November 14th, 2010, 7:01 pm
The current largest fund managers that come to my mind mostly did not come through the investment-bank career paths that you describe. It may be that those who did have more money, but have a lower profile towards outsiders like me, so I never heard of them.Hedge funds do involve communication as much as anything else - you are a business manager - and so various technical jobs will be less likely to capture people who can communicate. I think the best path to being a big manager is to start at a young age, and not have a drawdown greater than 20% for 15 years. This favors someone who is patient - unlike the typical college grad with dollars in his eyes - and who is attracted to the idea of running his own business right away, even for small money.If you are an important and well-known guru in an investment bank, you won't need 15 years to raise big money. But even without hard numbers to back up my suspicion, I suspect that people who are more communicators at heart than traders at heart will not stay in the industry long if they don't have success in their first two years.I think people who are successful hedge fund managers, like a lot of areas of business, will be money managers right away at a young age, it is what their personalities are built to do. Of the people who start out trying to do it right off at a young age, some will be both lucky and good, and find themselves as major managers at a later age.I am skeptical that someone who works as a quant developer for even 18 months will ever be a successful money manager. This type of person is an order-follower, not a leader. A leader can lead people into even bad investments over and over, if that is what he was born to do.I would be curious to hear a list of past quants who became hedge fund managers. Or if it is assumed this is more a path for future than current managers.