6/5/12

Hey everyone,

I've been reading this forum for a few days off and on while at work and think it's a tremendous wealth of knowledge. It's great to see that people actually working in the industry go on here and offer up their real world experience.

I am absolutely dead set on working at a hedge fund within the next 3 to 4 years.. and I know the best way to achieve something is to a) create a plan, b) write the plan down and be mindful of it every day, and c) diligently stick to the plan without exception

I am here to get help in developing my plan... but first you must know my background, which is honestly very very bad. Since I have absolutely zero pedigree on paper,I have a huge uphill battle and I need quality advice on how to reach my goal as efficiently as possible. I truly feel as if I have no time to waste.

So here's my background (sorry for it being long):

I grew up in a rough neighborhood in Los Angeles and basically none of my friends/family graduated from college much less had professional jobs. I went to a shitty state university where I started off majoring in accounting. I was also in a band early through college which was going mildly well. We had an opportunity to record an album with a high profile producer, at which point I was already doing poorly in school and figured this was a once-in-a-lifetime chance, so I just dropped school halfway through that term and moved into the dude's studio/4 story mansion.. I got straight Fs that semester. The album became something we never wanted it to be, and after lots of arguing, the band imploded and we all went our separate ways.

My separate way was to realize I was sitting on a 2.6 GPA and was probably going to end up as poor as my friends/family if I didn't get my shit together quick.

In my last two years I have managed the following:
1 - 3.7GPA in last 1.5 yrs, resulting in a 3.1 overall GPA and a 3.2 in accounting
2 - added finance as a major, 3.7GPA in that...
3 - got a corporate finance year-round internship at a F100 telecom firm (think TWC or DTV) where i work almost exclusively with the retirement plans' investments.. but kind of it's basic work (helping/liasing with PMs to put together LDI strategies, create presentations, analyze yield curves for liability purposes, put together SEC filings, prepared some reports for the CFO)
4 - landed a full-time offer in the financial services audit group at a mid-tier accounting/advisory firm; i will almost exlcusively be auditing hedge funds, FoFs, PEs and other alt asset classes, doing some GIPS compliance here and there too..
5 - graduated and passed all 4 parts of the CPA exam in 1 month and sat for CFA level 1 last week.. hopefully passed that too
6 - been volunteering at 2 organizations helping educate and mentor inner-city children for 2 reasons, a) I don't want them to go through what i did early on, and b) it'll probably help if I decide to apply to b-school

So here I stand... 7 months out of college and still working at the F100 telco firm (position got extended) while I wait for this audit job to start.

The plan:
I am THINKING I should do this... but I honestly don't know if it is the most efficient route...
1 - once at the mid-tier CPA firm, get into their transaction advisory dept. if that doesn't pan out, network and transfer to a big4 firm (i have a shit ton of friends in big4)
2 - once at the big4 firm, network and transfer to their transaction advisory dept
3 - once at big4 transactions, network like a motherfucker and get into a MM investment bank
4 - once at a MM investment bank and once I completed the CFA program, start networking and recruiting like a little bitch to land that dream job at a HF

concerns:
1 -i feel like i should just cut to the fucking chase and not 'round-about' my way into the typical path of getting into a HF (IBD -> HF) but i feel that trying to get in through the typical path will yield a higher quality and quantity of opportunities.
2 - i'm already in my mid 20s.. will I be at a disadvantage when recruiting for a HF when im 29/30?
3 - at what point will my GPA no longer be scrutinized as it has been thus far? i thought about studying towards a 700+ GMAT score and going to a top 15 school and using that to make up for the shit GPA but.. i feel like so many bschools inflate your GPA.. i can totally see a recruiter telling me "oh you have a 4.0 at Columbia.. that's great but we all know these schools inflate GPA.. so tell me what your UG GPA is" or some shit. then i'll be back at square one, but with $150K of debt. besides, without prior IBD/AM experience, will an MBA even position me for a fair shot at getting into a HF? I think not...
4 - while I'm waiting for this auditing gig to start, should I try to get a quick informal internship at a HF or boutique IBD?

Please WSO, help me sort this shit out and get on the straightest, shortest path towards a HF job. I would deeply and sincerely appreciate it.

Thank you

Comments (23)

Best Response
6/9/12

I have been successful in the hedge fund world and i didnt ever work in banking. Im just saying because I see alot of people here who have no experience in the business telling you to go work in banking...if you want to work at a hedge fund go get a job at a hedge fund dont go work in a different industry that is stupidity.

