Bailout

The value of hedge-fund experience

By Felix Salmon

A lot of asset-management professionals dream of one day running a hedge fund. But in the case of Maxime Carmignac, it looks more like it’s the other way around: the heir apparent to the $48 billion Carmignac Gestion fund-management empire is now running an internal $100 million hedge fund as part of her preparations for taking over from her father as CEO, CIO, or both.

Hedge fund managers have more freedom and are paid more money than fund managers generally, so one can see why many buy-siders (and sell-siders, for that matter) want to move into the world of hedge funds. At the same time, as the likes of Bill Gross and Carmignac’s own father have shown, you can become a buy-side billionaire without running any hedge-fund assets at all.

As consolidation in the hedge-fund industry increases — the number of funds is falling, while average AUM is rising fast — there is an increasing number of former hedgies looking for work in the more boring areas of the buy side. Is hedge-fund experience something that big asset-management firms like to see on a resume? And does this mean that the performance of asset managers generally might see a bit of an uptick as employees who have done a round-trip through hedge funds return to their fold? The Carmignacs certainly seem to think that way.

Full post as published by Macroprudential on January 07, 2010 (boomark / email).