What do failed HF analysts/PMs next?
Hey guys, so relatively straightforward, where do HF analysts/PMs who wash out (have a couple bad years) go afterwards? Let's say you did 2 years in IB and then went to HF? I understand that if you wash out earlier, let's say in your twenties, you can get your MBA and pursue another role. However, what if you are in your thirties? Typically that is too old for business school to use it to pivot, so what do these guys do now for a job? Some may be lucky enough to find a role at another HF (pretty difficult if you performed poorly but nonetheless) but where do the vast majority of the others go?
I've heard opening a beach bar in Thailand's become a pretty popular exit opp
Day trade/prop trade lol, hopefully you don't have 3 years of washed up in your investing career.
bump curious as well. I've only heard from my friend that one analyst leaves the HF industries but not exactly sure where he ended up. This was at a multi-manager platform after having a pretty bad year in 2016. I have also friend who didn't like HF and took a finance job at a start-up by his own choice. Would be curious what others see HF analysts or PM who leave HF ultimately ended up.
young guys have a pretty good shot at getting another HF job, still relatively cheap labor
the more senior you are the less likely it is you'll work again. hopefully at that point you have a decent amount of savings.
Invest in a dry cleaners like Dollar Bill in Billions...nice FCF ;)
What if you don't succeed at a HF? (Originally Posted: 07/24/2015)
My background is IBD/PE.
I've always been curious what people did if they're not successful at a hedge fund, let's say a L/S or deep value fund. Unless you've already developed an edge/strategy beforehand, how can you know you'll be successful / what happens if you're not? If you don't generate alpha at one fund, your problems don't exactly go away moving to a smaller fund.
IB, and to a lesser extent PE, there's always value in ability to do the work, knowing processes/negotiation well, and building relationships - all things you know you can learn with time.
It's like anything else. Work at it enough and you can at least be competent enough to move to another fund, and another, until you find somewhere comfortable or start getting lucky. Also, for the first few years (well, depending on the type of fund) you will not really be responsible for generating alpha so much as diligencing ideas.
Thanks. How much time are you typically given to ramp up from DD to idea generation and eventually P&L responsibility?
HF world is cut-throat and not a passive career. You have to be confident, even in the face poor results. You have to be able to make calls with conviction and own your mistakes. Most importantly you have to learn from your mistakes and apply those lessons to the future.
I was once told by a PM that I admire - that a great analyst has to have a bit of an ego - and i dont mean that in the sense of cocky arrogance but you have to be able formulate independent ideas and think against "the pack." This type of attitude may not suit everyone.
If you can't accept your mistakes, learn from them and evolve youre probably not cut out for the game and more suitable as someone supporting in research efforts etc.
Practically speaking if you go IBD - PE - HF and you suck at the HF and wake up in your late 20s without a seat, you are going to have to adjust your career expectations downwards. Depending on the state of the market, you may not be able to reenter the alt investing industry in a capacity which is satisfactory to you at all.
This is the untold story of 'the path'... The filters get a little tighter at each step, and are quite tight by the time you are looking for senior assoc/VP-level positions. Probably a minority of people who want to have a successful, long-term career on wall street actually achieve it.
All great responses. Thanks everyone. This phrase is exactly what I was thinking about: "wake up in your late 20s without a seat".
I don't work at a HF, but I don't know if junior people are responsible/expected to 'generate alpha' per se. Frankly, you can do all your homework and extra credit yet sometimes you're just wrong. I'm not sure what else I can say besides you learn from mistakes and get better with time. In my experience, the people who are 'really good' are only right ~50% of the time. I think what you said about IB/PE can also be said about HF, there's value in every part of the process even if you're ultimately wrong.
For a junior person the bigger risk is if the guy right above you fails. Often times these funds will slash and entire sector team if they underperform, which is usually on the Senior Analyst/PM, but the junior guys get cut as well. Seen that happen a bunch of times. Is less likely that as a junior person you will fuck up so spectacularly that they will let you go for blowing up a fund. They'll def let you go if you're lazy, or if your process sucks. But otherwise the jr. guys are a lot like RA's at a mutual fund or banking analysts/associates.
I wouldn't be too worried about employment status. It's a small world and those that have done good work are able to land on their feet and will generally get another seat somewhere else (if they want back into HFs). I've also seen plenty of talented people leave HFs and they all end up doing well for themselves doing other things. Having strong analytical skills is valuable everywhere.
HFs aren't exactly career track jobs and anyone coming into this business should assume it can all go away quickly. It comes with the territory. Even achieving partner status doesn't ensure stability.
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what if you fail as an analyst/portfolio manager? (Originally Posted: 07/19/2011)
There's a lot of talk on this site about making it to portfolio manager, managing money, big bonuses, etc.
But, I'm wondering what if you made it to portfolio manager, while despite all your efforts, you either underperform the market or screw up somehow, and your employer fires you. What do you do then?
Same thing with being an analyst, what if you made a few bad calls, and you get fired. What sort of work would you do after your stint?
I'm sure you working guys have known people like the ones that I have described, what do they end up doing?
I'm curious. Thanks.
You could try and be like Meriwether.....
Since analysts don't have track records they never really "fail" With good references, experience, and market knowledge analysts can move around even if they've made some bad calls.
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