Please, I just can't wrap my head around it. I'm sure there is some semi-rational reason why a hedge fund would hire an investment banker but I just don't see it. I would say that if you're in the business of attracting actual talent you might as well go as far away as possible from M&A guys.
So yes... I'm clearly an ignorant close-minded idiot. Please change my mind!
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Exactly! Is it because they have no specific hiring strategy? Is it so HR doesn't need to go through as many resumés? The only reason I could see is that at the very minimum you have someone who knows how to work long hours and can deliver simple jobs without screwing it up. Hence, I don't see how HFs could differentiate themselves by hiring IBers. I'm just wondering if I am missing something. It just all seems a bit strange considering competitive nature of the HF industry entirely based on human capital
I realize you're just a college kid that's a compsci major but your question is very weird, especially because you have so much embedded doubt for something that's so crystal clear obvious. Furthermore you imply that M&A bankers lack talent, when again, you're just a college kid. Step one, come back to earth.
HFs are a huge sphere, clearly a more quant oriented fund wouldn't hire an banking analyst. For more traditional value, credit, fundamental based shops there are a few reasons. For starters, training people is a huge time suck, unless you are some huge mega fund you're not going to want to spend the time and resources to train. So when you get a banking analyst, you get a kid that at a minimum has gone through a banking training program and then grinded on the job for 2-3 years. Also being in the flow of banking allow you to understand the deal process, capital markets, etc., which is also helpful. From a technical standpoint, certain banking groups like M&A and restructuring will have pretty strong modeling skills. In regards to differentiation, a jr analyst at any fund isn't driving returns so its a moot point. Ideally, just like in any profession, if you have enough people come through the system long term some of them will work out and become stars within the firm.
Correct. You fail to realize how important this is in the business world. Finding people who work hard, can figure out problems themselves, and have extreme attention to detail is rare.
I hate to admit this, but one of the most valuable things that I've taken away from my IB experience is checking work 3 or 4 times, auditing every cell in a spreadsheet, double checking the sources for any input. It's the mentality that's valuable.
I would honestly hire a former IB analyst for almost any role regardless of experience because of that mentality. It's similar to the reason people hire former Navy SEALS. It's not because climbing rope and jumping out of helicopters is very applicable to the work place, but rather that someone with that sort of mentality can accomplish whatever you need done.
I think if you look into what most fundamental (L/S, SS etc etc.) funds actually do, you realise that the skillset learned in banking is very helpful. Where would they hire from otherwise? I think the ER argument is a valid one (although my view is that ER people come with too much baggage) but otherwise where else do you find people with the skillset required? I don't understand your question really because you don't really link the day-to-day work to skillset. Is your perception that bankers do not learn the technicals on how to assess a company? Im sure most junior bankers have not learned to form a view or develop a thesis but they bring the toolset to analyse which is really all they need to do in the beginning. How would the perfect candidate look in your mind?
What do you mean by too much baggage? I'm not hurt or anything just wondering