Pages

  • Sharebar

Most of my friends are going into banking. Not because pitch books and road shows are their thing, of course, but it opens a lot of doors. 100 hour work weeks, camaraderie in the form of all-nighters editing PowerPoint slides and sharing Seamless meals, and having no skin in the game never really sounded appealing to me, but I guess to each his own, right? Needless to say, it turns out I'm not the only one who's not overly excited about the idea of working on the sell-side, and this includes my friends lucky enough to get return offers or full-time gigs at their respective banks/research houses. But as most of them will tell me, "starting on the sell side is the quickest route to the buy side, and I'll be a hedge fund rockstar in just two years!"

Wait a second... wouldn't the quickest route to the buy side be... starting on the buy side? Or was I missing something?

Fortunately, I wasn't. And if you're sure you want to be investing for a living, going straight to the buy side is the best career move you can make. With recruiting all but over, I'm happy to be starting my career with the job title "Research Analyst" and doing something I'm actually interested in doing.

Anyone interested in making a career out of investing should be trying to make this jump. The argument that banking or sell-side research makes you a better investment analyst is bullshit. Being an investment analyst makes you a better investment analyst. But if you're planning on interviewing for the buy-side right away, there's a few things you need to be prepared for. I'll try to highlight a few of those below.

1. Have two stocks to pitch. And know everything there is to know about them.

If this sounds hard, you're not actually as interested in investing as you thought you were. If it sounds fun, keep reading. You should be able to explain exactly what these companies do in very simple terms (if they don't already know them), be able to paint the picture of why the market is divided on the stock, identify the catalysts in the short and long term that make this a great business that will eventually realize its intrinsic value, and provide some intelligent thoughts on valuation and why the stock is worth investing in today. I'd stress illustrating the long-term growth profile of the company over anything else, and make sure you highlight what the drivers are of that growth. Analysts want to know that you look at all aspects of a company, so mentioning management, industry economics, and company-specific competitive advantages are all essential. On valuation, you don't have to be an absolute wizard but you should know the typical industry multiples, show where the company is undervalued relative to competitors, and have some insights into how the company manages its cash flows and if there is a shareholder-friendly focus coming from management.

Obviously having one stock to pitch is always important, but I strongly recommend two. In a standard superday you'll most likely be talking to several analysts individually, and pitching them all on the same thing isn't a bad thing, but knowing just one business is something anyone can do. If you mix it up, it's that much better. You're likely not going to be asked for more than two ideas in any interview, so knowing three or four is probably not as beneficial as the jump from one to two.

2. Have a reasonable (and legitimate) explanation for why you're passionate about investing.

A lot of the decision-making around who to hire coming straight out of undergrad seems to come simply from who actually wants it the most. Often, the simple "walk me through your resume" question gets substituted in buy-side interviews for a slightly different question, "tell me why you're here.", The answer isn't too different since either way you're trying to lay out a narrative, but if you can't point specifically to your experiences in the past (both on and off your resume) that show why you're a good fit for an investment firm right away, it's probably not going to work out. This is where having personal investing experience comes in handy, as you can usually point to that (but be ready to talk about your investments, see #1), or being part of some investing group may be just as good if it's not bullshit. Either way, you need to come across as someone who's completely okay with sitting at a desk doing directed research and crushing 10-Ks for a year or two, so conveying a strong interest is actually important.

3. Be prepared to take lower compensation at first. Trust me, it's justified by better hours and over-justified by a much higher ceiling as quickly as a few years out.

Even if you think you're better than Warren Buffet, you're in your early 20s and haven't proven yourself to anyone yet, so don't expect any more than you'd be getting had you worked on the sell side. In fact, it may suck but you should probably expect less. Some of my offers were pretty bare. Even among respected firms 70k base with 10k signing and 10-15% bonuses for the first year are pretty standard. And for someone just starting out, that's going to be plenty. Most places will pay less, some places may pay more, but it's not about your first year's pay. What's more important is what your ceiling looks like and how quickly you are going to gain experience and hopefully move up the ladder to a position with more responsibility. Though it's easier to make 150k in 1-2 years in banking, it's easier to make 400k (or way, way more) in 4-5 years at an asset manager or hedge fund.

4. Location is irrelevant.

Unless you can't handle early mornings in San Francisco (I know I couldn't), geography can't be a big deal to you, since many of the best places to work on the buy side aren't even in New York. For a while I was convinced that if you work in finance and you're not in New York, you must be a failure. I'm starting to think it's the other way around. I don't have much to add aside from that, but if you really want to jump straight into an investment research role, you can't be dead-set on a certain city.

Any other monkeys taking this path? Thinking about it? Advise against it? As always, I'd love to hear. But so far, I'm not having any regrets...

16 1

The WSO Advantage - Land Your Dream Job

Financial Modeling Training

IB Templates, M&A, LBO, Valuation. Learn More.

Wall St. Interview Secrets Revealed

30,000+ sold & REAL questions. Learn More.

Resume Help from Finance Pros

Land More Interviews. Learn More.

Find Your Mentor

Realistic Mock Interviews. Learn More.

Comments (90)

  • FranciscoDAnconia's picture

    I personally know of some people who chose very good sell side offers over decent buy side ones because they wanted to to end up at an "elite" (subjective) PE/HF that didn't necessarily recruit undergrads or, if they did, took like 2 analysts from H or W. With PE and even HF recruitment becoming more structured, I would say an argument could be made for starting in the sell side. Curious to hear your opinions though.

  • yeahright's picture

    Very informative post. You mentioned having two stock pitches and a reason you want to be in investing, but what else do you need to know for research when preparing to interview?

    Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."

  • TheKing's picture

    WhiteHat:
    1. Have two stocks to pitch. And know everything there is to know about them.

    If this sounds hard, you're not actually as interested in investing as you thought you were. If it sounds fun, keep reading. You should be able to explain exactly what these companies do in very simple terms (if they don't already know them), be able to paint the picture of why the market is divided on the stock, identify the catalysts in the short and long term that make this a great business that will eventually realize its intrinsic value, and provide some intelligent thoughts on valuation and why the stock is worth investing in today. I'd stress illustrating the long-term growth profile of the company over anything else, and make sure you highlight what the drivers are of that growth. Analysts want to know that you look at all aspects of a company, so mentioning management, industry economics, and company-specific competitive advantages are all essential. On valuation, you don't have to be an absolute wizard but you should know the typical industry multiples, show where the company is undervalued relative to competitors, and have some insights into how the company manages its cash flows and if there is a shareholder-friendly focus coming from management.

