Comments (66)

Sep 10, 2010

There are a couple strategies I'm interested in:

-Event-Driven: Baupost Group. Klarman is an absolute beast and I feel that he best exemplifies Graham's value investing principles. The guy's ability to perform in value situations with a huge AUM and his willigness to look at things with an absolute return perspective (as in going to 50% cash, etc.) are very impressive. Plus making hedge fund money in Boston would be dope.

-Global Macro: Falcon/Moore/Quantum. Three choices, because I don't think there necessarily is a best way going about global macro. Falcon because of the In The House of Money interview. The whole global micro perspective and focus on being like a real money fund (without the constraints) is admirable. Moore seems like one of the very top dogs right now and their risk management (limit on drawdowns) seems exemplary of what I would want to have at my hedge fund. Quantum, do you really need a reason?

Jan 18, 2013
GoodBread:

There are a couple strategies I'm interested in:

-Event-Driven: Baupost Group. Klarman is an absolute beast and I feel that he best exemplifies Graham's value investing principles. The guy's ability to perform in value situations with a huge AUM and his willigness to look at things with an absolute return perspective (as in going to 50% cash, etc.) are very impressive. Plus making hedge fund money in Boston would be dope.

-Global Macro: Falcon/Moore/Quantum. Three choices, because I don't think there necessarily is a best way going about global macro. Falcon because of the In The House of Money interview. The whole global micro perspective and focus on being like a real money fund (without the constraints) is admirable. Moore seems like one of the very top dogs right now and their risk management (limit on drawdowns) seems exemplary of what I would want to have at my hedge fund. Quantum, do you really need a reason?

Is Falcon still around? I couldn't find any of their 13F filings under Falcon Management or anything similar.

Jan 18, 2013
peinvestor2012:
GoodBread:

There are a couple strategies I'm interested in:

-Event-Driven: Baupost Group. Klarman is an absolute beast and I feel that he best exemplifies Graham's value investing principles. The guy's ability to perform in value situations with a huge AUM and his willigness to look at things with an absolute return perspective (as in going to 50% cash, etc.) are very impressive. Plus making hedge fund money in Boston would be dope.

-Global Macro: Falcon/Moore/Quantum. Three choices, because I don't think there necessarily is a best way going about global macro. Falcon because of the In The House of Money interview. The whole global micro perspective and focus on being like a real money fund (without the constraints) is admirable. Moore seems like one of the very top dogs right now and their risk management (limit on drawdowns) seems exemplary of what I would want to have at my hedge fund. Quantum, do you really need a reason?

Is Falcon still around? I couldn't find any of their 13F filings under Falcon Management or anything similar.

Even if Falcon's AUM were large enough, I believe the fact that it is a family office precludes them from having to file a 13F.

Sep 10, 2010

Concentrated Value: Lampert's ESL / Klarman's Baupost
Activist Funds: Ackman's Pershing Square / Loeb's Third Point

Sep 10, 2010

Paulson & Co. because it's Paulson & Co.

Apr 7, 2012
brooksbrotha:

Paulson & Co. because it's Paulson & Co.

You're joking right? The guy went against gold during one if its largest rallies in the past 10 years and then invested money in a Chinese reverse merger scam. His 2011 performance was amongst the worst in the sector. His Advantage Plus fund returned -52.64% in 2011 while Recovery returned -27.92% and Enhanced returned -21.55%. The Advantage and Advantage Plus funds are still negative in 2012. The guy fucked up pretty bad. I sure as hell wouldn't want that on my CV.

Apr 7, 2012
englandwales:
brooksbrotha:

Paulson & Co. because it's Paulson & Co.

You're joking right? The guy went against gold during one if its largest rallies in the past 10 years and then invested money in a Chinese reverse merger scam. His 2011 performance was amongst the worst in the sector. His Advantage Plus fund returned -52.64% in 2011 while Recovery returned -27.92% and Enhanced returned -21.55%. The Advantage and Advantage Plus funds are still negative in 2012. The guy fucked up pretty bad. I sure as hell wouldn't want that on my CV.

Still a great shop to work at and you'd be surrounded by geniuses, and the multi-strategy investing exposure you'll get there is amazing. But of course you beta unpreftigious bros will never know that.

