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HF
 

Volcker Rule Clarification

Mongoose5's picture
 
Points)
 on 5/22/13 at 1:53am

So I understand that the Volcker Rule restricts banks from prop trading with FDIC insured capital/deposits (HF, Private Equity, etc.), but what if a bank uses non-deposit money? For example, capital raised from its own equity or debt, investor funds, profits, are these all part of the 3% exception? I tried searching for this but couldn't really find anything specific. Could someone please clarify for me?

Networking at Ira Sohn

BFOX's picture
HF
(Monkey, 41
 
Points)
 on 5/6/13 at 4:15pm

.

SA IBD -> S&T?

black mamba22's picture
IB
(Baboon, 128
 
Points)
 on 5/4/13 at 5:10pm

I'm about to do an SA IBD stint, but after reading more into banking, S&T sounds way more interesting to me. I'd also be interested in ending up at a HF.

Is it at all common to go from IBD to S&T (at the same bank)? Obviously there aren't a lot of transferable skills, but if I do well in my IBD internship and request to transfer to S&T could it happen? It's not like I'm trying to transfer from the BO, so I feel like maybe it can be done?

Exit Opps: No name boutique with well connected MD's

Plastic Cup Boys's picture
(Baboon, 139
 
Points)
 on 5/3/13 at 4:09am

What are your thoughts on exit opps (PE / VC / Corp Dev / HF) for an analyst at a no name boutique with well connected MD's? Not a complete no-name but one that has a recognizable brand in the niche market it focuses in. Does anyone have personal experience successfully jumping to a legit buy-side firm from a lesser-known boutique?

How hard is it to get interviews in such a case? Even if the analyst were to get interviews, will he / she be at a big disadvantage compared to a peer who is at a BB / MM / elite boutique, assuming both candidates have the same amount of knowledge? How much weight is put on the name of the firm?

Tried the search function, but didn't have much luck. Thanks in advance.

Part-time Investment Analyst at start-up hedge fund opinions

PierreC's picture
O
(Monkey, 40
 
Points)
 on 4/10/13 at 7:52pm

Hi guys:

I was offered a part-time position (up until the firm moves its office from country X to Y) as an investment analyst at a start-up hedge fund in my city. The position's relevant work experience requirement is 0-1 years, and must have an BBA in finance.

The fund manager is well-known and has quite an impressive track record/background which makes me feel more comfortable about the situation.

My concern is the following:

Should I take this position (despite having zero experience in HFs) and hope I will learn first-hand from the HF manager himself, or should I aim for a full-time gig at a well known and established firm?

Part-time Investment Analyst at start-up hedge fund opinions

PierreC's picture
O
(Monkey, 40
 
Points)
 on 4/10/13 at 6:49pm

Hi guys:

I was offered a part-time position (up until the firm moves it's office from country X to Y) as an investment analyst at a start-up hedge fund in my city. The position's experience requirement is 0-1 year of professional work experience with BA in finance.

The fund manager is well-known and has quite an impressive track record/background which makes me feel more comfortable about the situation.

My concern is the following:

Should I take this position (despite having zero experience in HFs) and hope I will learn first-hand from the HF manager himself, or should I aim for a full-time gig at a well known and established firm?

Two year analyst programs at hedge funds

goldman in da house's picture
 
Points)
 on 3/25/13 at 11:30pm

I have noticed that a lot of hedge funds offer two-year analyst programs similar to banking for post-IBD positions. What is the rationale behind that, and is this some sort of a red flag with regards to the kind of experience one might get? I can't shake this feeling that they have two year analyst programs so they can focus less on developing you and get to churn & burn you like in banking. Anyone have any comments on this?

Research at Financial Data Vendor --> Equity Research

tonydaboiii's picture
ER
(Baboon, 149
 
Points)
 on 3/23/13 at 2:17pm

Just landed a research role offer at a financial information provider (an UK firm), mainly covering HF/MF/OTC. So will this position be helpful in making the shift to sell-side few years down the road, and after acquiring the MBA? Thank you.

p.s. I just graduated from undergrad. in Nov 2012 and currently on the track pursuing the CFA as well (June 2013 L2).

