I work in private equity and have gotten an offer to move over to a prominent long/short equity multimanager hedge fund.
I know that I would enjoy the job itself but I'm very worried about getting laid off. The industry seems brutal and there have been tons of firings in the news due to fund closures and bad performance - Perry Capital, Visium, Surveyor, etc.
I'm sure the people who got canned were insanely smart guys but there were circumstances outside of their control that led to them getting let go. Am I smarter or could I be a better investor than those guys? I have no idea - probably not.
It seems every other story in Bloomberg and WSJ is about how hedge funds don't beat the market, how everyone should just index, and how fees are coming down in the HF industry due to underperformance. Even Julian Robertson recently lamented that "It's been a long time since I thought I was in the right business."
I've also heard PMs say that the industry has gotten dramatically more competitive over the past decade and that it's harder and harder to make money, especially with the quants now in the game and firms that focus on trying to squeeze out shorts.
From those of you who are actually in the industry, would you recommend going into it right now? Would a different strategy than long/short be better positioned for a long term career?
And what do those who get laid off do afterwards? I imagine the resume gap can be tough to explain unless the firm went out of business.