Lost job at L/S HF - looking for advice
It is quite a feeling having to push a reset button on my career, especially after having achieved some relative degree of success so far (~5 years in finance - banking + buyside). Wanted to know if any one else in the HF world on WSO has experienced losing their job and what the path froward was for you... I like stocks + the markets and I want to be able to bounce back from this but am taking a few moments to reflect on what I actually want at this inflection point.
Curious what other's experiences were like + if anyone would be willing to chat directly (can give more details at that point)... approaching this with humility and an open mind as I think through next steps
EDIT: This is the most MS I've gotten. Current net worth is very relevant to the decision to get an MBA. I was trying to help out and give advice
Thinking about MBA but frankly it does not sound appealing to me... net worth $200-500K range
Lol. This guy is down on his luck, and you're just a rubber necking, asking to see his dick.
Past income maybe I agree, but current net worth is very relevant to the decision to get an MBA. I was trying to help out and give advice
Sorry to hear about the job loss. Unfortunately, this is fairly common in the HF world especially recently.
In my experience, the only way to survive in the HF world is to be a consistent revenue generator (generally speaking, all other skills are replaceable to some extent). If you truly believe you have the ability to generate alpha or will one-day, I say stick with it. If your long-term goal is to find a successful PM/group to take you under their wings, you are going to struggle. Majority of the PMs in this industry don't make it.
This is a tough period, so stay strong. It's more common than you realize, and many people go through a couple of these periods in their market careers. Others are luckier.
First, ask yourself, how much do you love the game? For some, they can't see themselves doing anything else. You have to be hungry to get through this time and to see long-term success in this business. If you can see yourself doing tech or medicine or whatever, then maybe this isn't for you.
If you decide you're in, then network is key. Hit everyone and see what shakes out. Many of the high quality seats come and go through relationships. Don't rely on headhunters. Referrals are so much more valuable. If you don't have a network, start building one. If you stay in the business, befriend more senior people down the road to talk ideas and help in times like this.
Plan to be out for 6 - 12 months and budget your lifestyle accordingly.
Prepare materials on several ideas to pitch. Write-ups, presentations, whatever your style is, start working on those and go hard on them. People are hungry out there and so you need to show you want it - 20 pagers, primary research, differentiated. You have the time now to frontload this. If you have some experience, the expectation is probably going to be higher than for a junior banker.
Take every call. Practice interviewing. Your story is key initially, and your ability to sell your intelligence and experience. Talk the talk, don't be shy. Make sure the pitches are tight - succint and with edge.
If / when you get to case rounds, you need to put in 80 - 100 hour weeks and you need to go above and beyond. Be resourceful in getting info. Show you want it, because if you don't someone else will.
Stay physically healthy - exercise regularly, eat well, sleep more, drink less. Stay mentally strong - you are not the first and you will not be the last to experience this (even Dan Loeb lost his hedge fund job, couldn't find another hedge fund job, and went back to the sell-side before founding Third Point). Tough times don't last, tough people do. Go hard - you only have one life to live, do or die.
Thanks for the pep talk - helpful
In similar position - super helpful pep talk, thanks
So well said.
But also, Dan Loeb did sell-side?!
Not just sellside, he did Fixed Income sales at Jefferies.
How did Dan Loeb lose this hedge fund job? Was he laid off or did the fund go under?
I like this a lot. network is key and it’s really a time where you have to rely on other people and their generosity at times. Getting referrals from contacts and having people make extra effort on your behalf is no small feat - show the gratefulness and return the favors when the shoe is on the other foot. couple years back - my own PM who ostensibly had a good relationship with wouldn’t really utilize his contacts to give me referrals when our fund shut down so it’s really down to the person.
I also agree on the case and pitch stuff - with equity it may be easier from an information perspective vs. credit where there’s lots of private info and reliance on Cov Review, Reorg etc. for info/analysis. bottom line though is you start to lose your Bloomberg, sellside research access and GLG and tegus etc. so you’re at a distinct disadvantage to folks still in the market. what you have as an advantage is really time. no amount of digging for primary research will replace some insight from a GLG call/interview with a former exec, but it’s something.
Np. Good luck. I'd also trade my PA to stay in the flow and for some income. Make sure to continue to follow the market either way.
Feel free to PM me. Know of a few l/s funds potentially hiring as well.
