Engineer break into Hedge Fund?!
Hi,
I hold a BSE & MSE in Electrical and Computer Engineering from a top engineering school. I have worked in few top tech firms (e.g. intel, microsoft, etc)
Currently I am planning to attend one of top MBAs to study finance.
Is it plausible/realistic for someone like me to break into hedge fund/venture capital/private equity/IB (focused in tech sector) after MBA?
Thanks for comments, in advance!!
P.S. It would be nice of you if you comment on each area, hedge fund vs. venture capital vs. p/e.
what's your reason for wanting to work at a hedge fund/finance as compared to working for top tech firms where the momentum and pay are clearly increasing?
Yes, it is certainly true that you have very good hours and comparatively decent pay at tech firm. But working at tech firm as an engineer, you will mostly be spending your time on "machines" and soon you will feel your work pretty routine. And even though tech firm has the pretty ok commission/bonus/stock reward but nothing comparable to hedge fund or similar field, as far as from what i learned. Probably most importantly, I want to do something new and something quite challenging. Plus, with growing funds in Asia, I believe my tri-lingual and background would help as well.
definitely possible, some hedge funds recruit out of business schools regularly, bridgewater, citadel and aqr for example as do PE shops. however, each one is different and you need to identify what you want to do and focus on it. For example, citadel hires for global equities groups which I think do fundamental investing, while aqr hires Chicago gsb students and is a quantsy shop. BW, no idea what they do, but they do have MBAs as management associates and maybe a few as investment associates.
Can an engineer break into an HF? (Originally Posted: 07/18/2015)
Hi, thank you to the regulars who's willing to share their opinion.
I'm a structural engineer with 6 years of experience wanting to lateral to an entry level HF position in San Francisco. As for work environment, the structural engineering field functions quite similarly in their firm structure to an HF (as we are private consultants). You first begin as an analyst, where the project managers assign you what to analyze and senior engineers check your work before it goes to the partners/directors. Eventually, you hone your analytical skills as well as your critical thinking, decision making, risk mitigation, and soft skills involved with coordinating a job while dealing with clients. Slowly developing your independence, you begin taking on smaller projects and eventually move on to bigger stakes.
I've had a good run, and am trusted to run projects that frequent magazines and the news at a very highly coveted firm with a solid presence in code development and academia. I have high-rise projects that are peer reviewed by professors who are considered to be a worldwide authority in designing buildings to resist earthquakes. However, I'm feeling very disenfranchised about the compensation structure where the rewards are reserved for the few while the rest are expected to slave away thankfully just to take part (even at my level). In the beginning of my career, I admit, I just nerded out over the engineering aspect without much thought about money and found it easy to put in those 60+ hr weeks. However, getting older and speaking with various level seniors that began opening up to me, the realization that I will never reach financial independence on this route without taking on huge risks/liability has led me to concentrate in finances directly.
Fastforward a bit, and now I'm in a state where I'm so hungry to be a part of the finance/investing field that the time spent at my full time job is becoming an obstacle. I have been soaking in as much as I can, and like many of you, realize that I relate heavily to the buy-side. It's not just the research/analytical aspect that gets me nerding, but the strategic aspect as well. I really like that part of my current job, taking technical findings and applying it strategically (which is why I chose engineering over pure sciences). Moreover, I chose structural engineering as it differs greatly from other engineering fields, in that you are a private consultant accountable to a client. I think HF really does mirror what I love about my current field (using high intellect, technical skills, people savvy, and ability to multi-task many different parts of your brain) while alleviating what I dislike (the terrible pay structure). I also like the flexibility a HF has in investing opposed to traditional bank funds, which I find very interesting.
As much studying as I try to do, my day job is demanding (~60hr weeks) and my progress gets frequently interrupted by deadlines. I would love the opportunity to fully immerse myself in this field of practice. Does anyone know of a case where an engineer has successfully made it into an HF without prior experience in the finance sector (IB/PE)?
Any advice would be greatly appreciated, including any funds that anyone here may know in the SF Bay Area that are more prone to hire "raw clay" to mold? I'm a direct kind of personality, and don't find going back to school or a stepping stone job very attractive.
Thank you
Isn't it basically only engineers doing those complex calculations? Or do they add a graduate degree? For example, at the last investment bank I worked at one of the quant's that I knew was a phd in industrial engineering.
