HF London Scene - What's it like out of undergrad?
Looking to learn more about the opportunities to go directly into it from your undergrad degree; was a thought provoked by an American-based intern deciding between PE/HF out of his degree which I found interesting.
I am completely new to this but intrigued mainly by the diversity of what I've read on here; how HFs (seemingly in the US at least) are open to hiring even History grads, for new perspectives - but generally just people who can well articulate their thought processes / those who are well rounded from all walks of life / have a varied knowledge base, provided they can adapt quickly to new situations - which seems quite exciting.
I have been reading on the forum but it is largely tailored to either people asking about internships, or more concerned with breaking into HF in the states instead. From what I see online, it is more quanty focused roles that are being advertised in London.
Interested in learning more about what HF opportunities there are during undergrad in the UK to break in. In terms of learning about the roles available out of undergrad / coming in from IB, I'm looking to learn a bit about the typical work (is it just like applied ER?) / hierarchy, how involved you get to be as an analyst, salaries, hours & any other relevant information. I hear there are flat structures, but this is an anecdote.
if I have missed anything or anything is incorrect, I would appreciate if someone could chime in below.
Look foward to your thoughts. Thanks!
Bump
A lot of types out there. Out of undergrad you’re mainly looking at Point72, Citadel, Millenium and DE shaw. Collectively maybe <10 seats in london for HF out of school. Standard multimanager model, ramp on names, build models and generate ideas around earnings season. Low career security but given a lot of responsibility early on with opportunities to contribute to PnL.
Heavy data manipulation/monitoring depending on sector. Functionally quite similar to ER.
some global macro funds had grad schemes for investing roles but don’t have them anymore; Rokos/Brevan Howard etc. Think Capula might do something.
Brevan have a grad program but the overall quality of grads is quite low to what you would see in the sellside bank trading floor on more structured desks. e.g index options grads or equity exo grads at GS/JP/MS are probs a lot more self-taught is my take
Brevan’s is rotational I believe? So there’s some MO functions in the grad scheme w no promise of a seat on the investing team
https://www.buysidehustle.com/life-on-the-buyside-at-a-multi-manager-he…
Good read for Long/Short equity
What does buyside hustle work as now? I think he's at a distressed fund or smtg right?
Slightly off topic but useful thing for undergrads to read... I think a lot of people don't realise quite how many reputable funds are out there that are willing to take undergrad talent if you can impress them enough. However, I would make the distinction between the macro funds and the L/S funds that I think that far more funds are willing to take grads in the macro space because they can contribute earlier with either quant skills/trade ideas from novel thinking. I would also say that a lot of the best seats that you can get out of undergrad arnt advertised in the normal format of job posting anyone can apply for... they find you. So you need to put yourself in a position for them to find you, which is itself very hard for example being at the top colleges at oxbridge, academic competitions and previous internships. I did a summer internship at a fund basically unknown by the majority of people on this site but under two superstar PMs, 6 weeks into my internship I had interview invites from every big fund you can think of for grad jobs that arnt advertised because at these places the recurring theme is 'we hire exceptional talent and will find space for them', there is no such thing as 'I was really good but they just didn't have space' If you are really good your getting a job and an incredibly large sign on bonus to go along with your incredibly large non compete
Macro is set up in a way that generally allows people with less experience to contribute meaningful trade ideas. I've seen people intern at Bluecrest, Soros types etc by getting headhunted.
It's quite different in long/short, there are so many processes and frameworks (and frankly speaking some mundane menial tasks like combing 10-k/presentation/transcript for the odd item) that you need to drill deep and then model out with reps before you can consistently pitch ideas through. That's why the few L/S shops that are reputable and take undergrads make them do 6m-1 year of training before they even get a shot at contributing to PnL. The process of idea -> trade is more obscure and winding in L/S than in macro ime.
Any examples of similar unknown funds that are well regarded in the UK? Extremely little information regarding some I found.
I think the point they’re getting at is they’ll find you if they’re interested
Alot of these firms are discrete by design
I mean I can list them out but there really isn't any point because they barely have a functioning website and no presence on things like LinkedIn.... These types of places are the ones where the PMs have super loose risk limits and less capital under management but enough to generate £250m a year with a Sharpe of 6.... do this for 10 years then retire with 100 mil in the bank. They are low key by design
I am a final year student at Oxford. I was wondering what you mean by “these roles find you”?
As in, if you’re part of societies (alphafund etc), you network with fund through that?
As in they will contact you, I’ve seen it happen a handful of times. Usually the person has published a paper or project (normally quant related) and gets directly headhunted by funds.
Its all done very discreetly.... The scenario is that you are known as someone that is smart in the correct circles with people that a couple years ahead of you, publish some novel research can be academic or through investment society's/ get some ridiculous grades/ win hard competitions etc. For example, someone gets hired by X fund that's a couple years ahead of you that you impressed 2 years ago (enough for them to remember you), they hear that recruitment is coming up so they say to PM should invite Y person down to chat and see if you like them, you have a foot in the door. Its almost solely based on your reputation as someone that is super smart and sharp.
I went to a very average secondary school for gcses/alevels and I went back last year to give a chat about finance careers. One kid who would have just turned 16 asked all the right questions, had perfect grades, enjoyable to speak to, expressed a strong interest in finance etc. So when its time as long as nothing has changed ill invite him to interview for us. He might not be the right fit but if he still impresses ill send him to another fund.
Joined a boutique HF in London straight out of uni that did not have a proper grad scheme in place. I found the role on LinkedIn less than a month before summer exams and had to interview with 4-5 members of the team.
For the first 6 months, most of what I did was one of a) building models on new investment ideas, b) updating existing models with quarterly earnings, or c) doing write-ups of investment ideas / earnings updates for the senior analysts I was working with.
While this was at times frustrating because I obviously wanted more involvement in the investment decision-making process, this allowed me to gain experience of dealing with companies across all sectors and several markets.
Thereafter, I was slowly given my own coverage. However, before I reached that stage, I also had to become IMC qualified, so that I could make my own orders to the traders. CFA is not a set-in-stone requirement, but is highly desirable.
Do you make enough vs IB or is the salary quite low?
Knew someone who managed to intern at a decent L/S fund (not crazy AUM, maybe 250m). Said he left for an FT role in Sales at a Tech firm as it paid more (£50k base).
My starting comp was just under entry-level S&T comp at a BB, but I also received a year-end bonus.
More important than the absolute number of comp is the # of hours worked for this comp: I did not mind being paid less than my mates in IBD if it meant no weekend work, being home by 7 pm every day, and having the entire weekend for my social life and hobbies.
Can shed some light on L/S - in the US the advice you'll get is typically to do banking first since this gives you the most optionality in the type of fund you'll be able to join, in the UK the opportunity landscape is far more dominated by MM so if you're sure about pursuing HF as a career then grad schemes there will be your best bet: best training, get started earlier, limited opportunity cost. There are also 'pseudo-pods' like MW and DESCO which now offer grad schemes but don't know too much about these.
If longer-term investing is your thing, I would go for a LO RA programme or start in SS ER. 'SM' HFs in the UK typically go by a private investment partnership structure so you need to have immense conviction in a fund before joining as you will only really get paid if/when you make partner - you will be much better placed to diligence these opportunities from the SS. There are maybe 5-10 'well-known' SMs but most of them are downsizing and to my knowledge do not hire undergrads. Outside of these, it will be very hard as an undergrad to know if you are joining a sinking ship/dysfunctional PM/fund that doesn't pay.
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