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I feel as if you're naturally leaning to IBD. Again you can revisit HF later on in your career as a fairly common path for analysts and (sometimes) associates in IB find themselves w/ exit opps through headhunters to HF/PE. Depending how you do at the BB, you can find yourself w/ a FT offer and a great starting network upon graduation. Again though, keep in mind the second you step foot in your office at IBD many of your colleagues (other analysts) will immediately be looking for that exit opp to (usually) PE or sometimes HF.
Again, you seem like you're leaning towards IB. If you can work in New York or London for SA then I think that's the way to go. You don't have to lose your passion for investing and can definitely revisit the HF track later on.
If you care about career optionality, employment pedigree, and a built-in network, then your BB IBD role is the path to pursue.
Banking gives you the best mobility within finance. You can accept internal promotes to move up the hierarchy in banking. You can finish your analyst stint and pursue internal mobility to ER, S&T, or GCM. You can recruit for PE, GE, and VC roles. You can recruit for a range of HF strategies (basically anything except macro and quant). You can move to finance roles in industry. It also gives you mobility beyond finance. You can move to a strategy role in industry, to consulting, etc.
Banking also gives you a recognizable employer that boosts your profile. Michael Spence won his Nobel for this research on job market signalling. The bulge bracket firms are known across the world. People are stupid and often rely on the wrong things to shape their impression of you. Similar to how someone could graduate from Harvard with a 2.1 in Basket Weaving yet impress everyone at dinner parties and networking events with a casual "At Harvard I ....", being able to say you worked at a BB bank will open doors for the rest of your life. No matter what you do, your bio will say "So-and-so began his career in the x-group at Morgan Stanley." Given that you mention you're from Europe where entrepreneurship and scrappiness isn't as core a part of the national DNA as it is in America, you may want to weigh this heavily. The fact that you're choosing between the three most elite BB firms only adds to this point.
Banking does give you the valuable network you alluded to. It isn't a joke. You can pick up the phone and call people across the Street and beyond. Analysts from your firm will place at all the megafunds, a smattering of the middle market firms across geographies, some in public market roles, others to corporates, and so on and so forth. It's really cool to be able to plug something or someone into LinkedIn and see a handful of paths to your target via people you know really well from your time in the trenches together. That was one of the takeaways I value most to this day.
I am hugely risk-tolerant and a vehement proponent for pursuing your moonshot dreams. Far be it from me to encourage someone into the soulless mindsuck that banking is. However, it's clear you're pretty undecided, and it's the people who are most strongly committed who succeed the most wildly. Banking is the perfect choice for the smart but undecided person. It gives you a very solid foundational building block for your career, primarily for the three key reasons I've outlined above.
Besides, this is just the summer we're talking about, and given that BB IBD full-time recruiting essentially requires an IBD summer internship whereas full-time HF recruiting does not recruit a HF internship, you can also draw a clear conclusion from an option-pricing perspective.
Good luck either way. It's certainly a champagne problem to have.
1) What are the odds that you get a FT offer at the HF? I would probably have swung toward the HF if it was US based but coming on as the 4th guy on a 3 man team direct from undergrad sounds like a relatively difficult task.
2) Do you have any sense as to what types of investing you would be interested in? Those firms run a wide variety of strategies and even if you are passionate about investing, you might realize you actually want to do PE/VC, not HF.
The HF offer could potentially get you where you want to be sooner, but comes with a variety of risks and glass ceilings so to speak that the banking offer would not in all likelihood.
Congrats. PMed you.
HF SA vs IBD SA (Originally Posted: 08/19/2011)
Just wondering if it makes sense to work in IB the summer before senior year, or in HF, assuming you eventually want to wind up at a Fundamental L/S HF. From reading the posts on here, it doesn't seem like too many HF recruit out of college, and a summer in HF instead of IB might hurt chances with a FT offer at a good bank. IB->HF seems like the most probable path, but would taking a summer gig at a HF vs IB be worth the risk if you could get a FT offer at the hedge fund?
any ideas?
bump
HF or IB internship for an undergrad (Originally Posted: 12/14/2006)
I've been speaking with 3 HFs and am about to begin the interview process with 2 of them. I am worried though that I need to be pursuing a banking opportunity for the experience.
Which would you choose?
And why?
