The higher-ups at a multi-manager hedge fund all earn small percentages of each individual team’s P&L if that’s what you’re asking.

I mean, how does a hedge fund manager of a multi-manager hedge fund make money from the annual return that comes from the capital allocated to each PM and his team? If the portfolio manager takes 15% p&l from the annual return of capital allocated to him and the team.

$500K AUM makes you a retail investor. Most people would say you need $100 million AUM to call it a “hedge fund,” but some smaller ones might still qualify. The key is whether or not you’ve raised outside capital with the traditional 2/20 structure.

??? Not sure I understand what you’re asking. The HF starts with a certain amount of assets and then earns a return on it during the year and takes a percentage of that return. If they want to invest more money, they can choose to take less or raise more outside capital.

I don’t know, but you don’t really see many “old” traders, so… I think if you wait past the mid-level (VP or so) in S&T, it gets difficult. They want to see that you can manage your own book and generate good P&L results, but they also don’t want you to stay at a bank for 10+ years.

Very informative post! What would be the maximum age for attempting a transition from S&T to PM ? Would HFs say what maximum age they’re willing to tolerate? In my surroundings people are out by 55 in general.

We don’t focus on these types of transitions, so the best answer I can give is “Maybe, but it’s not as easy as you might think” because mutual funds view themselves as quite different from wealth management and because there is not much turnover at the PM level (unlike at hedge funds). All you can really do is start reaching out and networking with these funds and see what they say.

Is it realistically possible for me to make a switch to a PM / associate PM position at one of the largest mutual funds ? If yes, what steps should I take ?