Mutual Funds (GAMCO/PIMCO/BlackRock) vs. Hedge Funds

Prangs's picture
Rank: Orangutan | 331

How does the prestige of Mario Gabelli's Asset Management Company (GAMCO), PIMCO, and BlackRock stack up against hedge funds?

In general hedge funds>>>>mutual funds but I feel as though Mario Gabelli, Bill Gross, and Larry Fink all carry weight.

1) Are these three places seen as prestigious?
2) I am interested in being an investor. Activist hedge fund could be really cool. I am a junior at a non-target and I have gotten offers/have been invited to interview at the following places/have been told via networking I will get an interview for the following internships. Which one of these internships would best set me up for the future? Summer Portfolio Analyst at PIMCO, Fixed Income Summer Analyst at BlackRock, Equity Research Summer Analyst at Gabelli (maybe working somewhat close to Gabelli-met him at a conference last year and kept in touch actually-but remember i'd be doing sell-side ER for a value investor) vs. Goldman Investment Research, GS S&T, Citi S&T, JPM S&T?

i do not have all of these offers but I want to know where the former 3 stack up. Or should I just shoot for banking?

3) I know PIMCO and BlackRock pay well-but Glassdoor Salaries says Research Analyst at GAMCO's salary ranges from 55k to 125k. 55k seems super low? a) could this be pre-bonus and b) if not should I not do this?

I'm aware I could be being a stingy douche right now in terms of pay..

Comments (20)

Jan 4, 2014

Posts like this is proof that the quality of WSO has deteriorated precipitously.

It's tough to compare the "prestige" of hedge funds vs mutual funds. Depends on the fund in question and your role. Generally speaking, working for a top long-short equity/special situations/activist/distressed debt fund such as Baupost, Greenlight, Pershing Square, Paulson, York, etc., is more prestigious than working for a mutual fund simply because it's tougher to get the job. But as I said it's hard to make a sweeping statement either way. This isn't like consulting where you can categorically state that MBB is more prestigious than Deloitte.

Regarding your question, it ultimately boils down to what you want to do. If you are passionate about accounting and valuation and love doing fundamental research on stocks and learning about a company's business line, GAMCO or sellside ER makes sense while PIMCO and BlackRock do not. On the other hand, if you prefer macro products, multi-asset class research, portfolio construction, etc., then PIMCO and BlackRock make more sense. Let's say you prefer the latter and are deciding between PIMCO and say Goldman rates S&T. That's a serious decision you have to make, and in such a case I would tell you to look carefully at what each role entails. From my understanding, portfolio analyst at PIMCO is sort of glorified middle office; the name brand looks good, but you will learn more at Goldman S&T since you will get direct exposure to products and doing flow trading for major buyside clients.

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Jan 4, 2014
mbavsmfin:

Posts like this is proof that the quality of WSO has deteriorated precipitously.

It's tough to compare the "prestige" of hedge funds vs mutual funds. Depends on the fund in question and your role. Generally speaking, working for a top long-short equity/special situations/activist/distressed debt fund such as Baupost, Greenlight, Pershing Square, Paulson, York, etc., is more prestigious than working for a mutual fund simply because it's tougher to get the job. But as I said it's hard to make a sweeping statement either way. This isn't like consulting where you can categorically state that MBB is more prestigious than Deloitte.

Regarding your question, it ultimately boils down to what you want to do. If you are passionate about accounting and valuation and love doing fundamental research on stocks and learning about a company's business line, GAMCO or sellside ER makes sense while PIMCO and BlackRock do not. On the other hand, if you prefer macro products, multi-asset class research, portfolio construction, etc., then PIMCO and BlackRock make more sense. Let's say you prefer the latter and are deciding between PIMCO and say Goldman rates S&T. That's a serious decision you have to make, and in such a case I would tell you to look carefully at what each role entails. From my understanding, portfolio analyst at PIMCO is sort of glorified middle office; the name brand looks good, but you will learn more at Goldman S&T since you will get direct exposure to products and doing flow trading for major buyside clients.

if I want to go to a Third Point, Greenlight, Pershing Square at some point-then what's my best bet between Goldman Investment Research and Gabelli ER? Or would banking be better to get to those funds?

Jan 4, 2014

If that's your goal, a top banking group is by far your best bet. Nearly impossible to get into those funds without it.

Jan 4, 2014
mbavsmfin:

If that's your goal, a top banking group is by far your best bet. Nearly impossible to get into those funds without it.

sorry why is banking better than top research? I still don't understand for example at a distressed debt fund, why a distressed debt or high-yield analyst (on the research side-or some banks combine S&T with research analysts on the desk) is worse off than an ibanker?

Or for like a greenlight-why wouldnt working with gabelli be beneficial compared to IBD at MS M&A?

Best Response
Jan 5, 2014

The fact is that elite funds hire more banking analysts than research analysts or S&T analysts; the debate over why and if it's "right" is happening elsewhere as we speak, and like attack ships burning off the shoulder of Orion, will be lost, like tears in the rain.

