Know when to leave your job

In business, it is often the same. Chief executives are loath to give up the respect and perks of their job unless the board instructs them to. However dismal the situation, there is always another strategic review to be conducted, another round of changes which might turn things around.

Hedge fund managers, however, are more like athletes. The scores and results leave nothing hidden. Their returns, risk-adjusted, of course, say everything about their performance. Either you win championships or you don't. You make your investors, and yourself, a lot of money, or they go elsewhere.

Timothy Barakett was a hedge fund galactico over the past 15 years. His company Atticus has been one of the most watched, feared and well-regarded hedge funds. Highly aggressive, very profitable and with a whiff of glamour, courtesy of its co-chairman, the British investor Nathaniel Rothschild. But then in the middle of August, Barakett announced he was done. Aged 44 with $1 billion in the bank, he was walking away to concentrate on his philanthropic activities. His main global fund fell 27 per cent in 2008, along with most others.

But over the years, he has made a fortune for investors. If you had invested with him when he opened his fund in 1995, you would have seen your money grow nine-fold. Over the past five years, when the markets were essentially flat, Barakett's fund was up nine per cent a year. And then he was gone. Not at his peak, but not too far off it. Out of his $4 billion fund, he returned $3 billion to investors and kept his $1billion for himself. Atticus will live on without him.

Other money managers have folded their tents over the past year, but most of them had seen their funds and reputations shredded by the economic crisis. Few leave the field, as Barakett has, with their reputations intact.

One who did was Andrew Lahde, a much less significant money manager who had nonetheless had one staggering year in 2007-08 when he made a fortune betting on the collapse of the housing market. Last October he shut down his fund and returned money to investors, saying that the investments he had used up to that point, credit derivatives, were now too risky. In any case, after making an 870 per cent return in a single year, he had achieved his mission. At 37, he had made his fortune by growing an initial $10 million fund to close on $90 million.

"I was in this game for the money," he wrote to his investors. "The low-hanging fruit — idiots whose parents paid for prep school, Yale and then the Harvard Business School — were there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behaviour supporting the aristocracy only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God bless America."

He urged people to abandon any notion of building a "legacy" through their work. "Give up on leaving your mark," he said. "Throw the BlackBerry away and enjoy life." But assuming you are neither Lahde nor Barakett with millions in the bank to cushion your departure, when is the right time to change jobs?

Sometimes it's obvious. You don't fit in, you hate getting up in the morning, you're bored and feel undervalued and you're always having lunch on your own. Unless there is some crushing financial motive keeping you in place, it's clear you should move.

Less obvious is the moment when American career specialists suggest you "re-pot" your career. They recommend you re-pot every five to seven years, as you would replenish the soil and nutrients for a plant. The ideal time to do that re-potting is not when you are fighting your way up an industry, or when you have become so good at your work that it has become easy, but at the moment of your greatest success.

The moment to leave is when you have been at your best for a while, but before you become stale. You want to leave like Pete Sampras left tennis, after winning the US Open against his greatest rival, Andre Agassi — not when your knees are creaking and you're receiving sympathy applause as you go out in the first round of the Queen's Club Championship.

The challenge is spotting that moment and acting on it, as it tends to coincide with a period of intense professional satisfaction. The moment to choose uncertainty is when you feel more confident than ever. When you are in a position of strength and everyone wants you. Quit then, and you will keep surfing along the crest of ever more interesting work.

Peter Drucker, the late American management guru, wrote that it is vital for the modern worker to keep plenty of options open outside his or her present work. This means potential other careers, as well as hobbies, weekend pursuits, charitable work, any one of which might offer the next opportunity. That way, when the moment comes to re-pot, you are not scrabbling around hunting for something else to do. The alternative should be obvious—as with Barakett's philanthropy. Given that he embarrassed no one by clinging on after his talent had faded, he would be welcomed back eagerly one day by the profession he once dominated.