How common are 100 hour weeks in HF?

Are hours?
1. Long like banking (100+)?
2. Track the market (so like 8 to 6 maybe?)
3. Depends more on your team

,so what about other things like how predictable are your hours and do you get called in on the weekend? how much "reading from home" is actually expected? And does any of the above include time for traveling?

 

Hi LDpppg, any of these discussions helpful:

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  • More suggestions...

No promises, but thought I'd mention a few relevant users that work in the industry: TheTrader007 Ash Ketchum macro bruin

You're welcome.

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Hours are far from 100 hours - in the HF world, the work you do requires clear thinking/focus. It's basically impossible to operate at high function for 100 hours a week. My experience is around 60 hours on average. Depending on how much involvement you have with the book though, you'll spend a lot more time following markets outside of work; checking overseas markets overnight, for example.

 

Thanks for the answer rabe! I'm asking more from a junior analyst's point of view - so is the thinking that after 60 hours, any incremental effort is inefficient? Would you say that the 60 hours includes time spent following the markets outside of work, and traveling? I guess in other words I'm asking, is there a point at which how "good" you are depends less on how many hours you work in a week, and it's more about some other X factor?

 
Best Response

I did IB, and PE across two funds for 6 yrs prior to the jump to the public world, so definitely have some perspective on this. I think in general, across the board, with the exception of a few notorious preftigious HFs, hours are more reasonable relative to PE/IB.

The biggest reason behind this is public investing is inherently not a transaction based model- you're not working towards a first-round bid or second-round bid, you're not on some sort of exclusivity driven deadline to close a deal, and you're not taking on the additional responsibility of serving as the corp dev arm of your portfolio companies (which is fun but can be a pain when you're helping prepare stupid board decks no one reads).

The other reason, although not as big a consideration at some funds, is conducting quarterly valuations and having to mark those to market. In PE- it's all subjective, vs at a public shop, you're marked to market everyday by the markets so you're not triangulating on value.

I do want to be clear- earnings weeks are hectic, as updating models and synthesizing new information takes time. But even those weeks I consider generally manageable relative to what I went through. You're definitely thinking critically about companies in your portfolio but you can do that anywhere- at home, work, etc. I've found people in general on the public side to not care as much about face time, because it doesn't do much. It's also because often times you're not working on a "deal team" - you're on your own. So it matters to exactly 0 people where you sit and do your processing.

Few caveats: I can't speak for the distressed guys. I imagine their hours and lifestyle to resemble PE more than HF, as often times the securities bought/sold are illiquid, deals are relationship driven, and there may be a need to come to a decision relatively quickly. I also will say that funds that trade more and are market neutral (we're long biased) will probably have longer hours as shorts generally catalyze over a quarter or two, and its imperative to get the timing right. That can all create additional work.

Hopefully the above makes sense. I'd reiterate- the biggest driver of the difference in hours is working in a transaction based model vs not

 

Wow thanks so much for the detailed reply! If you don’t mind some follow ups on your answer:

  1. Kinda dumb question but what do you mean by prestigious funds? Isn’t it just how good your manager is? Or are you saying people who like working more self select into these places?
  2. I get what you’re saying about the transaction side being the driver of hours, but when you initiate and exit a position, isn’t that essentially two different analyses you have to do per position, and so you’re doubling your workload? Or is exiting positions solely decided by your boss?
  3. So obviously there’s a ton of new info when earnings come out, but if the work is mainly just updating your valuation, wouldnt that be less busy? Would you say you kinda initiate most new positions after earnings on some catalyst and so that’s why it’s so busy then?

Thanks so much!

