Transitioning from Multi-Manager Platform Fund to Long-Term Focused Value Shops?

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KingAlpha - Certified Professional
Rank: Monkey | banana points 50

So I recently went through the recruiting grind (currently 1st year IBD) and ended up getting an offer at a large, multi-manager platform (think Millennium, Point72, BAM, etc.)

Although I am tempted to take it and end the process, I've always considered myself a long-term, value guy. Since it'd be incredibly risky to turn it down (don't have anything else in pipeline), I was wondering if anyone had experience with the process of transitioning to a single-PM/long-term value shop from a multi-manager fund?

I have a feeling I won't be able to stand the short-term focus of the MM shops, and know if I accept it I will try transitioning to a long-term value fund down the road. Any input would be appreciated!

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Comments (7)

Mar 30, 2016

I'd take it. Getting offers these days at well respective hedge funds is getting harder and harder. Funds that can hold large positions past 6 months-year are quite few. Have you seen the recent headlines of withdrawals? Activists are also not doing that well as of late. You should be able to use the name to later branch out to another fund later I'd assume as well.

Mar 30, 2016

Six months to a year is considered a long term position??

Mar 30, 2016

well most hedge funds don't hold longer than a year

Mar 31, 2016

can go either way. on the one hand, a transition is actually not so hard if you're decent (you may not get interviews at the absolute top value funds unless you have a really good resume otherwise), and learning to invest is a good thing. And you'd be surprised -- sometimes the investment approaches are far more similar than you might think. You may also find you like working at a multi manager more than you think -- you don't really have any idea what you do or don't like yet just yet...you're not even a year out of college!

On the other hand, if you really just know that you want to work for a tiger cub or value fund or what have you and this job just feels wrong, you can pass it up. You are only a 1st year in IBD and so you will have the opportunity to go through recruiting again next year.

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Apr 1, 2016

Take the offer, and that's coming from a guy at a value fund.

-Spots at the best long-term value shops open up very rarely. Even if you are a stud there might be <20 spots each year that fit the mold often described.
-The top value shops tend to rise and fall. Bill Ackman was the next Warren Buffett in 2008 and 2014. He had to shut down Gotham Partners and PS IV. He has to be up 85% from here to get back to his old high water mark. Passport suffered a few years in the wilderness before coming back to prominence recently. I think this is kind of random, but its worth noting.
-Even though multi-managers have a different time frame, you are still going to learn a ton. Like xqtrack, the work is not that different. I think you'll also be "closer to the book". If you're on a small team, you are working one-on-one with a guy actively managing his P/L. Analysts at the top value funds tend to grind away on a small coverage universe and just feed their ideas to their boss.

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Feb 2, 2017

Gray Fox, thanks for the reply (I know this is dated now). I am currently beginning my search into value funds - any tips or pointers? Thanks!

Apr 1, 2016