Tried to start my own fund, not really working out, what should I do from here?

Alright boys, I tried to start my own quant fund with a friend from my masters. The track record is decent so far, but a year and a half have passed, and it is clear that raising money is going to take time. So, I need a job. Problem is, I've not the faintest clue where my experience lands me at the moment. Applying to everything, but guidance would be appreciated.

Background:

Finance and Accounting Undergrad - Super not a target school
Masters in Economics - Target school (one of the two British ones)
No internships or jobs at bulge brackets. Hedge fund slot on resume probably looks like I'm making things up.

Skills:

Can code in Python, do not consider myself very good though.
Can do LBO/DCF/ basic crap that undergrads can also do, but not very experienced in real world deals.
Can do econometric models, but not an A tier econometrician.

Problem is, I don't consider any of my skills A grade. WTF do I try for? Should I just be an analyst at some IBank? Is trying for PE/ Quant funds worth bothering with? Is ER even hiring at all nowadays?

Most of all, how do I network now? I can't really network in London anymore, and my old non-target-school network is worth barely anything.

Comments (18)

Funniest
Feb 15, 2019

Teach English in Japan haha

What concert costs 45 cents? 50 Cent feat. Nickelback.

    • 11
Feb 16, 2019

If the actual fund performance is good and you like what you are doing, then why bail over short term fundraising needs?

    • 1
Feb 16, 2019

Actual fund performance is fine, but honestly it's with my and my friend's money (<100k), so people don't take it as seriously as they might.

It looks like it will probably take at least a year or more to raise real money to the point where we have a business which pays the bills, and to be frank I don't want to live with my parents, hence the job search.

Feb 16, 2019

if you have a track record over 1.5 years, max drawdown under 5%, sharpe ratio over 1.5, max drawdown under 2008/2009 lehman blowup backtest scenario under 10%, and strategy that can scale to over 200mm AUM pre-leverage without suffering from liquidity, AND if you can tell a story about WHY your strategy works, then you have a shot at a seat at a multi-manager (like millenium). i would suggest trying that (if you qualify).

If you don't meet that threshold, and since you already feel comfortable programming, then you should improve your coding skills and get a job as a programmer while you figure out your next move.

just google it...you're welcome

    • 1
Most Helpful
Feb 16, 2019

Having only your money and your friends money in the fund isn't why people don't take it seriously. You aren't taking it seriously and you are projecting that in conversations.

Based on your post your strategy is working and I'll make the assumption that it is scalable. Who's money is in the fund is almost inconsequential. In fact, that's a great story to tell:

"My partner and I put up all of our assets to build this fund model and now that we have a track record of success through a volitile market period we are ready to offer what we have created to additional investors. Let me walk you through our thesis..."

Think about this decision in terms of a trade.

One more year of living at home with your parents gets you the ability to pay your bills and have a real business. This looks like a good trade. Are you sure you want to pull the plug?

    • 6
Feb 16, 2019

Consider an IR position at all? Skill set is obviously incredibly useful when raising capital later for your own fund and you seem to be relatively full circle.

Only problem is that you'd likely be stuck signing a non-compete or something similar which might defeat the whole point.

Feb 16, 2019

That might be worth looking in to actually. I hadn't thought of that, thanks. Honestly non-competes are a bit sticky everywhere.

Seeing as I don't intend on renouncing my equity share in our little fund, it might be quite problematic even in Ibanking, which really has nothing to do with any of our activities.

Feb 16, 2019

Only shitty thing is that it's easy to get stuck in IR but if you're going to try and start a fund later, it's a not a bad skill set to have.

Feb 17, 2019

I'm in the same boat as others advising you not to give up -- sounds like an exciting venture and I guarantee you that working for yourself is going to be better than an IB analyst job.

What has been your fundraising strategy to date -- is it institutional focused? In the short term I'm sure you could get some friends and family money in there and take your AUM up to at least a million or two.

One other thought (not sure how viable, I don't know quant asset mgmt / fundraising well) would be to find some BSD out of the asset management industry who has a track record at a name-brand quant firm. Tell him you've developed proprietary quant technology, explain your track record, and offer him a big chunk of equity to come run the fund. If he was looking to strike out on his own anyway, you've saved this guy a lot of trouble (i.e. he doesn't have to build his own product / thesis), and institutionals will back an experienced guy with a good track record.

Feb 23, 2019

It sounds like your skills are a step below competitive for many fields. Rather than focus on networking and figuring out where your skills can get you today, I think you're much better off picking one of these many areas and developing your skills further.

To answer some of your questions:

  1. To be an IB analyst, you'll want to be very sharp on your modeling: LBO, DCF and other valuation topics. Since you're at a level you describe as 'basic crap' I'd recommend taking an online course like BIWS or TTS and networking while learning that stuff properly.
  2. PE: same skill set as IB analyst except it requires better command of those skills and thus usually time spent as an IB analyst first, so I'd say this is the least relevant of the areas you've listed.
  3. Quant funds: you're running one now with decent returns so . . how is this not the most obvious job? Fact that you're even asking whether this is "worth trying for" makes me think one of us is totally missing something. Hopefully me.
  4. Is ER hiring: I'm hearing that market is very tough these days, at least in the US with new regulations, not sure if it's as tough in UK.
  5. Networking: if you know that you're well-prepared for a given role, networking is easy. Email people, briefly tell them your skill set and why you make sense, and ask them if they could spare a little time for coffee. Usually the ones that need people respond and you're set.

Problem is, too many people put networking before the job/skill development, and then they go into networking all like "what should I do, what do you recommend?" which puts the burden on the other guy to do your thinking for you, which isn't a good use of his time. Figure out your interest, sharpen your skills, and then network in a way that's plug-and-play for those who meet you.

    • 1
Feb 23, 2019

I get where you're coming from. I was in the same boat leaving uni and went to work for an IB. There's something to be said for backing yourself, and at the same time it's great to have a tangible record of working for someone else and being self sufficient [ie. not living at home], saving to build up capital, etc.

Your skills section sounds like me when I was leaving uni... "I can code but not the best", "I can model but not the best", "I can stats but not the best". It's amazing how easy it is to underestimate yourself / overestimate the complexity of the industry.

Without giving too much in the way of details on me... I speak to these firms all the time. I help them build the business, raise capital, find talent (I'm not a recruiter, it's all 'do you know anyone who can do xyz'). I have a couple of contacts looking for your skills to join as a junior, and one or two who run emerging programs for guys your size.

If you're serious about either continuing your fund or finding a role, PM me and we can grab a coffee/pint if you're still in London. But I'm not talking to you until you can prove that you've done this by showing me the track of your fund, because I can't find that you answered the question above.

Offshore liffe

Feb 24, 2019
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