ER at BB or IB at lower middle market bank

To maximize your chances of landing a role at a middle-market (MM) hedge fund, here’s what you need to consider based on the most helpful WSO content:

1. Which Path Places Better in MM Hedge Funds?

• Equity Research (ER) at a BB: ER at a BB like UBS/BofA/DB can be a strong path to MM hedge funds, especially if you’re covering sectors that align with the fund’s focus. Hedge funds value the deep sector expertise and modeling skills developed in ER. Additionally, BB branding can carry weight in recruiting.

• IB at a Lower Middle Market (LMM) Bank: While IB experience is highly valued by hedge funds, being at a lower-tier bank may limit your exposure to high-profile deals and networks. This could make it harder to stand out compared to candidates from top-tier IB groups.

  Verdict: ER at a BB generally places better into MM hedge funds due to the combination of brand recognition, sector expertise, and transferable skills.

2. How Difficult is it to Re-Recruit IB Full-Time from a Lower-Tier Bank?

• Re-recruiting from a lower-tier bank to a better IB group is challenging but not impossible. You’ll need to:
  • Network aggressively with alumni and professionals at target firms.
  • Demonstrate strong deal experience and technical skills.
  • Be prepared to explain why you’re looking to move and how your current experience has prepared you for the transition.
• Keep in mind that re-recruiting is competitive, and many candidates from top-tier schools or firms will also be vying for these roles.

3. Additional Considerations:

• Skill Development: ER will give you a strong foundation in public markets, which is directly relevant to hedge funds. IB, on the other hand, provides broader financial modeling and transaction experience, which can also be valuable.
• Networking: Regardless of the path, networking is critical. Build relationships with headhunters and professionals in the hedge fund space early on.
• Long-Term Goals: If your ultimate goal is MM hedge funds, prioritize roles that align with the fund’s strategy (e.g., sector focus, public vs. private markets).

Recommendation:

If your primary goal is to break into MM hedge funds, ER at a BB is likely the better choice. It offers stronger branding, relevant skill development, and a more direct path to hedge funds. However, if you’re set on IB and willing to put in the effort to re-recruit, the LMM IB role could still work, though it may require more effort to transition to a better platform.

Sources: Private Equity Recruiting Process (From Banking), https://www.wallstreetoasis.com/forum/private-equity/then-and-now-compbanker?customgpt=1, LO to MM HF?, Q&A: I'm a hedge fund recruiter.