What Happens If You Start Your Own Hedge Fund and It Doesn’t Work Out?

21 Comments | Hedge Funds & Asset Management - How to Start Your Own Hedge Fund

Starting Your Own Hedge Fund: Failure and Exit OpportunitiesWe’re back today with the conclusion of this series on how to start your own hedge fund.

When you’re presenting a stock pitch in interviews, one common mistake is failing to address the downside risks and how you might hedge yourself.

And the same is true when starting your own fund or your own company: everyone likes to watch The Social Network and pretend they’ll be the next Mark Zuckerberg, but 90% of start-ups fail within the first 5 years.

With hedge funds, that failure rate is 80% in the first year alone.

So here’s what happens when your own fund doesn’t quite work out – from what you do next to the toll it takes on your body, family, and bank account.

This is my favorite part of the entire series because it addresses the human side of a profession that most people mistakenly believe is completely driven by numbers:

Fund Mergers & Acquisitions: The Right Way to Exit?

How to Start Your Own Hedge Fund, Part 3: How to Hire Your Team and Build an Organization

6 Comments | Hedge Funds & Asset Management - How to Start Your Own Hedge Fund

Hedge Fund HiringOne of the benefits of working as an investor is that you don’t necessarily need to manage large teams to make money.

Many of the most well-known hedge funds have very, very low headcounts, with far fewer employees than normal companies in the same revenue range.

But you still need to hire some people once you’ve started your own fund, unless you want to be doing everything by yourself forever (not recommended).

That’s arguably the toughest part of the entire process, especially when you’re just starting out and barely have any management fees to attract top talent.

Our multi-part series on starting your own hedge fund continues today as we do a deep dive into the hiring process and how you can hire the right talent with limited or no resources.

If you ever want to start your own company of any kind, you need to read this – developing winning investment strategies is great, but it means nothing if you have the wrong people.

So here’s how you can avoid all that and get started on the right foot with hedge fund hiring:

Starting Out

Q: So let’s say you’ve just raised funds, maybe around $100 million in AUM, and you’re about to start operating. What does your team look like at this stage?

On the Job as an Associate Portfolio Manager in Asset Management: The Fastest Path to Becoming the Next Warren Buffett?

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Associate Portfolio Manager Jobs in Asset ManagementCompared to the ways many billionaires make their money, value investing is relatively simple: only invest in companies you understand, and pay less than their intrinsic value… and then keep doing that for decades.

Of course, the idea is very different from the execution – and getting into the industry and then advancing at top investment funds is never a straightforward path.

To find out exactly how that works, today we’re speaking with Tim Piechowski, an Associate Portfolio Manager at Alpine Capital Research (see CNBC video appearance here), who worked in trading, corporate banking, equity research, and even attended law school before moving into his current role in asset management.

Here’s what you’ll learn:

  • What it takes to stand out over other interviewees, and why our interviewee chose asset management over trading and equity research
  • Why our interviewee went for a JD instead of an MBA
  • What you actually do as an Associate Portfolio Manager in asset management
  • Why a CFA is not required, but still extremely helpful, for buy-side roles
  • Why you can get into trouble by listing investment experience on your resume
  • Insights on value investing and what to look for (and what to avoid) when you’re investing in companies

Prior to joining ACR, Tim was a Research Associate at San Diego-based Brandes Investment Partners. At Brandes, he analyzed banks, thrifts, insurers, and holding companies on a global basis. Tim holds a JD from Saint Louis University School of Law and earned a BSBA with concentrations in Finance and Accounting from the McDonough School of Business at Georgetown University. While at Georgetown, Tim held internships with Credit Suisse, the Allied Irish Banks, and the Griswold Company, a direct access broker on the floor of the New York Stock Exchange. Tim is a member of the Missouri Bar and has attained the Chartered Financial Analyst (CFA) designation.

Story Time: From $6.35 Dividend Checks to Associate Portfolio Manager

Q: So how did you first get interested in investing?