AM to HF? Is this common/possible
Hi,
Currently first year UG and think I want to move into AM/HF as a career path. I am still unsure what to specialise in (FI, equities, etc) but am pretty sure I want to be on the buy side.
My dilemma is that HF sounds great, but how does what they do differ from an AM, and how do you get into a role at a HF? I have the understanding that HFs can be Long/Short, but can't some AMs also be L/S?
What skills are there that are needed for a HF that an AM may not have? Can you move from an AM to a HF?
This is hard for me as there are few HFs in the UK that offer internships/grad jobs for UGs.
Also probably worth noting I want to be a portfolio manager/CIO towards the end of my career, thats the end game.
Can any experienced monkeys help?
Thanks
Edit: My dream really would be to be a bit like a prop trader where I am allocated x amount of cash and just told to make a return (old-school S&T where you could take risk); am I even looking at the right roles for this?
Hey im a first year undergrad myself. people on wso dont seem to help us newbies haha. iv'e done lots of research independently though and also know a few people etc so i may be able to shed light on your question.
from my understandings HF's seem to be mainly hiring PHD candidates increasingly or people with masters in strong mathematical fields. its becoming quite rare to join HF out of undergrad.
the skills needed in HF now are a increasingly going towards algorithmic trading / schotasitc calculus modelling so having a phd in computational finance would probabaly help in getting a HF role. however some hedgefunds still use top down fundamental analysis, but i think even these HFs will inevitably automate at some point.
Maybe you should have done better independent research...
The only HFs that only tend to focus on hiring phd candidates are quant funds (or maybe some healthcare focused funds?). Those are the funds where you'll see the math or cs phd guys from MIT, Harvard, etc. Those are also the funds that will use a lot of the math / cs that you mentioned. You don't need to phd to get into a HF.
"some hedge funds still use top down fundamental analysis".... a lot of hedge funds that use top down / bottom up analysis. Certain functions within these funds might automate in the future, but it's still too early / naive to say that they'll be completely wiped out because they are going to be automated.
Depending on the type of fund OP is interested in there are different ways to land a seat. If you're looking at quant funds, there are quite a few seats that you can land right out of undergrad (look at 2 sigma, de shaw, p72, citadel, etc. so many funds offer internships to undergrads), otherwise maybe a masters / phd program would be a good option if you're set on doing that thing. If OP is interested in your typical non quant funds, there are still quite a few seats you can land out of undergrad (although quite hard too), otherwise 2 years of IB / PE or a combination of two would be a good path, maybe MBA too if you want to look at that.
The main difference between AM / HF from my experience (interned at both types, heading to FT at HF), is that AM guys tend to focus on relative returns vs HF guys focusing on absolute returns. I'm sure someone working FT at an AM can add more colour to the differences, but even in terms of lifestyle, AM guys seemed to have a more relaxed time I guess in the sense that my PM at the AM would come in at 9 leave by 5, maybe earlier on fridays. On the other hand, my bosses / coworkers at HFs would have more unpredictable hours. Strategies would be another difference too I guess? But again not too knowledgeable / experienced enough to comment on this much.
Maybe as a next step reach out to alumns from your school at AMs / HFs and talk to them about their role, jobs, etc. and try to figure out what interests you. Maybe do some research on the web... lots of resources out there. I can't really comment on the AM side of things more because I just had one internship there but hopefully someone else can add more colour
Thanks for this
I currently have no cs ability although I am looking to develop these skills over the next couple of years. Quant funds sound great, but I have no interest in pursuing a PhD, maybe a masters (either MBA or MSc). Would you by any chance have a list of quant and non-quant funds if you have previously applied to internships in them? Would be a great help as I have not come across many in my search
I pretty much just used to send an email to every fund in the city regardless of them having a posting or not. Very tedious way to find stuff but worked out in the end... also helped me land a couple of great opportunities and great way to build my network too. I would suggest that since you have the time. Network with alums / analysts at funds you're interested in - that would be one way to get in possibly in the future.
I can't really list out all the funds that I applied to because tbh I applied to a lot. I would suggest going to bberg / CapIQ and pulling up a list if you can and emailing funds. Use your school's job board as well - that will help you a lot. Otherwise I'm sure there are a lot of posts on here as well that already have a list of funds that you can target. Maybe search on here and do what I said to find a list? If that doesn't work lmk and I'll see if I can maybe put up / send you a list.
I've been a lurker on this site for a while. You have to prove you can add value usually during a internship at that fund. Or being able to network to a smaller start up fund. Either way going to a HF after undergrad don't expect a big salary.
As far as AM goes you can get a internship and work there if you get a full time offer. Look in the AM section on here under most popular and you'll find the thread where it goes more in depth of the lifestyle of AM career. If I find it i'll post it.
Yes it's possible; you won't get in to the rockstar SM funds that only hire out of the Apollos of the world but you can easily switch to a MM or normal SM if you want. It's not that common because you will realize upside adjusted for risk AM and HF are about the same.
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