You’re right, but it’s also a numbers game. Wharton and Dyson are the 2 best UG business schools. Cornell especially has a huge population, so they’re still impressive but not that insane.
Other HYPSM or even T10 don’t have as many people focused on that, but per capita (based on the number of students interested) they place as well into the most competitive / prestigious companies.
Also, days of buy buy and sell sell are pretty much over. Everything is quant right now. Everything has been hedged to the hilt that you really have to get the direction of the market right to make $. Ken Griffin and his Citadel options making business pretty much run the Wall St. Hedge funds are becoming just another gamblers to be eaten by them for profit.
Reading this post (and most of the others) I can tell it's likely nobody has any actual HF experience posting here
"everything has been hedged to the hilt" seriously, wtf are you talking about?
"Citadel options making business pretty much run the Wall St" They run THE Wall St? What does that mean? Run it how? How does that effect the typical Wall St businesses such as M&A , raising capital, making markets, blah blah blah. Citadel's core business is market making fyi which is a market neutral business.
"Hedge funds are becoming just another gamblers to be eaten by them for profit." Huh? All investment funds (including your mutual fund) takes risk. That's how they make money. E.g. if you buy an S&P index fund, you're long US equities. So everyone is by definition gambling.
Back to the original question - is it fun to work at a HF? My experiences is they are no different than the alternatives. It's a pretty nerdy job - most people are PhDs in something quantitative - and the vibe is very academic. I've never worked in tech, but I'd guess working at a small tech startup would be similar to my HF jobs. Hours are 40-50/week on avg for me. The office is quiet. There is no snorting coke off of strippers. Again, it's basically a bunch of nerds. We do brain teasers for fun, for example.
Oh and finally - working at a HF is a great job, it has paid me well. But, I would never EVER invest in one. EVER.
maybe not an ethnic mafia per se, but the elite hedge funds tend to draw employees from the top colleges. I've been told that the same goes for M&A, for that matter. Namely, UPenn, Harvard, Stanford, Cornell., are the top of the list in that order.
There are people from all types of colleges and universities in the industry. Only one of the four schools you listed offers accounting as a major. It's good to have more c.p.a.s in the office than a bunch of government policy & political science majors from Ivy League schools pretending they are smarter than everyone. Hedge funds are not the apex of the industry.
I mainly agree, but there are a couple of points that I disagree with.
1. Citadel is a market maker - they buy and sell and make a little profit on each sale. To use an example, if a stock trades for $10, they’d aim to buy some at $9.99 and sell an equal amount at $10.01 to make a guaranteed profit.
2. You’re technically right, but investing in the S&P, isn’t truly “gambling”. It’s increased about 10% for 100 years even through bear market periods. It has some risk, but it’s one of the least risky long-term investments. The only thing safer is US government bonds, since if the US isn’t able to pay the global market will have crashed. 3. Researchers are PhDs but most traders don’t. Instead, they’ll typically have a major in math or CS, a minor in the other (or if they’re really smart, a double major in both), and attended a top school.
Some people sought employment at hedge funds in 2000s because N.Y.S.E. firms ceased sponsoring brokers/financial advisors with Series 3 licenses. When I was in college, no one talked about seeking employment at hedge funds because so many services used to be offered at n.y.s.e. firms.
maybe not an ethnic mafia per se, but the elite hedge funds tend to draw employees from the top colleges. I've been told that the same goes for M&A, for that matter. Namely, UPenn, Harvard, Stanford, Cornell., are the top of the list in that order.
There are people from all types of colleges and universities in the industry. Only one of the four schools you listed offers accounting as a major. It's good to have more c.p.a.s in the office than a bunch of government policy & political science majors from Ivy League schools pretending they are smarter than everyone. Hedge funds are not the apex of the industry.
Who is talking about "political science" and blah blah blah? We are talking about MBAs in Finance programs, and they do offer that, and those are the people they are hiring.
Some people sought employment at hedge funds in 2000s because N.Y.S.E. firms ceased sponsoring brokers/financial advisors with Series 3 licenses. When I was in college, no one talked about seeking employment at hedge funds because so many services used to be offered at n.y.s.e. firms.
