Leaving the sell side to a Hedge fund
Hi guys,
I am currently working as a quant in the sell-side. My position is well established in this place and I have been there there for a while now but i am getting less excited with what i do. I see myself getting less motivated and more frustrated. I can honestly say my position is safe and i could probably stay here for another decade but probably wont be paid much more.
However, i have a new opportunity to join a pod in a hedge fund (pretty well established i would say). I know i am liked and really wanted
I was hoping to get your opinions and see what you think
I come from the middle of nowhere in the US where what i make now would blow the minds of people there.
Does it really make sense to leave a safe place and take a risk such as moving to a hedge fund?
Does it really make sense to risk my career for what could turn out to be short term gains?
The sell-side is shrinking so it would probably be tougher to get back into the sell-side?
Would i be condemning myself to what could turn out to be endless job hoping?
I have savings and while i take care of family i dont have dependents
I have weighed pros and cons and yet still cant seem to come to a decision
I'm interested in hearing what you guys think?
Thanks
same boat actually!
How are you going about it? I personally have written all pros and cons and yet i still can seem to answer the question
SHAVE YOUR HEAD and become a BUDDHIST MONK
if by 'pod' you mean a pod at a multi-manager that is at risk of getting fired for hitting a pre-defined drawdown, your number one question should be if you think the PM is good enough not to blow up- that can come from talking to the PM during the interview process, his/her background and track record (sharpes if you can get those), or reputation second hand from those that work in the industry.
on the other hand, if you want real career progression and upside you need to be in a risk-taking role somewhere. Me personally I would evaluate in terms of EV (evaluate the team you are joining plus your own estimation of your own abilities in that context) as opposed to 'risk' (variance) terms. Status quo is most of the time the least risky.
Yes, I meant 'pod' as in pod in a multi-manager and yes there are drawdown limits. The PM has a good reputation on the street but i dont have any info regarding track record/sharpe. I hear you about being in a risk-taking role for major upside. I guess what i am questioning myself about is how much do i want to risk? do i stay in a relatively low risk position with no significant upside but relatively safe so stable for the next couple of years or do i take a risk with major downside. For someone who doesnt have any major safety net should i think of it. These are the questions i am asking myself. Anyone in similar position? With regards to my abilities within the pod - i am fairly confident in it since my skillset (background) is specifically what they are looking for Thanks for your response in any case. It kind of gives me a way of thinking about it.
One thing I learned being in this industry was and still am following is... don’t follow the money. Follow the experience and money will follow. You have no dependents, so fuck it.
I understand and this is an element i am considering I know by moving to the pod i will have a greater responsibility and also greater opportunity to learn since its a small team
One thing that did concern me was when I joined a fund and I was trading, I had no support. It was all on me. If I had to build a model, I had no quant. I had nothing. If a senior trader was pricing something in RFQ for some structure product, I had figure out what our new positions would be if we traded it. It was tough but I learned so much
How long has the pod existed at the multi-manager? If at least 3 years, it's a good sign.
Keep in mind that seats at multi-managers are always available, as there is very high turnover. It's risky to join a startup pod, as they might be out on the street in 6 months.
If it's the right team/pod, then, go for it.
Hmm, i am not sure how long they've existed. My guess would be less than 3 though
Actually specially of survival. How does it work in a multi-manager HF when recession hits? I would guess if the pod gets hit by the recession they get shuts down but what if they are not hit but overall manager is hit at topline? any ideas?
Naturally, management will shut down the pods losing money and keep the ones performing well through the recession. Which is what they would also do in any environment.
Pods are judged relative to their peers in a given strategy (quant equity pods, FI RV pods, etc).
In a good year, management may trim the bottom decile in a given strategy. In a bad year, this may be as aggressive as trimming the bottom quintile.
If you have a good relationship with your boss and anyone that could block your rehiring I say go for it. If your secure and think it’ll give you a chance to grow then do it.
Not getting your job back is a possibility but you do have experience and that’ll be valuable to someone.
I do have good relationship with my manager. But i dont think it'll be easy to convince a rehiring.
Sell side right now is trimming down on number of people and i think 1/2 yrs from now strats are the next to be trimmed.
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