Abstract

Using unique, hand-collected data about the careers of 1,375 individuals who became hedge fund managers, we analyze the speed with which they rise to top positions in asset management and the risk of setbacks in their careers. First, we find that employees who start their career from low-level jobs rise faster and more steadily to top positions than those starting from medium-level jobs, especially for males. Second, job-level transitions are typically associated with switches across employers, but employees who switch infrequently across employers have faster and more stable careers, suggesting that longer stretches of time with a few employers allow better learning of workers’ skills than frequent churning. Third, we investigate career risk using fund liquidation as a laboratory, and find that the careers of high- ranking employees are significantly and permanently damaged by the liquidation of the fund they work for.