) focus on short-term results. In the case of my firm, we have taken ~3 experienced hires over the past four years, but no one above about 3rd or 4th year analyst level. Only one I can think of came from h/f background with the others at other L/O or sellside shops. You would really need an entire sector team to lift out (which has happened at our competitors in the past) or else the firm is likely to promote a sector team lead internally. My visibility into comp is a bit opaque because I'm not at that level yet, but I'd say general broad strokes, senior analysts (7+ years at analyst level) will be in the $700k+ range, and team leads are in the $1mm range. Fair amount of variation across the firms but that's probably a decent starting point.
Bear in mind that these are not stress-free jobs by any stretch. You are often making recs that can impact $100B+ in total AUM across the portfolios and you'll certainly feel the sting of bad calls. People can and do get fired although I think turnover is meaningfully lower than at our h/f counterparts. We've shed maybe 1-2 analysts/PMs a year since I joined 4 yrs ago (out of ~35 person team). I do think the overall stress levels and certainly the hours are more pedestrian than at the elite hedge funds. You're probably looking at 50-55hrs outside of earnings and 65+ during earnings, but again depends on your coverage.
Do most analysts at L/O shops come from sell-side research or banking?
It varies. Biggest pipeline for new analysts for us is via the top 4-5 MBA programs, and I would guess that is also the case for most of the other large AM firms. The pre-MBA backgrounds can vary quite a bit, with a fair amount of banking/PE types but also ppl with previous experience at other buyside shops, consultants, the occasional sell-side research associate etc. Healthcare team will also pull from industry (MD/Ph.D.) quite a bit. MBA programs are probably 2/3rd of our analyst recruiting, with the remainder being either direct promotes from Associate (after 5-7 year stint post undergrad), or experienced hires. I don't think we take a ton of just straight up banking backgrounds, but we certainly see plenty of people who did 2 yrs banking + 2 yrs PE ahead of b-school.
Try looking into Fund of Funds. You can make a decent base and the hours are incredibly good. Also, your background will allow you to continue to leverage your skill set and network.
Good luck!
move to a sovereign wealth fund like ADIA or GIC.
The comp and benefits are sweet but I think ADIA requires a move to Abu Dhabi (with free car, housing).
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