Interview question: Why is this HF better than others?

Hi

I have an interview coming, and this question will probably be asked.

Obviously the answer depends on the HF, but what are the big differentiation factors of a HF?

Thanks

 
Best Response

in order of importance

  1. prestige
  2. quality of shoes worn by analysts (are they cole haan or is everyone rocking gucci & ferragamo)
  3. ratio of hermes ties to southern accents (ideally you want this to be unsolvable, because you can't divide by zero)
  4. location of investor day/shareholder meeting (are they renting an island in seychelles or doing it at the lame ass waldorf)
  5. founders' pedigree (are we talking HBS, GS TMT, tiger cub, etc. or did this shmuck sneak in from a MM trading desk)
  6. strategy (how esoteric is it? can it only be explained to people w/PhD's in applied mathematics from MIT or will dumbass calpers CIOs understand it? hint: you want the former, not the latter)
  7. type of stone in lobby (no bullshit hardwood or standard grade marble, you want repurposed slab from the parthenon) /////
  8. absolute returns
 
thebrofessor:

in order of importance

1. prestige
2. quality of shoes worn by analysts (are they cole haan or is everyone rocking gucci & ferragamo)
3. ratio of hermes ties to southern accents (ideally you want this to be unsolvable, because you can't divide by zero)
4. location of investor day/shareholder meeting (are they renting an island in seychelles or doing it at the lame ass waldorf)
5. founders' pedigree (are we talking HBS, GS TMT, tiger cub, etc. or did this shmuck sneak in from a MM trading desk)
6. strategy (how esoteric is it? can it only be explained to people w/PhD's in applied mathematics from MIT or will dumbass calpers CIOs understand it? hint: you want the former, not the latter)
7. type of stone in lobby (no bullshit hardwood or standard grade marble, you want repurposed slab from the parthenon)
/////
1834. absolute returns

These kids nowadays... It's not all about absolute returns you know.

 
thebrofessor:

in order of importance

1. prestige
2. quality of shoes worn by analysts (are they cole haan or is everyone rocking gucci & ferragamo)
3. ratio of hermes ties to southern accents (ideally you want this to be unsolvable, because you can't divide by zero)
4. location of investor day/shareholder meeting (are they renting an island in seychelles or doing it at the lame ass waldorf)
5. founders' pedigree (are we talking HBS, GS TMT, tiger cub, etc. or did this shmuck sneak in from a MM trading desk)
6. strategy (how esoteric is it? can it only be explained to people w/PhD's in applied mathematics from MIT or will dumbass calpers CIOs understand it? hint: you want the former, not the latter)
7. type of stone in lobby (no bullshit hardwood or standard grade marble, you want repurposed slab from the parthenon)
/////
1834. absolute returns

These kids nowadays... It's not all about absolute returns you know.

 
thebrofessor:

in order of importance

1. prestige
2. quality of shoes worn by analysts (are they cole haan or is everyone rocking gucci & ferragamo)
3. ratio of hermes ties to southern accents (ideally you want this to be unsolvable, because you can't divide by zero)
4. location of investor day/shareholder meeting (are they renting an island in seychelles or doing it at the lame ass waldorf)
5. founders' pedigree (are we talking HBS, GS TMT, tiger cub, etc. or did this shmuck sneak in from a MM trading desk)
6. strategy (how esoteric is it? can it only be explained to people w/PhD's in applied mathematics from MIT or will dumbass calpers CIOs understand it? hint: you want the former, not the latter)
7. type of stone in lobby (no bullshit hardwood or standard grade marble, you want repurposed slab from the parthenon)
/////
1834. absolute returns

quoted in case anyone passes this up.

lulz.

 

I'm assuming you're interviewing for a junior role.

A lot of hedge funds tend to keep it all private and dislike outsiders knowing more about the way the firm operates. Hence don't go overboard giving 10 points. Keep it simple and in my opinion focus on:

  1. Brand rep. Even if they are not that well known, if they exist for more than 10 years, there is something good about them so highlight that. Speak about both firm and professionals who run the fund your interviewing for.
  2. Growth (firm) - look at both growth due to returns and hiring of new managers. If growth is shitty and AUM has gone up only due to poaching other fund managers then be very subtle about this
  3. Find at least one unique point about this firm; this could be anything really but it should matter. For instance, I talked about top guys coming from all branded shops, a good mix - both AM's and IB's and have done well at the firm I was interviewing for. Since I interviewed for an internship I said the firm has people with an open mind (cuz they're willing to give a student a shot) so will be so much more interesting to add value here (this point in a way was BS but was well liked). The way I said this I made the guy who decided to interview me look like a celebrity (so just lil bit of necessary humour and chuckle in an interview)

I think point three is very important - it can even consist of 3-4 sub points that are not in the press etc. Also, it helps to add in a sell-side reference without dropping a name unless asked for saying the person you spoke with rated your firm and fund highly etc for XYZ reasons (XYZ is very important as it shows substance and not BS). But if numbers etc are private don't mention them as it makes sell-side guy look unprofessional and they will think of you as someone who has a big mouth.

Also remember, it's ok if you don't know fund size or other numbers and key stats. As long as you have an idea is fine. I've seen few people coming and quoting our fund size as some $200m as that's what Bloomberg shows (UCITS and shit like that) but in reality the fund size is $800m+ which was known only to investors. Now imagine how pissed the PM or analysts must be listening to someone reducing their AUM to 25%!!!!!

EDIT: just an addition, after mentioning above if you can tie in how your experiences will add value and how u fit in well will look good. Just be subtle about it. But don't make yourself look like the best candidate by being too direct, they're smart enough to figure that out.

 

(Assuming this is for a junior role)

Honesty can work pretty well as long as the guy interviewing you isn't a completely arrogant douchetard, because there's probably only so much you can actually know about the fund, so any 'unique' reasons you come up with are most likely utter bullshit.

You just reel off a few nice things that are true and commonly known (e.g. successful track record, something about their investment philosophy, background of the people, etc), then recognise that you could probably say the same about some other funds, but ultimately this is what you want to do and you think you would be a good fit.

It plays well because many HF guys love to think that they're so sincere / honest / tell-it-like-it-is, because they are soooo above the lying imbeciles on the sellside, plus it'll help you stand out from all the other guys with very generic answers.

 

1) Strategy--is it long/short fundamental? Credit? Macro?

2) Look through their 13-Fs (whalewisdom is a great resource for this) and look at their positions. What are they buying, what are they selling, etc.Have an opinion here but don't try overdue as they'll know far more about the positions than you

3) Work/Lifestyle can vary tremendously between funds--describe how your personality makes you a good fit for their firm (ie. if it's a small fund, talk about why you enjoy working with smaller teams).

If you could provide more information about the hedge fund you're interviewing at, I'm sure people could assist you with better answers.

 

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