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Jan 18, 2013
brooksbrotha:

Paulson & Co. because it's Paulson & Co.

dude are you serious...you want to go work for the 'one-trick pony'

Jan 19, 2013
roofstreet:
brooksbrotha:

Paulson & Co. because it's Paulson & Co.

dude are you serious...you want to go work for the 'one-trick pony'

Are you serious? Look at the post date. Over 2 years ago. When his fund was still legitimate.

Sep 13, 2010

Value: Greenlight-I like Einhorn
Activist: 3rd Point- I like Loeb
Macro: Soros/Quantum- He's the legend
Quant: Ren Tech (though it wouldn't be a good fit)- they're the best and they only hire the best
Ideally: My own.

Sep 13, 2010

Soros
Tudor
Moore

EDIT: Sorry didn't see the why, but I'm pretty sure those names speak for themselves. Those guys are legends man, plus I wanna see PTJ wear Bruce Willis' sneaks.

People like Coldplay and voted for the Nazis, you can't trust people Jeremy

Sep 13, 2010

DE Shaw for the office culture...

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Sep 13, 2010
Sep 14, 2010

@jorge and @ goodbread

what do you guys think about brevan howard? how do you think it compares with moore and others?

Sep 14, 2010
zbb:

@jorge and @ goodbread

what do you guys think about brevan howard? how do you think it compares with moore and others?

I think they're a really great shop and right up there with the legends in the macro field. Like Moore and Tudor they have excellent risk management and the fact that they were up in 2007-2008 where everybody else (except Paulson, Soros, etc obviously) got slaughtered speaks for itself.

People like Coldplay and voted for the Nazis, you can't trust people Jeremy

Sep 14, 2010

According to a very recent study, Brevan Howard has been making an average of $1.8 billion since inception, twice as much as Soros. That being said, Alan Howard is said to be pretty ruthless and I find it puzzling that one of the founders (Blochet, the B in Brevan) moved to Moore to become a Sr. PM. So BH is an awesome shop, just maybe not the most fun place to work from what I can tell.

Sep 14, 2010
Sep 14, 2010

Brevan Howard is top notch. They're the hedge fund that managed to snag the superstar 28-year old morgan stanley trader by offering him guaranteed $25 million.

Sep 14, 2010

Eclectica. Alas, they never reply to my emails..

Sep 14, 2010

Brevan Howard is in the same class as Soros, Moore, and Tudor. However, the reputation is that its a tough place to work.

Sep 15, 2010

Apart from DE Shaw and Tiger, has anyone successfully got into some of the firms mentioned here (or the firms in the recent FT article about top HFs) without significant finance experience or are these just pipe dreams? Are these guys even hiring? Bridgewater is the only one that seems to have a regular recruiting program, but I'm not sure I want to work there.

I'm more interested in the value investing funds (Klarman, Berkeshire, Greenlight) and global macro funds (Quantum in particular) and am wondering if it is even worth it to spend the time networking, cold-calling, etc. to try to get into one of these places. Sometimes I'm hopeful that if you're persistent you might catch a break because that's how some of the founders started up - for example, Buffett had a hard time getting into either Harvard or Graham's Columbia class (can't exactly remember which) and then Soros broke into the industry despite being a philosophy major. But then I look at the resumes of current employees and it looks hopeless - mostly HBS with high finance or MBB exp. for at least 2 years and then some. I wonder if going an atypical route by simply mailing your own research report that jives with their investing strategy might be convincing (obv. difficult with global macro, but certainly doable with value investors)...

FWIW, my resume is decent (MS in Biocomp, BS in CS from Stanford) and I've interned at MBB with full-time offer, but no finance experience and not a single econ class. That said, in an interview you probably couldn't tell that I've had no finance or economics experience (i.e. I am pretty well versed in both topics). Don't want to make this a "What are my chances" thread...

Sep 16, 2010

How many different Tiger funds are out there now? I know Chase Coleman heads Tiger Global (he's in his early 30's but made several hundred million last year), and there is also a Tiger Asia.

Sep 16, 2010
Sep 17, 2010

Funds with investment themes centered around emerging markets, sovereign debt restructuring, and currency devaluation.

Sep 17, 2010

There was an ad in my alma mater's career services site for a fund with a "no assholes" HR policy that produces pretty cool returns in the small cap space with a concentrated portfolio. After my current shop, the "no assholes" thing sounds pretty great. But that's mostly because the fund I work for is more of a cult of personality than an actual institutional investor.