 

Based on your comments, it appears you're probably still in college or in an unrelated industry, but no problem, I'll try and take a stab:

1) "Prestigious" refers to the Millenium, Appaloosa, Maverick, Tiger Global, Pershing Square, Coatue types..funds you hear about every day in the news and are well regarded/respected (although I can't be so sure about Pershing anymore!). Let's be clear - most people don't like working more - they're forced to, unless they're workaholics which there is an abundance of on Wall Street. Managers play a big role in driving culture at the end of the day. For e.g. I've heard Coatue is a miserable place to work at, is incredibly cutthroat, and the hours suck. On the other hand, David Einhorn's Greenlight Capital has a great culture with reasonable hours but he's the driver of that culture, the AUM doesn't drive that. To that point, there are enough no-name shops that have terrible cultures and hours because their PMs are straight up A-holes. So, to conclude, I hate using this line but it depends. In general, at larger, well reputed shops, of course the performance pressure (and associated reward) is higher. This isn't unique to hedge funds, this applies in literally every industry. Staying on top is just as hard as getting to the top.

2) I don't think you understand what buying a private vs public company means, else you wouldn't be asking this question. Basically when you are trying to purchase a private co, there's a ton of due diligence outside of investment related diligence, including accounting, legal, environmental, blah blah blah that goes into it, so as a junior professional you're typically managing several workstreams to get a deal done. On the public side, it's not two "separate" analyses to enter and exit a position. Simplistically, you establish an "intrinsic value" for the company - i.e. what you think it's worth based on your assessment of the company's growth prospects, knowledge of the industry and competitors etc, and you leverage a bunch of valuation methodologies to triangulate on value. The goal is to buy a security at a discount to this intrinsic value. As the security begins to move closer to your estimate of intrinsic value, you start to think more about selling down, and if there are any events that cause it to trade way above your estimate of intrinsic value for reasons you can't logically explain, it's better to be extremely disciplined and just sell. It's not as simple as that but my point is these aren't two decisions you're making. TLDR- buy at a discount to intrinsic value, sell if price >> intrinsic value. Each quarter once #s come out, you're updating your intrinsic value estimate.

3) Updating valuation models almost always takes longer than people think. Firstly, it depends on how much information the co. provides to public market investors. You can bet that for traditional value focused shops, we're tracking every metric they'll give you. Secondly, it's not just updating the #s, there's a bunch of filings released starting with the 10-Q, 8Ks and Investor Presentations that each contain different information you may be piecing together for your models. Apart from the fillings, you're paying close attention to what the company is saying on its earnings call, what the sell-side is thinking, what competitors are saying on their earnings calls, and any industry research you can get your hands on to ultimately decide whether a position is less or more attractive based on this new info and whether it should continue to be purchased, maintained, trimmed, or sold. I'm dramatically simplifying the decision making process here but that's essentially what you get compensated for so you have to give this stuff a lot of thought, and it's time consuming.

Hope this helps.

 

My bad for the late reply, but once again thanks so much for this! Yeah I'm still in college right now and worked in finance/accounting at a corporation, interested in working at a hedge fund potentially.

@ #1 - Yeah that makes a lot of sense that it's driven by people at the top. I was thinking more long term that I would want to be in a job that rewards you not just for being hardworking... like sure you need to work hard, but I guess do you feel like you're developing and compounding on a toolbox of skills? or are you just always playing catch up?

2 - Sorry I see what you're saying. I was referring more to like activist investing (seems more interesting to me right now but maybe that's because the media loves to focus on it so that's just what i've been more exposed with) - so for just normal equity investing then I see how private equity would be way more work

3 - thanks for that color, seems really exciting (not sarcastic)... do you eventually become really fast at this, or is it always a really involved process? I don't know if you're more higher up or younger, but do the more senior people prefer to stay involved with all the little numbers that come out or is that more shipped off to the junior guys? are there any tips or tricks for this, like building your model so it's more customized for each company or like is there a easy way to structure everything so things are easy to update? my excel work is probably too nuanced on dumb accounting stuff (finance accounting double major) instead of caring about the real things that matter. And then if they report so many metrics, how do you decide which ones are importnant or do you just keep a record of everything to be safe?

