How to get Trading job at a Hedge Fund?

Quote from Vinny1:

Start your own hedge fund.

Anyone can run a hedge fund. Just take all of your client's money, stick it into the SPY and IWM and then take a 1 year vacation. If it goes up 10% and you have 1 billion under management, you make 20 million in management fees and 20 million in incentive fees for a total of 40 million. Even if it goes down a little, you still make close to 20 million just in management fees. You can even write covered calls to rake in some extra premium.

Now the tough part is trying to raise that $1 billion to play around with.
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$1B to start would be for superstars only...
I have recently spoken with ex-star Goldman Analyst, he is starting with 200M, so for someone with no particular institutional research/trading record 20-30M to start would be an achievement in my opinion.
 
Quote from Vinny1:

Start your own hedge fund.

Anyone can run a hedge fund. Just take all of your client's money, stick it into the SPY and IWM and then take a 1 year vacation. If it goes up 10% and you have 1 billion under management, you make 20 million in management fees and 20 million in incentive fees for a total of 40 million. Even if it goes down a little, you still make close to 20 million just in management fees. You can even write covered calls to rake in some extra premium.

Now the tough part is trying to raise that $1 billion to play around with.
More...

I run a fund. Performance has little to do with the business of running fund. One issue is the ability to make money is already a prerequisite in the fund business.

"You're a trader. Your job is to make money trading. If you're not making money... you're not a trader" ...way of thought. This is the world we live under. In a business where making money is the bare minimum, they look at how you make that money. There's a lot of risk management involved from the trading side.

"Most" of the business is ran by marketers or how well you're connected.

As an example:

It's easy to talk shit about any trader/fund (including myself).. All I can say is, they're taking too much risk, within different levels. Really, there's no reward without risk, I can only concentrate on the risk side and make any trading sound bad... correct? Another cliche is "markets are always changing"... correct?

An experienced investor will be knowing the tough questions. It's up to the "manager" and the marketer to "sound" convincing that the "universal risk of trading" is under control. If you are aware of the risks, the rest of the game is to be convincing to overcome their skeptism.

Hedge fund is not about trading. It's about business. Ever wonder why all the "relatively shitty" funds manage so much money?

To wrap this up... it's all about sex. It's how well you can pick up a Playboy playmate when you're strolling down the strip with your horse, with a pack of Viagra in your pocket.

PS. Institutional traders are a lot more sophiticated than a retail trader.
 
Quote from midlifeguy:

So, what is the alternative for someone with lots of buyside trading experience? Am I now not marketable?
I cannot imagine starting from scratch as a Securities Broker. What avenues does one take? I can trade my own account for some money but the uncertainty and lack of benefits is a tough one with a family.

Thanks
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What is lots of?

I don't want your whole resume but what are your technical skills?

An "outline" of your trading experience would be helpful with giving advice.

Another issue is, it's very rare for a top hedge fund to hire a junior trader unless the candidate has extra skills, like quant. / programming / strong academic background.

You'll have to be a darn good trader to join the team solely on trading. Of course, "SIZE" will be a big issue.

As I mentioned on the previous post, being profitable is the bare minimum. What they are looking for is how you're making that money.
 
Quote from midlifeguy:

So, what is the alternative for someone with lots of buyside trading experience? Am I now not marketable? I cannot imagine starting from scratch as a Securities Broker.

.. These are thoughtful questions, and it's lamentable you've gotten mostly juvenile replies. Perhaps some adults can weigh in? To begin with, it's tough to sell yourself as a 'trader' to the hedgefund world unless[/i/ your specialty is one of the usual-suspect hedgefund strategies such as risk/convert/stat/fixed-income arb. The funds typically aren't a good home for the guy who's traded a few ESs back and forth for his own account. But often you can get a toe-hold by working on an order execution desk at a fund, even if you view it as a temporary step down in the world. Then build your reputation by adding bits of value here and there. Most hedgefunds are unbureaucratic, and achievers will bubble upward, once they're onboard and visible to management.
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It seems very difficult to parlay Buyside Trading experience into anything of substance. The Buyside is getting gobbled by Algorithms and Computerized software. The Traders that are left on the Buyside have a very short future. It is depressing to think that all those years of work have accomplished nothing in the way of a marketable work history.
What do people do when they leave this field?


Quote from Rodney King:

Quote from midlifeguy:

So, what is the alternative for someone with lots of buyside trading experience? Am I now not marketable? I cannot imagine starting from scratch as a Securities Broker.

.. These are thoughtful questions, and it's lamentable you've gotten mostly juvenile replies. Perhaps some adults can weigh in? To begin with, it's tough to sell yourself as a 'trader' to the hedgefund world unless[/i/ your specialty is one of the usual-suspect hedgefund strategies such as risk/convert/stat/fixed-income arb. The funds typically aren't a good home for the guy who's traded a few ESs back and forth for his own account. But often you can get a toe-hold by working on an order execution desk at a fund, even if you view it as a temporary step down in the world. Then build your reputation by adding bits of value here and there. Most hedgefunds are unbureaucratic, and achievers will bubble upward, once they're onboard and visible to management.
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On a serious note I posted this comment to another thread and think it is worthwile for someone in your position to look at ....

This is just my 2 cents but here goes and this is from experience....I have an MBA but I agree with the other posters in that it isnt a requirement for the position.... short of having the pedigree, the best route is to be on the other side of the phone from a hedge fund at a sell side firm handling the order execution in whatever are your best at (Bonds stocks whatever)...then after you spend the next year or two on the phone with these guys you and they will find that you either get on well with them or theres no chemistry (I know it sounds a bit gay but there it is). When you are handling their business and you can do it under pressure without drama or F'ups they will realize that when theres a vacancy at their firm they know the one guy who knows there business and knows how to handle it and thats when opportunity knocks .... again only my advice in short .... take it or leave it

Further on that thought remember when your looking and it isn't going so well that these gigs are in some cases lottery tickets for you and the guys handing them out aern't just going to give them to whoever .... get to know people and keep in touch with them somewhere something will break your way...think Law of Large Numbers.
 
hey midlifeguy,

If you have a lot of experience trading why don't you trade on your own?

If you are good at trading you should be able to make good money and you only have to answer to yourself. Why go with a hedge fund if you can succeed on your own?
 
I think that starting your own hedge fund is a big mistake unless you already have money, or deep contacts with money and you are a natural at raising money. The start up costs and the day to day management overhead is enormous.

But you don't necessarily need to go that route. There are umbrella firms out there that will take you in under one of their "share classes", depending on the risk of your system and it's returns as measured by the usual statistical measures. The umbrella firm is responsible for bringing in the money and selling your "system" to prospective/existing clients of theirs. The payouts to you are negotiable, but basically you get raped if you compare to the typical 2/20 deal. However, it is a great way to build a track record.

If you have one bad month, you are on the shit list. If you have two bad months in a row, the money gets pulled and you don't have a job. In order to even step up to the plate, your system has to backtest well for at least two years, and forward test well for probably at least three months.

This is what I have heard anyway.

nitro
 
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