Nov 28, 2010
FinancePun:

There was an ad in my alma mater's career services site for a fund with a "no assholes" HR policy that produces pretty cool returns in the small cap space with a concentrated portfolio. After my current shop, the "no assholes" thing sounds pretty great. But that's mostly because the fund I work for is more of a cult of personality than an actual institutional investor.

Are you at bridgewater? A friend recently got an offer from them but turned it down because the place was "creepy." They have cameras installed at your work station which takes snapshots of your computer screens every 5 minutes.

Apr 7, 2012

I just want to point out many firms do this as a security measure.

Brady4MVP:
FinancePun:

There was an ad in my alma mater's career services site for a fund with a "no assholes" HR policy that produces pretty cool returns in the small cap space with a concentrated portfolio. After my current shop, the "no assholes" thing sounds pretty great. But that's mostly because the fund I work for is more of a cult of personality than an actual institutional investor.

Are you at bridgewater? A friend recently got an offer from them but turned it down because the place was "creepy." They have cameras installed at your work station which takes snapshots of your computer screens every 5 minutes.

Nov 28, 2010

Tweedy, Browne, & Co. for the learning experience. Then my own shop called James Bond Capital Management

Nov 29, 2010
James Bond:

Tweedy, Browne, & Co. for the learning experience.

Nice. Legendary shop.

Nov 28, 2010

Silverpoint
Appaloosa
Lone Pine
GSO

Nov 28, 2010
Nov 28, 2010

RenTech, definitely.

Then Shaw, Citadel, AQR.

Apr 13, 2012

Man AHL, Tudor, Moore, BHAM, Caxton.

Apr 13, 2012
Macro Arbitrage:

Man AHL, Tudor, Moore, BHAM, Caxton.

Man AHL seems like the odd one out. Any particular reason for them? (I know they're a great fund, but the strat is pretty different)

Apr 7, 2012

Oaktree, loan-to-own gets me wet, and they have a very stable culture with the ability to lock up a large amount of capital for long enough to play in distressed with serious intent.

Apr 7, 2012

That was written back in Sept 2010.

Apr 7, 2012

I don't think anyone is doubting the chops of some of Paulson's analysts. But let's be real for a second, NO ONE at HBS was going hoping they would get an offer from Paulson back before 2007. They were a solid merger arb shop with an experienced PM who had a rigorous process (at least judging from a paper I read by him from way back in the day).

But losing 50% in one year is absolutely, astoundingly awful. The shop's blatant disregard for risk management is appalling. Paulson analysts would be welcome at almost any other event-driven shop as analysts I'm sure, but I wouldn't let them run any of my money (as a PM) and neither would many HFs.

Apr 7, 2012
GoodBread:

I don't think anyone is doubting the chops of some of Paulson's analysts. But let's be real for a second, NO ONE at HBS was going hoping they would get an offer from Paulson back before 2007. They were a solid merger arb shop with an experienced PM who had a rigorous process (at least judging from a paper I read by him from way back in the day).

But losing 50% in one year is absolutely, astoundingly awful. The shop's blatant disregard for risk management is appalling. Paulson analysts would be welcome at almost any other event-driven shop as analysts I'm sure, but I wouldn't let them run any of my money (as a PM) and neither would many HFs.

Ok, that's fair. I was just talking from the learning perspective. As I mentioned earlier in the thread, I would only work at Paulson & Co. as a pre-MBA associate and I don't think anywhere else will give you the solid experience of merger arb, special situations, and equity long short investing that you would get there. Good understanding of the allocation, timing, and risk management process occurs at the senior associate / VP level (if you're somewhere that allows you to be involved from diligence to execution), and no, I wouldn't want to learn that at Paulson either.

The fund just got too big for their own good.

Apr 7, 2012

Agreed. What do you guys think about Bridgewater? From what I've gathered about the culture, it doesn't sound like my cup of tea but I find it crazy that they have been so successful managing so much money the last two years. I get the sense that they have a very solid process down and that they just happen to be exceptionally in sync with the markets right this second, though it probably won't last.