    Obviously having one stock to pitch is always important, but I strongly recommend two. In a standard superday you'll most likely be talking to several analysts individually, and pitching them all on the same thing isn't a bad thing, but knowing just one business is something anyone can do. If you mix it up, it's that much better. You're likely not going to be asked for more than two ideas in any interview, so knowing three or four is probably not as beneficial as the jump from one to two.

    This times a billion. So many people "want" to work on the buyside at a hedge fund but don't really want to, if you catch my drift. If you're thinking about hedge funds and aren't already doing this to some degree, you probably don't really want to work for a hedge fund.

    Nothing wrong with that, btw. Not ever job is for everybody.

  • cauchymonkey's picture

    Thanks for the informative post.

    I'm a junior in college interested in getting into the buyside after graduation. As a novice, I've been having some difficulty finding stocks worth pitching. Many companies look hot and have a lot of things going for them, but that stuff is usually already reflected in the stock price. Or some other companies are relatively cheap but may have problems that make them value traps.

    I read in another HF thread on WSO that analysts in value hedge funds may come up with only a few good ideas in a whole year, and that with them spending a decent chunk of their workday doing research. Unfortunately at college I don't have the time to spend all day doing research and reading 10-ks and company histories of a ton of companies.

    What was your strategy when you were an undergrad for formulating stock pitches?

  • In reply to TheKing
    ucmaroon47's picture

    TheKing:
    WhiteHat:
    1. Have two stocks to pitch. And know everything there is to know about them.

    If this sounds hard, you're not actually as interested in investing as you thought you were. If it sounds fun, keep reading. You should be able to explain exactly what these companies do in very simple terms (if they don't already know them), be able to paint the picture of why the market is divided on the stock, identify the catalysts in the short and long term that make this a great business that will eventually realize its intrinsic value, and provide some intelligent thoughts on valuation and why the stock is worth investing in today. I'd stress illustrating the long-term growth profile of the company over anything else, and make sure you highlight what the drivers are of that growth. Analysts want to know that you look at all aspects of a company, so mentioning management, industry economics, and company-specific competitive advantages are all essential. On valuation, you don't have to be an absolute wizard but you should know the typical industry multiples, show where the company is undervalued relative to competitors, and have some insights into how the company manages its cash flows and if there is a shareholder-friendly focus coming from management.

    Obviously having one stock to pitch is always important, but I strongly recommend two. In a standard superday you'll most likely be talking to several analysts individually, and pitching them all on the same thing isn't a bad thing, but knowing just one business is something anyone can do. If you mix it up, it's that much better. You're likely not going to be asked for more than two ideas in any interview, so knowing three or four is probably not as beneficial as the jump from one to two.

    This times a billion. So many people "want" to work on the buyside at a hedge fund but don't really want to, if you catch my drift. If you're thinking about hedge funds and aren't already doing this to some degree, you probably don't really want to work for a hedge fund.

    Nothing wrong with that, btw. Not ever job is for everybody.

    agree with everything said white and king, making the same jump myself and would echo all of your points.

    And so it goes

  • cheese86's picture

    That is definitely true cauchymonkey but bear in mind you just need to sound somewhat knowledgable in an interview whereas we need to pick winners or lose our job. You are correct that just because a company has a low P/E, EV/EBITDA, w/e metric you use doesn't make it a good value pick. If you have screening tools those can be a good place to start so at least you can get pointed in the right direction (try net debt <1 EBITDA, <6x EV/EBITDA, etc. to get you started). From there you start to look bottom up, start looking at the companies that you see and use your gut to guide you. Some will be an obvious pass within five minutes but some you may spend hours on before deciding it just isn't up to snuff (this happens all the time and is the reason for the few big ideas a year comment). No one is going to go out and buy on your pitch alone but the most important thing for you to do in an interview is to demonstrate an understanding of what holds/creates value in a stock, a basic understanding of valuation, and some more qualitative reasons for buying. Oh, and I almost forgot PASSION FOR INVESTING/MARKETS!! That alone can get you the job out of undergrad....I would say the toughest part is just finding the opportunities that are even open to you with no work experience.

  • In reply to cauchymonkey
    kraziazi's picture

    cauchymonkey:
    Thanks for the informative post.

    I'm a junior in college interested in getting into the buyside after graduation. As a novice, I've been having some difficulty finding stocks worth pitching. Many companies look hot and have a lot of things going for them, but that stuff is usually already reflected in the stock price. Or some other companies are relatively cheap but may have problems that make them value traps.

    I read in another HF thread on WSO that analysts in value hedge funds may come up with only a few good ideas in a whole year, and that with them spending a decent chunk of their workday doing research. Unfortunately at college I don't have the time to spend all day doing research and reading 10-ks and company histories of a ton of companies.

    What was your strategy when you were an undergrad for formulating stock pitches?

    Ditto. Unless the point is not necessarilty to show the employer the best stocks, but to show them you're passionate? That might make sense..

    This could be it, sweetheart.

  • Tommy Too-toned's picture

    been there done that

  • Going Concern's picture

    WhiteHat:
    4. Location is irrelevant.

    Unless you can't handle early mornings in San Francisco (I know I couldn't), geography can't be a big deal to you, since many of the best places to work on the buy side aren't even in New York. For a while I was convinced that if you work in finance and you're not in New York, you must be a failure. I'm starting to think it's the other way around.

    Don't agree with this. Sure not all good buy side roles are in New York, but they're also not in Wyoming. Also moving to a different role within the same city you're in is definitely easier than trying to relocate to a different city further down the line.

    “The new day brings new hope. The lives we’ve led, the lives we’ve yet to lead. A new day. New ideas. A new you.”

  • Ravenous's picture

    This is a pretty good post, +1 for you sir.

    #1 I don't agree with however. You don't need to know everything about the stock, you just need to know why others are wrong and the current price is not an accurate reflection of future performance, and then identify the (hopefully large) delta between fair value and current. It is far, far better to have a crisp, well reasoned thesis than to have a rambling dissertation about a name (I know you weren't saying to have a dissertation). It's kind of disappointing to interview someone from HBS / GSB / Wharton and get a 50 page slide deck on a stock only to realize they don't actually have any clue how the company works or why it would be a good investment. Like, at what point during your rambling 50 page presentation should you have realized that you have no idea what you're talking about?

    It's also a question of return on time. If I can cover five names in the time it takes you to cover one, I'm going to win over time if I can hone in on the key points consistently (which I can).

    Something approximating 90% of the people on the buy side have no idea what they are doing (true story). It took me a while to come around to that fact, but having met with over 200 management teams, read through countless conference calls with retards asking retarded questions, and having interviewed with many firms, I know that's a true statement.