I literally don't even know what this means or what you're talking about.
Worked in one as a fixed income trader for a couple of years ages ago, and before that in an investment bank for quite a few more. Funds are better environments than banks, the pressure and the ungodly hours are the same but, depending on what you do, you are able to manage more your work day and you get paid more. It's a young men's game, unless you are one of the lucky ones into management. You retire because you have made money or you are burnt out. I remember being too tired to go running
Worked in one as a fixed income trader for a couple of years ages ago, and before that in an investment bank for quite a few more. Funds are better environments than banks, the pressure and the ungodly hours are the same but, depending on what you do, you are able to manage more your work day and you get paid more. It's a young men's game, unless you are one of the lucky ones into management. You retire because you have made money or you are burnt out. I remember being too tired to go running
Everyone always talks about the hours. What exactly are you doing that takes up so many hours?
just looked it up. A typical hedge fund manager works about 40 hrs/wk.
And average salary is $129,890 per year
So, still time to run and probably even afford a pair of super shoes and an out of town race. Beyond that, you might want to look at the other areas in finance. But you will undoubtedly sacrifice a lot of free time.
I find it difficult to believe that the average salary of a hedge fund manager could possibly be that low unless this figure doesn’t include a typical huge annual bonus.
Worked in one as a fixed income trader for a couple of years ages ago, and before that in an investment bank for quite a few more. Funds are better environments than banks, the pressure and the ungodly hours are the same but, depending on what you do, you are able to manage more your work day and you get paid more. It's a young men's game, unless you are one of the lucky ones into management. You retire because you have made money or you are burnt out. I remember being too tired to go running
Everyone always talks about the hours. What exactly are you doing that takes up so many hours?
And how are you being mentally productive working 80-100 hr/week over a significant time frame? Even with lots of stimulants, I imagine there are some expensive mistakes when the whole office presumably is very sleep deprived. Are the PhDs working less?
just looked it up. A typical hedge fund manager works about 40 hrs/wk.
And average salary is $129,890 per year
So, still time to run and probably even afford a pair of super shoes and an out of town race. Beyond that, you might want to look at the other areas in finance. But you will undoubtedly sacrifice a lot of free time.
I find it difficult to believe that the average salary of a hedge fund manager could possibly be that low unless this figure doesn’t include a typical huge annual bonus.
I was to, and checked several sites, but they all agree. Not sure about the annual bonus but none of the sites mentioned anything about it in terms of compensation received and if particularly generous annual bonuses are commonplace and even expected, how could they not be including them?
WHat i did see is how performance impacts an investor's fees paid, and commonly a hedge fund goes by a 2-20 fee schedule (2% management fee, 20% of investor's yearly profit margin).
* looked at more sites and it seems that bonus can be on top of published salary, and salaries are reputedly higher according to a couple of new sites I am checking.
Yes, this makes more sense. Starting salaries at top quant firms are only $150k, and that barely increases to only about $200-250k as you’re more experienced, but that’s excluding the bonus. A normal starting salary is about $350-400k for the first year, including the normal bonus and signing bonus, and that’ll increase to about $450-500k if you do well (bonus increases), and after that if you’re good you’re golden. It’s not uncommon to make more than $1M with about 3-5 YOE if you’re good.
Yes, this makes more sense. Starting salaries at top quant firms are only $150k, and that barely increases to only about $200-250k as you’re more experienced, but that’s excluding the bonus. A normal starting salary is about $350-400k for the first year, including the normal bonus and signing bonus, and that’ll increase to about $450-500k if you do well (bonus increases), and after that if you’re good you’re golden. It’s not uncommon to make more than $1M with about 3-5 YOE if you’re good.
that is what i was told by someone with a foot in the door in IB. For HF, on the other hand, which is what I was quoting, I don't have any idea other than what i read.
i did for a few years. Long hours, toxic environment. Very competitive, extremely fast pace and cut throat. if you have maths , statistics or economics knowledge you will be in good stead. You are very well paid. depending on your division, lots of travel and little sleep will be involved. not for the faint of heart.