CFA and HF Recruiting
Hello all, Quick question about the CFA and hedge fund recruiting. I will be starting with an EB in June, and I am very interested in exiting to a public markets gig after my analyst stint. That said, I am wondering if taking the CFA Level 1 exam in December would be beneficial when it comes time for recruiting, either from a signaling perspective or in terms of technical preparation. Anyone have any advice here?
Thanks!
I did L1 as a senior and thought it was worth it in terms of brushing up and refining what I had learned in UG finance. Probably worth it if you are sure you want to do public markets investing. People will tell you to just have fun not study but honestly you'll have enough free time that you can do both, and I think it does reflect well on you RE: your commitment to the field, etc
That was my thinking too -- definitely makes sense to me. Did you end up finishing the charter, or did you stop at level 3?
Also, on a related note, any advice for fund recruiting as far as networking goes? Is it worth it to be setting up informationals, or should I simply let the headhunters do the legwork?
Really depends on the hedge fund. The CFA is valuable for long-only Asset Management, but trading in the classic hedge fund sense is a bit different, many HF strategies don't use traditional analysis as taught in the CFA curriculum.
AM is more interested in your credentials, whereas a HF only cares if you can make them a lot of money (with or without X, CFA).
I would just say don't start it unless you intend on finishing it. Seen too many ppl start the program, get through L1 and then just either flame out after failing L2 or lose interest entirely. That seems like a huge waste of time to me, since you get nothing for having passed L1 alone. I do think it remains very worthwhile if you are willing to go the distance. That is from my "sleepy long-only" perspective, however...
Appreciate the input here guys. A Friend, how would you fit value-oriented L/S into that picture? Definitely understand the trade-off between, say, Fidelity and Pt72 with respect to the CFA, but how do you think it would play if I was talking to a L/S manager with a fundamental bias?
Jankynoname, that's an interesting perspective, as I had actually been thinking of doing just that. My thought process is as follows: if I take L1 in December, the recruiters will see it in January, and it would (hopefully) serve as both a good signaling mechanism and it would help with the technical interview prep. Once I get a job, however, I figured I would only complete the charter if my employer wanted me to or I felt I would need it down the road. I guess in short, I feel like there could be value in just L1, given my timing.
If it's more fundamentally oriented I could see them appreciating the CFA (at least level 1 to show your interest and to differentiate yourself from other candidates). Of course only pursue it if you have time, and your time cannot be spent in a more productive fashion to reach your goal.
Also, I've spoken to people who run pretty quantitative strategies and they've told me that they do not care if their analysts have the CFA or no (meaning that it's not beneficial but also not a negative). Just that you keep in mind that the CFA L1 will not be a bad thing, even if you decide to go after funds that see no value in it.
I'm not sure if a PM at a HF would view things differently, but from my perspective I give very little weight to someone who has passed just L1, it's a bit like when people put "CFA Candidate" on their resume. Anyone can be a CFA candidate, and almost anyone can pass L1. I interview a lot of MBA level candidates and usually if I see someone has passed L2 I will take note of that because in my mind they are "over the hump" and should be likely to complete the Charter. I'd say i value L2/full Charterholder similarly, which is to say that shows a lot of dedication and that someone is motivated. Doesn't mean they will be a good stockpicker... but it is a good signalling mechanism like you said.
Given your timing, I think it makes sense to go ahead and start the program. I never think it hurts, and it will set you up on a path where you will have optionality to complete later. Optionality is a good thing...
I would take a look at what it takes to pass L2 before you even look at L1 is,
My story is that I swore off L3 during the last two weeks of studying for L2. Supposedly, this is the "hardest" CFA exam. I passed L2 six weeks later. It's three years later and I still haven't signed up for L3.
L1 is a joke, L2 (or perhaps L3) is the true hurdle.
As a buyside statarb guy, I'm not sure how much value there is in the CFA exams or what you memorize to pass it.