Thanks, just PM'd you.. user name starts with a V
Likewise - shoot me a PM
if you want to stay in the industry, be open about telling your story...if you feel your ideas were hampered in your prior seat by your PM...open a trading account at interactive brokers, start a twitter account with your name and open an account at collective2.com and publish your portfolio and trades in realtime, along with a link to your collective2 account, and then use that as your calling card. Put your money where your mouth is, post your analysis of your own portfolio on twitter / a blog (keep it clean and organized), and let the quality of your work be your best asset to finding your next hedge fund analyst job.
Sure, you'll need to do the standard interview process...but transparency for an analyst is highly valued (if you are good at what you do).
Had this happen to me a few times. Comes with the territory.
Keep in touch with your network, especially the sell-side. Equity sales guys always know who's hiring, who's on the way out, who's joining new shop. I had referrals and got in touch with incoming PMs during their garden leaves, 6 months before they even started the new role. That puts you way ahead of the competition.
wow, sonibubu you've been let go a couple of times? Been following your insightful comments on here for a while. Your trajectory has always seemed very smooth even at MM.
Did you find getting cut happening more often once you switched to MM? Also, do you think MM seats have become less 'safe' for analysts?
One voluntary, the other a team blow-up. First time I thought it's end of the world, now I look forward (mostly joking here) to it so I can get paid during garden. I just hope it's not this year because Americans can't travel so I'd get bored.
Contrary to popular opinion, I actually think MM HF are fine. If u look at who's getting inflows, big MM are getting most and that's if they want it...many aren't taking new capital right now. At current interest rates , why not tighten risk and just lever up a turn instead, if necessary? There's plenty of idle cash right now. They'll always be hiring because institutional investors love the risk mgmt. At least in the near future.
My personal view is than single manager funds are the ones in more trouble, but others would know better. I don't follow those guys as closely and only talk to a couple people at those funds.
Great idea, thank you
part-time MBA could be a nice reset and a great place to network
any buy-side professional, and HF employee in particular, should be ready for such disruptions. They happen all the time. The good thing is that such cuts carry no stigma. I think you should go get another job, and in the interim keep trading even if it's small amounts. I know getting another job is taxing and difficult, and easier said than done. I'm not minimizing the challenge. But it is the order of the day. Write your trade ideas down, send them to senior people on occasion, and put out a monthly letter of your views on the market. People will take notice.
Thanks, yeah putting out original, differentiated content and having some returns to back it up is a logical approach to this problem
Have you thought about leaving HF industry?
If I fail at securing a new role in a reasonable amount of time I’d evaluate that option
i was in your shoes as well and given the responses on the board it's far more common than you would think. it sucks, but keep your chin up.
1) perspective - you got paid partially in a year where there's a global pandemic and hundreds of thousands of people are dead. that puts you in the top 10% of reality at least.
2) be antifragile. great advice on the top to work your network as much as possible. i ended up back on the sell side after a few goes at the startup HF route didn't work out (after the banking, PE shuffle) and have been biding my time since. just as with investing/trading/gambling - a career is about risk-reward; and there's times to be aggressive and not depending on your own personal risk tolerance and life stage/goals.
3) flexibility. stay focused for a while but don't be afraid to open your paths after some time bashing your head against the wall and if nothing gives. so many ex hedgies have found success in other aspects in life - the fact you got to where you are already shows you're either hungry or lucky, both of which work out in the long run more often than not. the ones who have fallen by the wayside are the ones who think they're entitled to/too good for a certain type of role or job.
3b) just because there's a 'defined path to success at the junior to mid level' doesn't mean anything's set. look at any number of senior seats on the street that still pay a boatload of cash. Mark Mahaney or Eric Sheridan (sell side analysts pulling in more money than most HF PMs) did their time in Galleon / Baron and that didn't work out for them. i know a few ex hedgies who have made their way to CFO positions of small and large sized companies after spectacular flameouts. my personal hero is Salman Khan of Khan academy - if 2020 has anything at all to teach us is that a lot of people in this industry have an overinflated sense of importance of the work that you do and how it matters in the world. which brings me back to point (1); perspective.
Perhaps a little off topic; but do you have any learnings you'd care to share about going the startup hedge fund route for those of us thinking about that path? Any pitfalls you'd correct your next go around? Anything to watch for/diligence in the principals if you're joining at the level below (i.e. founding analyst)?
