Thoughts on Ashler Capital?

The question says it all. Looking for any info on Ashler Capital including comp, how sweaty it is etc

Insurance long/short desk

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Comments (29)

  • Investment Analyst in HF - EquityHedge
Apr 12, 2021 - 9:35pm

I think most would say its a small amount worse than GE/Surveyor in terms of reputation. Comp and hours are going to be 100% based on the team so you need to provide a bit more info here.

  • Analyst 2 in IB - Ind
Apr 12, 2021 - 9:55pm

not dick-ish at all. im in banking and just started learning more about hedge funds today

PM book size is like $300-600m. i am a first year analyst at my current bank but the HF role is for an "associate." not sure how many people work on the desk but my hunch is less than 10

  • Investment Analyst in HF - EquityHedge
Apr 13, 2021 - 4:27am

Ashler is same thing as citadel GE/surveyor. Started with a value tilt before they just realized that the GE formula is better.

Best advice would be to ask sales guys about this PM/analyst. Hopefully someone in your HF network can connect you?

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  • Investment Analyst in HF - EquityHedge
Apr 14, 2021 - 2:33pm

In a market neutral framework, which is where the industry is going (including SMs), sector matters less as long as you are an expert in your chosen sector. I would imagine insurance is rather unique/difficult sector to learn and a factor neutral return with a decent sharpe in that industry could get payouts nearing 25%+ at a lot of funds. You dont wanna be in energy which has had huge secular declines but as long as you think the sector will exist in size in the future and enjoy it, its fine.

Apr 14, 2021 - 3:30pm

Terrible take. He's joining Ashler/Citadel, so he will be buying insurance longs against insurance shorts. Definitely a business model that works, pretty much in any sector.

Apr 15, 2021 - 7:23am

This, basically.  Sms think about risk on $ so you want a sector with largest unlevered moves and dispersion. Banks and insurance are tough in SM most of the time because there's low dispersion (so is RE, utes, etc.) and drivers of subsector moves aren't repeatably predictable (rates, macro) so hard to just make a big sector bet.  Mms think about risk on vol, and force keeping subectors pretty tight, so having a lot of stocks that trade together should actually make portfolio construction easier, you can't make sector bets anyway in those models (other than p72 to some degree) so lower dispersion just means you run more gross.

  • Principal in PE - LBOs
Apr 15, 2021 - 8:13am

MMPM

Terrible take. He's joining Ashler/Citadel, so he will be buying insurance longs against insurance shorts. Definitely a business model that works, pretty much in any sector.

Really? And how marketable is he as an insurance analyst outside of the MM space?

If you're managing your career properly in the early years, you should make sure there substantial demand for whatever skills/specialization you're developing.

HF skills (ie stock picking) are among the least transferable skills, so you're already locked into a field with a not very compelling secular backdrop and not much lateral mobility into other career tracks. Now your going one level down, and limiting yourself further to a sector specialization that really only works at a 4 firms?

Unless you are deeply passionate about insurance, AND feel like you have a real differentiation in attacking that space, you're setting yourself up to be dramatically pigeonholed for the remainder of your career.

For a more senior guy that got into the industry when it was much less mature and had an insurance specialization when there was still real money to be made there (across strategies not just at the 4 MMs that matter), I'm sure it's a fine track stay the course - what other choice would they have, anyway.

For a 25 year old, I don't know why you would choose that path with a blank sheet of paper standing in 2021 with all the alternative paths open to you. Again, unless he has some deeply rooted reason for wanting to do insurance. Something other than that's where he got placed when he entered investment banking.

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  • Analyst 2 in HF - EquityHedge
Apr 14, 2021 - 5:06pm

Insurance/financials is a great sector to trade neutral in. Would take it over some super volatile TMT subsector

  • Associate 1 in PE - LBOs
Apr 14, 2021 - 5:08pm

If anything something like insurance, banks, autos, etc. can be a good coverage to have at a MM. The lack of huge dispersion in returns across names makes it harder to make a killing, but also harder to blow up, which is a constant concern at these types of places.

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