IB without a doubt. It will leave you with more options (banking/pe/hf/whatever, m/b/b, etc) for full-time recuiting.
Not having a banking internship is going to make the full-time search very difficult. Trust me, I went through hell to get an offer after spending a summer with a PE shop.
If you're looking to go into IB out of college, I'd definitely go for an IB summer gig.
As for why: let's put it this way. If I said I wanted IB after college, and I had the option to summer in IB or consulting, of course I'd choose IB. It will provide you with the more relevant skills.
Now, if you're not looking to work in IB later on, it's a different story.
A lot will depend on the quality/reputation of the hedge fund, and (shockingly) what you want to do over the short-medium term. We had kids do summer stints with our fund and had no problem getting full time offers at top tier banks.
I chose HF for a few reasons: 1. I didn't want to do banking- I did a fair amount of due diligence and decided banking wasn't for me. Most kids do banking for the exit (usually buyside) and I already knew I wanted to do buyside as a career. Consequently, I figure I save myself a couple years and skip the sellside stint altogether.
Work-life balance- I enjoy having a life outside of work, and being able to sleep 8 hours a night. Pay is competitive and you work half the hours.
Plenty of great exits- I easily can go back to a top school or jump to another fund.
Intellectual stimulation- I'm constantly challenged and actually enjoy my job.
Consulting/banking is the professional equivalent of treading water until you figure out what you really want to do. If you want to do buyside, then skip the banking stint. Otherwise, do banking/consulting.
generally speaking, my experience is that the hf ops out of banking are much better than they are out of undergrad. the few people i knowwho took hf jobs out of college are working at no name hedge funds which are like $500mm in Oregon. The alternative is to do 1-2 years of banking and end up at a multi-billion fund.
your call.
Top Global Macro HF or MM IB for SA (Originally Posted: 01/18/2013)
Hi guys- I have been following the site since the fall, but wanted to wait to post a thread until I actually got offers. Quick background- I am from a non-target, but strong LAC school. I am studying abroad in Italy for 3 months starting in mid-February until May. I have two offers so far, one from a top HF (similar to Moore, Tudor, etc) and one from a solid MM IB (since I leave for abroad before their super day they allowed me to do an accelerated interview process). I am also interviewing at other similar MM’s (like Jefferies, Cowen, Stifel) whose superdays, IF I get invited back, would be right before I leave. I was wondering what you guys thought would be the better option for SA. Obviously interning at the HF would look great on a resume, but I am almost 100% sure I will not get a full time offer if I intern there. Especially considering I am from a non-target, would it be safer/wiser to take the IB offer that would possibly translate into a full time offer? Thanks in advance, and please go easy on me as I’m new to all of this.
Do you want to work at a hedge fund full-time? Or, do you want to work in investment banking? This should be enough to answer your question.
The HF - not even comparable. If it's something like Tudor, Moore, I'd take it over Goldman.
Thanks for the input guys. I would ultimately like to work in either PE or HF. I would be completely fine with doing two or three years in IB first, and then hope to move over. I think the issue, and question I have, is whether it'd be worth to intern at the HF knowing that I won't get a full-time offer, and then having to go through the full-time IB recruiting process from a non-target school, which will be difficult.
Be realistic - given that you have a non-target background, and the fact that the HF will not give you a return offer, you may be better off doing the IB gig, killing it, landing a return offer, and then weighing your options from there.
Internships don't guarantee a second look during full time recruiting (if you're doing resume drops, etc.), especially considering that most people get their gigs through networking.
Personally, I feel that as a non-target, you need to be a little more risk-averse compared with your target competitors; you're really in a tougher situation than they are. I'm not saying you can't do it, or that it can't be done, but as you said, it's going to be much harder.
Agree with other posters. Take MM IB, that's a good platform for going to HF or PE in future; esp since HF isn't giving FT offers.
The HF internship has a very different risk and payoff profile. It is the bolder choice, but I would take it in a heartbeat. Even if there is no offer at the end, if you work your ass off, there will be guys there who will want to help you. It really comes down to what you are shooting for.
That plus I've seen tons of people who've interned at these HFs, and even if they don't get FT offers from the same places, they go into the best divisions at BBs beyond doubt - prop trading desks, derivatives trading, private equity / merchant banking etc. These divisions I would argue are objectively better opportunities than IBD.
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