1) diligence as much as possible and try to work only with people you can trust (hard enough in finance, harder in this space). the amount of misrepresentation / borderline fraud in the startup HF land is frightening. reference calls, background history, do your fundamental research and get creative. history and track record of who they've worked with - why people left/don't work with them anymore is a big one.
2) know your place and your bargaining power - essentially small to zero. know what you get out of it - do you have a track record? a guaranteed reference from the founder if things don't work out? jack squat? again - i've had some messy experiences so this may not be 100% true across the board.
3) it gets harder to explain startup HF exits after the first one. biting the bullet to crawl back to SS was especially painful, when dealing with ditzy HR drones who had the gall to ask me the question 'what would you differently/what have you learnt from your time at the hedge fund that didn't work out?' - 'yeah - not join a fund that was going to fail... i mean wtf.'
4) it's still a lottery ticket. i've had a ton of soft offers to work with guys who 'got a book at ravelin' or 'got an anchor, want to come work with me' over my few years in sell side and these are smart, honest guys with tremendous track records i used to respect and work with/against over the span last few years. 0 out of 7 startups have survived. the founders are fine, but if i joined them i would have been S.O.L. and more broke than i currently am.
the shit sandwich tastes the same from both sides of the table. be honest, do good work, and compound your reputation. and FFS, have perspective.
Im the OP - this was great advice. I strive to match my feelings to this view of reality. My approach is as follows: earn the best risk-adjusted returns for myself over the course of my career.. Whatever direction that takes me in that aligns with my skills is the right path forward. Thank you for the wisdom
I’ve gone through this myself a couple of times, including right now. Funds shut down, or politics... various factors. Believe it or not I’m now thinking of the MBA route myself after having been a PM for a couple of years...
economy outlook in 2-3 years does not look good right now, maybe not a good time to invest in an MBA degree.
How’d you market yourself after those situations?
It's about focusing more on what your contributions were, on the skills you can bring, on any structural edge you have. Be able to talk about the things you can bring to the table. No one will blame you for a fund closure, or a senior PM who blew up because it is just so common.
Could you help expand on the politics point? Is this pretty common?
Definitely. At a junior level, not as much. The PM you're working for should handle the politics. Once you're the PM, that becomes part of the job. For example, how much capital to manage, how your strategy is better than others at the fund, who should get promoted to head of division, who should be the one advising senior management and overseeing others' risks, who should get paid if the firm doesn't do well, etc.
Same thing happened to me. I worked at a large multi-manager after three years in investment banking. I hated the short term nature of the investment style and in just one year I quit that job. I then transitioned to a startup hedge fund that was up a ton for the year. In just two months that fund blew up and I went from making potentially half a million a year at a multi-manager to unemployed. I almost left the industry to go the corporate route, but thankfully I did not. I found a job at a deep value shop and I have been happy ever since.
It was hard to get back up on my feet given my identity was (and still is) tied to my job. But you need to realize that how you feel when you are unemployed is entirely mental. Keep yourself busy, constantly reach out and connect to people, learn from their experiences, learn about their jobs, and figure out what resonates most with you.
More about my experience and what to do if you are unemployed here.
Great to see you thinking and reflecting: it will bring you truly useful insights about yourself.
Take good note of who is kind and compassionate to you, and who isn’t: sadly, it is at times like this that you learn who the real friends are. Don’t lose hope and run it like a marathon.
Been there at a similar stage of my career, feel free to reach out if you want to chat.
As others have said, it's definitely a time to think and reflect about what you really want to do. Do you want to stay in the industry, do you want to stay in the strategy, what kind of firm do you want to work for? If you want to stay in the industry, your network is key, don't be shy about reaching out to people, especially on the sellside (EDIT: also, PBs), even if you think they're just acquaintances. You'd be surprised at how much people want to help.
It's also a great time to take up hobbies / interests. You'll learn something new, and it will help to take your mind off the job situation. After you've sent your CV out to everybody you know, there isn't really a huge amount of stuff to do, other than working on the occasional idea or pitch. Might be a controversial take, but I don't really believe you need to put in tons of work into ideas / pitches - you have buyside experience now so it's more about fit rather than proving your ability.
Lastly, keep backing yourself. Most interview processes are ultimately about fit, whether it's experience, investment style, personality, etc. It's a numbers game of meeting the right fund and right team where you both like each other, so don't sweat it on processes that don't work out.