Private Equity vs Hedge Funds: 4 Key Differences

alpha mail's picture
IB
(Baboon, 168
 
Points)
 on 4/10/13 at 4:30pm
PE VS HF.png

Mod note: This comment was originally posted in
HF vs. PE for Pre-MBA Associate and we wanted to share this great post on the differences between the two routes to those who missed it. Click here to see more top rated comments.

Full disclosure, I'm biased to the HF path, but have friends at top PE shops. First things first, PE and HF are two fundamentally different career paths. Yes, they're both buyside gigs and both pay extremely well. However, it's the differences you'll have to pay attention to.

1. I would say HF is less modeling intensive than PE just BC at the top PE funds you're only going to be modeling as a pre-MBA associate, whereas at a top HF (fundamental value / long-short equity) you'll be doing some modeling to support an investment thesis but you'll also be screening for ideas, crafting the thesis, and defending it with valuation models, et al. Obviously this a blanket statement and realistically the real answer is that it depends on the shop.

At the top non-sourcing PE shops, dealflow is going to be driven primarily by bankers and the rolodex of your operating advisors and senior professionals. This means that as an associate you're going to primarily do LBO modeling with little work on the sourcing side and little work on the post-acquisition operations side. This is great because it'll make you extremely comfortable with modeling down to a very granular level and it'll help you understand swappable cap structures and HY debt. As mentioned in some other threads, megafund PE is very much banking 2.0.

BlackRock or RBS for HF?

ametista's picture
O
 
Points)
 on 3/18/13 at 7:29am

A friend of mine has two offers: one in RBS rotational grad program, he should rotate in DCM, Macro Research, etc.
The other is for Blackrock, investments division, fundamental equities team.

He would potentially be interested in exiting to HF in a few years, strategy wise he's passionate about global macro, fixed income and event driven (although I think he would also be interested in a traditional fundamental long-short fund).

Should he go for RBS or BlackRock? This is for London, I am aware that RBS isn't big in the US, but in the UK they have a stronger position.

Summer 2014 or Summer 2013 (early leave) Recruiting Thread

goldman in da house's picture
 
Points)
 on 3/1/13 at 10:41am

Since there's one of these in the PE forum, I thought I'd start one here since this would probably be even more helpful for those who want to break into the hedge fund world.

Anyone have any recruiting news for first year analysts? Doesn't have to be post-IBD analysts, and no need to list specific fund names if they're small funds and you'd feel uncomfortable.

Hedge fund after one year of IBD

randomwench's picture
(Monkey, 57
 
Points)
 on 2/25/13 at 3:32am

Has anyone made the jump after one year and would like to comment on some of the things one should consider? Any advice on recruiting for immediate start positions? I talked to all the well known headhunters including Dynamics / SearchOne, and I'm planning on starting to network on my own through my undergrad's alumni network and cold emails.

I'm also curious as to whether the pay cut for only having one year of IBD experience is quite significant versus joining a HF post the 2 year stint. If the differential exists, does it go away pretty quickly?

I know the HF world is full of variability, but hoping to get someone's insight here.

Stress / pressure at hedge funds

goldman in da house's picture
 
Points)
 on 1/30/13 at 5:30am
stressed.jpg

One of the things I hate most about banking is the high pressure / stress that gets put on the analysts from the rest of the team. I honestly think I could deal much better with external stress (ie: from markets), but I have a suspicion that hedge funds may even be more stressful than banking since a series of bad ideas would easily get you laid off. Can anyone working in the industry comment on their typical levels of stress and perhaps compare it to banking?

Thank you.

Is Going to the Buy Side at Junior Level Really a Good Idea? I Don't Think So.

HedgeKing's picture
 
Points)
 on 1/27/13 at 3:42pm

If we look at the bios of senior people at buy side firms, whether they be HFs or PEs, we would find the senior level rarely come from the ranks of the junior staff, with the exceptions of AM firms. It seems promotion from the junior level to the senior level on the buy side is hard and rare. This brings up a question. Is going to the buy side at the junior level really a good idea?

Why do more people want PE than HF?

Joshua93's picture
(Monkey, 57
 
Points)
 on 1/21/13 at 6:35pm

It seems like there is a much higher ceiling in HFs and that the gains are made much more in the short term enabling you make lots of money while still being young. So why does it seem like more people around here are interested in PE?

