Why are people leaving the HF industry and where are they going
- Odyssey’s Quarterly Buyside Newsletter Q1 2021
- Odyssey’s Quarterly Buyside Newsletter Q4 2020
- Odyssey’s Quarterly Buyside Newsletter Q3 2020
- Odyssey’s Quarterly Buyside Newsletter Q2 2020
- Odyssey’s Quarterly Buyside Newsletter Q1 2020
- Odyssey’s Quarterly Buyside Newsletter Q4 2019
- Odysseys Quarterly Buyside Newsletter – Q3 2019
- Odysseys Quarterly Buyside Newsletter – Q2 2019
- Odysseys Quarterly Buyside Newsletter – Q1 2019
- Odysseys Quarterly Buyside Newsletter – Q4 2018
- Odysseys Quarterly Buyside Newsletter – Q3 2018
- Odysseys Quarterly Buyside Newsletter – Q2 2018
- Odyssey’s Quarterly Buyside Newsletter – Q1 2018
- Odyssey’s Quarterly Buyside Newsletter – Q4 2017
- Odyssey’s Quarterly Buyside Newsletter – Q3 2017
- Odyssey’s Quarterly Buyside Newsletter – Q2 2017
- Odyssey’s Quarterly Buyside Newsletter – Q1 2017
- Odyssey’s Quarterly Buyside Newsletter – Q4 2016
- Odyssey’s Quarterly Buyside Newsletter – Q3 2016
- Odyssey’s Quarterly Buyside Newsletter – Q2 2016
In this Newsletter
- Hedge Fund Talent Stepping Away
- Junior Investment Bankers Leaving Ever Earlier
Investment banks trying to stem the tide of analysts leaving for the buyside
- Are your Interviews as Rigorous as your Investment Process?
New methods to help better screen candidates
- Turning the Screws on Employees
Firms using employment terms to gain the leverage over staff
- View on the HF Industry
from the GAIMops Conference, Cayman 3/16
This is the first of what we hope will be a series of quarterly newsletters. We at Odyssey spend our time filling investment roles at fundamentally driven alternative investment firms, and that process leads us to meet people in the industry every day. We often get asked to share what we’re seeing in the terms of trends, the ‘pulse’ of the market, who’s moving where, and so on. This is our attempt to be a little more organized and systematic. We hope it delivers. We would welcome a chance to discuss any of these topics live – ping us back at: firstname.lastname@example.org
Hedge Fund Talent Stepping Away
The private side is appealing to some with its locked up capital and its long-term investment horizon, as are family offices with their flexible investment mandates. The most common requests though are for the mutual fund world. Yes, there are hesitations about ‘sleepiness’, perceived meritocracy, and the more muted bonus potential, but for many this is out weighed by the combination of perceived durability, long-term career stability, and high base salaries uncorrelated to performance. Sure, they’ll have to give up the ability to short but of late very few people have been able to impress with their alpha short returns.
Compensation is presumably the biggest factor at work here making people rethink their industry choices. Comp at year-end 2015 was considerably down from 2014. For many front-office folk at hedge funds, bonuses were down 30-50% and in 2016 the outlook already looks bleak given Q1 performance, particularly if the fund is significantly under its high water mark. There are other factors at play as well. There’s a growing frustration from longer-term investors that their funds are reacting to current market conditions by making shorter term, quicker trades. People have been burned by their start-up funds not being able to get to scale, and by founders of established funds deciding to convert to family offices. There’s also the overriding intellectual frustration felt by these smart over-achievers who just haven’t figured out how to generate returns with this market volatility. Their hope is they will do better in a different setting.
These factors aside, the conversation about quitting hedgefunds still normally turns back to money. As a senior long/short equity analyst recently put it to us, with a characteristic mathematical rationale, “Would I take a seat at a long-only where I can make $500k a year for 20 years, versus making $2m in a hedge fund one year, getting blown out the next, followed by a who-knows-how-long period on the beach? I’d take that trade.”
As ever, we’d welcome the chance to discuss these topics with you: email@example.com
The Odyssey Search Team
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Odyssey Search Partners is a premier executive search firm founded in 2010 and led by Adam Kahn and Anthony Keizner. We specialize in placing investment professionals in the private equity, hedge fund, family office, and private credit sectors. Our expertise spans all levels of recruitment, from pre-MBA hires to Partners and Portfolio Managers. We approach every search with diversity in mind.
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