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6/5/12

breaking into hf/pe is difficult without ibd at a BB or elite boutique and top group as well that why ibd is the typical path. Though some places like citadel recruit from ug. I would go for a master's then ibd. Learn everything u can and in 2 years move to hf. If not just network and get contacts. It may be possible to get out of undergrad but hard even for ivy kids.

"Solace in Revenge"

6/5/12

You could also just do an MSF/MFE -> IBD -> PE/HF and save yourself a lot of pointless work.

Get busy living

6/5/12

thanks for the quick tips... is it hard to break into any HF without BB experience? or just the top ones? also, did you guys have a chance to read my concern with leveraging myself so much by going to bschool? I think I can get into a top 15 bschool due to my strong upward trend, designations and extracurriculars, but once i'm there, are all the BB firms going to shut me out due to my low UG overall GPA? or will I actually have a good shot? it would be wise to network my way into transaction advisory before I start bschool right? or at least get some pre-bschool internship at a boutique IB firm?

6/5/12

When you network learn how to write consicely. Professionals don't have a lot of time... get to the point. Given your style I think its a sound advice.

6/5/12

your shortest path would be to start your own

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6/5/12

MSF -> IBD -> HF

Edit: What UFOinsider said

6/5/12

Thanks for the advice guys. Bollinger - I know how to write concisely and will do so if my question requires a simple and swift response. Due to the nature of my question, a more detailed and elaborate description of my situation should illicit a well thought out, quality response. Context is very important; I don't necessarily believe it's efficient to be concise all the time.

If I do go MBA/MSF, What can I do NOW to get into a boutique IB so that when I am in a Master's program, I head into BB recruiting with some practical experience? Is transaction advisory viable/respected? Is there a faster route?

I think if I bust my ass like I have been, I can get in interview situations with Deloitte or EY TAS within the next 2yrs... but will I have wasted my time? Will they still care about my low GPA or will they more heavily weigh my work-related accomplishments?

And again, is BB experience required only at the top HFs? Or would the middle-market $200-600M AUM fund also 'REQUIRE' BB or elite boutique IBD experience to actually consider me?

6/6/12

I see a lot of similarities in my own story to yours, and am currently in a lull, so here's my advice (coming from the other side, seven years later).

I think you're kind of approaching this the wrong way, but I can't blame you since I thought the same way. Every ambitious kid at a big4 is trying to get in to the transactions group, but you're not even at a big4 in audit yet. Not to say that you couldn't do this, but I think it would take a lot longer than you think. I think the MBA is a quicker route to your goals, and you probably could craft a good story to get in to a good program. That said, you need to get a few years of solid work experience to get in, and some regional CPA firm is probably not it.

Personally, I think you need to more deeply examine why you want to work at a HF, is it because you love the market/stocks and want to manage money? (this is a good answer). Or is it because smart people do it, sounds cool, and/or makes a lot of money? If that's the case, you can do a lot of interesting things in business that make a lot of money without necessarily getting into a HF, so I would keep the path to those kinds of opportunities open as well and again shoot for the MBA, and then maybe do IB which will keep a lot of doors open. Or through the process of the MBA, you may know you want to be in the markets and decide that sell-side research is a better entry path for you, or you might get lucky and get to the buy-side out of an MBA program. The point is, a good MBA program will give you optionality and a decent entry point which is more valuable than you think because your interests and opportunities in the future are more unpredictable than you're probably thinking.

However, if you really do eat/breath stocks, then I think you take immediate action instead of planning several years out. You keep the MBA option out there, but in the meantime you do the CFA program, network with people in the business, manage your PA, read as many investment books, market commentaries, stock pitches, blogs, etc. as you can. Then craft a good pitch to pound the pavement with, i.e. network, network, network to get in front of any asset mgr, wealth mgr, mutual fund, or hedge fund you can with your pitches. All of this will show your passion for the business, which is key, and hopefully your pitch and interview will display your intelligence/acumen. It's a trial/error process, but you will improve and ultimately someone will take a flier on you. Once you're in the investment business, it's a clearer path and up to you to decide how to move around in the industry (even going back for MBA) and to find a spot that helps you achieve your goals.

6/7/12

IBPEHFVC - Thanks for a quality response. I believe I want to work at a HF... I love following the markets, I love managing money, and even more, I love managing risk. I found the CFA curriculum much more interesting than the CPA stuff. I know I need to network more to find out what it's like to actually work at a HF to see if I like the environment, but my gut tells me I'll love it.

I'm not particularly interested in IBD although M&A and IPO related transactions do interest me, and I think it sounds prestigious (even though it may not be). I am open to it and intrigued by it to a certain extent, but my heart is with equities/fixed income.