Also, why do you act like IBD is the only way to get into PE? Plenty, and I mean plenty of people I know have gone MBB and then gotten an M7 MBA before working in PE.

Thanks guys, these questions have been bugging me since I have been trying to decide whether I want align my path for HF or PE.

Wexford

Solidarity's picture
EN
(King Kong, 1,280
 
Points)
 on 1/14/13 at 1:15pm

Anyone with an inside look at these guys? Greenwich-based O&G fund with a large investment team.

Thanks

RIMM report feedback

Max Margin's picture
 
Points)
 on 1/12/13 at 1:02am

Hey everyone, I was wondering if I could get you guys to critique a report on RIMM I recently put together:

http://www.scribd.com/doc/119507200/Rim-Report-Dec...

This is not an equity research report per se, and is thus extremely light on valuation and fundamental projections.
What I tried to do is provide a general company overview and some novel insight into short term stock price drivers at the request of an acquaintance. It was published just before their latest earnings release.

I would really appreciate any criticism and advice you guys could provide in terms of structure, content, writing style etc.. This is my first attempt at something like this and I'm sure there are plenty of holes.

Thanks a bunch!

Should I pay $134 for these two "Street of Walls" HF case study guides?

goldman in da house's picture
 
Points)
 on 1/10/13 at 3:29am

I'm talking about these two:

http://www.streetofwalls.com/guides/hedge-fund-cas...
http://www.streetofwalls.com/guides/1130/?guide_id...

Each costs $67, which is a crap ton for ~15 pages of material that I could potentially get for free by asking people for their old case studies, but I feel like I have a long way to go in terms of HF interview prep and could make some use of it. Anyone have any opinions on this? I doubt anyone on this site has looked at these, but if you have I would greatly appreciate your review.

ER or HF Headhunter Contact

ladubs111's picture
IA
 
Points)
 on 1/9/13 at 2:32pm

Long story short, my firm decided to close down recently so I am out of a job. I got a short list of headhunter contacts already, but was hoping someone on this site could PM me some more. Thanks.

What Does a Hedge Fund Do? (part 3)

AndyLouis's picture
(Almost Human, 6,117
 
Points)
 on 2/2/13 at 2:05pm
money tree (1).jpg

See part 1 here
See part 2 here

From quora.com, op asked this question:

I don't understand what hedge funds do (their impact on the market and what managers do in the company). Could someone give a layman's explanation?

Balaji Viswanathan, Cofounder Fin/Tech startup has the third most voted answer:

Andrei Kolodovski and Bob Rice have already given great answers. I will add a few more points to give a little more background.

What are funds?
You must have already heard of a number of funds - Mutual Funds, Exchanged Traded Funds, Money Market Funds, Pension Funds etc.

A fund is a pool of investor money that is managed by a professional. The professional is responsible for finding investments that suit the funds objective. The profits from the investments are shared among those who have contributed to the pool of money. The professional fund manager is then compensated with a share of the money for his/her time & efforts.

What Does a Hedge Fund Do? (part 2)

AndyLouis's picture
(Almost Human, 6,117
 
Points)
 on 1/30/13 at 7:30pm
money tree (1).jpg

See part 1 here

From quora.com, op asked this question:

I don't understand what hedge funds do (their impact on the market and what managers do in the company). Could someone give a layman's explanation?

Bob Rice, Managing Partner, Tangent Capital, had the second most most voted answer:

Ok, a plain English overview of hedge funds and how they impact the market:.

First, what are they? Hedge funds are collective investment pools run by an investment manager-- but with radically fewer restrictions and less regulatory oversight than, say, a traditional mutual fund. There are over a dozen major strategies/styles, but all hedge funds share two traits: they invest in relatively liquid securities (unlike private equity or venture funds, for example), and they practice very active risk management, deploying assets in a way designed to protect the overall fund against big losses... the "hedge" that provides the name.  Of course, all investment managers try to avoid losing money through diversfication and wise security selection, but hedge funds go farther, often allocating some portion of their assets to "insurance" positions that will pay off if the fund's main bets are wrong. (That is a big reason why "average" hedge fund returns often lag the stock market when it's on a tear, but almost always outperform it during down periods.)