To your original question, allow me to paraphrase a man who like myself wears pince-nez sunglasses and alligator trench coats indoors: "What if I told you that everything you knew was wrong?"

All of those places are considered very prestigious (though Gabelli seems like a strange choice to include), but your reason for thinking they may or may not be and how it affects you is reflective of the actual underlying questions you SHOULD be asking. In fact all three of your examples perfectly frame why you're asking the wrong questions, because all three of those firms manage hedge funds as well as mutual funds (to wit, GAMCO also operates a broker-dealer and employs what would be properly termed sell-side research analysts, as you seem to be aware).

So let me make a couple of related statements/suggestions:
a) I would wager that less than 10% of the posters on this board could tell me the actual differences between a hedge fund and a mutual fund and even fewer knew that PIMCO, BlackRock, and GAMCO operate hedge funds, even though all that information is easily available through the SEC and those company's websites.

b) Brand name matters to a point, but it only takes you so far. At the large, well-known fund I work for, we interview people from basically every bank you've ever heard of, but we're much more likely to interview someone from UBS equity research than Blackstone fund of funds (and more likely to interview someone from MS M&A than either).

c) Stop worrying about working for Greenlight (or anywhere else for that matter). Just put it entirely out of your mind. The top 10 names that appear on this board (setting aside some large multi-manager operations) probably employ less than 500 investment professionals under 35. You could be a Wharton grad going to an elite banking group and the odds of you working there would STILL be incredibly low. The odds of you working SOMEWHERE where you can learn to be an investor and get paid are pretty damn good.

d) As a follow-on to C, I would also recommend that other than in general terms ("I want to work in PE, I want to work in public markets, I like credit, I like equities"), you should try to spend as little time as possible thinking about your next job and as much time as possible learning and thinking about what you're actually interested in/any good at.

e) Don't worry too much about pay at this point.

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Jan 19, 2014

Honestly, those mutual fund companies are probably great firms to work for, for 2 years, and exit to a HF after.
No one will give you shits for working for PIMCO or Fidelity than moving to a hedge fund.

Jan 19, 2014

KP crushed this thread, good work. Very fundamental misunderstanding of what matters and what does not.

I just hope some day soon all the college kids can hop off Greenlight's D and realize there's more out there than the handful of funds people seem to care for and love so much. What do you even know about Greenlight, Pershing Square, Third Point? Any idea what the work environment is like? Any idea how difficult it is to work with Dan Loeb on a daily basis? Any idea how much of a grunt you might actually be for the guy getting headlines and even if you do happen to source a huge position, that credit is not only going to be taken from you, but the blame will be put entirely on you if it blows up? (Sorry to pick on you Shane, you deserve better, but...) Do you think the guy who did the real legwork on HLF is going to end up getting a hugely disproportionate amount of the spoils from that home run if it ever ends up working out for Ackman?

My money says all these kids asking questions like this would be a whole lot more excited about working at Glenview, Brave Warrior, Lone Pine, Viking, Chieftain, Trian, TPG-Axon, Coatue, Eton Park, Slate Path, etc. but simply by virtue of being great funds that don't need to be as loud to absolutely crush it and raise capital, the masses aren't going to fall in love with them the way they do with the usual suspects WSO loves to talk about.

P.S. I excluded Appaloosa from this list because even I can only dream of working there someday. That being said, I have no clue what it's like over there but I'd really love to touch Tepper's balls one day. (Feel free to take that out of context... maybe)

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Jan 19, 2014
BlackHat:

Any idea what the work environment is like? Any idea how difficult it is to work with Dan Loeb on a daily basis? Any idea how much of a grunt you might actually be for the guy getting headlines and even if you do happen to source a huge position, that credit is not only going to be taken from you, but the blame will be put entirely on you if it blows up?

My money says all these kids asking questions like this would be a whole lot more excited about working at Glenview, Brave Warrior, Lone Pine, Viking, Chieftain, Trian, TPG-Axon, Coatue, Eton Park, Slate Path, etc. but simply by virtue of being great funds that don't need to be as loud to absolutely crush it and raise capital, the masses aren't going to fall in love with them the way they do with the usual suspects WSO loves to talk about.

I just want to second this.It's especially something to consider when you are evaluating the offer at Gabelli. Have you talked to anyone there about what it is like? Mario Gabelli might be a really smart man and an incredibly successful investor but that doesn't make him a great boss. I've seen how he treats his analysts in public so I can only imagine how bad it must be in private. Only you can decide how you would handle getting shit every day for the next few years and obviously you can put up with a lot if you just plan on doing it for 2 years. However since you have multiple choices fit should be a consideration.

You'll notice that the undergrads here only talk about prestige. They want the most prestigious job at the most prestigious firm so their e-penis on WSO can grow a couple inches. The people who have actually worked for a few years will talk about fit and culture. It really does make a huge difference. I had a job where I traveled a ton, worked crazy hours and got shitty pay (~$55k and no bonuses) but I loved it. I worked with great people and enjoyed what I was doing. Then I got promoted, had better pay and easy hours(if I was in the office 50 hours it was a bad week) yet I was miserable. I worked with a group of idiots I couldn't stand and spending 8 hours a day with people you don't like is much harder than 12 hours a day with people you enjoy. Obviously it is hard to really know about the culture before joining an organization but there are definitely red flags you can look out for.