    #2 This is unnecessary. It doesn't matter what your reason is as long as you're good and can make money for the firm. "Why do you want to be an investor?" is a retarded interview crutch question for retarded interviewers who don't know what to ask. It's a red flag if anyone asks you that. Real interviewers only need to ask 3 to 5 questions depending on the candidate (each of which may have follow up questions).

    #3 I agree with this completely, but you have to realize that this is beyond the scope of the vast majority of the people entering this business. I spent 4 years working directly for a PM with a top 3 track record among long / short funds over the last 15 years. Tell me how that's worse than working for some moron running a billion dollar fund where I would have made twice as much in the short run.

    #4 This is true. But West Coast hours are terrible.

  • cheese86's picture

    In addition to my post above, I also want to echo the comp statements. It may seem odd that the hallowed buyside is coming in below your BB banking offer but do NOT let that influence your decision at all. It is just silly and not to mention, lifestyle on the buyside is far better than for any bankers I know.

  • cauchymonkey's picture

    Ravenous: Thanks for the informative comment. When you say that 90% of the buyside don't know what they are doing, what is it that they are generally doing wrong?

    In addition, a lot of stuff I've read about pitches points to the importance of knowing why others are wrong, and knowing what is your "edge" on the street.

    How do I know what "others" are thinking? For example, I might look at a stock X and see various sell-side analysts holding different ratings. Suppose I think that their overall consensus is wrong. However, how do I know whether people have actually bought/sold the stock according to this consensus opinion. From what I've gathered reading these forums, it seems typical for buyside firms to completely disregard sell-side research.

    So what's the best way to get a hold of the consensus opinion that is being acted on, the consensus opinion that presumably is being priced into the stock?

    Cheese: Thanks for the reply. Are there free database tools that I can use or do I need to pay for them?

  • Bankn's picture

    If you want to hit a growing AM city...... Welcome to Minneapolis, Minnesota!

  • cheese86's picture

    Generally would have to pay for the robust ones (Bloomberg, CapIQ, Factset) but I would imagine there are basic free tools out there...

    Do not quote consensus/sell-side research in a buyside interview. You are correct that it is not very important to buyside analysts what the buy/sell rec or PT are.

  • In reply to cauchymonkey
    Ravenous's picture

    cauchymonkey:
    Ravenous: Thanks for the informative comment. When you say that 90% of the buyside don't know what they are doing, what is it that they are generally doing wrong?

    In addition, a lot of stuff I've read about pitches points to the importance of knowing why others are wrong, and knowing what is your "edge" on the street.

    How do I know what "others" are thinking? For example, I might look at a stock X and see various sell-side analysts holding different ratings. Suppose I think that their overall consensus is wrong. However, how do I know whether people have actually bought/sold the stock according to this consensus opinion. From what I've gathered reading these forums, it seems typical for buyside firms to completely disregard sell-side research.

    So what's the best way to get a hold of the consensus opinion that is being acted on, the consensus opinion that presumably is being priced into the stock?

    Cheese: Thanks for the reply. Are there free database tools that I can use or do I need to pay for them?

    I don't want to disrespect WhiteHat by thread jacking, but I also realize other readers might be interested in my response. I'll keep this short as a compromise and you or others can follow up with me off the thread if you want to go into more detail.

    I should clarify my comment since the buy side is a big place and you have technical traders, swing traders, quant traders, and a bunch of other stuff going on. I should have said "90% of fundamental investors."

    There are all kinds of ways to get into trouble:

    - Don't understand capitalism and associated principles
    - Bad timing
    - Fall for "stories" from management
    - Artificial institutional constraints (e.g., no stocks below $5.00)
    - Quarterly mandate that forces short-term decision making
    - Don't recognize value and/or catalysts
    - Like to buy stocks that are way up because that's comforting
    - Think you're a value investor because you buy stocks at low multiples (NO!)
    - Think that because something bad hasn't happened yet, it never will (so predictable)

    The list goes on and on and there are many iterations. You need to find the intersection of value, good business, and timing. It might be 1 in 10 or 1 in 20 stocks within a set of criteria that is seriously mispriced. The rest is noise.

    What others are thinking:

    - Consensus
    - Guidance
    - Valuation
    - Misperception about the business (this happens all the time)
    - Industry reports
    - Conferences
    - Reading research on SumZero or Vic (much of which is bad!)

    It depends on how "busy" the stock is. If it's a stock that has had a large price move in either direction in the last 12 months or less and is of a large cap size (>$500 million), there will be some general consensus in the stock, written or unwritten. If it is much smaller and has done nothing for years, there may not be anyone looking at the stock in detail. I always like it when I ask management when was the last time they spoke with an investor and they have to think about it for a while.

    Edit: But I am a small and microcap investor, so that makes sense for me. My sweet spot is $250 - 500mm but I'll go lower or higher than that. I rarely spend much time on stocks above a billion because those almost always have good coverage on the sell side and buy side.

The WSO Advantage - Land Your Dream Job

Financial Modeling Training

IB Templates, M&A, LBO, Valuation. Learn More.

Wall St. Interview Secrets Revealed

30,000+ sold & REAL questions. Learn More.

Resume Help from Finance Pros

Land More Interviews. Learn More.

Find Your Mentor

Realistic Mock Interviews. Learn More.

  • BigSwingingDave's picture

    WhiteHat:

    1. Have two stocks to pitch. And know everything there is to know about them.

    I would add that you should have one SHORT to pitch as well. I've had to do this for a hedge fund interview before, and if you come in with a prepared short they may be impressed that you are even thinking about shorting stocks.

  • TheBigBambino's picture

    .

    "If you want to succeed in this life, you need to understand that duty comes before rights and that responsibility precedes opportunity."

  • Accrual Dictator's picture

    This post seems mostly directed at the hedge fund industry, but do you think a lot of this applies to PE as well? I've done some more research and I think Private Equity is where I want to be. I don't think that I care where I do PE (i.e. I won't care if I'm not at Silverlake and instead at a boutique in Atlanta instead as long as I'm in), but do you think your principles still apply to PE? Also, how realistic is it even on the HF side to do it from a non-target? I feel that a buyside firm would be more likely to take a chance on an UG from Harvard than your average state school.

  • In reply to Accrual Dictator
    TheKing's picture

    Accrual Dictator:
    This post seems mostly directed at the hedge fund industry, but do you think a lot of this applies to PE as well? I've done some more research and I think Private Equity is where I want to be. I don't think that I care where I do PE (i.e. I won't care if I'm not at Silverlake and instead at a boutique in Atlanta instead as long as I'm in), but do you think your principles still apply to PE? Also, how realistic is it even on the HF side to do it from a non-target? I feel that a buyside firm would be more likely to take a chance on an UG from Harvard than your average state school.

