Possible to recruit-out-of-undergrad? | Non-Finance Background
I'm a sophomore at a T20 and am recently curious about hedge fund opportunities. I'm not super familiar with the whole finance path in general. I'm a CS major with mostly tech experiences (think Google/Stripe/Facebook). However, I've for the past two years traded on and off with commodity and event-derivative markets. Mostly just considered it as a hobby/side hustle, until 6 months ago when I was approached by someone in my network (someone who runs one of the exchanges I use) to manage some capital. I raised some more cash and was able to launch a fund with a six figure AUM. So far the returns have been good, which makes me wonder whether I could do something like this full-time. I don't think this exact derivative strategy would work with larger AUMs but I do like the idea of research and trading.
I'm trying to figure out where this experience might be most applicable/beneficial for recruiting in the world of hedge funds. A lot of people suggest quant to me, but truthfully, I don't have the IQ for that (at least the big-name shops). You can pretty easily grind to get a google-tier internship, but the quant interviews seem to be a lot more IQ-based (in addition to skill ofc).
Given this and the fact I'm not a traditional finance candidate, I'm trying to see where I could potentially be a desired candidate and what best ways to pursue them.
Some questions I've wondered:
Worth going to a BB?
Hedge funds that don't require traditional IB background? That aren't super IQ-based
How to get in contact with funds?
Any thoughts are appreciated.
There are a bunch of legit HFs that hire undergrads. A few big names (Citadel, p72, DE Shaw, Bwater, Millennium) and then a bunch of smaller, but still very legit firms like Baupost, Bracebridge, Silver Point, Weiss AM, Matrix, Farallon, and maybe some that I am not thinking of. All of these places, regardless of culture, are not guarantees for a SA return offer and the MMs are easy to fired at post-grad. Some of the small ones I mentioned have formal recruiting and some take a few kids more quietly.
I had the chance to intern at one of those smaller ones - for some it works out great and turns into a great career in which you get to skip IB/PE. But then there's also the bunch of kids who just aren't ready to add legitimate value and thus the firm isn't willing to pay them mid 6 figures out of school.
BTW - the targets for these places are not synonymous with IB targets.
what kind of backgrounds are HFs looking from undergrads?
Really varies firm to firm—some of the names you mentioned above have very specific target schools (some funds Yale invests heavily in really target Yale, some in Boston area like Harvard kids, etc, Silver Point traditionally takes UGs from Wharton). Some care a lot about school prestige (Bridgewater & DE Shaw basically don't loook at nontargets at all), others are more open
Outside of the big ones mentioned, the UG recruiting process is really informal at HFs. They're looking for smart people with a genuine interest in public markets. Having an idea of why X strategy (distressed, growth, etc) is important, and a stock pitch can be very helpful for showing what you can do/how good you are
You just have to get your foot in the door via networking & impress via your knowledge/passion. I got offered my internship at a HF in UG (not one of the ones mentioned, but about $4bn AUM) off the back of two 30 minute networking calls where I impressed some senior people via asking smart questions & demonstrating my interest in the strategy/space.
By definition, HFs want people with somewhat differentiated views/backgrounds, so it's hard to have a single background that opens doors (though obviously EB/top BB/MF PE internship helps a lot)
Also, hedge funds vary wildly—Matt Levine has a nice take which is like, hedge funds are a fee structure & not an asset class. Very unlikely that someone would truly be interested in DE Shaw, Bridgewater, Silver Point, and Matrix simultaneously given how wildly different their philosophies/strategies/day to day jobs are. Figure out what you really like & why you want to work at a HF vs in IB/PE/SWE. In general most HFs that WSO thinks are "top" are less oriented towards the short term kind of PA trading you seem to be doing—if you like that, and like commodity markets in particular, though, macro funds might be interesting. Fly under the radar now vs Tiger Cubs on this forum but you can make an absolute killing at a Rokos/Tudor/Brevan Howard, etc, though don't think any big macro funds ex. Bwater take from UG
Also no harm shooting your shot with quant, not everyone has to have an IMO gold medal or whatever.
BTW, re macro, the multi-managers are getting increasingly big in macro strategies—don't know if P72, Citadel, etc, hire for macro roles from UG as well as discretionary L/S but could be worth looking into.
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