I would be very careful about putting CFA candidate or CFA level 1 on your resume. The fund I worked at would typically grill candidates with any indication that they're enrolled/going to enroll in the CFA program. The problem with the CFA 1 is that concepts are overly simplified. You would be surprised how many CFA 1 candidates i've interviewed that don't know how to connect the financial statements.
That's a great tip, thank you very much.
On another note, do you have any advice for networking before recruiting begins? Is cold-emailing analysts and asking to buy them a coffee a little creepy, or could that be worthwhile?
Appreciate the hand here.
Not really - I loved getting free coffee. My biggest advice is to cold-email people you have something in common with e.g. grew up in the same town, played the same sport, went to the same school, were in the same frat or social club etc....
Also, best to email people between 8am - 12pm. Keep it short (1 - 2 sentences), and get straight to the point.
Definitely read "how to win friends and influence people", it's a great networking guideline
Are you taking about people in the process of getting the CFA charter or specifically candidates for level 1.
I don't expect much knowledge from a level 1 candidate, as the only thing they've proven so far is that they are able to sign up for an exam and pay 1k in exam fees. I do see it as a sign of interest for investing though (which I value highly), but don't expect any more knowledge from them than from any other kid coming out of school.
For other candidates (l2, l3) I do expect a certain knowledge of finance, as they've passed at least one of the exams before.
Both. It's the finance industry - there are always going to be irrational people trying to set you up for failure. Having any indication of the CFA on your resume could be that potential factor that gets you dinged from moving forward.
Charterholder, work at a value-oriented LS fund.
I'm not sure how elite boutique hours will work with studying? I never did banking but had friends who did it and am well aware of the horror stories. Working at an elite boutique will get you meetings with headhunters and interviews at funds. I would say its incrementally positive and valuable for a LT career in the industry. Even if you are an undergrad finance major and a smart guy, you'll still need at least 75-100 hours (they advise 300+). Their ethics section is a bunch or arbitrary bullshit that takes a lot of time. You'll want to take a few practice tests just to get used to it.
Grey Fox, thanks for the input, I was hoping you'd chime in.
Definitely agree the hours would be a problem for studying. I guess I figured that if I start studying now (while still in school) and take the test in December, I might be able to squeak by.
Can you add anything on the subject of pre-recruiting networking? Do you think setting up some informationals sooner rather than later would be beneficial?
I'd not really worry about networking for HF jobs, particularly at an analyst level. Its not something like banking where there is a class size of x every year and you need a couple people pulling for you internally. In retrospect my outsiders perspective for banking interviews is that its a lot like a fraternity rush process. Knowing some analysts at a HF probably won't be a huge boon in a process that is overwhelmingly driven by headhunters and more institutionalized over time. You'll get a lot of looks from an EB, there it is about conveying interest/intelligence/being a good fit.
Once you get in the business the value of a network goes up. The job opportunities at a more mid-senior level are almost entirely network driven. It helps to know a lot of people who have their ear to the ground. Having smart friends to go through ideas with is important too. The whole idea of some genius with a stack of 10Ks by himself, tuning out all the "noise" is largely a farce.
Quick follow up - you can take CFA 1 in June, depending on school schedule that is probably a better option than December.
Gray Fox, I considered this, but I suppose my thinking was if I take L1 in June, it might look strange come recruiting season if I didn't take L2 come December.
L1 is June/December, L2/L3 is June only.
L2 is no joke. The pass rates on all 3 are below 50%. L1 clears the people that just don't put the effort in to studying. L2 is hard. L3 seemed easier but the pass rate is still low. It involves a significant written portion which I think hurts the ESL test takers.
I'm currently a L2 candidate and I can't even get a phone interview with a fund. I will be stuck in wealth management forever.
What else are you doing to show you're ready for an analyst role at a fund?
CFA & Hedge Fund Recruiting (Originally Posted: 10/18/2017)
I currently work in trading and am on track to finish all 3 CFA exams by age 23 (won't have enough work experience for charter). Will that set me apart in hedge fund recruiting?
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