    The problem with PE is that the skills you need are honed in banking. Most PE shops, even tiny tiny tiny ones, won't look at you if you haven't already done banking. A couple major shops recruit straight from undergrad, but their target school list is VERY small. The job is way less about coming up with investing ideas and it's much more about modeling, due diligence, and other shit that you learn in banking.

    I can answer follow-ups if you have any, just go ahead and post them here.

  • In reply to Ravenous
    slowdive's picture

    Ravenous:
    This is a pretty good post, +1 for you sir.

    #1 I don't agree with however. You don't need to know everything about the stock, you just need to know why others are wrong and the current price is not an accurate reflection of future performance, and then identify the (hopefully large) delta between fair value and current. It is far, far better to have a crisp, well reasoned thesis than to have a rambling dissertation about a name (I know you weren't saying to have a dissertation). It's kind of disappointing to interview someone from HBS / GSB / Wharton and get a 50 page slide deck on a stock only to realize they don't actually have any clue how the company works or why it would be a good investment. Like, at what point during your rambling 50 page presentation should you have realized that you have no idea what you're talking about?

    It's also a question of return on time. If I can cover five names in the time it takes you to cover one, I'm going to win over time if I can hone in on the key points consistently (which I can).

    Something approximating 90% of the people on the buy side have no idea what they are doing (true story). It took me a while to come around to that fact, but having met with over 200 management teams, read through countless conference calls with retards asking retarded questions, and having interviewed with many firms, I know that's a true statement.

    #2 This is unnecessary. It doesn't matter what your reason is as long as you're good and can make money for the firm. "Why do you want to be an investor?" is a retarded interview crutch question for retarded interviewers who don't know what to ask. It's a red flag if anyone asks you that. Real interviewers only need to ask 3 to 5 questions depending on the candidate (each of which may have follow up questions).

    #3 I agree with this completely, but you have to realize that this is beyond the scope of the vast majority of the people entering this business. I spent 4 years working directly for a PM with a top 3 track record among long / short funds over the last 15 years. Tell me how that's worse than working for some moron running a billion dollar fund where I would have made twice as much in the short run.

    #4 This is true. But West Coast hours are terrible.

    #1 - Totally agree with you that most folks on the buyside are morons. The biggest problem is that most people can only extrapolate what has happened in the past, and cannot use their imagination or common sense to think about how the game could change, before it happens. Even when things are obvious, people miss it, over and over again. But I am grateful for this, because that is why I can make money.

    Also agree that being concise is key. Even if you have all the goods, if it is hidden in a pile of random information, no one is going to appreciate it. You want to be able to go deep, figure out what is most important, and hit the highlights hard. It is REALLY important to isolate and understand the one or two key drivers of a business. It totally differs depending on the industry, point in the cycle, etc.

    #2 - I disagree with this. I always like to see people who are market junkies and really love what they are doing. Someone can nail all the technicals, but if they don't have the intangible attributes that makes a good HF investor (such as the aforementioned imagination and common sense), they'll never make it as an idea generator. I do think that simply asking why someone wants to be an investor is inviting a bullshit answer, but I like to ask about seemingly random parts of their background, and see whether they are passionate about investing from different angles. Not too dissimilar from coaxing the truth out of management teams.

  • In reply to slowdive
    Ravenous's picture

    slowdive:

    #2 - I disagree with this. I always like to see people who are market junkies and really love what they are doing. Someone can nail all the technicals, but if they don't have the intangible attributes that makes a good HF investor (such as the aforementioned imagination and common sense), they'll never make it as an idea generator. I do think that simply asking why someone wants to be an investor is inviting a bullshit answer, but I like to ask about seemingly random parts of their background, and see whether they are passionate about investing from different angles. Not too dissimilar from coaxing the truth out of management teams.

    That's kind of my point. If you have to ask, it's already over. It shouldn't even be a question because there is no way that someone can prove that they want to be an investor except by demonstrating it through the quality of their work, so all you're going to get is lame answers. The candidate knows they are lame but still has to provide a lame answer. Everyone loses.

    A good interviewer will only ask questions that add value and improve their understanding of you as a candidate in a very specific, targeted way. If they start asking you stuff like "Why did you go to X college?" or "Why do you want to be an investor?" it shows that they either don't know how to think or didn't prepare properly (especially evident if they're reading your resume on the spot). There are exceptions if you're coming from left field with a very unusual background, but basically, those questions should never be asked.

  • In reply to slowdive
    Going Concern's picture

    slowdive:

    Also agree that being concise is key. Even if you have all the goods, if it is hidden in a pile of random information, no one is going to appreciate it. You want to be able to go deep, figure out what is most important, and hit the highlights hard. It is REALLY important to isolate and understand the one or two key drivers of a business.

    I think this is pretty eloquently stated. +1

    “The new day brings new hope. The lives we’ve led, the lives we’ve yet to lead. A new day. New ideas. A new you.”

  • In reply to Ravenous
    slowdive's picture

    Ravenous:
    slowdive:

    #2 - I disagree with this. I always like to see people who are market junkies and really love what they are doing. Someone can nail all the technicals, but if they don't have the intangible attributes that makes a good HF investor (such as the aforementioned imagination and common sense), they'll never make it as an idea generator. I do think that simply asking why someone wants to be an investor is inviting a bullshit answer, but I like to ask about seemingly random parts of their background, and see whether they are passionate about investing from different angles. Not too dissimilar from coaxing the truth out of management teams.

    That's kind of my point. If you have to ask, it's already over. It shouldn't even be a question because there is no way that someone can prove that they want to be an investor except by demonstrating it through the quality of their work, so all you're going to get is lame answers. The candidate knows they are lame but still has to provide a lame answer. Everyone loses.

    A good interviewer will only ask questions that add value and improve their understanding of you as a candidate in a very specific, targeted way. If they start asking you stuff like "Why did you go to X college?" or "Why do you want to be an investor?" it shows that they either don't know how to think or didn't prepare properly (especially evident if they're reading your resume on the spot). There are exceptions if you're coming from left field with a very unusual background, but basically, those questions should never be asked.

    I totally disagree with this. Passion for investing shines through in more than the quality of someone's work. The intangible factors that I seek can subtly show up in the course of a casual conversation. Sometimes I will ask about random hobbies they have listed on their resume, sometimes I will ask them what they think about certain companies, or events in the news. Like everything else in this job, I rely on my instincts to lead me to the goodies. When interviewing people for more senior positions, measuring pure competency becomes more important, but for junior guys, I value their overall feel as a candidate more than anything tangible they can put on paper. Case studies and whatnot are still important, but frankly it is difficult for junior guys to differentiate themselves with those things. I care about what they can grow into, not where they are today. It sounds like you take a different approach, I have no need to convince you that my style of doing things is better.

