Aim for HF after undergrad or IB/restructuring?
Currently a freshman. One day working at a prominent single manager sounds cool. They don't hire out of undergrad. Would much rather work at HF than IB/restructuring. So if I was to work at a multi manager which firms would you suggest I go for. Also, do you think pursuing those HF options are better than trying my best to go GS IB or PJT RS when it comes to breaking into a single manager fund down the line. Thanks
No, do not go straight to the buyside at a hedge fund or private equity firm (unless you know for sure that it is at a place that offers a great training program). The training/mentorship for someone straight out of college is much better when you start out in investment banking. Most hedge funds don't have that many bodies and they want someone who understands the basics on day one (understanding how to go through and read financial statements, makes no mistakes, doesn't need much oversight, and can use excel pretty well).
Those who I have worked with on the buyside with an investment banking background are generally much better in their work product/output than those who didnt start out in IB. IB sucks for a few years yes. But it is the best place to start your career and get all the basics down. Plus, you are a freshman still, you think you have an idea of what you want to do but you really don't. IB keeps the door open and gives you a bunch of exit opportunities in case you change your mind in the future. Much easier to go from IB -> HF or PE. Much harder to start out at a HF then switch to something else as the skillset is very specialized.
Plus starting out in IB at a good shop gets you access to recruiters who can help make the transition to the buyside easier.
Read more of my general thoughts on this below:
How about a place like citadel/P72? Good place to start after school/after IB or s&t internship?
Investment banking still makes the most sense to start your career. Job security at the large multi-managers doesn't exist. Plus the investment style is not for everyone. Fresh out of college you have no idea what kind of investment style you identify with/want to pursue longer-term.
I used to work at a large multi-manager like the ones you mentioned. Wasn't for me. Can learn more about what it's like to work at one of those shops below:
Well, obviously yes. However, getting into those firms is a different story. Also, S&T is quite different than a quant background at P72 and Citadel.
That's good advice. Only fork in the path I'd proffer is going into external reporting/IR/audit as another option. It's also a good way to learn how to read and construct models, statements and mindsets that you need for buyside skills at a HF.
I don't really agree with this. First of all, the myth of training and mentorship in banking is a joke. I was at an EB and BB, and I got a TTS class and abuse from VPs at both. We weren't allowed to recruit openly, much less consistently ask anyone for advice on our career. It probably took years off my life. And I don't know how many skills you actually learn either. For PE, maybe banking teaches you useful skills since most of your associate years are process and deal oriented work. But for a HF, banking taught me exactly zero about how to think like an investor. I would've been far better off developing that skill set / mode of thinking earlier in my career. And learning on the job and being pushed to take on real responsibility earlier is a way better model for learning than being micromanaged by three overworked psychos trying to show you up to the MD at every moment. As to the recruiting point, I think as buyside analyst programs grow, I've seen lots of the PE/HF undergrad analysts move around fairly easily, and the recruiters have been plenty willing to talk to + help them.
I think for the vast majority of college students, this is not good advice. Most people have no idea what they want to do longer term straight out of college.
Sure, if you know for a fact that you want to work at a hedge fund for the rest of your life at 21 years old, then maybe it makes sense to work at a HF straight out of college. The problem is that people fresh out of college think working at a HF must be the promise land cause you can make a lot of money and work much less hours than in banking. They don't realize what it actually is like working in the industry.
It's not for everyone. It's much more introverted of a job than people realize, there are a ton of different investment styles different at various hedge funds (shorter term time horizon, quarterly earnings modeling, lots of speculation), and the amount of money you can make is misleading. A lot of analysts at hedge funds actually make less than their investment banking peers, it all depends on the returns in any given year. I know many at multi-managers who didn't receive any bonus in some years cause their team didn't do well. A ton of turnover and no job security as well.
For someone to just jump straight into a HF without knowing 100% for a fact its what they want to do longer term is not great. Investment banking provides much more exit ops and allows you to have 2 more years of real work experience to figure out what you really want to do next.
Even without direct mentorship, banking provides you with a structured setting on how to do a bunch of basic stuff like create revenue builds, forecast fixed vs. variable costs, capex, etc. for different industries and business models. Even if you're just thrown to the wolves, you still get to see in-depth company models built by a CFO, with a mid level person to check your work, and past work product for reference.
It'll also give you exposure on how value is created from transactions, which become highly relevant for distressed and activist investing.
Most funds, especially SMs, will not even provide training on how to do basic business model analysis, but expect you to be able to do it well day 1. It's not something you can just pick up from wall street prep, although there is Brett Caughran's course.
What’s a TTS class?
You’re a freshman and your only goal is to work at GS or PJT RX? Sounds like you need to do a little more soul searching rather than blindly following what you’ve been told to do reading this website.
nowhere in my post did i say that. Don't want to work at GS or PJT RX. If you actually read the post you would see that. I'm just asking for advice.
Find the hidden SM that do take undergrads. There are hundreds of them out there you people just don’t know about them because they don’t advertise.
Not to hijack this thread, but I'm also trying to join a HF out of college. Could you share any strong SM's that take undergrads besides the ones talked about on this website Abdiel/Matrix/Farallon etc. Pms open if you don't want to share publicly.
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