Possible to transition from attorney to hedge fund?
Hey everyone, I'm brand new here so hopefully this hasn't been covered before. I've spent the better part of a decade practicing M&A law. I recently moved to Boston and am looking for work/considering options. I've been trading forever and my portfolio is about 60% currencies, 40% equities/options. I have no educational background in finance, but obviously am familiar with a fair amount from my job and trading activities.
My question is, given my background, is it possible for me to transition careers to work for a hedge fund? If so, what type of position should I apply for/what's the best approach to market myself?
Thanks.
I've seen this a lot at 1 type of firm in particular, which is distressed credit funds and activist funds where a lot of alpha comes from suing or threatening to sue. However, they're usually hiring lit due to the above.
That's funny, I was literally reading up on Blue Mountain Capital this morning. Andrew Feldstein and Stephen Siderow are both Harvard JD's. Guess that's a yes?
Guessing: come in to the fund for a legal role (compliance) and transition to the investment team.
New Generation Advisors.
No in a likelihood sense. You can maybe be inside council at a larger shop.
from a research perspective, depends on the strategy. of course not for long/short or global macro, but certainly possible for very niche strategies such as distressed debt. plenty of legal need...plenty.
Gotcha - thanks for the input. Looks like my dream of being handed a Bloomberg and a pile of cash to play with is unlikely to happen lol.
Look into event driven trading firms. Particularly those that specialize in "risk Arbitrage". Basically you speculate on whether or not m&a goes through or not. Given your m&a background I'm sure you have an expertise in understanding anti trust issues , and can pick up the rest on the job. Banks have units that do this too for clients
Second this, I think this is one of the few strategies where your skills would be directly transferable.
Maybe you'd have an edge at a distressed shop? Still a student so don't take my word for it but I know a legal background is valued at many of these funds
Clint Carlson started his career as a lawyer; now he has a $10bn multi-strategy fund. Merger arbitrage is the most logical move for you (also what Carlson did). With the pick-up in deal activity, now's not a terrible time to try to go for it. Non-M&A event driven investing is in the dumps right now, but analyzing corporate actions is easier for someone with a legal background.
Firms are desperate for compliance lawyers with all the new regulations, but I've never heard of someone transitioning from compliance to investment. In fact, its likely far easier to move from M&A law to investing than it is to move from compliance to investing. I would not recommend moving into compliance unless you are sure that you want to do compliance.
Thanks everyone. The risk arbitrage concept is intriguing. I've got a couple of in-house counsel interviews lined up so I'll see how those pan out while I consider my options.
I apologize in advance if this sounds ridiculous, but what about having a conventional legal job and then creating a hedge fund on the side which I could hopefully grow organically? The "problem" I have is that several acquaintances have asked me to invest on their behalf. While I consider that a compliment, it's not worth the headache as I'd end up paying taxes on their gains and it'd be a shit show if I ever lost money. Not sure if it'd be less of a headache to formalize, but I'm sure you guys can weigh in on that lol.
I would think it is nearly impossible to manage and grow a hedge fund on the side while dealing with a full time legal job... as a lawyer you are better positioned to understand the legal requirements of managing other people's money than I am, and my head hurts just thinking about the paperwork you'd be dealing with. I would say if you want to start a hedge fund, go work for a hedge fund first to see how they operate from the inside, then start your own once you are ready to fully commit to it and have partners lined up to complement your legal skillset.
I spent about 2 years practicing corporate and financial services law. Similar background to yours in terms of trading - I have been managing a portfolio for about 10 years now (maibly equities though) I guess it took me about 7-8 months to find a role as an analyst within the Asset Management space so it could definitely happen but your legal experience will be largely discredited by most. There are some of us out here though so I'd be happy to help, if possible.
I'm at a global L/S value fund (mostly equities but we dabble in credit as well). One of our junior analysts was an M&A lawyer for 3 or 4 years before moving into the hedge fund space so it's certainly possible. However he did an MBA between being a lawyer and coming to work for us so it is hard to say if he could have made the transition without that and just his legal background. You would be surprised where legal expertise can come in helpful even in more mundane L/S strategies.
I would argue against the "take a compliance job then lateral" route. There is a pretty large divide between investing roles and supporting roles at most funds. None of our back office personnel are ever included in meetings where investments are discussed or research reviewed so it's not like you have the opportunity to impress the PM with your thoughts/knowledge. I think you will find it very difficult to transition from general counsel to an investment role.
There are certain funds that hire lawyers specifically, largely are focused on distressed situations and are highly litigious. Aurelius is a good example of a large established one, but there are several others that are smaller and up and coming (e.g. Mudrick has had a great year, Marble Ridge just launched). You can definitely break in but need to start learning actual fundamental investing. The fact you've had a PA is modestly relevant, but in reality I don't think anyone really cares
What does GC do at distressed debt fund? Other HF options for big law bk atty? (Originally Posted: 03/07/2014)
Anyone from a distressed investing fund have some insight on the role of general counsel? I'm currently working at a top shelf bankruptcy group in NYC and may have an offer to transition to an assistant GC role at a fund. Problem is, I don't really know what they do or what sort of growth potential there is in the role. So I'm not sure how to think about the option. Do attorneys get involved in the investing side in funds that are focusing on bankruptcy situations? Can they share in a significant way in the upside of the firm? Or is this the equivalent of "settling down"? Are there other options in HFs for someone with a good bk law resume? Any thoughts are appreciated.
Just spoke with a MD at the a large SSG/distressed fund. His background is M&A law. He said as you spend more time at the firm the lawyers and finance guys roles begin to blend together. His title was never general counsel though.
Any other input from anyone else? Thanks!
That's interesting to hear, thanks. Anyone from a smaller distressed fund have an idea what their GC/in house attorneys do?
You'll likely be too swamped to get involved on the investing side - especially if it's at a very large fund. I would ask the fund exactly what they expect from you. As for sharing in the upside, that depends on the negotiation on your package - independent of your role description
Anyone know anything about DB's distressed products group or distressed/SSG at other banks?
1L law student looking for advice for preparing HF interview (Originally Posted: 01/14/2018)
Hello everyone:
I am a 1L law student who just realized lawyer career is not for me after 1st semester. I am interested in both finance and management consulting. I haven't decided to drop out from law school because my parents funded me through college to law school so I feel obligated to finish my JD (it is an Asian parenting thing). I applied few SA in management consulting firms and also a bunch of finance summer jobs. I cold emailed a small HF and they replied. I am really want to take this opportunity. I am an Econ and International Studies major in college and I do not have any quant/modeling skills. However, the HF does not use common strategies (so they probably don't expect any quant/modeling skills from me). I believe they probably expect me to do legal due diligence work or equity research if they take me as an intern. The boss scheduled the phone call on mid-late February. I have done many hours of research about this fund and my potential boss.
What should I do to increase my chance of getting this intern at this point?
Also, I would be appreciated to any advice about how to break into finance/consulting as a 1L who already knows that he does not want to be an attorney.
Thank you
PM me.
Work for a fund started by a former lawyer.
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