Apr 7, 2012

From the numbers I've heard, Bridgewater doesn't pay junior bros that well

Apr 8, 2012
Apr 8, 2012

I've heard a lot of bad things about Bridgewater. I'm not sure about the indoctrination and paranoid monitoring of employees, but the transparency and honesty they encourage in employees sounds really refreshing. I'm sure all you guys who are out in the working world know how dysfunctional corporations can be. Anyone who's had a really shitty boss can especially relate. You can only do so much as your group's efficiency and reputation go down the drain, with the blame often unjustly settling on the employees instead of the manager. Office politics and the lack of transparency in the dialogue between people at different levels within the corporation stifles the learning process of the lower level employees and hinders the company's productivity as a whole. I think it would be great to have a company culture where everyone is held responsible for their ideas and must rigorously defend them in light of the company's goals. Dumb ideas get weeded out and crappy employees can't use office politics and bureaucracy to hide their own ineptitude

Apr 9, 2012

Bernard L. Madoff Investment Securities... although I heard they have had a lot of turn-over lately. Amazingly consistent track record though!

Apr 10, 2012
Gray Fox:

Bernard L. Madoff Investment Securities... although I heard they have had a lot of turn-over lately. Amazingly consistent track record though!

They have one of the highest Sharpe ratios in the industry.

Apr 10, 2012

Neither of these funds are housed in "Hedge Funds," so I suppose I'm cheating somewhat, but I would want to work for Michael Hasentab's Global Bond Fund at Franklin Templeton, or Bill Gross's Total Return Fund at PIMCO. Learning from either of these guys would be an incredible experience. I'm pretty sure the former favors PhD's, though, and the latter is just im-fucking-possible, so these are pipe dreams more than anything else.

Apr 10, 2012
atomic:

Neither of these funds are housed in "Hedge Funds," so I suppose I'm cheating somewhat, but I would want to work for Michael Hasentab's Global Bond Fund at Franklin Templeton, or Bill Gross's Total Return Fund at PIMCO. Learning from either of these guys would be an incredible experience. I'm pretty sure the former favors PhD's, though, and the latter is just im-fucking-possible, so these are pipe dreams more than anything else.

Honestly I think the distinction is less important than many people on here make it. There are good reasons for being on either side of the structural fence, and bigger shops increasingly offer both (PIMCO being an example) and there are a lot more alternative-strategy mutual funds than there used to be as well.

Apr 11, 2012

Macro: soros, brevan howard, tudor, moore
Value: baupost, greenlight, gotham
Event-driven: paulson, perry, och-ziff, york
Long-short equity: SAC, viking, passport
Distressed debt: oaktree, avenue, elliott, appaloosa
Quant: rentech, de shaw, two sigma

mutual funds: capital group, dodge and cox, wellington

Apr 11, 2012

Call me immature, but to have a company named dodge & cox in San Fran is priceless.

Apr 13, 2012

If the office was in the castro district then I would have to work for them just so I could say I'm dodge & cox in the castro.

Noob questions: Why is Greenblatt's fund generally associated with value investing? I thought his was an event driven fund? Is it multi strategy? Or is it just that the two can be applied together.

Also, the breakdown of funds that Derivatives just offered seems solid, but I don't understand why 'Value' is separate from 'Long-Short'. Aren't value hedge funds generally using a long short strategy? Is it just that not all long-short strategies use a value/fundamental analysis approach?

Apr 13, 2012
tkaelle:

If the office was in the castro district then I would have to work for them just so I could say I'm dodge & cox in the castro.

Noob questions: Why is Greenblatt's fund generally associated with value investing? I thought his was an event driven fund? Is it multi strategy? Or is it just that the two can be applied together.

Also, the breakdown of funds that Derivatives just offered seems solid, but I don't understand why 'Value' is separate from 'Long-Short'. Aren't value hedge funds generally using a long short strategy? Is it just that not all long-short strategies use a value/fundamental analysis approach?

None of those things are mutually exclusive from one another.
1) Value is a philosophy on asset pricing; generally it's contrasted with growth-at-a-reasonable-price in the fundamental-driven (ie not macro or quantitative) world.

2) Event-driven means investing around specific events (M&A, bankruptcy, spin-offs, board proxy battles, etc). It could be value-oriented (for example distressed or special situations) or valuation-agnostic (merger arb, where you only care about valuation insofar as it influences if the deal gets done).