One more question on the following statement:

IBPEHFVC:

I think the MBA is a quicker route to your goals, and you probably could craft a good story to get in to a good program. That said, you need to get a few years of solid work experience to get in, and some regional CPA firm is probably not it.

I am with you on this... but what IS solid work experience? Should I do 1yr at this firm, 1yr in big4 audit, and 1yr big4 transactions? or 1yr at this firm and network like a mofo to get into a boutique IBD or small shop HF? Keep in mind this would all have to occur within the next 3 years before I go for the MBA. I honestly don't think boutique IBs or small shop HFs will currently even consider me with a 3.1 from a state school and no professional services exp, even with the strong up-trend in grades and some CFA exams passed.. but maybe I'm overestimating them. I know accounting firms are dumb enough to give me a shot once I'm in the audit practice and have proven myself internally.. so I was thinking this would be the easier route, although I haven't yet tried to network with boutique IBs. What's more respected to a HF or even a BB firm? big4 transactions exp or boutique IB exp? Also, I am not sure if you read it, but my firm also has a pretty decent transactions dept.. i don't know how what kind/size deals they (or the big4 firms, for that matter) do, though.

Also, you say your coming from a similar background as me. If you don't mind me asking, what have you been able to accomplish thus far?

6/7/12

your proposed plan makes sense but it's tough. To get into any reputable hf, you need to be from the top groups, period. Being in a MM will not get you interviews at all through just headhunters

your best choice is to go to grad school and do another year of recruiting and HOPE you end up with something in ER, AM, or IBD. Those 3 routes will lead you to HF.

Alternatively, you can network now to get into any of the positions mentioned above, but it's unlikely due to the current market now. So many bankers and desk guys are being laid off.

6/8/12

You really have no business or investment experience at this point. So, if you're hellbent on the investment business, then no use in wasting time w/ an MBA unless you haven't gotten anywhere 4 years hence. I think I outlined a strategy that I would take for that route...which is to learn and get into that business as fast and early as you can. Also, you don't need to be at a "reputable hedge fund", whatever that means, to have a fulfilling and rewarding career as an investor. For investing, it will always be better to have investment (or at least front-office finance) experience than accounting or other experience, so I wouldn't focus on working your way into some big4 transactions group. However, working your way up in accounting, and in transactions, or maybe going into industry, whatever the best opportunities as they present themselves are, wouldn't be bad for an MBA. It still won't be easy to get directly into the investment business from there, especially as you could have other good opportunities like IB or whatever to choose from which might change your perspective.

My background isn't exactly the same as yours, I had a mid-3 gpa from a lower/semi-target type school, but I started in big4 and was late to the game in determining what I wanted to do once I started full-time because I spent time in college focused on music and girls. After I started in big4, I immediately was looking for any finance/investment job I could find, with my target being IB, and lucked out w/ a small buy-side start-up. Spent a few years there, left for an MBA, and have since then worked or interned at a large long-only, a boutique long-only, and a medium-sized equity L/S hedge fund. Along the way and while I still had the time/energy I made sure to knock out the CPA and CFA. I will say that I have gotten pretty lucky at many points along the way, however, I have also put in considerable effort in managing my career, whether it's networking, exams, continuously interviewing, etc. I think you can make your own luck to some degree, which is why I suggest being proactive as soon as you know exactly what you want to do. I've seen plenty of success stories just at the few places I've worked, e.g. a PM managing tens of billions who started out in accounts payable, and a sr analyst who started in mailroom. You can make it happen.

In reply to Bondarb
6/10/12
Bondarb:

I have been successful in the hedge fund world and i didnt ever work in banking. Im just saying because I see alot of people here who have no experience in the business telling you to go work in banking...if you want to work at a hedge fund go get a job at a hedge fund dont go work in a different industry that is stupidity.

I wholeheartedly agree.

In reply to IBPEHFVC
6/11/12
IBPEHFVC:

Personally, I think you need to more deeply examine why you want to work at a HF, is it because you love the market/stocks and want to manage money? (this is a good answer). Or is it because smart people do it, sounds cool, and/or makes a lot of money? If that's the case, you can do a lot of interesting things in business that make a lot of money without necessarily getting into a HF, so I would keep the path to those kinds of opportunities open as well and again shoot for the MBA, and then maybe do IB which will keep a lot of doors open. Or through the process of the MBA, you may know you want to be in the markets and decide that sell-side research is a better entry path for you, or you might get lucky and get to the buy-side out of an MBA program. The point is, a good MBA program will give you optionality and a decent entry point which is more valuable than you think because your interests and opportunities in the future are more unpredictable than you're probably thinking.

