How is the role of the Pre-MBA associate different in PE versus HF?
It seems both jobs entail doing diligence and financial modeling. What choose one over the other? It seems a lot of these HF don't participate in active trading, but just long-term investing so the role of the pre-MBA associate would be very similar to that of a PE associate right?
Any help would be appreciated.
Yeah, it depends more on the spectrum of strategies rather than the classification "PE" or "HF". If you imagine the spectrum of investing going from active trading of public securities to large LBO transactions, there is a point in the middle where the line between HFs and PE becomes blurred. This may include long-term investments in public securities (sometimes activist), privately structured investments in publics (PIPEs), and equity investments in private companies. Both PE firms and HFs can play in this arena and the analysis would be similar between firms. But the analysis probably wouldn't include an LBO model for example, which would be what pre-MBA associates at buyout-focused PE shops spend a lot of time on.
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