I am the OP... thank you for this insight. Super helpful way to think through the recruiting process. I have been aggressive about interviews and am gaining traction, but processes are taking a while. I will keep everyone updated on my progress. Thanks again
OP again - wondering if anyone has noticed that processes are taking very long (2-4 months) as a result of covid. My last job search when I was speaking with a firm only took 1-2 months. Anyone have any context on this?
Hi, Sorry to hear about your job loss. But the end is only a new beginning. I can help you setup your own Hedge Fund, along with helping you get regulatory clearance. And I only charge a fraction of what the big law firms (under 21k). who would anyways delegate the work to new interns that would copy paste a template. I would provide full hand holding support from getting prime broker and custodian to raising funds and offer documents along with obvious legal entity formation and a Wall Street address. Thanks in Advance
If the above post
'wither away you a** muncher!
hmmmm
Ok then friend.
I know it really sucks and will be hard. It’s a really depressing and demoralizing process.
here is my (cynical) advice
1) The best predictor of whether a fund wants to give you an offer is whether other funds want to give you an offer. There is a “network effect” or “winners win” effect in some sense with recruiting. I had no offers after 2.5 months of recruiting then had 4 very competitive offers all in 1 week. Portfolio managers for the most part just copy what others do while trying to seem smart and not get fired; this extends to how they hire as well. For this reason it makes sense to hit the pavement HARD all at once even if it’s painful to do so; this improves your chance that you can use traction with certain funds as a signal you can display for other funds to want to hire you.
2) One thing that helped keep me sane was remembering there is a lot of randomness here. the interview is a terrible test of your abilities and there’s just too much randomness for you to take a rejection personally. Ask yourself whether your interviews would have identified the next Warren Buffett from a crowd of 100 people. You probably aren’t the next Warren Buffett of course, but it helps put your failures into perspective.
3) instead of reacting to any one interview, think about your cumulative probability of receiving at least 1 offer versus being empty handed. Try to train yourself to only be upset if your probability of complete failure becomes unacceptably high (which for me was 20% or greater). one thing that really helped me is I had a spreadsheet tracking every interview and firm I was looking at as well as my probability estimate I would receive an offer from the firm based on where I was in the process. To estimate these odds I looked at my historical conversion rates from when I recruited a few years ago. I would then calculate the probability I would get at least 1 offer based on the implied cumulative probabilities. I’m a weird dude but this helped keep me sane for a few reasons:
a) based on how the math works, no one failure will move this cumulative probability that much. Hopefully this lessens the blow of failure.
b) recruiters know how scared you are and will try to bully you. Even if you don’t have another offer in hand, if your cumulative probability of at least 1 success is sufficiently high then you should feel comfortable turning down a bird in the hand for one that statistically exists in the bush. I have done this many times in my career and each time it has been a great choice.
4) being in the job search is really hard and insanely stressful. Sometimes the help you need is emotional and not just practical. Make sure to make time for people and activities you care about. You probably won’t be totally emotionally healthy during this period but you should remember that you’re a person with emotions and do the best to care for yourself.
At some quant funds, especially the more corporate ones, the interviews give the impression that they want to hire a warm body but don't really care who it is. Even if another Buffett or Simons came along, that isn't what they are looking for and they have no use for someone like that. There are a very limited number of "high impact" seats and they are all taken already.
And yeah, recruiters will definitely lowball you or sell you on crappy roles if you don't have an existing job. To get a competitive offer, you need at least two of them.
That’s interesting... which funds made you feel that way?
what did they do that made you feel that way?
How did you ultimately decide between your 4 options?
one of them was a clear no because the PM was a dick in the interview. I talked to past people that worked for him and they basically agreed
another one was a well known / successful PM at a multi-manager. I turned it down because the role was in Chicago and my girlfriend didn’t want to move. I would have had to end the relationship to go but at the time I saw it as reasonably likely we would get married. The fund has high turnover and so this seemed like a bad option. In retrospect, I think this was my best option. Factor neutral multi managers are the winning model for the future in my opinion; that doesn’t mean it’s the best deal for you as a young analyst.
the third one was actually a PE role to be a VP. this was also a really good option - I said no only because it was a startup fund. I also got a million in equity in the fund. I was kind of dumb for not taking this. I turned it down because I was overly seduced by option 4. It didn’t help I rented out an apartment next to option 4 before I got the offer at 3. I was a little concerned about moving away from public markets because I’m really weird and awkward. I also have the fairly strong view that most PE funds underperform their risk- and factor-adjusted public equivalents and don’t really have a genuine reason for existence.
the fourth one was the one I chose. It was a quant fund with legendary returns. The historical returns were the main reason I was interested. I had a non traditional role there which made it risky as an option. I felt comfortable taking a risk at this point and wanted to try something different. think I chose basically in error, but honestly I couldn’t have known better. I have never had a more boring job in my life. It was the right sort of place to work (they are a winner in most of the secular trends in the finance world) but it’s totally the wrong role for me. I guess it’s an interesting detour though.