 

I'm going to be honest with you. Don't do it, if the amount of hours is what you're worried about. You won't do well in any industry if you don't have a genuine interest in it. Doesn't matter if it's neurosurgery, HF, or Law. When you're in a performance based industry, your work is reflected on the amount of hours you spent honing your craft. I'm not saying you have to spend a "definite" amount of time, but realize that it's very hard to get great at something if you dread the hours.

All the best HF, and PE guys who've done remarkably well are the type of people who have a hard time leaving work.

Just my 2 cents.

I think- therefore I fuck
 
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I'm going to be honest with you. Don't do it, if the amount of hours is what you're worried about. You won't do well in any industry if you don't have a genuine interest in it. Doesn't matter if it's neurosurgery, HF, or Law. When you're in a performance based industry, your work is reflected on the amount of hours you spent honing your craft.

To a point. A lot of folks have other life obligations such as families or side businesses that require them to have some semblance of work life balance. That said it's one of those questions where if you have to ask, then you probably shouldn't be asking.
 

60 might even be on the lighter side (non earnings, etc.), but HFs are extremely firm/PM dependent so your "mandatory hours" could range from 40 hours a week to much higher depending on the person

http://www.wallstreetoasis.com/forums/how-are-hedge-fund-hours-like

60 for MM PE seems light except for lifestyle firms. MM PE is 70-80 hours during deal time (and 90-100+ on more intensive deals) at the associate level; 60 is a relatively relaxed week

 

When I first started at my current long short equity fund, I was working worse than banking hours consistently - due to unfamiliarity with the process and inability to focus what mattered. My boss told me to stop with the long hours, to work at most 12 hours a day. And he's right - we do so much reading, thinking, writing that it's really difficult to not get enough rest and still work at an optimal amount. Just because we work less hours than in banking doesn't make it any easier - I would argue that having done both, fundamental equities is a lot harder is more brain taxing than turning comments that your VP drew.

Net net, the focus shouldn't be on the number of hours. Look at everything holistically - the job content, career trajectory, location, pay, hours, etc.

 

The fund I work at (large multi-strat) has a culture of pretty much zero face time and I would say almost 100% of investment professionals works 60+ hours in a typical week except for traders at probably ~45-50 (more if you include the less-pleasant portion of mandatory broker/sell-side socializing).

The normal analyst/PM gets in between 6:30-7:30 and leaves 5:30-7:30 plus a decent amount of idea dinners, late calls, reading, working etc in the evenings and on weekends. This has a bit of seasonality (more during earnings/turmoil, less during the summer) as well. Also 100% of the floor eats lunch at their desk.

Of the people putting in more/longer hours in the office, it's weighted towards junior folks who are less likely to have a family to get home to, idea dinner to go to, etc.

I agree with Mr Pink Money in that it doesn't HAVE to be crazy hours in the office, and the key is to get your work done and produce good ideas. That said, I think in practice there's literally ALWAYS another stone to turn, another idea to start on, etc so people who excel in the field will tend to find a "reason" to work. I could definitely get away with ramping my ~65-70 hour weeks down to 55 but I don't really feel like I'm being kept at work by some external force. That will (hopefully) change someday when I have kids.

Other observations: a) I'm never bored and the days fly by-doesn't "feel" like a long day b) 60 hours isn't really a crazy amount to work for finance professionals, or even white collar workers at large, in this day and age. bii) 60 hours with a half hour subway commute within Manhattan is only a little more than 45 with an hour and a half commute from NJ/CT/LI, and I'd wager it FEELS like a lot less! (Not that every commute has to be 1.5hrs but you get the idea) c) Very few of my late 20/early 30-YO friends work materially less than me and plenty work more, sometimes a lot more (especially anyone in banking or law) d) Even compared to those working a comparable number of hours, the early tilt of my day means that I have a lot of flexibility with my social calendar relatively speaking. e) I'd estimate that our back/middle office, especially legal, teams work more hours than the front-office teams

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

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