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What are entry-level hedge fund jobs like?

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Making the move to the buy-side is often a goal of investment banking analysts, as well as a dream for many undergraduate students. Because there are so many different types of hedge funds and jobs within those HFs, there is no "standard" day. Our goal at WSO is to give you as good of an idea as possible, so we will update this as we come upon more information.

Long/Short Equity - 2nd Year Equity Research Analyst (by WSO user KevinNYC)

  • 5:45 am: Wake up! Turn on the TV and watch CNBC for 20 minutes before I roll out of bed. Check to see what news has hit the tape: Asia and Europe markets, macro-economic indicators, and futures markets. While I am very intrigued by the overall market, the market structure of my fund requires complete hedging so I only isolate events which will affect my universe of stocks. Today, same store sales data is released. I take note of the retail chains with technology exposure.
  • 6:30 am: Head out for the morning commute. Bring sell-side research papers back to work that I brought home last night to read. I need to call the Goldman Sachs analyst to figure out assumptions used in his Intel model.
  • 7:00 am: Arrive at my desk. Open up Bloomberg, Outlook, and Position Monitor. Quickly check our current positions to make sure there was no substantial overnight move. Skim through the 75 emails I received since yesterday. Every morning at 8:00 am we have a morning meeting with the entire technology team. I need to send an email out highlighting any sell-side or company specific information that was released relating to my universe of stocks. Luckily, most important information is sent directly to me by the sell-side sales reps, investor relations at the respective companies, and Bloomberg alerts -- how did this business work before email?
  • 8:00 am: Attend meeting. Talk about some important notes that were published this morning. For example, the Morgan Stanley analyst has found out through Asian channel checks that Apple has ordered enough supplies to produce 13 million more iPhones for this calendar year, 2 million more than was previously estimated. While I don’t cover Apple, my universe includes semiconductor companies that sell to Apple. I am excited to update one of my models because we are long a significant supplier to the IPhone.
  • 8:30 am: Stare at market. Bells kick off and I spend the next 10 minutes watching the
    market adjust to the new day while simultaneously watch our positions. Good start to the day, we have already made $70K!
  • 8:40 am: Organize my calendar for the day. I have a management meeting, a call with the Goldman analyst regarding Intel, and two companies reporting after the market.
  • 9:00 am: Gather questions. I have a management meeting today at our office and so I am responsible for forming questions to ask the management team. I read through my notes from the previous earnings conference call, skim over my financial model, and figure out what the sell-side thinks by reading through research reports.
  • 10:30 am: Attend meeting. I throw on my suit jacket and head up to the meeting with my analyst. I hand over a copy of the questions to my analyst, which he combines with some questions of his own. I greet the CFO and IR Director whom I have met at a previous conference. The meeting begins and the analyst and I start digging in.
  • 11:30 am: Update model. Using the information obtained from the meeting, I update our model. I dash into my manager’s office with a smile on my face and tell him we need to short more of the company. I tell him what has changed after the meeting and explain how it further justifies our thesis. He agrees and we discuss a long-side hedge to remain market neutral. Finally, after a lengthy discussion, we enter our new trades and update the portfolio.
  • 1:00 pm: Call with Goldman. My goal is determine what assumptions the Goldman analyst is using and how he chose them. After a lengthy debate, I come to the conclusion that the analyst has no great reasons to downgrade Intel except for the fact that he didn’t have enough stocks in his “underweight” category. I quickly tell my manager about the call and explain that the stock is trading lower on account of this research report. He agrees and we buy some stock on the recent dip.
  • 3:00 pm: Send out earnings previews. The market closes and we end $2M up on the day. For the last hour, I spend my time writing up earnings previews for the stocks reporting after the close. The earnings preview is a brief summary of our thesis, our current positions, and what we think the company will print.
  • 4:00 pm: Listen to calls. I need to listen to 2 calls in the next hour.
  • 6:00 pm: Send out earnings review. I send out my notes from the call and recommend some tweaks to our positions. I am pretty happy with the outcome despite having mixed prints. We were right on our long position, and it is up 6% after-market, however despite our short printing in-line, managements’ outlook was better than expected. The upbeat guidance has pushed the stock towards a 5% after-market gain. In summary, a pretty good earnings day resulting in a net $1M profit on the pair trade.
  • 7:00 pm: Leave! What a busy day, I barely had time to get up from my desk to go to the bathroom! I pack up some reports I didn’t get a chance to read during the day and take my laptop with me. I look at my schedule. Next week involves insane travel: Las Vegas for an industry conference, Phoenix to visit fabrication plants, Silicon Valley to meet with ten companies, and finally San Francisco for a sell-side technology conference before I head home. One day at a time; off to the gym.

