Hey guys,
I am currently an MBA student at H/S/W. My goal is to get into i banking as an associate and move to a PE or HF afterwards. I know it is common for IBD analysts to move to PE/HF, but how about for associates? and what type of roles am I most likely to get (partner track, etc)? I am a CFA and have been in finance for 4 years now (investment consulting). Thanks for any ideas.
| +126 | Is my life over after not getting GS? | 32 | 36m | |
| +78 | BEING WHITEGIRL IS PARADISE | 15 | 4m | |
| +73 | Best IB group on the Street | 35 | 52m | |
| +65 | Thoughts and tips on how to speak like an investment banker. | 25 | 20h | |
| +58 | BIG FOUR ARE PARADISE | 15 | 19h | |
| +48 | Tell me one good reason why Jefferies isn’t going to be a top bank in the next 5 years | 23 | 11h | |
| +36 | UBS Outlook | 28 | 1d | |
| +35 | How to deal with egotistical team? | 6 | 3d | |
| +33 | Highest Paid Bankers in Toronto? | 51 | 17h | |
| +31 | Are you “less ambitious” for having long term goals outside of NYC | 13 | 3h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
tough. not impossible but tough. more likely to happen at small, up and coming firms. the larger, more established firms typically promote from within or more likely - hire people with pre-mba PE experience
@"ledger123" Thanks. What do you think chances are at a hedge fund (fundamental stock pickers, or distressed opportunistic guys)? I have been looking at openings for some of these funds and they all require 2 years of banking. I'm not sure whether they mean analyst level or associate but I should pick up the same valuation and analytic skills (and hopefully more) as the analyst on the team.
I find it baffling that so many MBAs think that the MBA ---> Banking ---> PE route is typical. Not saying you're one of those, but just a general observation. One would think that people would do their diligence and be aware of the fact that the probability of getting into PE from anywhere but a banking analyst program is slim to none.
To answer your question: very very tough. I can't recall a single example, and I've been around the block a bit. The MBA ---> Banking ---> P/E route is more rare because generally the non-banking to MBA to banking experience isn't one that is particularly valued in P/E. The unspoken mentality is that you scoop a banking analyst while he's young and hasn't yet had an opportunity to become a real banker. If you're a promoted associate, yes you're kind of an official banker now, but you've also got 3+ years of solid experience... and even still these guys don't get into PE. If you're an MBA associate, you're twice a loser cuz you're a real banker and you don't have the valued experience of being a model monkey through the analyst years.
I think a lot of people want to use an MBA to break in, and understand the difficulty of going from something unrelated, through an MBA prog, and into PE right away. So they think if they got into banking it would help them transition. Then again OP says they're at HSW and who knows what they could do with connections like that - if they utilize them.
With that being said, I came from an unrelated background and am now working as an Associate in a small regional PE firm. Going to a top 5 b-school next fall. What do you think my chances are of getting a position as an Associate or above at a larger PE firm in NYC?
Very interesting you are from a non background. How did you manage to get in. I am very interested in this. Thanks in advance for your guidance and congrats!
@OP, to answer your question on your chance of going to a fundamental/distressed HF, after a post-MBA IB associate gig, I would say it is equally as tough as PE, but perhaps your CFA may help you a bit more on paper than if you were to pursue PE. What Marcus says above is right and many of my MBA friends past and present have had this experience. However, I don't think it is impossible. Recruiting for roles that demand 5+ years of work experience on the buy-side are largely unstructured, opportunistic and can drag on for months, so it will be a combination of experience, how you look on paper, how you interview and of course luck. This goes for everyone, even those who came from traditional IB analyst programs. It seems like you've positioned yourself as best as you could as far as how you appear on paper at this point of your life, so don't be discouraged. People forget how long their careers are and it is possible that you could land the buy-side job you want within 5 years.
I don't hear many CFA charterholders refer to themselves as CFAs (i.e., as a noun).
Regardless, I have seen associate level bankers jump ship to PE positions. Some had previous experience - either through internships or before going to business school - and others had 0 experience and transitioned to the buy side before VP promotion. Don't expect to lateral to the buy side (same level) once you're a more senior associate up for VP promotion… unless you're a special case. They'd likely expect you to come in at the same level of a newly minted MBA graduate. If you want to make the move, then i would recommend you starting working on that ASAP.
just my 0.02.
