Hedge Fund Scene Outside of NYC

I have been working in equity research in NYC for the past 4 years and am ready to make the jump to the buyside. While NYC has been awesome, I'm also looking for a change of scenery. The main cities I'm looking to live in are Boston, Chicago and D.C. I'm now trying to figure out which of these cities would be the easiest to find a first year hedge fund analyst position in (for what it's worth I've done tech equity research the past 4 years). Any advice on which city would be the best to focus on in terms of the most hedge funds looking for new analysts? Thank you so much for your help.

 

Boston and Chicago. No real presence in D.C. The dropoff in number of HFs once you leave NY/tri-state area is so large that you will likely need to focus on multiple markets. Chicago might be slightly better for hedge funds, while Boston is better for asset managers/ long onlys.

In general buyside is Tristate area > Rest of Northeast ~ Chicago >>SF >>>>LA/Dallas >>> everywhere else.

 

Structural disadvantage - I don't think so.

The key advantage would be the opportunity to meet others to compare notes, trade/test ideas, and build a network for future job opportunities. But most of that can be done over phone. If you can travel to some conferences and build out your rolodex, picking up the phone will be just as good. So if you feel comfortable in your ability to network from afar, I don't think it's a structural disadvantage.

Conferences and management access are much easier in NYC, but again, nothing that picking up the phone can't overcome.

The biggest structural challenge might be around moving to another firm. Harder to interview / meet with recruiters when you are in another city.

Lastly, I would point out that some think being outside of NYC helps you develop your own views / be more contrarian which makes you a better investor.

 
Gray Fox:
In all seriousness it might be better to be out of NYC. Clear, independent thinking is better than constantly being surrounded who talk about their ideas, positions etc. Even if you try to drown it out you are immersed in it.
Oh hell yeah
Get busy living
 

buddy of mine and i talk about this a lot. i'm going to assume that when you say "nyc", that includes greenwich, because that's technically nyc area and is the hf capital of the world. the answer is absolutely not. he argues that working at a place out of the loop puts you at an advantage in terms of not letting your mind get consumed group think. tons of insanely smart managers (buffett, berkowitz, included) who explicitly say they want to get away from the city for that reason. they're "doing all right." also, the smart hf guys who peace nyc to places w/ no taxes like (lampert moved away from greenwich and got this island down there now) and tx.

 

NYC is conducive to turnover - lots of people jump around frequently (for good and bad reasons). If you want to be able to hop to another fund quickly, being in NYC is helpful. But I think in general, moving from NYC to another city tends to be more difficult than vice versa because funds elsewhere tend to want someone with ties to the location so they are more likely to stay. I've very rarely heard the same concern from an NYC-based fund.

 

I don't think you lose too much optionality, controlling for quality of your fund/experience. People (especially younger people) bounce around between coasts and cities. That said, I have seen people settle for roles that are a "step down" from what they were doing before in order to stay where they had put down roots. This is more common for older folks with families.

To the extent it does impact compensation, it will likely be more than offset by cost of living. Again controlling for caliber of fund, the talent market is fairly efficient and people make well-informed decisions with consideration given to quality of life.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

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