  • xqtrack's picture

    I disagree that working on the sell side is a bad idea. It's obviously not necessary for everybody, but I do know that there are a lot of investments (in long/short) I've seen where the experience of working corporate finance is definitely a big value add. Personally, I can think of at least 3 positions that are in my team's current portfolio that I wouldn't have been able to analyze if I hadn't spent some time in an investment bank.

    Also, working on the sell side can sometimes help you get to a better fund to start out at. This matters only because the PM you work for is your rabbi, and you will learn so much from him/her and the senior analysts on the team. The smarter they are, the more you learn. It's nice to think that you can learn everything by reading books etc, but when I look back at the way I pitched stocks during my initial interviews (after reading all the books out there) and the way I started thinking about them just 5-6 months later, the difference was pretty shocking to me.

    But your mileage will vary.

  • In reply to slowdive
    Going Concern's picture

    slowdive:
    Passion for investing shines through in more than the quality of someone's work. The intangible factors that I seek can subtly show up in the course of a casual conversation. Sometimes I will ask about random hobbies they have listed on their resume, sometimes I will ask them what they think about certain companies, or events in the news. Like everything else in this job, I rely on my instincts to lead me to the goodies.

    Would be interested to hear some specific examples.

    “The new day brings new hope. The lives we’ve led, the lives we’ve yet to lead. A new day. New ideas. A new you.”

  • In reply to Going Concern
    slowdive's picture

    Going Concern:
    slowdive:
    Passion for investing shines through in more than the quality of someone's work. The intangible factors that I seek can subtly show up in the course of a casual conversation. Sometimes I will ask about random hobbies they have listed on their resume, sometimes I will ask them what they think about certain companies, or events in the news. Like everything else in this job, I rely on my instincts to lead me to the goodies.

    Would be interested to hear some specific examples.

    It's tough to say, can be anything. One time I was interviewing someone, and in the midst of our conversation he asked me a question about something I had briefly mentioned. It was a challenging topic, and I launched into a rather technical explanation, jumping quickly from point to point. Most candidates would have slumped back, their eyes glazed over, but instead he became enraptured in curiosity when I started to delve into things that he didn't know. It reminded me of myself, back when I was trying to get in this business. These are the kind of things that you can't bullshit your way through.

  • In reply to slowdive
    Going Concern's picture

    slowdive:
    Going Concern:
    slowdive:
    Passion for investing shines through in more than the quality of someone's work. The intangible factors that I seek can subtly show up in the course of a casual conversation. Sometimes I will ask about random hobbies they have listed on their resume, sometimes I will ask them what they think about certain companies, or events in the news. Like everything else in this job, I rely on my instincts to lead me to the goodies.

    Would be interested to hear some specific examples.

    It's tough to say, can be anything. One time I was interviewing someone, and in the midst of our conversation he asked me a question about something I had briefly mentioned. It was a challenging topic, and I launched into a rather technical explanation, jumping quickly from point to point. Most candidates would have slumped back, their eyes glazed over, but instead he became enraptured in curiosity when I started to delve into things that he didn't know. It reminded me of myself, back when I was trying to get in this business. These are the kind of things that you can't bullshit your way through.

    Fair enough. So basically he had a strong intellectual curiosity. True that there is no direct question that you could ask to uncover that.

    “The new day brings new hope. The lives we’ve led, the lives we’ve yet to lead. A new day. New ideas. A new you.”

  • BatMasterson's picture

    A more apt question than "Why do you want to be an investor ? or Why are you here ?" is

    "What is your investment philosophy (aka thesis)?

    I really don't believe you will be asked to recite your memorized story on the one or two stocks you wish to pitch, but rather you'll be asked on one picked for you. This way they separate the wheat from the chaff...

    Ex.: What do you think of FB ? (I just picked it at random, I don't care about FB). If you can't think on your feet, you don't stand a chance.

    "I like money (as do most females) but love is...great :)"-student
    "Perhaps you've failed to take into account my hidden assets"-007
    Storm: Orig Mix

  • frgna's picture

    Happen to know from personal experience, having even just a little bit of experience on the sellside goes a long way for many hedge funds. It's a universally recognized skillset, work ethic, and test of toughness. I do know at least one person who went straight to buyside, then HSW, then an elite hedge fund, was unfortunately laid off during the crunch, and had a harder - not impossible, but it was an issue - time getting back because many dinged him on the fact he'd never worked on the sellside.

    This is just anecdotal of course but in my opinion unless it's really a great offer think hard before passing up a little experience on the sellside. Building some connections on the sellside is a great way to be resourceful later to a fund (ex. "Oh yeah, I was an analyst with the VP who's now on the restructuring - let's give him a ring.")

    Interesting thread.

    if you like it then you shoulda put a banana on it

  • In reply to frgna
    Going Concern's picture

    frgna:
    Happen to know from personal experience, having even just a little bit of experience on the sellside goes a long way for many hedge funds. It's a universally recognized skillset, work ethic, and test of toughness. I do know at least one person who went straight to buyside, then HSW, then an elite hedge fund, was unfortunately laid off during the crunch, and had a harder - not impossible, but it was an issue - time getting back because many dinged him on the fact he'd never worked on the sellside.

    I find this a little hard to swallow. Was there a certain skillset or knowledge base he was lacking, or was the problem just that he didn't have a big bank's name on his res? Because if it's the latter, then it's really only the connections that would matter, and even then that's a subtle intangible benefit at best. I don't see how any value fund / fundamental investor would care that you spent 100 hours per week making colorful pitchbooks and creative DCFs while trying to get the recalcitrant printer to work and being screamed at from all directions.

    “The new day brings new hope. The lives we’ve led, the lives we’ve yet to lead. A new day. New ideas. A new you.”

  • In reply to Going Concern
    frgna's picture

    Going Concern:
    frgna:
    Happen to know from personal experience, having even just a little bit of experience on the sellside goes a long way for many hedge funds. It's a universally recognized skillset, work ethic, and test of toughness. I do know at least one person who went straight to buyside, then HSW, then an elite hedge fund, was unfortunately laid off during the crunch, and had a harder - not impossible, but it was an issue - time getting back because many dinged him on the fact he'd never worked on the sellside.

    I find this a little hard to swallow. Was there a certain skillset or knowledge base he was lacking, or was the problem just that he didn't have a big bank's name on his res? Because if it's the latter, then it's really only the connections that would matter, and even then that's a subtle intangible benefit at best. I don't see how any value fund / fundamental investor would care that you spent 100 hours per week making colorful pitchbooks and creative DCFs while trying to get the recalcitrant printer to work and being screamed at from all directions.

