Hedge Fund Business Development/Investor Relations

spark:

Very curious at this. Could any of you explain a bit more details on this? What are some example groups for job application in IR?

A lot of HF IR individuals come from Prime Brokerage/Cap Intro Groups @ BBs.

What other 'details' would you like?

def not front office

Working in IR is not a front office position. A jr. position in IR will mostly involve coordinating meetings with potential and existing investors (but not likely doing much of the talking or even participating in certain cases), updating marketing materials (i.e. current returns, changes to the team, AUM figures, etc.) and handling follow up requests from meetings. An IR job would teach you how to interact with potential investors and may expose you to the investment side of the business. However, it is difficult to jump from IR to an investment role (this of course will depend on the group you join).

Depending on the type of shop you land at and the strength of others on the IR team, you may or may not learn all that much. In my experience the vast majority of IR folks at HF's don't really grasp all that much of what is going on in the portfolio itself but are good/decent at handling data requests and setting up meetings that involve investment personnel to discuss what's going on in the portfolio. In terms of comp, you need to remember this is marketing/client service job (i.e. not super high paying). The head of IR will probably make decent (but not exceptional, unless he or she drives big investor $$ into the fund) and the others will probably do ok but no where near what you could make as an investment analyst or PM.

Hf_guy, thanks for your post, very helpful. I was considering pursuing this position as a way to eventually move to research, but I am learning that it's not a likely transition. All else being equal, would you rather be in HF ops, or IR?

Thanks for your comments. The only reason I thought Ops would be better is for the product knowledge you get. I suppose it would depend on the HF, but I am in final rounds for an ops job on the trading desk with some very bright guys.

Thanks again.

http://dealbreaker.com/2009/11/hedge-fund-investor-relations-1.php

I had a feeling this would be the first thing posted. So am I to understand that it's generally just a job for unusually dim, mediocrely attractive blond women?

How many blonds does it take to change a light bulb?

At the junior levels, and at most hedge funds, yes, that's really all it is.

At senior levels, and especially in PE, it is more interesting/respected. For instance, David Rubenstein is basically an investor relations officer. The thing is, he had really good connections before he even came in to PE, and those have only gotten better with time.

I would hate to beat a dead horse, but can anyone give any more information that the above?

Would be grateful if anyone could share info, thanks!

raoul duke:

I've seen a lot of posts about IB and S&T careers, but only cursory coverage of Hedge Funds on WSO. That having been said, can anyone give me some color on the Hedge Fund / Hedge Fund of Funds investor relations career path specifically as it relates to the following:

1) Exit ops (if any, besides more sales) 2) B-School Apps; how does it look on an app if you continue being promoted in an IR role at a top HF or HFoF? 3) What does the salary structure look like at entry / more senior levels? 4) What sort of experience is typically required to be considered, if any? 5) What is the work like at junior levels? How does this transition to more senior level work? 6) Is the experience you'll gain valuable, or is it just collecting a check until Grad School?

Really, any information any of you can give on this front would be great. Thanks in advance.

Hate to say it, but most HFs want attractive women in those "investor relations roles". If you're interested in this sort of work, what you may have to steer yourself to are the "business development" roles.

any info on salary?

really interested in this, too.

Doesn't require much to get in. Gives you the path of sales/fund-raising for the fund. Can really move to anything internally (though most places want a commitment)

could you expand on that?

I had an initial phone screen for a large FoF in Stamford (10bln AUM, I believe). Anyways, they really were looking for someone without much "analyst" experience. They were largely concerned b.c the role was open due to the IR person moving on to research.

All in all, solid role if that's what you're into. If you found this to be something you enjoyed long term you'd find there is a lot of potential.

I'd take everything you see on this site with a grain of salt. Let me know if I can help further. Best of luck.

n/m maybe a case study?

gratz on job btw :)

Squirtlez "What do you mean in your comments did not quite understand: will this add value along with my CFA level 1 and my series exam I will be taking..

I hope you didn't just copy/paste that post description. Not exactly the best impression if someone your new company sees that post.

40k?

IR sucks

http://www.alphamagazinerankings.com/compensation/compensation_noninves…

Honestly what are you "worth" to the firm? Do you have connections/relationships with LPs? Have you raised investor money? If you're a junior person who basically just processes reports and marketing materials and takes phone calls, the numbers linked seem high to me.

We have an IR person who is pretty experienced and gets a salary (which I assume to be pretty moderate but I don't know for sure) and a commission on new business he brings in.