    • Event Driven Strategies - 3rd+ year Analyst (by WSO Certified User Mr. Pink Money)

    • 6:45am - Wake up
    • 7:30am - In the office
    • 7:30am to 8:30am - Breakfast, Check inbox/messages, Read paper/blogs/etc., morning meetings
    • 8:30am to 1:30pm - Depending on the day, read transcripts/filings (30% of time), investment meetings/calls (20% of time), build models (40% of time), investment memos/emails (10% of time). This is a juggling act since I'm usually working on 1-2 new ideas and 2-3 portfolio positions during the week.
    • 1:30pm - 2:30pm - Lunch/Pay Bills/ESPN
    • 2:30pm - 8:30pm - Meet with PM (ranging from 30 minutes for brief updates to 3 hours for research findings) and more modeling/reading/conference calls rest of the day
    • 8:30pm - Midnight - Go home, dinner, gym, read paper/blogs/etc., read more filings
    • Sometime between Midnight - 1:00am - Bed

      • I'm not lying when I tell people I am a professional footnote reader. A typical year as an investment professional:

      • First quarter of the year can be pretty busy as many funds tend to put more/new money to work and companies begin to hold analyst days, etc. Combine that with earnings season in late January and I easily end up putting in 12-16 hours over the weekend.
      • Moving into middle of the year, things definitely slow down a bit over the summer and I only work mornings (8am to noon) as needed during the weekend.
      • The end of the year is Jekyll and Hyde. Hours are usually manageable, but I've had some of my worst weekends in October/November.

    Global Macro Trader - Partner (by WSO Certified User Bondarb)

    • 545am Get to work, print up and read overnight research pieces both from internal analysts and from the sell-side. Check in with traders in London for color on the overnight session.
    • 830am If its a Monday my group has a group meeting where we go over the calendar for the week, talk about new trade ideas, and discuss management of the positions we already have on. We also do meetings like this in front of big events such as central bank meetings and payroll reports to go over our thoughts and strategies ahead of these events.
    • 930am-430p Read research, watch markets, do trades if appropriate, talk to sell-side analysts and traders, talk to coworkers about markets, go over charts, work on my own creations (model-type things). Sometimes go to meetings with economists and traders from sell-side who come into our office.
    • 430p leave call levels with our internal nightdesk and go home.
    • 5-9p Go do something social
    • 9p log into my computer from home and check on overseas markets. chat online with our internal nightdesk and with sell-side guys in Australia, New Zealand, Tokyo, etc. This is what i'm doing now.
    • 10p go to sleep
    • 2am get call from nightdesk...something happened overseas and a position is running badly against me. Drag myself back to my computer, log in, and see whats happening. decide to do nothing. i can still get 2 hours of sleep if i go back to bed. This happens about 20% of nights.
    • 545am do it again!

    This is not to say you can't get a general idea of life for a hedge fund analyst from it. Certain types of funds will weigh heavier on certain areas. An equity research associate will probably spend more time on filings, an analyst at a quant fund will probably spend more time working on coding, and a global macro analyst may spend more time on current events.

    WSO also offers an original guide to some of the careers on Wall Street, A Look Behind the Wall: An Overview of Six Wall Street Career Paths. This guide will give you a more in-depth view into the traits necessary for breaking into and maintaining a successful career in investment banking, private equity, venture capital, private wealth management, hedge funds, and management consulting. While this guide does not purport to have all the answers, each one of the contributors offers a unique, candid, and personal view of the lifestyles, compensation, and exit opportunities afforded by the careers they have had the opportunity to work in.

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