Sales and Trading to Hedge Fund/ AM

I just accepted an analyst position for S&T at a BB with desk placement to come a little while after starting. In the future (a few years down the line) I would like to work on the buy side and be closer to the investment decision. My question is three fold:

  1. What would be better for someone who wants to be an analyst/PM in the future, sales or trading?
  2. What specific product desks would be most beneficial in helping me make the move?
  3. I heard structuring on the sell side is good experience for someone who wants to move to the buy side, what desks have structurers?

Thanks.

 

Congrats on the new role. Is it a rotational program? If so, you may get an idea of what the answers to your questions are as you begin working in the various areas that they place you in. I moved from sell-side risk management to a hedge fund so my experience is a little different, however: 1. Trading, but sales could help you make the connections needed to lateral (depending on the desk). 2. Depends on what kind of background you have, as well as the type of hedge fund you'd like to work in. 3. This may depend on the bank but I've noticed an increasing number of "structurers" appearing in the equity derivatives space lately.

Then out spake brave Horatius, The Captain of the Gate: "To every man upon this earth, death cometh soon or late. And how can man die better than facing fearful odds, For the ashes of his fathers, and the temples of his Gods."
 
runthetown:
I guess the real question is, how bad of a move is this?

Will it help in my finance career path if my eventual goal is to become a PM type role at some fund?

IBD would be better

 

my bank won't even recruit mba's for trading desks anymore. (although i'm sure there are exceptions to this rule) they exclusively focus on undergrads and msf/doctoral grads. traders don't require advanced degrees, except for the quants and those guys need phds or msfs.

trading has traditionally been more of a boiler room type atmosphere, with balls of steel and the ability to take huge risk being prime qualities. the typical trader does not need to know how to write a business plan, and he does not benefit from having worked in a different industry in the past. in trading, you either have it or you don't.

very different than banking or research. traders also seem to get typecast in my opinion. i'm sure lots of them end up at funds, although i don't know enough to provide specific numbers or %s.

 

thanks. One follow up, what qualities do bankers get out of their two year analyst experience that prepares them for work at hedge funds? I understand completely why working in M&A would definitely qualify one for PE, but why do former bankers seem cookie cut for hedge funds, atleast on this forum it seems to be the case.

 

If you wanna move to the buyside, you need to move to a FICC trading desk from which you could get buyside opps into macro funds further down the line, or into IBD/Research. It will be very difficult to move from EM Equities trading on the sellside to a HF.

The accounting qualifications won't help at all.

 
Awon Eleyi Awon Eleyi Won Bad Gan:
If you wanna move to the buyside, you need to move to a FICC trading desk from which you could get buyside opps into macro funds further down the line, or into IBD/Research. It will be very difficult to move from EM Equities trading on the sellside to a HF.

The accounting qualifications won't help at all.

Wow, this is horrible advice....except for the accounting part, accounting would be of zero use.

Have you never heard of an Emerging Markets hedge fund? There are hedge funds that cover every product and every region. Hell, if you make money, a large fund (probably macro, but doesn't need to be) will just hire you to trade international equities. The large macro funds trade every product under the sun--mortgages, loans, distressed debt---they don't just "take macro views on commodities and FX" like so many people on this site seem to think.

You want to know how to move to a HF---make money. You want to do fundamental analysis--what is stopping you from doing that at the bank while you manage your book (we are talking 2-3 years from now). Once your at the bank you can move into research if you really want to, but you are better off just staying on as a trader and become a trader with a more fundamental/ medium to long term view . If you have read Inside the House of Money or any Market Wizards book you would know that all different trading and investment styles can make money.

If you do well at your job, you will find that all doors are open to you.

"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."
 

I see your point that others skills will be more developed than mine but using that as an excuse not to try and narrow that gap doesn't seem to make too much sense?

But if, as you say, accounting qualifications are not the most useful thing to have, what can I do, outside of the workplace (for at least the first year of my career, after which I will likely aim to move into a more valuation oriented role)...? Read a bunch of 10-Ks a la Buffet? Read a bunch of books on valuation/financial modeling/security analysis? Try and, as Gekko suggested, make the way I trade more fundamental based despite the ultra-short timeframes and limits for losses that one is subject to when trading at a bank? Take on of these 'wall street financial modeling courses', although I am extremely skeptical about this last one.

Again, any advice appreciated.

 

Thanks again for the advice, I have absolutely no problem dropping 'back' a year to apply to a different / the same firm but into the right role for me and some experience of trading certainly can't be a negative.

Having spent time on the desk I'll be joining I have to agree that there is no way their minds are wired in such a way as to trade from a fundamental perspective so I doubt arriving and letting them all know that I didn't like the way they did things and thought I had a better way would go down too well.

Wondering, what's your view on Research vs. IBD? Have friends who have gone through the IBD route and come out with the job they want in a HF but have told me to try and avoid banking if I possible can, at the same time, I know what most of the buyside thinks of sell side research...?

Will definitely get on top of the accounting/valuation/modelling technicals as soon as I get some spare time over the summer

Thanks again

 

Trading can lead to a global macro or commodities hedge fund, or to execution only trading at an equity/debt hedge fund.

Most HFs that require fundamental valuation of securities (i.e. focus on equity and debt), hire analysts (who later become PMs) out of investment banking.

 

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