Longevity of Hedge fund career: how long do people last in this industry?

Pizz's picture
Rank: King Kong | banana points 1,450

For someone who makes it into a Hedge fund analyst job (any strategy) either out of undergrad or from IB/PE or post-MBA, how long do people last typically in the industry? Do people have 40 year careers in this typically (become PM by the end, either at same firm or another firm)? What if you're not good enough to make PM eventually--then what happens? Do people typically not have 40 year careers in a HF capacity?

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Comments (5)

Mar 3, 2019

Bump

Mar 12, 2019

Just hypothesizing, but I suspect that the majority of people fall into two buckets at each end:
1. <5 years - either they don't have the intellectual chops to make it or they decided the don't like the industry / want to pursue something else

  1. 10+ years kinda the opposite of the above. Work their way up to eventually becoming a PM / starting their own shop.

A 40 year investing career would be pretty rare. for one it's an incredibly challenging industry and what worked in 1980 probably doesn't work now. Even for those that have the ability (and luck) to make it longer term, a lot guys probably retire early as well

    • 1
Mar 13, 2019

Can't generalize across strategies.

No one has a 40 year career - the industry barely existed 40 years ago.

You can have a long-stable career with more P/E like, less liquid, and less competitive strategies (credit, mortgages, etc).

Public markets is a crap shoot - a lot will depend on your luck in finding good PMs/jobs. @M_As_In_Mancy this isn't rocket science, no one is leaving b/c they're too dumb , though some might decide they're not interested enough to work as hard as it takes. A bunch of people with top pedigrees joined Blue Ridge, Eton Park, Tourbillon, bla bla bla take your pick just in time for the "prestige" funds to blow up and leave them jobless.

Most Helpful
Mar 20, 2019

Avg tenure at multi-mgr (non-survivorship adjusted): 2-4y [the real average for analysts is closer to 1-2y]

To the person above who suggested sub 5y is indicative of lack of intellectual chops or motivation - you're way off mark. PM (and fund) performance are arguably far more crucial than a jr employee's performance. And given the tight drawdown limits at such funds, intellectual rigor from a jr employee will almost never be a determining factor. The interview process at such funds are both extensive and challenging - you can be confident that most people who have a seat at the big funds possess the intellectual rigor and work ethic.

Will also say this, it is embarrassingly common for an analyst to be stopped out less than a year after joining a multi-mgr. There's no love loss at these funds, the entire team gets canned. Less common at single mgr, but it also still happens (i.e founder decides to turn fund into a family office, fires the analysts hired 3 months ago).

The buyside isn't the panacea for wealth that it once supposedly was. If you're still walking this path, you have to be partly delusional, partly confident, while maintaining a healthy dose of humility fortified from accumulating battle scars. And most definitely, one has to have a love for markets/ investing. To you, the 'average tenure' is largely irrelevant, because deep inside you're convinced you're an outlier among outliers. You truly have to believe you're the next George Soros/ Warren Buffett. That is, until the market gets you...

    • 2
Mar 13, 2019