Work Weekends and Long Hours, Fund Manager Advises Young Bankers

LONDON - Credit Suisse may be encouraging its young bankers to shun the office on weekends if they are not working on a big deal. And Goldman Sachs might have a “junior banker task force” to examine how to make the lives of lower-ranking analysts and associates more efficient and humane.

But Randall Dillard, managing director and chief investment officer at Liongate Capital Management, a fund of hedge funds, had a distinctly different message for a roomful of prospective financiers on Monday morning: expect to work hard - really, hard. And don’t look for short cuts.

“I don’t say that because I enjoy telling people to work long hours,” he said. “There’s just not a lot of coasting.”

He cited a recent Financial Times poll that asked young bankers how much they worked. Fifty percent reported that they worked 60 hours a week. “That’s not even in the game,” he said.

Mr. Dillard, speaking at the 2014 London School of Economics Alternative Investments Conference, said the hedge fund industry was poised to grow. There is a growing pot of money - projected to be $370 trillion in 2020 - that needs to be managed.

Hedge funds can short the market, making investing more appealing and theoretically safer. Big investors like pension funds now group hedge funds not as a separate asset class but as part of larger buckets of strategies to be managed, paving the way for even more money to flock into the sector.

But the crux of his unusually frank speech was to explain how to get - and keep - a job in the industry.

“It requires discipline, not incredible insight,” he said. Start early, he advised, right after college. And offer to work without pay, he said. Only 4 percent of those who apply will get jobs. “I don’t say that to be elitist,” he said, sounding very sincere.

Mr. Dillard’s varied career in finance led him to investment banking, merchant banking and proprietary trading as well as law.

But he was rather dour on the private equity sector. “Trust me, after eight or nine years you will want to commit suicide,” he said, calling it the “roughest business to do well in.” He managed $22 billion in private equity assets, he said. “I couldn’t go to the movies without feeling guilty.”

Nor did he enjoy managing traders. “They are a bit whiny,” he said. “They all say ‘pay me, pay me, pay me.’”

Students in the crowd seemed to appreciate the candor.

“Sure they pay us a lot,” said one, asking that his name not be used because he was applying for jobs in the industry. “But divided by the number of hours we work? It’s not that great.”

Mr. Dillard retired after getting burned out, but got bored, and started a hedge fund. Reflecting on his life experience, he summarized the value proposition of working like crazy for a few decades.

“If I don’t die, then investing a little bit of time up front and accumulating savings to buy it back in the back end of my life, it’s not a bad proposition,” he said.

“If you die unexpectedly, it’s a very bad proposition.”