Rick Sherlund's tenure as a sell-side research analyst has finally come to a close, and with it the last vestiges of a bygone era. We've known for months that Sherlund was looking toward opportunities on the buy-side and today it was publicly announced that he'll be joining the Galleon Group as a managing director tasked with investing in a portfolio of software stocks.
Galleon Group is a well-known NY-based hedge fund group focused primarily on information technology and health care investments. The fund was started back in the early 90s by Raj Rajaratnam while he was a rising star at Needham. After a few years of running the fund inside of Needham while also serving as the investment bank's President, he bought the fund from Needham and went out on his own. Galleon started in 1997 with approximately $350mm and now stands north of $6.5 billion.
Will Sherlund flourish in his new role? Time will tell. Both my partner David and I were sell-side research analysts prior to becoming money managers; and I can say without hesitation that they're far less correlated than one might suspect. That said, Sherlund is joining an established fund with infrastructure and processes well in place. He doesn't have to go through the rigmarole of starting his own fund and all the trappings involved [e.g., fund-raising, marketing, hiring a staff, legal & compliance].
As I said a few months ago, in many ways this signals the end of an era.
Here's to good sailing.