The possibilities and limitations of taking vacations in SM L/S HFs
My #1 hobby is backpacking. I try to get completely off the grid (no cell signal) for 3-4 nights at least 2x / year. I recently read something on the IB forum where someone mentioned they never unplug and are expected to at least check-in and read market news while on vacation.
Another example, outside of my off-the-grid backpacking example, would be a ski trip. Presumably I will have kids in ~5 years when I am a senior analyst or junior PM and will want to take them skiing and, while I will have the ability to check news for ~1h / day, I will want to focus the rest of my time with my family and not check my phone.
I think HF is the right career for me after PE but not being able to unplug on vacations would be a deal-breaker because the "always-on, always-responsive" culture of PE drives me off the wall.
If someone could describe in vivid detail the constraints and possibilities around unplugged vacation, that would be most appreciated. Thank you in advance.
Bump
up to 1 week is feasible at specific times of the year - e.g. Christmas to New Years, or late August, or maybe right after memorial day
2-3 days should be fine
other than that it will be very difficult
This is my experience too. Everything about HFs can be fun but not being able to unplug for two weeks to travel is a major negative vs. any other job. I've gotten used to it but many of my friends (outside of finance, but even at long only funds) have that ability to disconnect which I envy.
Thanks. What do those 2-3 days look like? Do you notify a peer analyst and ask them to cover? If you are a PM who do you notify, the fund head? How does one "cover" at a HF?
Can chime in a bit at senior levels- my dad is a finance senior guy and has a friend group representing all major industries- senior bankers, LO AM PMs, PE partners, and HF managers. I’ve traveled with this group, played golf, etc and guess who works more than anyone else on vacation? HF managers
In PE, it’s easy enough at the senior levels to just tune out unless you’re on a super busy process or serious issue at a port co. LO AM is similar, maybe in earnings seasons there’s some issues but basically nothing is urgent enough to pull you in off vacation just given extended hold periods, safer names, etc.
IB pretty awful but if nothing super active going on you’re enough of your own boss to be able to clear some time.
HF is awful. The guy I know is constantly getting calls on the golf course, leaving the pool to deal with work blow ups, and can’t do things like go on a fishing trip without cell access if the markets are open (and everyone else I listed above does this regularly). Know a few different ones but similar prototype always- tiny news/fluctuations can be so impactful that these guys (all PM level) literally cannot be away from work for risk of something going to shit. That’s the reason I’ll never work at a HF.
My experience has been pretty much the opposite, but it depends on fund type (MM vs SM, size of team, how much you follow models vs purely discretionary, strategy (do you trade earnings?), etc). Now I always keep a pulse on the market because I enjoy it (and yes, it’s my job and source of income) but I am away and “unavailable” for long periods of time. At the senior levels (at an SM) I find it pretty easy to be away for 2-3 weeks at a time (have done this many times). My team keeps me updated on anything important (over email) including summary of markets on a daily basis, and I don’t get calls unless absolutely critical (I.e. COVID hits the market). So I do review my emails, probably once at the end of the day to make sure things are still going well, but I also know that if anything is truly off I’ll get a call (and those almost never happen).
The audience here is gunning for a role like "your team" so they are going to be more plugged in than you are. You have earned the leverage to not have to be on top of everything right away.
Well said by the other poster I actually think you can get away with more time off than other industries but the question is what you consider time off being "totally unplugged" with any positions on is just going to be hard to focus. But lowering your var knowing the "2-3" things you want to track, planning to take time off after "volatile period" where the firm has performed is a lot easier. Know guys who can easily take off 3weeks but know that for 1-2 hours a day typically right at open, and then near close they need to be able to reached easily works for them. Unless your book is flat not sure I would want to be away 2weeks with zero communication to the real world.
As for juniors, the max vacation you get is like 3 weeks annually so if you plan to take it in 1 shot its a bit extreme since you should really have 2-3 times a year you recharge. But think with good communication with the PM, knowing its a quiet time of year there is coverage etc...It is possible to do just thing is most people do not want to deal with what it would take.
So being totally unplugged 3-4 days is prolly feasible no PM is not going to hire someone due to that limitation not having a proper procedure in place and giving forewarning that's a different situation. Yes there is some MMs out there can tell you they will chase you up the mountain maybe send a chopper after your arse but there is also reasonable people out there too.