    Hi Going Concern - he had actually worked at a BB (Morgan or Goldman or JPM) on a desk out of undergrad pre-MBA, so it certainly wasn't the lack of a name, and his MBA and post MBA work was of course tops. And it wasn't even a specific skillset, really.

    The way he described it, it was more like "We just generally want people who've also been on the other side of the deals and more rounded" - it's subtle and weird but important to some funds, and all else equal I guess they prefer those who have it and they can afford to be selective that way. He landed fine on his feet at the end, so again it was not a huge issue but it was a hindrance I'd say.

    I guess the way to illustrate it is to imagine you have two identical 4-5 yrs experienced candidates looking at the same fund opening, but one spent his first 2 yrs at a top analyst program working hard - it's not super straightforward and I'm biased having worked in banking, but I think I'd lean toward the ex banker and here's why: at a junior level (2-3 yrs exp), you're gonna know that the sellside banker has (probably) put in more hours and seen more/deeper situations than a similarly seasoned buyside analyst (from what little I know of what entry level buyside analysts do - I plead complete ignorance here) and learned to handle pressure situations/deadlines on more occasions, and you know the grammar and punctuation will be perfect. With an ex banker, you kind of know what you're getting, where with a more esoteric buyside entry level analyst, unless you really know the fund, how they invest, how many times they turn over their assets in a year - you could be looking at a much wider band of experiences/training. Just my theories and madness though, curious to hear your thoughts.

    if you like it then you shoulda put a banana on it

  • In reply to frgna
    frgna's picture

    frgna:
    Going Concern:
    frgna:
    Happen to know from personal experience, having even just a little bit of experience on the sellside goes a long way for many hedge funds. It's a universally recognized skillset, work ethic, and test of toughness. I do know at least one person who went straight to buyside, then HSW, then an elite hedge fund, was unfortunately laid off during the crunch, and had a harder - not impossible, but it was an issue - time getting back because many dinged him on the fact he'd never worked on the sellside.

    I find this a little hard to swallow. Was there a certain skillset or knowledge base he was lacking, or was the problem just that he didn't have a big bank's name on his res? Because if it's the latter, then it's really only the connections that would matter, and even then that's a subtle intangible benefit at best. I don't see how any value fund / fundamental investor would care that you spent 100 hours per week making colorful pitchbooks and creative DCFs while trying to get the recalcitrant printer to work and being screamed at from all directions.

    Hi Going Concern - he had actually worked at a BB (Morgan or Goldman or JPM) on a desk out of undergrad pre-MBA, so it certainly wasn't the lack of a name, and his MBA and post MBA work was of course tops. And it wasn't even a specific skillset, really.

    The way he described it, it was more like "We just generally want people who've also been on the other side of the deals and more rounded" - it's subtle and weird but important to some funds, and all else equal I guess they prefer those who have it and they can afford to be selective that way. He landed fine on his feet at the end, so again it was not a huge issue but it was a hindrance I'd say.

    I guess the way to illustrate it is to imagine you have two identical 4-5 yrs experienced candidates looking at the same fund opening, but one spent his first 2 yrs at a top analyst program working hard - it's not super straightforward and I'm biased having worked in banking, but I think I'd lean toward the ex banker and here's why: at a junior level (2-3 yrs exp), you're gonna know that the sellside banker has (probably) put in more hours and seen more/deeper situations than a similarly seasoned buyside analyst (from what little I know of what entry level buyside analysts do - I plead complete ignorance here) and learned to handle pressure situations/deadlines on more occasions, and you know the grammar and punctuation will be perfect. With an ex banker, you kind of know what you're getting, where with a more esoteric buyside entry level analyst, unless you really know the fund, how they invest, how many times they turn over their assets in a year - you could be looking at a much wider band of experiences/training. Just my theories and madness though, curious to hear your thoughts.

    Also to be clear, I am not saying that entry level buysiders don't work hard - I really just have no idea what they do - I don't mean that facetiously at all, I really just have no experience with it.

    if you like it then you shoulda put a banana on it

  • In reply to frgna
    Going Concern's picture

    frgna:
    The way he described it, it was more like "We just generally want people who've also been on the other side of the deals and more rounded" - it's subtle and weird but important to some funds, and all else equal I guess they prefer those who have it and they can afford to be selective that way.

    The traditional value fund isn't going to be that focused on "deals". I guess if you have a fund that focuses on certain types of situations/events, like M&A for instance, then a banker's deal experience could at least bring something to the table. My guess though is that your friend was dinged because the places he was interviewing at were populated with ex-bankers who were biased towards scooping up more of their own kind.

    “The new day brings new hope. The lives we’ve led, the lives we’ve yet to lead. A new day. New ideas. A new you.”

  • In reply to frgna
    BlackHat's picture

    frgna:
    I think I'd lean toward the ex banker and here's why: at a junior level (2-3 yrs exp), you're gonna know that the sellside banker has (probably) put in more hours and seen more/deeper situations than a similarly seasoned buyside analyst (from what little I know of what entry level buyside analysts do - I plead complete ignorance here) and learned to handle pressure situations/deadlines on more occasions, and you know the grammar and punctuation will be perfect. With an ex banker, you kind of know what you're getting, where with a more esoteric buyside entry level analyst, unless you really know the fund, how they invest, how many times they turn over their assets in a year - you could be looking at a much wider band of experiences/training. Just my theories and madness though, curious to hear your thoughts.

    With an ex-banker you definitely know what you're getting, not that that's a good thing. I'd say having put in more hours isn't a good thing (nor is it a bad thing really, except maybe burnout potential), and unless the buyside position is shitty I can't imagine a situation where the junior analyst who worked at a BB is going to have a deeper understanding of companies or potential investments. Deadlines are nonexistent at an investment firm, and if my own experience as a semi-retard in the grammar field have any weight, nobody cares about grammar or punctuation either.

    One thing I'd stress that WH didn't really touch on is that if you want to work at an HF one day and your two full-time options are GS IBD and Bumblefuck Asset Management, you'd probably do better to choose GS. But if you have a shot at a name-brand gig on the buy side, even something like Fidelity or any of the other large structured analyst programs, I suggest going that way. You'll learn 1000x more and will have a much better work/life balance as well. The pay is probably a little less but with what I've been hearing about bonuses lately I'll guess the pay gap is converging a bit. Don't have an ear to the ground on comp at the junior levels anymore though, would love to hear what people are seeing out there.

    I hate victims who respect their executioners

  • idkmybffjill's picture

    Hi WhiteHat and Ravenous, I am an undergraduate and would LOVE to do exactly this. Please check PM's I've sent you.....thanks in advance!