Jan 19, 2014
BlackHat:

KP crushed this thread, good work. Very fundamental misunderstanding of what matters and what does not.

I just hope some day soon all the college kids can hop off Greenlight's D and realize there's more out there than the handful of funds people seem to care for and love so much. What do you even know about Greenlight, Pershing Square, Third Point? Any idea what the work environment is like? Any idea how difficult it is to work with Dan Loeb on a daily basis? Any idea how much of a grunt you might actually be for the guy getting headlines and even if you do happen to source a huge position, that credit is not only going to be taken from you, but the blame will be put entirely on you if it blows up? (Sorry to pick on you Shane, you deserve better, but...) Do you think the guy who did the real legwork on HLF is going to end up getting a hugely disproportionate amount of the spoils from that home run if it ever ends up working out for Ackman?

My money says all these kids asking questions like this would be a whole lot more excited about working at Glenview, Brave Warrior, Lone Pine, Viking, Chieftain, Trian, TPG-Axon, Coatue, Eton Park, Slate Path, etc. but simply by virtue of being great funds that don't need to be as loud to absolutely crush it and raise capital, the masses aren't going to fall in love with them the way they do with the usual suspects WSO loves to talk about.

P.S. I excluded Appaloosa from this list because even I can only dream of working there someday. That being said, I have no clue what it's like over there but I'd really love to touch Tepper's balls one day. (Feel free to take that out of context... maybe)

A fucking + post. I loled at the Tepper's balls part. Also Andreas is a straight up boss. Super nice, wicked smart, and doesn't jerk around in the media. However, I can think of a dozen more funds similar (not that your list was meant to be exhaustive) to Viking/Lone Pine where it would be more enjoyable to work and run by a manager that doesn't show up in the news everyday. Although Chase is in between, but I think that's a product of being so young?

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.

Jan 19, 2014
Will Hunting:
BlackHat:

KP crushed this thread, good work. Very fundamental misunderstanding of what matters and what does not.

I just hope some day soon all the college kids can hop off Greenlight's D and realize there's more out there than the handful of funds people seem to care for and love so much. What do you even know about Greenlight, Pershing Square, Third Point? Any idea what the work environment is like? Any idea how difficult it is to work with Dan Loeb on a daily basis? Any idea how much of a grunt you might actually be for the guy getting headlines and even if you do happen to source a huge position, that credit is not only going to be taken from you, but the blame will be put entirely on you if it blows up? (Sorry to pick on you Shane, you deserve better, but...) Do you think the guy who did the real legwork on HLF is going to end up getting a hugely disproportionate amount of the spoils from that home run if it ever ends up working out for Ackman?

My money says all these kids asking questions like this would be a whole lot more excited about working at Glenview, Brave Warrior, Lone Pine, Viking, Chieftain, Trian, TPG-Axon, Coatue, Eton Park, Slate Path, etc. but simply by virtue of being great funds that don't need to be as loud to absolutely crush it and raise capital, the masses aren't going to fall in love with them the way they do with the usual suspects WSO loves to talk about.

P.S. I excluded Appaloosa from this list because even I can only dream of working there someday. That being said, I have no clue what it's like over there but I'd really love to touch Tepper's balls one day. (Feel free to take that out of context... maybe)

A fucking + post. I loled at the Tepper's balls part. Also Andreas is a straight up boss. Super nice, wicked smart, and doesn't jerk around in the media. However, I can think of a dozen more funds similar (not that your list was meant to be exhaustive) to Viking/Lone Pine where it would be more enjoyable to work and run by a manager that doesn't show up in the news everyday. Although, Chase is in between, but I think that's a product of him being so young?

Oops, I fucked up trying to edit my post...

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.

Jan 19, 2014

FWIW, I'd give Glenn the right to name my first born son if it meant I'd get to work at Brave Warrior (for many reasons, least of which is the badass name). Same can be said for Stephen, Andreas, and probably Philippe (even though he's my least favorite Cub). Hell, I might as well throw in Chase and Lee too.

Sep 15, 2014

Bump

Oct 13, 2014

Great thread.

One comment, even among those firms you listed (coatue, etc) they're still very much brand names.

Even those you've "never heard of" can still be very legitimate, but they're tough to diligence because so few "former" associates and lack of reputation.

Oct 13, 2014

bump. if the questions are that misconceived, I'd jkindly ask someone to say so and I'll move on.

Oct 13, 2014

wow everything is so specific; so yea im still in HS and all i know i want 2 start in ibanking; so wat exactly is Equity Research?? is that like a division in IB like M&A and good ? about MF VS HF because i havent heard 2 many peopple talking about MFs either

Oct 13, 2014
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