“I think people starting their careers often make a common mistake – they have an idealized notion of what a career might be, but they fail to investigate the day-to-day,” began Jamie Zimmerman, Founder and CEO of Litespeed Partners, an event-driven fund specializing in distressed debt.
Zimmerman learned this the hard way – she had planned on a prestigious career in law, aspiring to be the first woman on the Supreme Court. But when it came to actually being a lawyer, she discovered she wanted a different career path.
Today, she runs her own fund, doing work she finds fascinating and engaging. “Your life is the day-to-day, and I think it’s very important that you love it, that on Monday morning you get up and you want to go to work.” She continued, “At Litespeed, we are investigative reporters with an investment overlay. Every day, we try to predict and profit from the future. It is always challenging, always interesting, and a lot of fun.”
Career in Investing
“I tell my children, when you are figuring out what work you want to do, find something you like, something you would do for free,” Zimmerman advised. In fact, her own career has been shaped by her desire to do work she enjoyed.
It didn’t start out that way, though. She began her career as a lawyer, but it wasn’t quite the right fit. “I did not like law school, and I did not like being a lawyer. I clerked for a bankruptcy judge my first year out of law school, and although I learned a lot, I wasn’t happy doing that either.”
That’s when she decided to investigate other paths – and her college reunion proved to be the perfect opportunity. “I went to my five-year reunion at Amherst College and began asking who was having fun,” she said. “Many of my classmates had graduated medical school and were residents, and they were getting crushed. Many of my classmates were working for consulting firms, being shipped here and there, living for long stints in airport motels. Those who were investment bankers were getting paid a lot of money, but they were working all the time. The traders, whether trading bonds or commodities, were having a great time.”
“So I decided I should get into a sales and trading program.”
And with that, Zimmerman embarked on her new career. “Every investment bank wanted to interview me, but they mostly wanted to hire me into corporate finance as a restructuring expert. Many said, with my academic qualifications, I was obviously too intellectual for sales and trading.”
Eventually L.F. Rothschild hired her as an analyst in the risk arbitrage department to add some bankruptcy firepower. “From the minute I got there, it was so much fun I couldn’t believe it.”
From there she moved to Dillon Read’s risk arbitrage department, and when her boss retired in 1989, she moved to Oppenheimer. She worked on the distressed debt desk, as an investment analyst, a salesperson, and ultimately running a small fund that invested in post-reorganization stocks. She then ran research for risk arbitrage at Toronto Dominion Bank in the late ‘90s.
By 2000, she was ready to strike out on her own and she founded Litespeed Partners. “The truth is I’m doing pretty the same thing I was doing in 1986,” she said with a laugh. Zimmerman explained that she had been involved in investing proprietary capital since 1986 and had been on the line as a portfolio manager since 1996. “Starting my fund was a natural progression, it was just a question of going out and doing it.”
Zimmerman did have to learn some things along the way. “I started with $4 million. I thought it would just do a good job and the money would show up. Looking back, that’s funny. I had to learn about marketing and client services. There’s a lot to keeping clients happy and finding new clients.”
Litespeed now manages $1.45 billion and has been in business for twelve years. For Zimmerman, work has never ceased to be exciting. “We have built a strong culture of hard-working people who come in every day energized to go to work.”
“I never know what I’m going to be working on, and that’s what’s most interesting about my job. We are value investors with an event overlay, our goal is to produce risk adjusted returns for our investors, but since we are a bottom up fund, we never know what we are going to be researching from day to day.”
Zimmerman said she is pleased with the changing landscape of the investing industry. “I think it’s wonderful that institutions are now investing in hedge funds. People have understood that this is a good, solid investment vehicle.”
As for the future, she said, “I hope to create a firm that survives past me.”
Women in Hedge Funds
Zimmerman believes that the hedge fund industry is opening up to women, and that more visible female role models in the space will speed that process. She points to recent research by Rothstein Kass showing that of the funds they tracked, those run by women outperformed those run by their male peers.
“I think the more women there are in the field, the easier it will be for women to be successful,” she continued. She recalled decades ago when she was one of the first female members of the New York Athletic Club. She showed up to swim laps in a purple swimsuit – pregnant – and was greeted by the gawking stares of some of the older male members. “That wasn’t that long ago – think about how much has changed in 20 years. I think over time, things will continue to change for the benefit of women. Sometimes I don’t think younger women realize how much progress there has been. It gets a little better every year.”
She also suggested that many women would benefit from embracing the spirit of competition driving the industry. “I think sports prepares one for that and I think it’s important for women to play sports when they are young – to enjoy the glory of winning and to have experienced the agony of defeat,” explained Zimmerman, a lifelong athlete who played three sports per year through college. “I think women sometimes get intimidated more easily than men, and don’t back their instincts with conviction. Women have to be encouraged to be comfortable acting on incomplete information – that’s really what this industry is all about.”
“In truth, I found that I enjoy being on the line,” she explained. “I enjoy being the risk taker. Your failures are pretty public and in order to run a fund, you must be resilient in the face of failure.”
“Sometimes, you are going to be wrong – but it’s a batting average game,” she said. “It’s great to compete – that’s what we do. We just compete every day and that’s what makes it interesting.”
To women beginning their careers in hedge funds, Zimmerman advised, “Trust your instincts, don’t be intimidated, and enjoy your job. Keep learning, as much as you can, and work for people you can learn from.”
Most importantly, she said, “If you want to advance in your career, you must love your job. People worry about pay, but if you like what you are doing, someday you’ll be good at it, and you’ll get paid for it.”
In Her Personal Time
Outside work, Zimmerman supports a number of athletics-related organizations. She mentioned the Women’s Sports Foundation, a group founded by tennis player Billie Jean King. “I love sports,” she continued. “I tore my Achilles tendon a few years ago so I got myself on the board of Woods Hole Oceanographic Institution.
She has two teenaged daughters, and she added, “I adore them more than anything.”