Ask Me Anything : Anon1254

Hi everyone,

It's been a little more than three years since I posted "Never, ever, ever, give up".

https://www.wallstreetoasis.com/forums/never-ever…

I initially shared the above thread to try to provide some perspective/inspiration for those who may need it - and I was overwhelmed (and humbled) with all of the positivity I received via comments, messages, and more.

As an update, in the time since publishing the initial thread, I've knocked out B-School and transitioned to the public equities side of things, where I currently work as an Analyst at a L/S Hedge Fund (my specific coverage is Healthcare, largely focused on Therapeutics, but also look at MedTech, etc., to a lesser degree).

WSO was instrumental in every single point of my career (the insights here posted by other members served as a great foundation for building my knowledge base of the Finance world) and I'd like to do what I can to help give back to you all. Happy to give you my perspective on any questions you might have (Career, B-School, Life, etc.).

Hope you're all staying safe (healthy), and look forward to chatting soon.

-- Anon1254

 

Hi Mr. Anon, I had seen your comment on my anonymous post. You’re right. Wallowing in self-pity won’t do anything. I need some guidance on what to do quite badly, and I would incredibly grateful for your advice. Is there a way for me to contact you? - A High School Senior

 

For some reason it doesn’t let me send more than one message a day. Is there any other way for me to contact you? Possibly a reddit or something along those lines? - A Grateful High School Senior

 

how are L/S funds in HC weathering the current storm? Im assuming you're not at an MM. Is this seen as a buying opportunity are are people generally just trying to survive?

In your opinion, what are some really good L/S HC groups? Outside of the big ones like baker bros, perceptive, are there any groups out there you would recommend following?

 
Most Helpful

Hey, thanks for the question. You're right in that i'm a a single manager right now. From what I gather, a lot of guys in L/S HC are trying to survive right now. You're seeing a lot of the market dynamics correlate to (or coalesce) around COVID-19 and any related news headlines surrounding it. This isn't to say that there's a tremendous buying opportunity at hand (there are ridiculously mispriced securities out there in the HC space that are late-stage clinical, trading under cash, with near term catalysts). I think the common denominator between institutional guys is that we don't truly know where the bottom is.

Personally, I tend to think April will be very telling for the market's trajectory (barring any positive news stemming from Hydroxychloroquine and Azithromycin), as I think the market will be looking at Gilead/Remdesivir readouts as an indicator. Not sure what the outcome of the trial will be, but I personally always assume the base case.

With this said, I can say high level that in our fund, short positions helped in the current market environment as did a couple names we had that popped on unexpected COVID related news.

As for your question about good L/S HC Groups, I would say RTW Investments, Sio Capital Management, OrbiMed, and RA Capital are worth following. From a long-only standpoint, I think BVF is also worth looking into. There are also a few crossover guys that are worth looking into, including Vivo and Bain.

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Thank you in advance for the AMA! I have a few career questions related to biotech HFs. 1. Would you say a PhD/MD is important for advancement within the biotech space? If you have the option to go straight from IB / PE to a good HF, would you recommend getting a MBA? It seems like the HC space values graduate degrees more than other sectors. 2. Can you please comment on your hours, weekend work, and overall stress? In your experience, do single-manager funds have better work life balance than multi-managers or are there other factors more correlated with culture? Do juniors tend to stay for the long run or do they burn out / leave for other opportunities? 3. What is the typical investment holding period at your firm? What do you think is the distribution of biotech HFs that focus on event-driven/short term investments versus long, deep value? 4. Did you ever consider joining a biotech activist hedge fund? Thank you.

 

Hey, no worries. Happy to provide my perspective on your questions.

  1. A PhD/MD certainly helps the case (many recruiters/funds post this as a pre-requisite for working), but it's certainly not impossible to break into a fund without these requirements. As mentioned in my earlier thread, I have a degree in the natural sciences (undergrad), and so does one of my colleagues. With this said, I do work with a few PhDs/MDs, and they definitely have strong technical knowledge that's invaluable to the space. I think the most important thing you can demonstrate is your ability to learn/pick up the Science. I think my undergrad foundation helped me out to this extent.

My choice to pursue B-School was two fold; first, it was personal as I'm a first generation college grad and wanted to do it for my own/family reasons. Second, given my lack of a finance background (educationally), I thought it might be a good way to fill in some gaps (which it ended up doing). I think an MBA helps to build your brand, but personally, I don't think it's required. Except for top schools (H/W/S/C), placement into HF is pretty tough and requires networking/in some cases pre-existing work experience.

  1. My hours are pretty standard at 50-55 a week. I've only had weekend work once in the year that I've been at my current fund. At my previous fund, hours were the same and I never had weekend work. Stress levels are also well under control; I genuinely love my job, and I also have a good tendency to stay calm when the markets get volatile (as they have now). I've never worked at a MM, but I can tell you that I'm pretty happy at a single-manager and have no intention of going to a MM any time soon (unless an opportunity presents itself that I can't pass up). I have friends that work at MM, and the common feedback I get is that the hours are all team/strategy dependent. As an example, one of my friends works for a short-focused team at a MM and his holding periods are long (so his hours are better). Culture is obviously extremely important as well (there are multiple threads on this forum that name some MM as being notoriously tough/difficult). My sense is that guys at MM are either up/out - you either perform and are given capacity to run your own book, or you're let go. This would intuitively make sense if you work for one PM alongside a small group of guys - as long as the PM is running the book, I would imagine that advancement opportunities are somewhat limited. Yes, burn out is also real. I know former Biotech HF guys that have gone into industry (C-Suite at Biotech), IR, sell-side research, or even left the industry completely and started up their own ventures. Investing is a tough game.

