Equity research to SM HF
I was interested on ER exit opportunities so I’ve read through all the posts on Reddit and WSO but I still have a few specific questions:
SM HF: I know MM HF are doable while SM like Tiger Cubs are out of reach unless you do 2+2. But what about other SM funds?
LO: I understand moving from ER to LO is doable, but how much do LO firms care about prestige/2+2/MBA?
Based on the most helpful WSO content, here’s what you need to know:
SM HF (Single Manager Hedge Funds): While Tiger Cubs and other top-tier SM funds often prioritize candidates with a 2+2 background (2 years in IB + 2 years in PE) or MBA, there are other SM funds that are more accessible from equity research (ER). Many smaller or niche SM funds value strong investment acumen and a demonstrated ability to pitch ideas over pedigree. If you’re targeting these funds, focus on building a strong track record of stock pitches and showcasing your analytical skills. Networking and leveraging relationships with recruiters can also help bridge the gap.
LO (Long-Only Asset Managers): Transitioning from ER to LO is indeed a common and achievable path. However, the importance of prestige, 2+2, or an MBA varies by firm. Top-tier LO firms (e.g., Capital Group, Wellington) may place more emphasis on pedigree, but many others prioritize your ability to generate actionable investment ideas and your understanding of the market. An MBA can be helpful but is not always necessary, especially if you have a strong ER background and can demonstrate your value through your research and insights.
If you’re aiming for either path, focus on refining your stock-pitching skills, building a strong network, and understanding the specific preferences of the firms you’re targeting.
Sources: 2 year PE MF program with MBA requirement - potential exits?, Q&A - Tiger Cub Analyst, Breaking into buy-side equity research - my experience, Citi, Lazard, Jefferies, Fidelity, Morgan Stanley, A warning to those aiming for Sell Side Equity Research
I’ve seen the move to very “elite” HFs from ER. Viking comes to mind
I don't understand the question. ER to buyside is the most common exit. All of the options you listed are possible from ER. MMs experience more turnover and therefore hire more, so more spots available. SMs are in structural decline with lean headcount and therefore don't hire as much, so fewer spots available. LOs are even more in structural decline and there don't hire as much even more, so even fewer spots available. Where you end up is a combination of 1) background and experience level 2) how much you want it 3) pure dumb luck with serendipity on coming across the open seat at the right time in the right place. No other generalizations can really be made.
Ahh the good ol' "what's the exit opp" forum question. As old as WSO itself. Gather around the fireplace kids, and I'll shall tell you a tale...
The year is 2010... Late cycle effects of GFC has taken a firm grip of socio-economic career perceptions that dominated the go-go 80's and the roaring 90's. Senate committees are roasting bankers for breakfast to earn cheap votes in their home states. Hating on bankers is in vogue. Europe's is plagued by sovereign debt meltdowns and bankruptcies.
IBD is in "structural decline" as I'm entering the workforce.
"Want to do PE kid? Forget it son you're coming in on "overtime"...
"Euu fundamental equities? Nah dude that's just dinosaur value funds. Yeah sure some 5 person outfit doing activist/value who grabs a headline every now and then but pays shit".
"Citadel? Dude are you okay? You should see a doctor. They're just betting on quarters it's not even investing, they almost went under 12 months ago".
Fast forward 15 years.... Now every other post is "How do I get into a pod?" or "Is Millennium better than Point72?". The same type of people that declared fundamental investing dead.
Trust no persons judgement who utter the words "you need to have done X to work at Y". Any cross-sectional path is doable as long as you've demo'd a) base level skill to do the job and b) convincing rationale of right fit.
What do I wish I knew that I didn't know? Gatekeepers will matter zero 3-4 years after your first job. Any buyside job beyond entry level will 90% be driven by headhunters who earn a living placing you where you want to work. Within the realm of basic sellside IBD/ER jobs, or even "mass-affluent" PE associate gigs, very little will matter for whatever buyside job you wish to have.
Do what you believe sets you up for success and enjoy doing. Life's too short to do something you don't genuinely enjoy for the purpose of hoping to do something else based on your outside in perception of the holy grail. If you wanna get 6 years worth of corporate finance experience in 2, do IBD. If you know you genuinely like researching stocks, do ER.
There are multiple paths to the same end goal. Now, I totally get that young people here want to optimize probabilities of end goals. But equally, over-obsessing about path dependency will lead you down avenues dictated by ill informed motives. If there's a will there's a way...
/The perpetual cynic
Do you think sell side ER is still great if i like researching stocks? I have read on WSO that only buy side ER is real research and intellectual job and they dont have a good consideration for SS ER.
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