Q&A - HY/Special Situations Analyst at $30bn+ HF in London
Long-time user of WSO under a different account, believe it's time to give back.
Background in LevFin/restructuring at a BX/GS/JPM, now sit as an investment analyst within a distressed/HY/special situations desk at a very large HF.
Will be attending the upcoming London reunion if of any interest!
Hey thanks for doing this.
How was the transition process? Did you go through a headhunter or did you mainly make the move on your own accord? What type of uni did you go to and did it help/hurt your transition/moving to HF? How's the work and hours at your new shop?
Long process, was also involved with 4-5 other shops as well which was not easy to manage when you're pulling IBD analyst hours, introduction was through a HH but I was very active with recruiting once I'd made my mind up on leaving.
I studied in London and went to the LSE and I don't think it had any effect on me getting recruited or not once I'd hit the interview (at least not at the HF, HHs do place important on this however).
Reasonably rough ramp-up period but nothing not seen on the other side, I'd say clocking in 75-85 per week on average given how steep the learning curve is, thinking medium term it'll be more in the ~60 range. Loving the work, but I'm quite surprised how unprepared one is initially coming from IBD. Yes, you're a whiz on excel, can read through financials and build a model but I'd say this is 20-30% of each trade we make.
Thanks for this!
One question, after how long did you make the move and could you shed more light into your process?
Just under 2 years, bit early but my thought process was that I wouldn't know that much more if I stayed on for a year longer and that it was time for a change.
Sure, so with my particular fund it was 2x initial meetings with the PM, 3x case studies (2 take home and 1 in office) which consisted of putting 2-3 pages together on a name they'd give you with a quick model and another 2 ideas you'd have to search for and pitch. Following this there were 2-3 more rounds with other PMs and 2-3 analysts with a quick offer following the final round. Very case-like interview process with a lot of fit involved given they knew I wouldn't know much when I joined anyway and just wanted to make sure that (i) I was a normal person and (ii) I could get the basics right.
Interesting, thanks! What's the usual background of people in the industry?
Thanks for doing this.
Quick question with reference to your post above and the use of the word 'trades' - What is the average holding period for your investments? Aware that this might be misleading and might range from small amounts of time to relatively large amounts.
Also, what would the remaining 70-80% of your work load be if 20-30% is modeling/excel? Trying to draw comparisons between your split and mine.
Looking forward to catching up on the 3rd. Cheers
Hi,
Thanks for doing this. Can I just ask what you mean by a case-like interview process? Do you mean similar to consulting cases? If so, what framework would you use for an investing type case?
thanks for doing. as someone with interest in this space:
how does your fund separate itself, given the large amount of capital focused on this space and the sparsity of great opportunities ?
how has performance been?
what’s your view on the market over the next 2-3 years?
For Europe, there's been huge pick-up in fund raising for direct lending over the past 4-5 years which I believe to be totally saturated with margins 150-200bps lower than they used to be historically and seeing how fragile the system is we place a very large premium on liquidity therefore we do not compete in that space. We do not run a carry book and therefore focus on catalyst-driven situations across Europe where we can go long/short and play both debt and equity (although >60% of the book is into corporate debt, with the balance into banks and equities).
Will not comment on exact performance but I'd say that we have had a good year if benchmarked against most other HFs with 2-3 "home-run trades".
thanks for doing the ama! will frontpage today + again next week
what type of asset classes do you invest in?
...
As in distressed RE Debt or Corporate debt ect? Special situations sounds a bit vague..
Look forward to seeing you there!
Saw the linkedin profile of an old aquaintance of mine, he is currently a "Senior Analyst, convertible bonds and Special Situations" at a fixed income asset manager with options to move to a hedge fund, 30 year old guy. Started his career at a small bank as a credit analyst at a small bank, then went to a no name business school for his MBA before making the switch. How common is this?
Have not seen this before. When I look at the other analysts within my fund it's a mix of people that either (i) started at other HFs or (ii) come from a top BB/EB group.
Thanks for doing this!
1) What headhunters did you use? Hinton Rose seems to be the go-to shop for Distressed, but any other good ones? 2) How did you make up your mind re jumping to a DD HF rather than PE or sth. else. I am in a similar position right now and am trying to make up my mind as both DD and PE sounds quite interesting to me. 3) Any recommendations for interview prep? There is obviously so much more materials for PE recruiting but DD is quite limited. Apart from obviously reading Moyer and the HL case, any other recommendations how to prep?
How do you model special events? And where do you get your data from?
Thanks for doing the AMA!
Quick question on LevFin/RX: how realistic is it to break into either coming from a CF/business modeling background from a big 4? Any advice you might share on making the jump?
Additionally to this, can you share what the usual background of people in the DD HF space is?
how much news do you read a day and from what sources? thanks for doing this
How many people are in your team? What are the last 3 names you looked at that are publically traded?
Thanks for doing this. Not so related to the type of questions people ask you here - and ofcourse if you don't feel comfortable no need to answer - but recently I've been reading/analysing troubled European banks a lot. What's your opinion on these? Thinking Deutsche, CS and maybe some Greek banks (Alpha Bank for example) can be potential home-runs with a 1-3year timeframe. For DB and CS, I really like their leadership and for the Greeks they're just awefully cheap. What keeps me from pulling the trigger is a capital raise/secondary offering. What are your thoughts?
Thank you for doing AMA!
What is your opinion on the future of SSG with BBs? JPM sold theirs in 2014
If you could give an advise, how can one prepare for SS if you are coming from IB ?
Is there any group at GS you look at favourably when recruiting analysts (heard that LevFin is more cap market-focused)?
Are any special situations that you would get involved in that have cropped up after the election results?
Aspernatur consequatur ut omnis reprehenderit dolorem. Iure nesciunt ducimus quos quam explicabo. Ut ab fugit saepe non. Qui asperiores aut delectus dolor maxime est. Occaecati illum deserunt in soluta laboriosam.
Exercitationem reprehenderit alias tempora nobis ipsa fugiat eos. Sit sit consequuntur sunt sapiente magnam voluptates harum. Aut accusamus repellat minima. Veniam molestias quia quis autem magnam recusandae.
Amet consequatur officia dolor corrupti culpa accusamus sed. Ullam amet nihil tenetur delectus. Sed mollitia quae eaque ratione architecto cum. Necessitatibus quaerat excepturi libero numquam est laborum. Nam natus impedit eius est et deleniti aut. Dolorum ut distinctio aspernatur est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Qui doloribus aut amet enim voluptas temporibus doloribus. Consequatur assumenda asperiores illum ut explicabo inventore omnis in. Officiis voluptatem voluptas sed officiis et.
Illo animi eius ea soluta quo eum dolor. Eos aliquam aut et reprehenderit.