HF Interview Pitch Compliance Issue?
As a registered agent of a broker dealer in SS research, am I allowed to pitch a covered company with a higher price target than what’s shared publicly? I’m not sure what you guys have experienced when interviewing with HFs. I want to send over a modified write up with a higher PT than what’s published and not sure if that’ll get me into trouble
Based on the most helpful WSO content, this could indeed raise compliance concerns. As a registered agent of a broker-dealer in sell-side research, you are bound by strict compliance rules. Modifying a price target (PT) to be higher than what is publicly shared could be seen as a violation of those rules, especially if it deviates from your firm's published research. This could potentially lead to issues with your current employer or regulatory bodies.
When interviewing with hedge funds, it's better to focus on showcasing your analytical skills and thought process without breaching compliance. You can discuss your reasoning and methodology for arriving at a different valuation or PT, but ensure that you clearly state it is hypothetical and not tied to your firm's official stance. Always prioritize transparency and compliance to avoid any potential trouble.
Sources: Breaking into buy-side equity research - my experience, Reflections from year 4 as an equity analyst, Long term, concentrated, deep fundamental investing, How to convert sell-side models to your own models faster?, Observations of an Equity Research Associate
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