You're right. I'm not using the CFA designation properly. I guess that explains why I always scored so low on the ethics section of the CFA exam :)
bump
Sorry to hijack, OP, but what about someone who laterals to banking at the associate level, without an MBA? Would such a candidate be considered for pre or post MBA PE positions?
Thanks
Thanks guys for the comments. Very helpful. My thoughts are that while banking at associate level is not a sure way to get into the buy side, I have seen people who have made the transition. As @"devoutCapitalist" mentioned I'd have to get in the same level as a fresh post MBA who did banking or PE before business school. Personally I am definitely fine with that. Also I agree that it is easier to get into hedge funds (distressed or fundamental strategies) rather than PE from banking at associate level.
guy just went to a megafund from VP level banking so it can be done but extremely rare, first time I have seen this
I'm a little confused about this concept in general. I understand that the more "common" path to PE/HF is from an analyst role, but I don't see why that means that there wouldn't be interest in associates.
Presumably a good associate learns how to model (even if they don't ultimately become as proficient at it from a speed-perspective as an analyst) in order to perform their job. On top of that, I get the impression that associates are doing more of the real "analytical" work in the sense of understanding the implications and context of the models in a more meaningful sense. It would seem to me that after a few years of associate/VP experience, a person would be just as appealing a candidate as an analyst for PE or, especially, HF role.
I get the impression that it's simply less common by virtue of the fact that ordinarily, associates (particularly post-MBA associates) are in IB for the long haul, so there is simply less of a supply of associates actually trying to go buy-side than is the case for analysts. I can understand how that might deter HHs from reaching out to associates, but I don't see why they would be uninterested if an associate took the initiative to reach out.
Am I just missing something here?
This has to be a troll. I can't say there is a single thing in your post that makes any sense.
Care to elaborate? Are you suggesting that associates never learn how to model, that they don't do more high-level analysis than analysts, that they have no appeal to the buyside after a few years of experience in IB, that HHs would have no interest in aiding associates who take the initiative to reach out to them, or that there is in fact no selection bias which reduces the incidence of associates who move to the buyside?
Agreed
Best bet would be getting a banking gig in London, everything here is a lot less structured and it's a lot more feasible to make the transition here.
associates dont learn to model and are not doing real "analytical" work. PE firms and hedge funds generally have no interest in post-mba associates without prior PE experience. like i said, it would have to be a unique situation.
What about management consulting? Would working as a post-MBA consultant at one of the top shops give me a better chance at getting an analyst position at a fundamental stock-picking hedge fund?
I don't think so. You have a better shot at PE than a HF coming from post-MBA MBB, and even that would be difficult to get I'd imagine. There just isn't much perceived overlapping skill set between MBB and HF.
I think it's pretty feasible to go directly to HF/top AM from MBA as you already have your CFA. Or, go into research (ER or DD/HY desk analyst) and make after a few years.
You already missed the boat, brother. There will still be unpreftigious canoes for you to hop on, but the mega yachts are way out of reach.
@"NewGuy" Can you back your statement with some numbers? If not, then please don't derail a good discussion that is happening here.
Just the typical confirmatory bias one would expect from an unpreftigious bro. Your question was already answered above - you're looking for answers to support your pipe dream.
Let me ask you a question - what would you have to offer above a candidate of the same age with analyst training at a top banking programme, buyside experience, and an MBA? You have 4 yrs of worthless experience - anyone with a background doing anything related or useful would have an effective leg up on you. So, what's your edge, brother?
Unpreftigious canoes will still pay you well - but that chip will forever remain on your shoulder brother because true preftige is out of reach.
I'm going to take the other side here and say that while you may be shut out from megafunds and the like (which have highly structured programs), there are lots of smaller/leaner funds that would be happy to take an associate who has largely the same skillset as many analysts but more poise and maturity. You'll probably have to be proactive about it, though. I work at a pretty lean shop which runs several billion of AUM and we're mostly indifferent as long as you don't come off as a "career" banker. in fact, the extra experience an associate brings -- if relevant -- is extremely valuable at smaller places where everyone bears more and broader responsibilities.
Note that I am generalizing and there are plenty of immature associates and no shortage of mature/poised analysts.
i've seen some associates move to PE/HF, but they were all from top tier groups (GS TMT / BX Restructuring / MS M&A, etc.). imagine it was not the easiest transition for them, and would only be more difficult at lower tier groups.
