Hiring Market in Hedge Fund
Hey guys, what is the current hiring market like for junior laterals at fundamental hedge funds? I assume pretty bad from weak fund performances you hear about in the news but was curious. Thanks.
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For juniors (2-3 yrs exp post-banking) it isn't so bad - the platforms are still adding at a decent clip. Mid-career/experienced (pre-PM) is much tougher at the moment in general. I know of more than a handful of guys who are spending 6 months-1 year out of the market before finding a decent seat.
The l/s startup environment seems active at first glance (mostly due to significant PM turnover at platforms in the past two years) but outside of some of the more heavily hyped launches (Holocene, etc) it's been tough for startups to hit critical mass on AUM even with disgustingly lean fee structures out of the gate.
Suffice it to say, there are alot of bodies and few good seats.
Second what kingofchardonnay said, re: experienced candidates being out of the market 6 months - 1 year even with strong resumes/ track records. So many funds (including multis) just underperformed dramatically last year and are not growing investor (as opposed to analyst/model crank) headcount
I expect there to be significant washout (ppl whose funds/ teams blew up and eventually leave L/S)
bump - would like more thoughts here
Have heard some of the larger multi-manager/multi-strat firms are ramping up hiring, P72 supposedly able to run outside money starting in 2018 from what I recall? Not sure if this is applicable at all larger funds.
Have also heard that it is easier to land a seat if you are fairly junior as well (1-2 yrs buy-side experience) which is unfortunate for guys in my situation trying to make the jump from the sell-side with 0 yrs investing experience, but I'd also prefer someone with experience over someone without it so I get it ha.
The whole industry is suffering right now due to the disconnect between markets and fundamentals.
(Just look at response to UK elections today. Supposedly bad news, GBP walloped -2%. Despite this, a market having a strong rally. Short biased HFs (more than you think) getting crushed day after day).
That being said, the funds doing well are the ones with a market-making arm. This provides alternative income streams which insulates them from the situation.
You're only experiencing the disconnect, 'cause you're looking at the wrong things.
It's perfectly sensible for the FTSE 100 to rally on today's news. If you look at the broader UK indices, they're underperforming equities elsewhere, which is the effect you're referring to. This is a pretty well known feature of the UK equity indices.
VIX broke under the lows of 1993 today. Considering the slew of negative news in the past 3-4 months, that's absolutely incredible.
You're obviously not in the industry/don't follow it. HF returns were abysmal in 2016, and Q1'17 was equally depressed.
I am confused... Did I say anything about the VIX or the HF industry?
As to me not being in the industry, that's pretty funny.
The VIX has been depressed asof late because the market has finally gotten the joke (albeit, a little late to the party):
1) After 2008, trillions of paper wealth was destroyed 2) Central Banks decided that was no good, and that they would inflate their way out of the problem...by printing money (QE by the US, Europe, Japan, China - each a little different, but all have printed trillions in fiat currency) 3) when you devalue a currency, assets priced in that currency go UP in price. 4) whatever the CB buys, also goes up in price. Maybe not immediately, but when you reduce supply, price tends to go up. 5) this is why both stocks and bonds have rallied for the last 8 years 6) bonds are a little tricky, because there is also a forward looking inflation component...which counteracts the CB buying to an extent. 7) this is also why bitcoin has been on a tear recently...fear of global hyper-inflation 8) corporate buybacks...corps have been borrowing cheap 10-30yr paper for a few years now, and using the proceeds to buyback stock, thereby pushing up the price. 9) Trump - ran on a platform of tax reform, aims to bring back 1 trillion in corp earnings held overseas. This is why the stock market has been rallying since Trump was elected (combined with his dis-taste of regulations in general, which is net stocks positive).
While i agree that there is huge economic dispersion in the US between the haves and the have-nots...(almost 100 million adult people not working - a large % of millennials living at home with parents because they can't find good work, regardless if by choice or not, plus the baby boomer generation at retirement age, but many of them have not saved enough for retirement...that's almost 1/3 of the population not working, living off the generosity of other people, and eventually that may cause revolutionary type problems...but that kind of thing happens very slowly, and then all at once). You can't day-trade that kind of economic problem...when the sh&t hits the fan, it will happen pretty fast...but until then, the mkt will stay on a tear. Recall the internet bubble of 1999-2000, the stock mkt in the mid 1980's into 1987, and the stock mkt in the mid 2000's into 2007/2008...the market screamed higher, right until it started to crash. This is just how markets work. There are no "slow bear markets" anymore...just boom and bust. Trying to time the bust is incredibly hard...Its easier to wait for after the bust (you'll know it when you see it) and then buy a portfolio of assets on the cheap. In the meantime, you miss out on the parabolic rise in assets/euphoria (which we are currently experiencing).
The low VIX is an example of "picking up pennies in front of a steamroller"...but its also just an expression of recent market trend...realized vol has been low....and trends tend to continue until they break. Markets spend a large % of the time trending...and you can go broke fighting the trend.
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