Thoughts on Abdiel Capital?

What do people in industry think about Abdiel Capital? Returns seem off the charts (especially this year). 

I know they take undergrad interns but they never seem to return, often have good jobs after but curious if this is because its not desirable or because the fund is very small and selective with its hiring. 

Anyone have any concrete information on the fund?

Hedge Fund Interview Course

  • 814 questions across 165 hedge funds. Crowdsourced from over 500,000 members.
  • 11 Detailed Sample Pitches and 10+ hours of video.
  • Trusted by over 1,000 aspiring hedge fund professionals just like you.

Comments (43)

Controversial
Oct 6, 2020 - 4:39pm

They invest in nascent business models with big tailwinds - investing ahead of the S-curve. Seems pretty elite guys with Harvard degrees. Heard good things about them.

Good "comp" for Abdiel would be Whalerock (run by Alex Sacerdote), Atreides Management (run by Gavin Baker), Hayden Capital (run by Fred Liu) and some of the Tiger cubs like Coatue and Tiger Global. 

Instagram: @dickthesellsider | Substack: dicktoad.substack.com

  • 6
  • 4
Oct 7, 2020 - 8:46am

Don't think they are on the level of those tiger cubs. Their fund is several times smaller and while their team is very, very smart (partner from chieftain cap/rhodes scholar), they don't have as much of a reputation for later stage investments.

Array

  • 1
Oct 7, 2020 - 5:17pm

It's a one man shop, so quite respectable. I looked at some of the presentations and materials on website and the philosophy of value and compounding is mostly borrowed buzzwords. Not much to differentiate from the hundreds of other "deep value" investing shops out there. That said, Fred seems to know his stuff. But just nothing special.

I will say that their returns have generally beaten S&P historically. They really knocked it out of the park this past year but Fred probably just bought puts, went long vol. strategies or shorted real estate/COVID impacted sectors/indices in March through April to get those 20% monthly returns. Seems like Fred's young enough to read reddit WSB, haha.

Array

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
  • Research Associate in HF - Event
Oct 9, 2020 - 11:06am

Ah yes one dude with $9mm AUM charging 50bps for a million dollar client is comparable to Whale Rock. Classic

  • Investment Analyst in HF - EquityHedge
May 23, 2021 - 4:24pm

Yeah agreed, Hayden Capital is a total meme. Their investor presentation literally has the quote:

"You don't need a scale to know that a 350 lb man is fat." - Ben Graham, Author of Security Analysis

And according to the same presentation, https://www.haydencapital.com/wp-content/uploads/Hayden-Capital-Present…, they have an annualized return of 31.6% over the past 6 years. Not bad, but it's also easier to do that with a much smaller fund.

Oct 6, 2020 - 5:52pm

What can one expect for comp and hours at a place like this? Super lean team so potential for good comp and the super long term investing style could be a mixed bag, deep dilligence vs not being tied to markets all the time

Oct 8, 2020 - 12:55am

It's more the latter. If a fund has been around for a while, spots don't usually open up unless someone leaves. For example, my fund has not hired someone in the past 3 years (although we will meet candidates regularly who are referred to us). So my guess would be that Abdiel has a small team and is not actively looking to add someone new unless an intern is truly extraordinary. 

  • Investment Analyst in HF - Other
Oct 25, 2020 - 9:30pm

Nascent business models with big tailwinds is good descriptor. Would also add: businesses undergoing a misunderstood transition in biz model or quality of moat + very focused on finding management teams who are both growth and capital return minded.

They had a very non traditional interview process. Instead of doing a standard multiweek case study like most of the other L/S, they wanted me to do a qualitative research project on a specific market and wanted to see how I approached a few expert calls.  I walked away from that process with a high opinion of them. They definitely differentiate. 

  • Analyst 1 in AM - Equities
Nov 25, 2020 - 12:25pm

Abdiel in a heartbeat. They have to be the hottest shop around. The returns are indeed off the fucking charts - who else is returning 80% 4 years straight? They're up 1500% all time in 4 short years... 

Abdiel, Shawspring Partners, and CAS Investment Partners are already all-time GOATs at this point. The returns are impossible to believe unless you've seen them with your own eyes. Just purely insane.

Nov 26, 2020 - 12:29pm

Yes, they have performed well and the numbers don't lie because that is real MOIC and IRR. But I will just say 3 things.

1) Beta markets. I bet lots of their investments have been in tech names that are public which have done well. The alpha is not as impressive then. Abdiel is known for concentration. They hold only several names. When you have billions of capital in just a few names, and the market happens to rip for those names, it's easy to capture a huge % return. This becomes very costly the second there's a drawdown.

2) Growing pains. They are a small fund to start with. It's much easier to do well with smaller bases. Look at how the Tiger Cubs have been doing with 5-10x more capital AUM.

3) Sustainability. Sure they have done well but the question is if their investment process and returns will scale as they get more AUM or if the markets don't rip as much in the future.

Array

  • 1
Nov 27, 2020 - 2:09pm

I would really love to find good literature on how both hedge funds & PE funds have successfully grown AUM while posting good results.

  • Investment Analyst in HF - EquityHedge
Nov 27, 2020 - 11:58pm

Easy now! The word stellar can't be used on WSO unless you're describing a stellar distressed shop.

Most Helpful
Jan 13, 2021 - 2:53pm

Name rang a bell in my head... turns out I read about them on WhaleWisdom a while ago. Definitely was impressed. According to the article, "Abdiel Capital was #1 among the top performing hedge funds over the last year... with a 123.96% return for the year ending Sept. 30, 2020." These guys have either been super lucky or are seriously onto something.

Start Discussion

Total Avg Compensation

June 2021 Hedge Fund

  • Vice President (18) $520
  • Director/MD (10) $359
  • NA (4) $325
  • Portfolio Manager (7) $297
  • Manager (4) $282
  • 3rd+ Year Associate (18) $269
  • 2nd Year Associate (26) $251
  • Engineer/Quant (51) $237
  • 1st Year Associate (63) $188
  • Analysts (183) $168
  • Intern/Summer Associate (15) $125
  • Junior Trader (5) $102
  • Intern/Summer Analyst (205) $82