I'm curious why IB is the most common path to HF. Is it just the connections you make? I understand equity research type positions or S&T being good foundations for hedge funds. Are there specific jobs in Investment Banking that are better than others? It just seems strange to me that M&A or the IPO process would teach that much that would be helpful transitioning to a HF.

In reply to Bondarb
6/11/12
Bondarb:

I have been successful in the hedge fund world and i didnt ever work in banking. Im just saying because I see alot of people here who have no experience in the business telling you to go work in banking...if you want to work at a hedge fund go get a job at a hedge fund dont go work in a different industry that is stupidity.

+1.

If you want to work for a hedge fund, work your way into a hedge fund.

Unless you have an immediate into a banking position like ER of course.

If the CFA appeals to you, go for it. I see multitudes of PMs & Research Analysts in HFs with CFAs. Leverage the fact that you are studying for it now as a possible 'in' to a fund. If you contact enough HFs (there are thousands in NYC alone), you're bound to nibble on something.

6/12/12

The most important thing is to meet people, network (which you seem to understand), and get rid of the notion that your background is "horrible." For one: it's not that horrible (my background is worse), and two: thinking that could put you in a negative mindset and may discourage you.

And yes, try to get an internship even if it's just short term and/or informal. You will learn something, and it will allow you to network. I'm doing this right now. Last week I knew zero people working at a hedge fund, now through an unpaid internship doing very basic admin/compliance work I know a handful of analysts and 3 different fund managers. I'm obviously not going to get hired as an analyst at the end of the summer, but it moves me closer to my goal and will open up more opportunities. Good luck.

"Hope for the best. Prepare for the worst. Capitalize on what comes."

6/12/12

op, in your shoes id say fk the traditional path, you will waste so many years just catching up with ppl who started out in ibd that its not worth it.

Just network hard, you can get into some hf that way, won't be the biggest or most reputable shop but its a start.

if you want to work at a hf, go work at a hf, dont spend the next 6 years prepping for it.

The whole ibd--> hf thing makes sense if you can start out in ibd straight from school because it costs only 2 years and gets u into a good fund, but spending 6 years (lets say you work for 2, do 2 years b school 2 years banking) is just madness

In reply to leveredarb
6/13/12
leveredarb:

get into some hf that way, won't be the biggest or most reputable shop but its a start.

Will this really work? My entire focus has been on building a career on the sell side, for whatever reason, so this is news to me. Does the same networking approach work for buyside as for sell side?

Get busy living

6/13/12

i personally know a couple of guys that networked their way into hf straight out of university (mainly small, not known shops). This is europe tough, so that may be different.

M&I has a story of some guy going from unknown banking boutique to some small distressed hf through networking, that might offer better overview of us.

In reply to leveredarb
6/13/12
leveredarb:

The whole ibd--> hf thing makes sense if you can start out in ibd straight from school because it costs only 2 years and gets u into a good fund, but spending 6 years (lets say you work for 2, do 2 years b school 2 years banking) is just madness

I agree 110% with this. I also dont think accounting is the best root however, understanding accounting treatments is beneficial in understanding the investing language. I think that if you want to make it into a hedge fund, try and start in the investment industry whether it is a equities research hub or analyst role. I think you need to be provided the platform where you can learn from someone senior and be afforded the opportunities to go to many events to network. I also believe talking to as many people as possible that you meet that are in finance and networking with them for the long term goal of becoming a PM. This is because you will not only build life long friendships but you never know what positions people will be in 10-20 years time. I think networking is by far the easiest way in. I think CFA + MBA is important also and those are my short term goals over the next 6 years before I tackle the next step. Btw I work at an equities research firm doing basic analysis on stocks but its a start and im exposed to people who have been in the industry for years. To have the opinion that you need an MBB, Big 4 corporate finance, or BB on your resume is a complete fallacy. Networking is the easiest and best way to get in. How to network? throw yourself out there and speak to people and learn from others even if you think they dont have a clue because you will learn even more than you think.

In reply to UFOinsider
6/19/12
UFOinsider:
leveredarb:

get into some hf that way, won't be the biggest or most reputable shop but its a start.

Will this really work? My entire focus has been on building a career on the sell side, for whatever reason, so this is news to me. Does the same networking approach work for buyside as for sell side?

Yup you can network but make sure you have the passion. As everyone else said you will most likely be looking to network with small funds.

9/15/12

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9/18/12

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