I did this path (BB to Mega Cap PE). PM if you want to talk.
Additionally, it depends heavily on the market. HF at the moment seem more than willing to interview associates for certain roles.
Banking Associate to Hedge Fund Analyst (Originally Posted: 04/04/2014)
Hey guys,
I will be an MBA student at HSW next fall. My goal is to get into i banking as an associate and after 2 years move to an HF as an analyst (fundamental stock picking or distressed, opportunistic strategies). I know it is common for IBD analysts to make the transition, but how about for associates? I have CFA and have been in finance for 4 years now (investment consulting). Thanks for any ideas.
If you have a CFA and are attending a H/S/W program for your MBA, why don't you try to directly recruit to the buy side? At programs like those, I don't think IB is a necessary prereq for going to a HF or top AM.
I definitely will do that if that's an option. But looking at the background of folks in hedge fund strategies I am interested in, they have some sort of experience that gives them them solid valuation skills (i banking analysts, equity research, PE, etc). I lack that experience so I think my shots of getting an investment analyst position at a decent hedge fund is slim. My goal is to get that experience under my belt and then head to a hedge fund.
What do you think?
As people noted in the other thread, IB Associate probably wouldn't be conducive to lateraling to the buy side. Best options I think would be ER or research at a top AM (I know Wellington has an MBA program).
Also, I don't think going straight to HF from MBA would be impossible (esp given you are a CFA charter holder).
My opinion on this, and I'd welcome any thoughts -
While it may be possible to jump straight to a HF with a CFA, if it was me, I'd still consider IB post-MBA. Why? Simple - working in IB does not CLOSE any doors. You can move up the ladder there, you can pursue PE / HF if you so desire, although it won't be easy... you can move to other areas of finance, corporate strategy / corp dev, etc.
However, on the flip side, my view would be that if you jump to a HF post-MBA, what do you do if after 3-5 years, you decide HF is not your long-term career path? I would guess that jumping from a HF to many other gigs would be very difficult as it's a more specific skillset...
Would love to hear alternative viewpoints, but my view is that in the same situation, I'd take the "safer" bet with more exit options - namely, IB as a post-MBA gig.
Agree with Anihilist that if investing is what you want to do you should get to it and not waste any time in IB. Sure you might get a top HF after an IB associate stint, but that’s far from a guarantee. You can do a lot worse than getting into a Wellington etc for a few years and going from there (attainable from top MBA’s). I hear what the other poster I saying about the IB option leaving more doors open and you should probably got that route if you’re not 100% sold on investment management. Reason being if you’re not 100% set it will shine through in interviews/you will get passed over by your competition as most of the MBA students who land these roles either have prior relevant experience or are passionate enough to do a lot of legwork on their own.
Do not do banking op.
ER/AM is your best bet OP.
Thanks for the comments guys. I am definitely set on going to an HF. But the competition is very strong and they all have much better valuation skills (banking, PE, etc.). I may be able to secure an analyst position at a start up HF or a second tier long only shop with my current background after MBA. But if I put my back to getting hired in banking I think I can end up in a good team out of my MBA. My hunch is that that will be give me a better chance of breaking into a first (or near first) tier hedge fund down the road. It is definitely a risk though. I have been looking at tons of LinkedIn profiles and everyone does banking analyst -> PE -> MBA -> HF/PE at the mega funds.
Ahh, now I see what your goal is: top tier HF or bust. Fact is even for the strongest banking analysts for top groups these are tough slots to land and it is possible/even likely you are not going to ever get the tap for this kind of slot. If you’re truly passionate about investing, rather than prestige you’d put your effort into equity research or good long only shops as other have alluded to. I fully agree that you shouldn’t go to a start up HF or second tier long only, but there is a lot between that and top tier HF. You are also correct HFs aren’t great training grounds and you are better going there as more of a “finished product.” That said you have to ask yourself what your end goal is: getting on buyside, getting any front office role at a prestigious hedge fund, or becoming a buyside portfolio manager. I would argue you have better slot at the first and last option by going top tier long only AM or equity research sellside, while you are correct that banking is best for the middle option. My philosophy has always been to get yourself in the mix at a decent shop and see what happens: top tier long has HF’s etc. I would venture the linkedin profiles you looked at are mostly analysts, whereas the same “path” doesn’t necessarily exist for directors of research/PM’s . Good luck
why do you believe that HFs emphasize "valuation skills" in hiring?
