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Joined: March 16th, 2019, 6:17 pm

Alternatives Investing

August 30th, 2021, 8:19 pm

I am contemplating whether to move from sell side market risk analytics to building technology stack for buy side alternatives investing. This buy side team is very young (<2y) so a lot of initial effort (~1y) in this role will be about building systems for data management, governance, reporting etc. The juicy part of building analytics for risk and investing comes only after that. 

While I did my initial research on alternatives (commercial real estate, distressed firms, aircrafts, ships etc.) as an asset class, I do not have anyone with first hand experience in this space to ask more in depth questions. This space feels very niche to me, though historically big firms like Blackstone, KKR have been operating since decades, so this move feels like a one way road. Eventually my goal is to be able to work alongside PMs (and hopefully for being one eventually) and contribute to alpha generation steps. 

The number of people per dollar of AUM is way smaller than in asset classes traded in traditional public markets, so a smaller team is one of the motivating reasons for me to consider (i.e. relatively less competition, but again it's more niche, so I might be underestimating my fit and skillset need to achieve my goals)

I am also in conversations (in intermediate stages, a couple of more rounds of interviews are pending for a final decision) with other buy side firms in the same market risk analytics space that are offering similar sized pay as the buy side in alternatives. 

So the following questions trouble me in this decision making:
  1. Is this move to alternatives business worth the risk of abandoning a more common field of market risk ? 
  2. Am I fully delusional w.r.t to my goal of working alongside the PMs to contribute to the firm's bottom-line ? 
Any suggestions, critical and/or humbling comments are helpful.