  2. Without giving away too much detail, our holding period is HFs have similar holding periods; some of the funds that tout themselves as more "fundamental" in nature can have different holding periods (you typically see the private/public guys have a longer-term, multi-year view on names).

  3. I think activism is interesting from an "edge" standpoint; I know a few Biotech guys who do this. It's great if it works - but you'd better have the utmost degree of confidence/conviction in your picks, since your strategy will likely encompass a concentrated portfolio. In market environments like the one we are currently experiencing, it's pretty hard to run an activist campaign and make your company stand out when everything is falling off a cliff. I also think that activism requires a lot of time/energy/effort - which may ultimately detract from building a diversified portfolio. I'd consider joining a Biotech HF that does some activism, but I don't think I'd join a pure-play activist Biotech HF.

Array
 

Hey man I just read your old "never ever give up" post. Congratulations on your continued success. I want to ask a few questions hopefully it does not irritate you.

How did you land the HF gig did you recruit straight from your MBA program? Other than the 2 years in IB, ER, or an MBA, what other backgrounds have you seen break into HF. What is the ranking of your MBA? And AUM of the HF? Lastly, and I hate to be that asshole, but how much money do you make and do you expect to make 7 figures at any point before portfolio manager?

You can give ballpark figures if you want. Thanks a ton for doing this.

 

Hey, thanks for the kind words.

  1. I landed my HF gig primarily through networking and really pounding the pavement (cold emails, coffee meets, etc. I've never used recruiters to land a job, nor have I used any On Campus Recruiting programs. I tapped my pre-existing Banking/Institutional Sales/Analyst contacts for introductions, and I was able to transition into my current fund.

  2. Highly depends on the strategy. For distressed (as an example), I've seen tons of lawyers make a lateral move (as this is natural for the strategy), while in Biotech, I've seen PhDs from Pharma industry with no prior experience get in. I also know of people at a MM that have investigative journalism based backgrounds. It really depends on what the fund is looking for/the expertise that you bring to the table, and how you can pitch yourself.

  3. MBA is top 10, and AUM of the fund is north of $200M.

  4. Comp-wise think low to mid 200's first year. Regarding your question about making 7 figures before PM - I certainly hope so (lol). Realistically speaking, probably not.

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For me, personally, I didn't find PE to be exciting. Long, drawn-out deal processes, the potential to be outbid for deals last minute (especially after spending months of diligence working on something), and more made PE unappealing for me. I'm sure my perspective may have been different had I worked for a Mega Fund or another firm with greater infrastructure, but I'm ultimately happy with my decision.

What I like about the public markets is the fact that I can come up with a trading/investment idea and implement it within minutes - and potentially see a commensurate gain (or loss) depending on the outcome of my idea. I also personally believe that the public markets are more dynamic/stimulating than private markets, so in the end, it worked out well for me.

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I’ve traditionally been good about work-life balance, luckily. Granted, on most nights I answer emails and occasionally have to do evening work, but I ensure that I’m able to spend at least 1-2 hours a day (everyday) doing something I enjoy.

For me, this is typically lifting at the gym, martial arts, reading, or catching up on a TV show. During this time, I typically don’t check my phone or respond to emails. I think it’s very important to have “you” time in this industry, and I keep that concept top of mind. It’s okay to be selfish.

Find something you enjoy doing and make it a part of your daily routine. I also recommend meditation as its genuinely helped my mind to slow down when I need it to.

Array
 

Hey thanks for doing this, I really appreciate you for paving the way forward. I'm currently in sellside biotech/pharma research at a boutique, and will have hit my 2 yr mark by Fall. I'm looking to hop into HF but had a few Qs. I have no MBA/CFA, just a science background.

Besides fund's strategy, what other factors did you take into consideration when you were initially choosing a HF? Culture? AUM? Team size? Etc

For cold emails/reaching out, who would you target for intro: associate/analyst or the PM directly? What was your strategy like (I.e. sending stock pitches, investment thesis, etc along with resume)

What kind of exit opps are you thinking after HF? Or are you pretty satisfied currently where you are?

In general, what are some of the things sellside can do to better prep for a role on buyside? 

Thanks in advance.

 

No worries, happy to provide some color.

Regarding my choice of HF, aside from strategy, the two most important factors for me were culture and team size. Culture is self explanatory - life is too short to work with assholes.

Team size was another focal point - my preference was to work for a leaner/smaller team where I could make more of an impact and wear multiple hats (also bodes well for potential upside at a fund regarding both comp and upward mobility within an organization).

For cold emails, I would always reach out to the PM. My policy is to always go to the decision maker every time. Regarding my strategy, I put a few bullet points in an email about why I was interested in the fund and what I could do for the fund, and attached my resume and a 1-2 page stock pitch.

For my current status, I'm pretty happy working at my fund, and I can't envision myself doing anything else (exit opps wise). I truly love investing in Healthcare, and every day is exciting for me.

I think the most important thing you should do on the sell-side is network with buy-side guys. I personally don't really rely on sell-side research a whole ton - I'll read equity research to get up to speed/gain additional color on a company if I need to, but I'll never use it to contextualize whether something is a buy/sell. I think getting in front of PMs/Analysts when you're on the sell-side - and building relationships/presenting original ideas/thought is the most important thing you can do. I'm assuming you already speak to buy-side guys, so try asking them to grab a drink post-quarantine to get to know them - and be prepared to discuss some names that you may not cover, but that you find interesting. HF recruiting is rather unstructured and esoteric, and it's also a small world - so position yourself as best as you can to land a new role via relationships.

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