As for answering the phone/checking market at the pool...just think HF guys are wired that way unless our wives throw away the phone we cannot help ourselves, as someone used the example could be on vacay at the pool and covid happens.
I got a call on my honeymoon to check if a convert we owned had a change of control clause after an M&A rumor.....there was me sitting in the hotel computer room in my bathing suit (in Barbados) with a pina colada logging into Bloomberg to check the prospectus! But if you love the work you don't mind and if you're not constantly thinking about markets or ideas you probably wont last long in the business. Today, with featherlight laptops and 5G internet, there is no reason why you can't log into Bloomberg everyday and check headlines/news flow and answer emails, and do so again in the evening before bed. I typically check twice a day, when I wake up and again before I go to bed, which is basically 15 minutes on each end of the day, so 30 minutes in total.
Honestly, I would be livid if this request came through on my honeymoon, its easy enough to look up (does your boss not know control F exists?), the PM who requested it could have checked it out in 15 minutes instead of interrupting your (hopefully) only honeymoon.
There are a lot of sadistic as*holes in the HF space, which you will find out if you make it into this business. A lot of fragile egos that like to remind you what a lowly piece of nothing you are as an analyst. That's the funny thing about the HF space, no two shops are the same and some guys land in a dream seat with good pay, great hours and a decent boss whereas for others you land in hell.
Over the past 10 years at the funds I've worked at (credit - distressed/hy/ll), all of my PMs take tons of vacations and typically only check in at night and only if there is an issue, which is rare. I mean like multiple 2-3 week trips per year, often internationally. I have always taken multiple 1-2 week trips per year, sometimes to more remote places with limited service and/or reversed time zones. I will check emails/new infrequently just to make sure nothing has blown up but its more back of mind than constantly checking. All of my coworker analysts typically take similar vacations - I'm talking stuff like Bali, Europe, African Safaris, Costa Rica, Mexico, Peru, Patagonia, SE Asia, Japan, New Zealand etc. Friends at other funds all take vacations as well. The concept of not taking vacations or not being able to check out seems more rare than not in my opinion, at least based on my experience. Maybe its dependent on fund strategy - but no one can work that much for ever without burning out. Of course you try to schedule trips outside of earnings periods, etc. but overall I'm pretty sure taking multiple vacations per year is the norm, especially once you have several years of experience.
If you have direct P&L (how you get paid in the HF industry), you need to be reachable and plugged into what’s going on.
Even as a junior monkey you should be trying to jam your ideas into the book because that’s how you get paid in the HF business and can have the meteoric rise/outcomes.
If you’re not available to deal with a blow up because you’re too busy putting you finger in a taxi drivers butthole in the Balkans, you’re useless. The entire HF business is about scale. If you can’t deal with a position/own risk outright and need others to step in on your behalf, it defeats the purpose. You don’t ALWAYS have to be on per se, but you’ll never know when a bomb goes off and if you’re unreachable that’s a problem.
While, we are directionally saying the same thing - and things can differ from strategy to strategy - the take is a bit extreme. In my experience at least, book turnover isn't so high that being out of pocket for a little bit isn't changing thigs. Most ideas don't aren't something that just pops up in such a short time frame - you're not just trying to consistently jam an idea in. Even in a blow up, actions aren't really taken immediately - granted you do need to get up to speed. Also, blow ups are pretty rare, and even still almost always around earnings - so easy to further derisk from a vacation timing perspective. I've had PMs get Sat phones for trips when they are really out there, so that is an option for the OP, basically an emergency line to be reached. These are long tail events. Overall, I think you're tone is bit overkill from reality - though maybe you're just hamming it up for fun on a random anonymous message board.
I agree broadly.. esp about most issues being around earnings.
But it also depends on the firm/culture/founder. Yes, ValueAct isn’t turning over their book because of a factor rotation or random Elizabeth Warren press release nuking a sub-sector… Pt 72 however is a different story. Maybe 10 years ago SM and MM were different animals, now the worlds have blended a bit with so many star MM PMs having launched their own sizable SM funds. So you could very well work at a SM that has MM dna.
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i think this varies wildly depending on what type of fund. a trading/short term catalyst fund is much less forgiving, when your investment time horizons are a day to a month, vs. a fund that can hold for many quarters.
also the more senior you go the more leeway you have.
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