Buyside firm size

How big would you say a buyside firm is with $400-500 AUM? Tiny? Small? Small-Med? How many employees should a firm this size have?

I think the homeless dude sitting around the corner of 53rd and Park runs a $400-500 AUM hedge fund in his coffee cup (he only trades loose change, though).

The homeless dude probably trades weed paper though. Yield = discarded weed that he found in the trash. Daily payments with.

really…that small?

yes. fo’ real.

I am going to take the leap of faith and assume you mean $400-500MM. For a long-only manager that qualifies as tiny. The shops you have heard of have hundreds of billions under management. However, for a hedge fund that isn’t too small - probably about 50th percentile. As for number of employees, I am no expert but lets say you take 1% mgmt fee. That is $4-5MM and wouldn’t pay too many people and cover the costs of running the business. Maybe 10?

assuming you meant $400-500MM as well, tobias is pretty much spot on. i have seen multiple instances where such funds are run by half a dozen people or less.

Mutual funds can grow into the 10s to 100s of billions. This is because they tend to be long-only and charge based on a percentage of AUM, usually in the 50bps to 2% range. This means that there is an incentive to accrete as many assets as possible to increase the management fees. Also, the long only strategies tend to scale better than some of the hedge fund strategies (there might not be enough “events” for an event-driven fund, etc.) Hedge funds typically have a 2-20 fee structure (2% of AUM, plus 20% of the profits for a year, perhaps subject to a high water mark). That fee structure is under pressure, but tradition and greed keep it alive. This means that Hedge Funds have to be much more aware of their optimal size, and smart ones will close themselves to new money if they feel that they can’t put it to as profitable a use as existing money. Some will even return funds if they don’t see enough opportunities, but that sends some difficult signals to investors. Large hedge funds probably top out at about 10-20 billion, and there are plenty of funds in the $500MM range. The big funds get most the press, so it sounds like they all have multiple billions, but my sense is that 500MM is pretty close to the median size.

Sorry, I didn’t clarify $400,000,000 to $500,000,000! They do separate accounts, mutual funds and a hedge fund

You’re trying to get a feel for the company, right? How many employees are employed?

You’re trying to get a feel for the company, right? How many employees are employed?

  1. 3 Portfolio managers. I would be an investment analyst doing small cap, large cap and junk bond analysis

I know stock brokers with more AUM …way more AUM.

Even though it seems small… it seems like a great opportunity.

I just left a smaller firm. 9 employees with $160MM AUM. 2 mutual funds and separately manged accounts. Long only. Equity and Fixed. Roughly 35-40MM in FI. The rest in equities-domestic only. From my experience…the emphasis tends to be bent more towards generating enough fees to cover business costs. Thus, you dont get the perks you would at a larger firm, where the have a lot more FCF to throw around. I echo the above…a good broker will have a book that size.