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Resurrecting this thread in search of some hope/emotional support I guess.
I’m similar to the poster above in that I’m currently going through the interview gauntlet after losing a seat (4 years in the industry.) I’ve gotten a lot of interviews but I’ve found that most have been either people using me for free work or informational interviews (the fund I got let go from has had great returns and I’ve been trained well so people have been asking questions around that information).
It’s been pretty disheartening frankly. Getting excited about an opportunity only to realize what it is has been an emotional rollercoaster.
I guess I’m not really sure what I’m looking for. Guess I thought it would help to post and see if any more experienced users could give me some perspective or advice.
when you goto those interviews, and they ask "describe your research and stock picking approach" you should just talk about the results, rather than the IP used to get there.
"we use a process of elimination that creates a portfolio of securities with better a better risk vs reward profile on the portfolio than most other funds...combined with a particularly clever trading strategy that improves portfolio performance...the actual implementation details are confidential and i cannot divulge classified info in a setting like this, but as you can see from our consistent fund returns and outperformance of our peers, this strategy has been quite successful, and i expect it to continue to do so...the strategy makes sense"
Hi everyone - OP here. Advice in general was super helpful and I ended up landing a great seat at another fund. On the case rounds it’s extremely important to go the distance and find your edge - I made sure to do that
Wow congratulations - I’m still in the same spot as you were in unfortunately and have been having a tough time
Any differences between your current seat and your last one or was it the right fit?
Im lucky in the sense that it’s the job I always wanted but never saw available in the market. Things work out sometimes. Longer term in nature than old fund
A happy ending congrats. Everyone needs more good news this year.
That's great news. These are definitely challenging markets to find a seat in. Well done.
Congrats OP! Unfortunately in the same situation as you (well without the job). Would be great if you could talk through how you found your edge. I feel a lot of funds that talk about deep-dive really define edge as something that can't be gleaned from calls/reports/peer reads (i.e. essentially GLG). The definition of edge is looser at platforms but several PMs there also rely on proprietary channel checks.
I'm obviously reluctant to shell out several hundred dollars for a channel check especially when I'm not earning income so would love to hear about your edge.
Thanks!
Edit: Missed that you found a seat. Congrats. I'll leave my advice here for others that might be in your prior situation.
Here's my advice (some of it already posted by others)
1) I would try to find a friend who works at a fund and squat there as a "consultant" while you look. You'll get a bloomberg, will be more likely to work on ideas and keep in the "flow" and would have optionality on a potential conversion from a consultant role to a full time role at said fund. Tiger cubs hire consultants all the time so you might want to start there.
2) Network your ass off. Hit up all your friends, sales folks you are friendly with, research analysts etc. This is almost now your full time job.
3) Get your resume in the PB Talent intro books. All the major PBs have folks that help place analysts/pms that are looking.
4) Importantly have a story on why you're out of work. Make sure your references are tight with your old team bc people are going to assume (if your old team /fund is intact) there is something wrong with you. Make sure your story about why you're not sitting in a seat and the story with your references are aligned.
5) Hit up headhunters like others have said and take every possible interview to keep you warm on interview prep
6) Have 1 fully baked long idea and 1 fully baked short idea to talk about along with some other ideas that might be less researched but interesting.
7) Don't appear desperate, despondent or too eager. Seem like you're taking the situation with grace and are being reasonably selective (even if you're desperate for a job). People will sniff this out and coming off as desperate will make you less attractive.
8) Try to get past analysts and straight to the firm founder/pm as fast as possible. Cuts through a lot of bullsh*t in the hiring process.
9) If you don't consult at a fund, be strategic on when you use your trial Bloomberg account.
10) Keep your head in the game. The interview process can be random, brutal and painful. Just realize that you're good at what you do and eventually you will land.
Finally - have some fun while you're out, as hard as that might be (especially during COVID).
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