If you want to work on the buyside, you should go work on the buyside. A post-MBA banking stint is not going to help your case, unless you're thinking about trying to do PE long term.
It really doesn't matter where you start after MBA. You could be at a small, newly minted HF and still make great money doing the exact same work you'd do at a "top tier" HF. If you go to a good AM or smaller HF and start to create a good track record, you could likely lateral to another HF down the road.
Not sure why you feel like confining your efforts to top tier HF (not even sure what this means really). The HF landscape is very different than PE and AUM isn't determinant of the quality of the fund. E.g. many funds actually return capital when they feel that they don't have anywhere to put it or are always holding too much on the sidelines. I've also read that many DD funds opt for smaller AUM as it allows for more "nimble" strategies. I mean yeah, a HF with a poor track record or a suspiciously small AUM should be cause for concern; but what's the difference between starting at a HF with 5bn AUM and one with 25?
These AM threads may be helpful: http://www.wallstreetoasis.com/forums/life-at-a-top-asset-manager http://www.wallstreetoasis.com/forums/third-avenue-management-0
Another little anecdote, look at SAC. Once considered "top tier", now a family office still getting fucked sideways.
I was not trying to suggest that I am some special person who feels entitled to work at only top hedge funds. I am perfectly happy to work at a less-than-stellar place where they will teach me the ropes and take a chance on me. But my reasoning is that my skills in analyzing financials of a company is so underdeveloped that the likelihood of securing a job like that is low.
A bit more color on reasoning: I know a lot about asset allocation and general investing since I work as an investment consultant, but if you ask me to analyze a company to invest in I wouldn't really know where to begin. This is the reason I think I will not be able to ace the long-only or HF interview at business school. My impression is that they typically hire MBA students who know a thing or two about analyzing company's financials and have had prior professional experience doing this. My goal is to become good at that as a banking associate for two years and then leverage that for an investment analyst position at a hedge fund.
I think equity research is definitely a more secure way to break into a long-short equity hedge fund. But My top choice is distressed investing (opportunistic strategies that go across the cap structure to make money), and my fear is that equity will limit my options down the road.
Welcome your thoughts...
Here are my thoughts. You don't start your MBA until the fall, you won't start recruiting until January and buyside recruiting really won't kick in until Feb/Mar of next year. You have plenty of time to learn the ropes. Start reading(if you haven't already) and start practicing putting together valuation models and pitches. There are lots of resources online to see some example valuations. Your school should have an Investment Management club that can help you prep as well.
If you really want the buyside then go for it, but you have to be sure that you want it. Speaking from experience you will face a lot of rejection, it will be incredibly stressful watching all your classmates get offers while you are still empty handed. But if you are passionate and take the time to learn it is possible. Especially coming from a top school. The name of the school will help you get in the door but once you're in the room you have to be competent about valuation to land the offer. I was in the military before school and most people tried to tell me I would have to go sell-side first to get that finance background you think you are missing. I ignored them all and now I'm going to a decent sized L/S equity fund for the summer.
1) So-called "top tier" HF rarely hire bankers - they hire those who already have buyside experience (PE, distress, AM, HF, etc.) No one at Greenlight is going to waste his or her time holding you by your hand. There are few exceptions here and there though, but they are rare.
2) Getting promoted at so-called elite hedge funds is very difficult. Turnover at great HF is much lower than in banking / PE, the chain of command is already established, and l/s HF tend to be very lean. From the start you'll be surrounded by rockstars.
Aut voluptas reiciendis reprehenderit sequi sunt neque qui. Autem aperiam sint ad perferendis consectetur sit aut. Tempore voluptatum qui qui qui voluptatem. Est quis a vero doloribus odio omnis eos.
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...
Ut natus quis rerum est. Voluptate nostrum repudiandae quisquam minus. Tempora modi reprehenderit dolore voluptas rerum. Fuga similique quo temporibus.
Ut iusto iusto voluptatem id doloribus eius. Dolor doloribus velit numquam ratione aspernatur.
Quae culpa sunt aspernatur nemo. Voluptas consequatur rerum corporis non.
Consequatur consequatur suscipit quo tempora. Sint dolores dignissimos aut aut modi accusantium. Nisi quis laborum nesciunt blanditiis soluta adipisci recusandae.