I got my Bachelors from UC Berkeley in Civil Engineering, and my Masters from UCLA with a focus in structural engineering for earthquakes. I guess the thing is that I'm not very interested in a quant fund (which is more closely related to computer science, mathematics majors).
Just a little background. We are private consultants, who are constantly answerable to clients. As it goes in consulting, we require a considerable amount of business acumen and people skills to move out of the "human computer" role. I feel there are great similarities in the type of thinking involved with picking good stocks and managing risk in a portfolio.
We take our analysis for a grain of salt and use our experience to manage risk. Accepting that analysis are only a tool to guide you into the right direction, but ultimately, the art is in your assumptions and how you use the results. There is a big component of managing risk, that are otherwise less emphasized in other forms of engineering that have the opportunity to do several iterations of full scale tests or large loss of life in not involved.
I really like the artful aspect of picking good designs and putting them together in a way to minimize risk of an undesirable outcome, all found on some analytical/technical basis. This is the main reason I am drawn to the buy side rather than the sell side. This coupled with an ever growing obsession with the stock markets and searching for different ways to find, quantify, and take advantage of market inefficiencies has led me to wanting to pursue a HF.
Thank you all for your responses! Any tips on how to network? I always feel weird cold networking, but I have found a few funds I really like I'd like to get to know. But don't know how receptive people would be, as I clearly want something but have limited value of what I can give in return.
Also, I am currently in the process of building a foundation for valuation and other skills that are essential. Aside from Damodaran's valuation books and bibles like The Intelligent Investor, does anyone have recommendations on what is considered critical knowledge? Anything else I need to know beside DCFs and all its variations? I'm getting quite familiar with financial statements, and just overall aspects outside of relative valuation multiples, but any help would be go a long way.
Thanks guys! Really appreciate it.
You might want to look into an MBA for a career change.
The answer is yes. Don't let an online message board discourage you if that's the route you want to go. No one is going to give it to you - - you have to take it.
If it seems like I was discouraging your chances, I would like to fix that. I believe you have an opportunity to make the move. That's why I responded the way I did about aren't engineers the one's doing the calculations. However, I was uncertain as to whether an advanced degree might be needed. From what I have seen in postings though, you will probably need to learn coding.
It's very possible. However, the biggest hurdle here is your location. Quant funds should be your targets, but most are in Chicago/East Coast..and you're on the west coast. Just go on a job board like monster/indeed and search 'Quantitative Analyst' in California or something like that just to start off.
SamEdison I'm curious where you are now. I somewhat in the same boat. I've always known I didn't want to do structural engineering for the rest of my life, it was just something fun. My passion has been investments and business and now, after 3 years of experience, I am trying to break into the financial industry.
I hear you on how SE firms operate like HF firms. I'm thinking about getting my MBA, but it's hard to sell the "Career Change". If it were the other way around, I feel like people would be more open to it, but because its from SE to an HF, people might think I'm after a fat check. But in all honestly, if I made the same salary as an analyst, I'd still be happy.
I wanted to ask where you are now; if you made the break through. And if you or anyone had extra tips and advice. I've begun cold emailing Funds and just trying to break into the financial industry in general. I'll be applying to Bschool this season. Thanks in advance.
Undergrad Civil Engineering, can I fit into a Hedge/VC Fund ? (Originally Posted: 02/15/2016)
Hi guys, I recently graduated from UMich in with a B.Sc in Civil Engineering. I come from a family of industrialists in India (we are VERY High profile/notable people there), that's just the nature of our business, although our family company's market cap is nowhere near as impressive.
I like the world of business in general, my grand father has instilled shrewd business sense into me at a very young age, we were mollycoddled a lot. So even though we're involved in the construction business, I have followed tech companies and like reading Popular Mechanics, Techcrunch, etc.
I was wondering if doing an MBA was my only path to re-routing my future towards new economy fields (I'd like to work in USA for a while).
All I did so far was help my corporate finance team back in India with several infrastructure projects, I'm familiar with fund raising, at SPV levels, debt equity ratios, project execution, that kind of stuff. I also read a lot of stuff on Venture Capital when I was young, same with Wall Street.
I was wondering, what should I do to refocus my career trajectory for the moment ?
How was your course selection? did you take any CS or quant-heavy courses? On the first look, VC seems like a long shot due to their affinity for tech background
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