  • In reply to TheKing
    Accrual Dictator's picture

    TheKing:
    WhiteHat:
    1. Have two stocks to pitch. And know everything there is to know about them.

    If this sounds hard, you're not actually as interested in investing as you thought you were. If it sounds fun, keep reading. You should be able to explain exactly what these companies do in very simple terms (if they don't already know them), be able to paint the picture of why the market is divided on the stock, identify the catalysts in the short and long term that make this a great business that will eventually realize its intrinsic value, and provide some intelligent thoughts on valuation and why the stock is worth investing in today. I'd stress illustrating the long-term growth profile of the company over anything else, and make sure you highlight what the drivers are of that growth. Analysts want to know that you look at all aspects of a company, so mentioning management, industry economics, and company-specific competitive advantages are all essential. On valuation, you don't have to be an absolute wizard but you should know the typical industry multiples, show where the company is undervalued relative to competitors, and have some insights into how the company manages its cash flows and if there is a shareholder-friendly focus coming from management.

    Obviously having one stock to pitch is always important, but I strongly recommend two. In a standard superday you'll most likely be talking to several analysts individually, and pitching them all on the same thing isn't a bad thing, but knowing just one business is something anyone can do. If you mix it up, it's that much better. You're likely not going to be asked for more than two ideas in any interview, so knowing three or four is probably not as beneficial as the jump from one to two.

    This times a billion. So many people "want" to work on the buyside at a hedge fund but don't really want to, if you catch my drift. If you're thinking about hedge funds and aren't already doing this to some degree, you probably don't really want to work for a hedge fund.

    Nothing wrong with that, btw. Not ever job is for everybody.

    OK that makes sense. Is it impossible then to get into PE, even boutiques (again, I don't really care about megafund), from a non-target? I've had no luck getting into bulge brackets and so far boutiques haven't bit on my resume. I think I'm at least competitive for regional boutiques if someone actually gave me a chance, but can regional boutiques still lead to boutique/MM PE, or do you have to go to a bulge/elite boutique?

  • SirTradesaLot's picture

    To be fair, when we are defining the universe of hedge funds as long-short equity funds, a lot of this is probably applicable. However, different types of strategies almost require you to start out on the sell side. Also, banking would be completely useless for most of those types of strategies.

    We deal mostly with derivatives at my firm and it would be impossible to imagine hiring someone from banking without other derivatives experience. Someone fresh out of college would be easier to hire if they had a highly quantitative background than someone from banking, because they would be at least as useful as the banker, but cheaper.

    adapt or die:
    What would P.T. Barnum say about you?

    MY BLOG

  • sk8247365's picture

    There are times when taking the buyside gig in a no-name city can be a disadvantage. Obviously, if you have an offer at buyside firm that has been heard of you can take it and will likely be fine. The line becomes a little blurry as you move to no-name firms in no-name cities.

    Case in point: I currently work at an unknown firm in a midwest state. We are institutionally funded by Fortress (I say this because you probably will still not be able to figure out what the name of the firm is). We chase deals alongside CarVal, Colony, GS, Carlyle, etc.

    I still heavily doubt that I would get two looks by any of those firms (or headhunters for that matter) simply because they would see the name of my firm, my non-target background, and toss that shit out. It is just the reality of top firms. They like IB backgrounds but will happily take you if you went to a decently reputable buyside shop too. But if you work at Westminster Financial doing lower middle market LBOs, you would be better off having any MM/BB IB firm on your resume.

    My comp is 20% less than NY/SF IB and is +20% after cost of living adjustments. Avg work weeks <60 hours. I am two inches from a promotion that will put me above 2nd year IB. But the buck stops there, as the firm does not have the standard VP, SVP, D, MD promotes afterwards. And that is when that brand-name IB matters.

  • In reply to sk8247365
    prospie's picture

    sk8247365:
    But the buck stops there, as the firm does not have the standard VP, SVP, D, MD promotes afterwards. And that is when that brand-name IB matters.

    Then what? What can you do, and what would you like to do at that point? I'm probably not the only one who would like to hear more on this, if you could elaborate.

    And when you say, "that is when that brand-name IB matters," do you mean that if you had Morgan Stanley IBD on your CV, you could move up faster at your small midwestern shop?

  • In reply to BlackHat
    shark-monkey's picture

    BlackHat:
    frgna:
    I think I'd lean toward the ex banker and here's why: at a junior level (2-3 yrs exp), you're gonna know that the sellside banker has (probably) put in more hours and seen more/deeper situations than a similarly seasoned buyside analyst (from what little I know of what entry level buyside analysts do - I plead complete ignorance here) and learned to handle pressure situations/deadlines on more occasions, and you know the grammar and punctuation will be perfect. With an ex banker, you kind of know what you're getting, where with a more esoteric buyside entry level analyst, unless you really know the fund, how they invest, how many times they turn over their assets in a year - you could be looking at a much wider band of experiences/training. Just my theories and madness though, curious to hear your thoughts.

    With an ex-banker you definitely know what you're getting, not that that's a good thing. I'd say having put in more hours isn't a good thing (nor is it a bad thing really, except maybe burnout potential), and unless the buyside position is shitty I can't imagine a situation where the junior analyst who worked at a BB is going to have a deeper understanding of companies or potential investments. Deadlines are nonexistent at an investment firm, and if my own experience as a semi-retard in the grammar field have any weight, nobody cares about grammar or punctuation either.

    One thing I'd stress that WH didn't really touch on is that if you want to work at an HF one day and your two full-time options are GS IBD and Bumblefuck Asset Management, you'd probably do better to choose GS. But if you have a shot at a name-brand gig on the buy side, even something like Fidelity or any of the other large structured analyst programs, I suggest going that way. You'll learn 1000x more and will have a much better work/life balance as well. The pay is probably a little less but with what I've been hearing about bonuses lately I'll guess the pay gap is converging a bit. Don't have an ear to the ground on comp at the junior levels anymore though, would love to hear what people are seeing out there.

    Not to be a tag-along, but I completely agree with WH and BH.

    To add, I feel the reason people are objecting is that most of the people on this sight go to the sell side with the intention to go back to the Buyside. I wouldn't blame people going to SS, it is an easier path to go down in that it is a road more traveled and there is a level of certainty in taking it. Also, the coveted IB BB positions are a lot more visible to the top graduating seniors because the IB positions are not as fragmented as the Buyside positions(particularly HFs). The "target" candidates know its there and know what they are going for (like OCR) . Bankeralla touched on this subject before when and why she chose to go IB.

    Fear is the greatest motivator. Motivation is what it takes to find profit.

  • In reply to prospie
    sk8247365's picture

    prospie:
    sk8247365:
    But the buck stops there, as the firm does not have the standard VP, SVP, D, MD promotes afterwards. And that is when that brand-name IB matters.

