I’m an MBA/CFA with a few years experience post-MBA in finance. Currently I’ve got 2 job offers facing me, both of which are value investing hedge funds. I’m a value investor at heart and this is a move I want to make.
One fund is large, the other very small. The first has a big reputation, the second is obscure and only a few years old. In the former I’d be a junior analyst, in the latter I’d be an analyst with other roles stacked on top (some sales responsibilities), but with a serious equity stake in the operation. Lower salary for the second, but much higher bonus potential if the stars align.
Instead of going into minute detail about the 2 funds, at this point I want to throw out a basic question - does anyone here work at a value fund, or have experience at one in the past?
Tough to answer without more appropriate details but the biggest things you have to weigh are the advantages of getting a bigger name on your resume with the disadvantages of being in a more junior role at that given fund. That said, my preference would be to start my career at a bigger and more prominent fund. If you can be a rock star analyst you’ll have other funds coming to try to poach you for a more senior role in the future. The smaller fund does sound somewhat promising from the standpoint of it having been around for at least a few years, and it’s good they’re willing to give you some equity from your first day. However, it is very difficult for smaller funds to scale these days so I would personally not go into it with the mentality of it expanding into something huge. Every sub $100mm fund out there wants to believe they can get to $500mm or $1bn in a few years but it doesn’t happen in 99% of cases. We can discuss more privately if you want but that’s my high level assessment. Oh and of course be very thoughtful about which group of people you like more. There are almost no circumstances where I’d accept to work at a fund where the people were horrible, unless pay were truly astronomical (like eight figures sort of thing).
Go with the bigger firm. Put in your time, and you will grow within the firm, or take your experience to a different firm. A known big fund is a valuable thing on your resume compared to a small firm.
Having other responsibilities doesn’t work. In theory, it sounds good for learning about the business, giving you the ‘know how’ for starting your own fund one day, etc. But it’s BS… in practice, you will be bogged down in the operational crap that just eats away at you mentally and takes up all your time. You won’t have your dedicated time to do research. I’ve been at a couple small firms, so I know firsthand.
Ha, I’m in the process of doing the opposite: moving from an analyst role at a huge, globally recognized company to one of the most seniot investment guys at a smaller firm, but with more money up front (although not a crazy amount) and more long term upside potential. Also, my resume will grow by about a page as I tack on PM responsibilities.
Pros/cons is a good way to do it. If you are still developing in your career, it is good to legitimize yourself with a big name. Once you have that experience, you can go back to a similar shop usually and can take some risk with a bit more of a safety net.
Yeah, only problem was that up til now I still didn’t have any “reputation” worthy names on my resume. This allows me to do that and will help me move to something on my own in the future. I’m still very early in my career, so legitimization and learning/mentorship defined the choice for me.