What Does a Hedge Fund Do? (part 1)

AndyLouis's picture
(Almost Human, 6,117
 
Points)
 on 1/7/13 at 10:30pm
hedge funds.png

From quora.com, op asked this question:

I don't understand what hedge funds do (their impact on the market and what managers do in the company). Could someone give a layman's explanation?

Andrei Kolodovski, Managing Partner, TRIZ Fund, had this top voted answer:

A Hedge Fund is a type of Investment Partnership.

If you want to co-invest with other people, you need an entity that can combine your capitals. Depending on what this entity invests into, and who is allowed to join it, you get various types of investment partnerships.

The most common type of investment partnerships is Mutual Funds. They invest in publicly traded securities (stocks & bonds), and anyone is allowed to join. To protect general public investors, Mutual Funds are heavily regulated and restricted in what they can invest into.

Hedge Fund is an investment partnership restricted to "sophisticated investors" - people who have enough experience to protect themselves. Hedge Funds are not allowed to accept capital from general public; in exchange, they don't have restrictions on what they can invest into.

This diagram shows the key difference:

Internships, Small HF vs PWM at BB

kyleyboy's picture
HF
 
Points)
 on 12/29/12 at 8:00pm

I am interested in going into either S&T or smallish hedge fund straight out of college if possible (ideally). For a freshman would it be better to take a small 1-2b HF internship with potentially good mentors or do a pwm internship?

Why Are These Guys Still Doing ER?

Hooked on LEAPS's picture
ER
 
Points)
 on 12/30/12 at 6:36am
ER.jpg

Pretty much every guy on that list has a strong track record over multiple years. I would imagine they get offers from HF's all the time to run money and with the current environment at investment banks, I doubt they are able to match what the HF's are willing to offer.

I'm guessing the people that do ER for a very long time have a lower risk tolerance than the guys that switch over to the buy side? Am I missing something here?

Btw, if a top rated research analyst made the switch to the buy side, how much money can they realistically expect to be running?

2012 All-American Research Team

West Coast IB -> NYC Buyside

WestCoastEastCoast's picture
(Monkey, 38
 
Points)
 on 12/23/12 at 3:16am

How difficult is it to go from Cali IB to buyside shops in NYC? Interviewing logistics is probably going to be the biggest obstacle but does anyone know people who've done it and how?

MFE right after undergrad?

carlfox's picture
ST
(Orangutan, 257
 
Points)
 on 12/6/12 at 8:17pm

I have the option of getting a five year BS and Masters. The BS is in quantitative finance, and the Masters would be in Financial Engineering. Would spending the extra year and getting the MFE increase my chances at getting an offer at BB S&T, HF, or even top prop trading shops?

MFE is top tier 2 if that makes a difference.

Thanks in advance.

GS FIG to HF?

wanttolearn's picture
(Chimp, 7
 
Points)
 on 10/31/12 at 10:41pm

I know that GS FIG does pretty well with head hunters for PE. Does it do well for HF recruiting too? What kind of funds could you go to if you worked in FIG at GS?

HF recruiting and having an advocate at my bank?

goldman in da house's picture
 
Points)
 on 10/21/12 at 2:15pm

Hello, I am a first year analyst and my bank has a policy that no recruiting is allowed at all during the first year (and the first part of your second year). Either way, I can't imagine investment banks being too keen on allowing HF recruiting since many of them ask for an immediate start. How have analysts gone about recruiting and having references while keeping their firm in the dark about possibly taking an immediate start offer? What should I do given my firm's policy to disallow recruiting until partly into your second year?

HF stock pitch interview assistance needed

trailmix8's picture
AM
 
Points)
 on 9/24/12 at 5:54pm

I have been hit with some luck. Last week I applied to a top hedge fund (think Carlyle, Bridgewater, Citadel) that is looking for 1 or 2 associates from the top MBA programs. I applied thinking that this would be a long shot and that there was almost no chance of them even responding to me to let me know that I am not good enough. However, they just emailed me wanting to interview me on Wednesday.

They want me to come prepared with a 10 minute stock pitch on a company in a market where I happen to be a fluent speaker of the local language. I found this article that I found very helpful as well as some other good resources.