    Then what? What can you do, and what would you like to do at that point? I'm probably not the only one who would like to hear more on this, if you could elaborate.

    And when you say, "that is when that brand-name IB matters," do you mean that if you had Morgan Stanley IBD on your CV, you could move up faster at your small midwestern shop?

    To elaborate, we have a very "upside-down" triangle structure. It looks like this (title; age): Analyst (23), Analyst (28), Associate (31), 8x Director (avg. 48), President (~60).

    Previous analysts have left largely because they could not make the leap to director. His words were "why would they give you that job when they can hire someone with 15-20 years experience?" So I take that as little chance of moving up after 2-4 years as an Associate.

    This is where having brand name can matter. If I want to stay in my industry but move to an Associate/VPish role somewhere reputable, I foresee difficulty. Or even if I want an Associate gig at a firm in SF/NY.

    If my resume goes MS IB 2 years - unknown buyside 2-4 years, the recruiter will see two things: BB experience and buyside experience. Very strong candidate.

    Maybe I am wrong, but if they see 2-4 years at unknown buyside in midwest, 9.8/10 they will give the interview to 2nd year MS IB. Unless I networked in and they had a very good feel for what I do. Then, sure, the odds are in my favor.

    As of now, if I can not make the jump to director I am hoping to network into a large fund. I'll scale down "large" until I get in somewhere.

    "...do you mean that if you had Morgan Stanley IBD on your CV, you could move up faster at your small midwestern shop?[/quote]

    Once you are in, all that matters is skill and your firms promote culture (i am sure you would agree).

  • In reply to Ben Shalom Bernanke
    wolverine19x89's picture

    If your dreams don't scare you, then they are not big enough.

    "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.

  • hsv's picture

    The King said "A couple major shops recruit straight from undergrad, but their target school list is VERY small"
    Hi The King can you or anyone else for that matter name which PE firms recruit straight from undergraduate and which target schools are on their target school list?

    First post on WSO

    Many Thanks

  • In reply to hsv
    BlackHat's picture

    hsv:
    The King said "A couple major shops recruit straight from undergrad, but their target school list is VERY small"
    Hi The King can you or anyone else for that matter name which PE firms recruit straight from undergraduate and which target schools are on their target school list?

    First post on WSO

    Many Thanks

    Silver Lake
    Bain
    TPG

    Wharton, Harvard.

    I hate victims who respect their executioners

  • Ron Paul's picture

    Oh, get a buyside job out of undergrad? Just get a buyside job out of undergrad? Why don't I strap on my buyside job helmet and squeeze down into a buyside job cannon and fire off into buyside job land, where buyside jobs grow on little buyside jobbies?!

  • In reply to Ravenous
    Bondarb's picture

    Ravenous:
    This is a pretty good post, +1 for you sir.

    #1 I don't agree with however. You don't need to know everything about the stock, you just need to know why others are wrong and the current price is not an accurate reflection of future performance, and then identify the (hopefully large) delta between fair value and current. It is far, far better to have a crisp, well reasoned thesis than to have a rambling dissertation about a name (I know you weren't saying to have a dissertation). It's kind of disappointing to interview someone from HBS / GSB / Wharton and get a 50 page slide deck on a stock only to realize they don't actually have any clue how the company works or why it would be a good investment. Like, at what point during your rambling 50 page presentation should you have realized that you have no idea what you're talking about?

    It's also a question of return on time. If I can cover five names in the time it takes you to cover one, I'm going to win over time if I can hone in on the key points consistently (which I can).

    Something approximating 90% of the people on the buy side have no idea what they are doing (true story). It took me a while to come around to that fact, but having met with over 200 management teams, read through countless conference calls with retards asking retarded questions, and having interviewed with many firms, I know that's a true statement.

    #2 This is unnecessary. It doesn't matter what your reason is as long as you're good and can make money for the firm. "Why do you want to be an investor?" is a retarded interview crutch question for retarded interviewers who don't know what to ask. It's a red flag if anyone asks you that. Real interviewers only need to ask 3 to 5 questions depending on the candidate (each of which may have follow up questions).

    #3 I agree with this completely, but you have to realize that this is beyond the scope of the vast majority of the people entering this business. I spent 4 years working directly for a PM with a top 3 track record among long / short funds over the last 15 years. Tell me how that's worse than working for some moron running a billion dollar fund where I would have made twice as much in the short run.

    #4 This is true. But West Coast hours are terrible.

    This post contains some ridiculous stuff including all the language about you being so much smarter then everyone...Seriously dude you need to get over yourself. On #1 no junior kid that I hire is going to make me money other then by grinding away at ideas that I give him to explore...so questions that gauge passion for the business displayed through knowledge and questions about fit are very important. To be honest when I hear an investment pitch from a junior-type I am really more concerned with what it says about how he would work and how much hunger he has to suceed as opposed to whether the trade is actually one I would put on. If you are hiring a kid in his early 20s to actually make investment decisions I seriously question what is going on where you work....

  • shd2109's picture

    What about getting into buy-side sales (institutional sales) and then going to b-school and ending up as a Research Analyst? How would you recommend that?

    S18H01D06

  • In reply to FranciscoDAnconia
    Themistocles's picture

    FranciscoDAnconia:
    I personally know of some people who chose very good sell side offers over decent buy side ones because they wanted to to end up at an "elite" (subjective) PE/HF that didn't necessarily recruit undergrads or, if they did, took like 2 analysts from H or W. With PE and even HF recruitment becoming more structured, I would say an argument could be made for starting in the sell side. Curious to hear your opinions though.

    Agree with Francisco: I was considering the option of returning to the VC fund I interned my last summer of undergrad; that fund was good (probably second quartile) but not great. Also, my skillset was spotty then (scientific major) and I decided to take a bulge bracket offer covering the same industry as I did in VC. I learned a ton. Fast forward three years, I got an offer from a top quartile VC fund which would have been out of my reach without the formal banking training and deal execution experience (the latter is not relevant to HF, only to PE/VC).

    But again, if you've got your skillset already up there (finance major or similar), you don't believe you'll learn much in banking, and you got an offer from a top fund, absolutely take it. But think twice: If you can land a buyside job at a decent fund out of undergrad, imagine what you could get after being top-ranked 2 or 3 years in a row at a bank and interviewing at even better funds.

    Last point to consider, you'll create a network during your banking program (top students at world's top universities). If your fund implodes, or you realize that the job is not for you, you can leverage that network to get other opportunities. Working 80-100h a week together, eating together, partying together... that creates strong bonds that last beyond banking, and the vast majority of the analysts in your class will be very successful.

    Aei ho theos geometrei

Pages