There seems to be a growing trend of those who eventually want to work in public markets spending a couple years in large buyout shops before transitioning. Curious what people’s opinions are to the benefits/detriments of taking this route vs trying to break in straight out of IB
| +47 | Do Quantamental roles really exist? | 23 | 3h |
| +18 | Worth Joining a Small Hedge Fund? | 13 | 2d |
| +17 | L/S Equity Career London | 11 | 1d |
| +12 | Hedge Fund (Fundamental Long Short Equity) Compensation in Singapore Hong Kong | 3 | 2d |
| +9 | Nvm | 6 | 1d |
| +8 | Yes, this question again… | 3 | 3d |
| +3 | Wfh / work remotely at MMs or SMs? | 2 | 1h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I'd say this is not a growing trend but actually inverting.
Also candidates from banking are more regularly picking PE over HFs except certain niches like RX (which overwhelming choose distressed credit funds).
Most people are risk averse and pick the safe route i.e. PE/MBA/whatever happens next after that.
Agreed on that front.
Regardless of the increase or decrease in popularity, I'm curious what you think the benefits are of spending a couple years in PE prior to jumping to HF?
curious as well. private and public investing seem to be completely different games unless you are looking at value oriented or turnaround shops?
Three large reasons:
Much easier to go PE -> HF than the other way around.
PE is a much smoother transition from IB, as the work is similar and there’s a more structured recruiting process compared to HF.
Finally, PE is generally a safer path at the moment. HF industry has been heavily scrutinized for the lack of outperformance against index funds, whether rightfully so or not, and as a result many shops have recently closed their doors. It’s very hard to outperform in a never-ending bull market. On the other hand, PE is booming and there is a ton of dry powder to be spent, which provides job security for at least the next 4-5 years.
Whether these trends will continue over the medium / long term is anybody’s guess
Agreed, especially as it relates to the type of work being more similar. Think there are any benefits from the perspective of becoming a better investor?
I did PE before I moved to a HF. One of the above posters pretty much nailed it. PE is safer from banking, there are more spots, recruiting is more structured, the work is similar, and you probably have more varied exit opps from PE than from HF. That being said, if you prefer the public markets, spending more time on analysis, more responsibility, and are ok with more volatile pay, then HF is the way to go.
I found that my PE background made me more attractive to certain HFs / PMs and probably helped me better understand fundamental drivers of business performance better than I otherwise would have.
Hedge funds like PE candidates because of the extent of diligence PE requires before investing into a business. You also get the benefit of being able to look "under the hood" of businesses and better understand how numbers tie to what's going on in a business.
Modeling in PE is also far more intensive given that you have access to private information so you're able to appreciate the actual implications of drivers in a business.
I wrote a pretty elaborate post covering this topic - probably worth a read as you contemplate different options. https://www.wallstreetoasis.com/forums/why-i-left-pe-switched-to-the-pu…
Incredibly helpful, thank you
Thank you for this - I'm assuming you're based in NYC?
Qui quia consequatur corporis voluptatum ullam. In ut nesciunt quia. Dicta molestiae impedit itaque ut voluptate dolorem. Autem vel voluptate veniam qui sit velit alias. Sed dolorum non et sapiente pariatur. Non et placeat et omnis omnis molestiae soluta.
Aut nam facere consequatur eum consequuntur provident repudiandae. Atque dignissimos molestiae est tempore.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...