Breaking into Hedge Fund as Rx IB VP
Hi all,
Could use some advice on breaking into the HF industry at my level. I started my career as an analyst and am now a VP at a restructuring investment bank (mostly through a few lateral promotions). I'm now 7 years into my career and have only done sell-side M&A and Rx advisory. I know I am late to the game. I started following the markets and have become interested in pursuing a career in public equities or credit (L/S, L/O, merger / convertible arb). Do I have a chance of breaking in or is the real path doing an MBA to break into a HF at this stage in my career? Any and all advice is appreciated.
i got into value investors club as a VP in banking and that helped when I thought about going this route
that said my impression is that this is an uphill climb. they (correctly) thought Id be less enthusiastic about doing tons of grunt work at this stage of my career
Distressed/credit would probably be more relevant to your background and yield better odds.
That said, it's not impossible, will just take a lot of networking.
Distressed HFs would be a pretty clean hire though will depend on how namebrand your bank is. Can ask some of your clients to coffee to ask that you are closer with and they usually know of who is hiring. You might get more indexed to restructuring teams at funds depending on firm which wouldn't come with the seniority hit but may be slightly different seat than what you are looking for.
Not too late at all. Has been done before, can be done again. Have seen both ways (direct or through MBA). Direct - you're better off focused on credit HF. The pushback you'll get from trying to move from RX to equity HF is not worth the friction. Once you're in HF land then you can flip locations in the cap structure. MBA can make sense where maybe you can get a low-commitment internship from a fund and step-stone it that way, especially if want to do equity HF. But a lot can change with the market during that time, and job markets can of course be unpredictable. Just be ready and have a story for the people who (claim) to have wanted to do HF since a toddler to pushback on why you've taken so long to make the move.
Some of the comments above make distressed sound straight forward. I have a few VP aged friends that have done it or tried and failed; it's very difficult.
The successful late switchers I've seen are pulled through a process, either by someone they've worked with, went to school with, or a client that likes your work product. There just aren't that many seats though, and soon you'll be up for a director promote where the paycut to go buyside will be massive.
A lot has already been said above but I’ll throw in my 2 cents. Speaking from my experience in the distressed / liquid credit world, it’s hard, very rare, but not impossible.
The question will always be, why didn’t you figured this out earlier and what makes you more valuable than an analyst with 2 years of RX experience.
None of the things that you will be better than a RX analyst at (negotiation, leading a process, etc) will be particularly valued by the funds, rightly or wrongly. And the assumption will be that you’re more expensive, less willing to do grunt work, and less mouldable than a young and capable 20yo.
Obviously you know all this already. What I have seen a lot more in the last 3-5 years is mid to senior Rx professionals moving into large credit funds, which is obviously a different role to distressed funds. Otherwise, it’s about taking an offer in a “less desirable” seat and then working your way up through the ranks and building your reputation and reps in the market. Again, neither are guarantees and will both take a lot of effort.
Currently with 3+ year of buyside experience. I’m trying to pivot back to banking. Can we switch seats?
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