HFs that hire out of undergrad
Is it possible to get an HF job right out of undergrad? I am interning in IBD at a mid BB. I know a few shops do this like P72 and DE Shaw, but is this common?
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There are 8 ish spots at citadel, 12 ish at P72, maybe a handful at DE fundamental. MLP has started a program. Then there are funds like matrix and silver point and abdiel but those are relatively random. Some LOs like RCG take some people as well. Can be done but very random
Silver Point has taken undergrads for 15 years, pretty consistently
I meant random in the sense that they only take a very very small handful of kids from a select # of schools each year and it’s not something you’d bet on getting at the start of summer recruiting.
You’re more likely to have success at smaller shops (i.e. single managers with less than $500M AUM) who can afford to be a bit more flexible and might be more willing to mentor you. If you’re smart, hard working, and can demonstrate that you have basic investing skills then you’ll be more successful.
Remember the primary reasons HFs recruit through headhunters/IB:
But at the end of the day, the HF business is pretty meritocratic and PMs mostly care about your ability to make money. So if you can demonstrate that you have 1 and 2 w/o doing IB, then it’s possible.
Still an uphill battle, don’t be fooled. Also job security is much worse - you have to be prepared for the fact that you might be fired in 6-12 months if you aren’t capable.
I should caveat my response with what the very smart people have said after me. I may have been speaking from a place of bias.
Given that IB doesn't really prepare you for macro HFs and that there's not as much of a defined recruiting pipeline like there is for L/S, it's a bit different. For L/S HFs (or event-driven/credit/distressed/anything else fundamentals-based), you will almost certainly be able land a spot at a more reputable shop if you do 2 years in IB or 2+2 (IB + PE).
That being said, it really depends on your skillset and your PM. If your PM has connections in the industry and is willing to go to bat for you, then IMO there's not as strong of a reason to do IB. But that depends on his graciousness/generosity/connections etc. There's also the option of working your way up through the hierarchy at a small shop, which is not a bad gig in and of itself (possibly more enjoyable than working at a MM).
If you're competent, hard working, and willing to network, it will probably be an upstream battle like I mentioned (both to get the 1st job, and to lateral to a larger fund if you want), but it's not a death sentence.
You create your own opportunities.
That's not to say you can go from being Joe Schmoe at San Diego State with a 2.5 in Communications directly to working at Baupost or something, but there's a large world out there aside from the brand-name $5-10B+ HFs, many of which have very intelligent investors (and very high returns) that you can learn from.
Some of the best spots in this industry (IMO) are at family offices that probably no one on this forum has ever heard of.
Please don’t join a 500m AUM HF out of college versus BB IB.
Interesting, so what kinds of funds do you think would be better to join compared to BB IB? Is aum the main consideration?
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