3) Long-short just means that you could go long or short, it can include dozens of different investing philosophies and trading styles, for example:
a) Run a book if independent long and short positions on under/overvalued securities
b) Risk arb, such as merger arb where you are generally long the target and short the acquirer or other risk arb trades like capital structure arb etc.
c) Running pairs trades like long AT&T short Verizon
and a million others.
d) Running a statistically-driven trading plan like mean reversion

Apr 13, 2012

Thanks for the explanation. So if I'm understanding correctly, there could feasibly be a long-short fund, using a value approach to pricing stocks involved in distressed and special situations? I can make the connection between going long on distressed situations where you think the asset is underpriced, but what types of special situations call for short positions?

Apr 13, 2012
numnum:

Thanks for the explanation. So if I'm understanding correctly, there could feasibly be a long-short fund, using a value approach to pricing stocks involved in distressed and special situations? I can make the connection between going long on distressed situations where you think the asset is underpriced, but what types of special situations call for short positions?

Well you could think that a distressed security is overpriced, for one. As an example, long the unsecured debt and short the equity because you think the equity will get wiped in the reorganization (can be a dangerous proposition!). Risk/transaction arb situations like merger arb or spin-offs can involve being long one part of the transaction and short another. Things like litigation or new regulation can create "events" that can negatively impact a company's value too; there's no set definition of what qualifies as an "event"-I've heard analysts stretch it to include beating street estimates on next quarter's earnings.

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Apr 13, 2012

As Kenny_Powers said, there's some overlap in the strats. You might note that the "event-driven" shops listed were all founded by merger arb guys whereas the "value" ones come from a more typical fundamental valuation background. The "long/short" funds cited aren't really associated with any particular philosophy such as value investing.

Apr 14, 2012

All of the latter four macro funds also run quantitative macro trading mandates similar to AHL, although their primary focus is on discretionary macro. As you may know, AHL has a stellar long term track record, and they've been hiring some top talent from other macro funds in order to improve their performance that has been fairly mediocre as of late due to choppy markets. They used to have the highest AUM among 'managed futures' (the contempt I have towards that name cannot be expressed in words) strategies as recent as four months ago (exceeded by Winton), and I'm optimistic that they'd restore that presence in the near future as the market environment improves.

Apr 14, 2012

I see. The story of AHL and Winton is pretty interesting, although my lack of quant chops beyond basic arithmetic will probably forever preclude me from looking into systematic shops.

Apr 19, 2012

Personally, I'm surprised that so many have listed enormous funds with assets in the multiple billions.

If I were young and looking to get into the HF industry, I would be looking to join smaller funds who are led by ex-heavyweights that are primed to grow quickly.

If you read HFMweek or FINAlternatives on a daily basis, you'll see everyday that big players from large BBs are breaking off and starting their own smaller funds. Sometimes these funds start with 50 - 500m AUM, but are expected to grow AUM extremely fast due to the branding of 'elite' personnel.

If you get into one of these funds at a young age, not only are you going to learn A LOT, but you're going to be able to grow with a young fund and ultimately move into positions of more prestige within the fund. Not only that, but you get the chance to work with industry veterans more closely.

While joining an enormous fund may look great on a resume, I doubt you'll get to work as closely with the more elite personnel right away.

Apr 19, 2012

Rothy, I hear you but I think that's more compelling for a mid-level person with some buyside experience in their pocket who's really ready/able to start trying to add value. Larger funds give you some stability, resources, name recognition, etc. that I think are worth considering.

Apr 19, 2012
Kenny_Powers_CFA:

Rothy, I hear you but I think that's more compelling for a mid-level person with some buyside experience in their pocket who's really ready/able to start trying to add value. Larger funds give you some stability, resources, name recognition, etc. that I think are worth considering.

That's true also. I guess I took it as a more hypothetical 'if' you could work at any hedge fund.. I think it would be fun to just be thrown into the fire in a small, but prestigious fund which is stacked with ex-heavy hitters. Everybody are season veterans and the learning curve is steep.. you'll catch on relatively quicker than you would working in a 10b+ fund in which you're not on the front lines because the infrastructure is just so vast.

Apr 19, 2012
Kenny_Powers_CFA:

Rothy, I hear you but I think that's more compelling for a mid-level person with some buyside experience in their pocket who's really ready/able to start trying to add value. Larger funds give you some stability, resources, name recognition, etc. that I think are worth considering.

It would be great to join a small, talented team just out of school right before they scale up in AUM and crush it. Kenny is right though, it would be a tough spot to be in and even tougher spot to land.

Jan 13, 2013
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Jan 13, 2013
Jan 18, 2013