Also note the linked numbers are as of 2006.

I wouldn't bank on going from IR to investment professional. The type of work depends on the fund but is usually a lot of marketing-related stuff (creating charts/graphs about fund performance, customizing slide decks, etc) and/or client schmoozing (especially if you've got a big rolodex/are hot/an ex-athlete).

Not saying it can't be done but I have never seen/heard of it. Top 7 MBA will give you a better shot, depending on what kind of middle-office role you have now.

I guess in terms of modeling, transactions, etc. it would be somewhat of a less intensive role than what I am in now (risk management). It seems similar to what an IR role in a F500 would be like. The potential upside is client interaction (with LPs I'm assuming) since I have basically no client interaction in what I'm in now.

What are the type of exit ops for IR? It doesn't look like FO type roles to me.

To me its seems like another ops job and is not worth avoiding business school for. Work on your CFA if you are serious about being at a hedge fund/AM or even equity research in a front office capacity.

In my gut I had that same feeling (to still go to bschool this fall), unless an amazing opportunity came by. Sounds like this isn't one of those, nor would I be able to get one with my work experience now I believe.

And also wondering how it looks to investors if there is no investor relations staff - does it hurt credibility? Again, if so, then at what size? Thanks.

I see at least three criteria:

1) Large enough to warrant outside queries (i.e. visibility/importance); 2) Large enough to receive queries in amounts the Principal(s) cannot handle without a dedicated staff member; 3) Enough excess cash generation to warrant creating a permanent position that generates no revenue and never will

My guess- $500M, at least. You need to be a significant fund and more than self-sustaining- but the true determining factor is really the number of investors you have. For example, if you are running a $1B fund with 10 investors, there is no reason to have an IR person really, because the Manager should be able to attend to all of the questions his Partners may have. If you are running a $500M fund with 2,000 investors (at $250,000 each), then you really probably should have an IR staff. This is a judgement call to a certain extent. And, no, I don't believe not having designated Investors Relations personnel is in any way frowned upon. Most start-up funds are strapped for cash.

IR is absolutely a revenue generating role, and they get paid as such.

Thanks for your thoughts, rls and dabanobo.

Dabanobo, when you say IR is a revenue generating role, are thinking of compensation being tied to fund raising (bringing in new clients, increasing stake of existing clients)?

If so, what if, instead, the IR pro is not expected to raise funds, but only manage existing client relationships, fund communications, etc.? Would you still describe this as revenue-generating? How so? And how would compensation be structured in this scenario?

I work at a distressed debt fund with apx 150 clients. we added a client services person (distinct from fund raising/ir/marketing) to maintain existing client documentation at 250AUM. This position monitors the work our administrator performs concerning clients and is involved deeply with our annual audits and internal controls.

we decided early on that our marketers should maintaining their existing clients on their own. our thought process behind this was that clients would not appreciate being pushed off to a new relationship manager.

Personally I think it's never too soon to hire an IR person.

Because let's be honest.. the main role of an IR individual is to raise assets.

And out of all the problems hedge funds are having right now, what tops the list? Raising Assets.

There are plenty of IR people out there who are out of work, looking for an opportunity even if it pays only based on performance/commission.

To me, it's a no brainer.

I've seen them at $200mm L/S firms.

i interned in this position at a top PE shop and i can tell you that the people in IR work extremely hard, especially right before fundraising. if the firm has multiple funds (i.e. for PE, traditional buyout fund, infrastructure fund, RE fund, mezzanine fund, credit fund, growth fund, Asia/MENA/LATAM fund, etc.) you will be working around the clock to secure commitments from investors. there is little client interaction at the junior level as the senior guys are the ones managing the relationships with the big institutional investors. at the post-banking level, a lot of the work is essentially fund marketing and making presentations so if you didn't enjoy this aspect of banking, you won't enjoy it in IR.

Is this still true at shops where they break out the investor relations from the business development role? I'd assume the business development role would be mainly pitching to new clients with a decent amount of getting out on the road. I guess the experience at HF's is far less standardized than that of banking analysts, so perhaps the role varies a bit fund to fund. Can anyone speak to the comp question? Is it a pay cut?

bump

Keen for info on this too

my guess is they take all the angry client calls so the PM can focus on his work.

you do fundraising. i assume modelling portfolio returns and performance and maintaining relationship with LPs such as pension funds, endowment funds, etc.