IB Associate trying to pivot to L/S equities - Interview Process Advice
Like the title says, i'm currently an associate in a coverage group, have been on the desk about 8 months. Always wanted to be in buyside seat and knew the best way to make that happen was likely through IB given my unconventional background, so it was always the conduit to get me there.
Have done a lot of networking with BD at a bunch of the pod shops and headhunters and anecdotally have been told that not as many seats were opening up as expected for whatever reason. Touched base with a bd at one of the pod shops who said they were actually looking for an IB associate to join a PM's team and is setting me up for initial calls (I think with another person on the BD team first) - am knew to the HF interview process so was wondering if there's any best advice for navigating the process / this pivot from IB to L/S equity that any of you can share or wish you knew back when you were making the transition?
I have done the research, know my story, but just unsure what to expect at each level or even how this process goes so any anecdotes are greatly appreciated.
Thank you all!
Stock pitches, actionable ones with clear catalysts.
Have long and short pitches ready to go
1) Get your story down - you should be able to clearly show you have a passion for this stuff. Books read, experience in student fund in college, etc. This will be the most important part of the interview and if you nail it, I found it makes the rest of the process easy and you're not stuck trying to convince people you're the right person
2) Get down what strategy / type of fund you want to be at. I struggled with Pod Shops, albeit I was only interviewing with them to get practice and through non conventional head hunters. I had much better success with SMs with a similar investment philosophy I wanted to pursue (fundamental, deep research, value-disciplined, long-term)
3) Be able to demonstrate you can critically think about business and risk - usually interview questions were like how would you look at this industry, tell me about a time you looked at a business in this space, what's a business you follow, most important thing to assess in a business. Never got technical, accounting, anything like IB / PE --> it was all qualitative and fit based
4) Know your deals well. I got asked more about my deals vs. stock pitches. I actually think stock pitches would be a waste of time because you have way more indepth knowledge about your deals / businesses you've worked with vs. pitches where most people typically put together a pitch after a week. Good investing is knowing businesses and industries
5) Have a pitch - I found this is actually the LEAST important part of the interview so I wouldn't even focus on this too much. Only got asked to pitch a stock maybe a few times and it was clear that they didn't have a good investment process / good strategy / weren't focusing on the right questions when looking for a candidate
6) If they do give a case study, it's typically a short-form idea where you're given XX amount of days to build a model and maybe write a report. Keep the model SIMPLE and focus on KPIs / drivers / unit economics and have assumptions. They won't expect you to know everything but just be able to show that you can think about what drives a business and can think about potential scenarios (nth probability....)
7) Sell TF out of yourself. Know your worth and be confident, if you get rejected feel bad for 1 day and then bounce back. This job isn't rocket science and you'll be surprised and how many people in this industry are not that smart. Show you are a good person who can learn, is humble, and driven
I should caveat and say that I knew exactly what my investment approach is, the type of place I wanted to be at, the type of people I wanted to work with, and obsessed with investing and research so it made interviewing much easier when I aligned myself with places that were looking for those types of people vs. "stock pickers". It is a tough hiring market right now and there aren't that many funds recruiting, but it's a long game vs IB / PE which moves very quickly. HF recruiting is all ad hoc and you'll just have sit around and processes take forever. But you'll get some interviews and you'll find that once you go through the motions, they're not that bad and you'll get incrementally better after interview.
Good luck!
This is all incredibly helpful and insightful so thank you! So far my story seems to be resonating well and BDs have told me it "makes sense" and is clear that I'm knowledgeable and passionate about investing and the job, so that's good to hear, I seem to be continuing to be passed on to more BD's so I think its moving slow but going somewhat well. The story, the passion, the selling myself and background are my strengths - def a little nervous about the more technical modelling, case study aspects of the interviews as I am an MBA associate, so I'm competent and know how to build them but idk how variable they can get since I'm used to the vanilla type 3 statement models etc.
It's good to know the stock pitches aren't an enormous weight of the process - I have 3 pitches basically ready to go that I can refine but I think they're in a decent place for someone who has never pitched before (variant perception, thesis, catalysts, risks & mitigants, etc)
Hopefully I get a few opportunities because I know the interview process is an iteration process where you get incrementally better as you go through.
Thank you again for your comment - it's extremely helpful like i said and I think a lot of people will find value in it since the HF process is a lot less structured.
My experience with stock pitches and their relevancy is a bit different.
Real quick: Every PM is going to be looking for something different, and it can be some unique style, background, culture, etc.. This can be hard to solve for or know ahead of time, so important to not get discouraged when it feels like you can't solve for what they are looking for. They can afford to be quite picky, vs. say an IB analyst who just needs to grind out the work with the job knowledge.
I think the pitches are quite important though, and if you come from any sell side or buyside research previously, I think they grill here slightly more. BUT its not always about whether or not the pitch is actually great, rather, they want to see that you KNOW what a good pitch looks like (and not just "this is a good business" or w/e). It will be about your communication style as well. When you are doing a 30-45min interview, they don't have the time to bring up the financials and start questioning why the pitch works (although one time I was in an interview room where they pulled up bloomberg terminal on the TV and essentially walked through all my numbers and thoughts live - surprisingly was one of my better interviews). Don't say I like NVDA because AI is big and they have CUDA ; make sure the pitch weaves numbers + variance to embedded expectations + narrative in a succinct package that is easy to follow. Why the opportunity exists, and how much you can make is front and center.
Case study is usually where they more thoughtfully test whether or not your process as an investor is sound, or that you have the tools to properly pick apart a stock.
TLDR: pitch quality isn't as important as having a pitch that "sounds" and "looks" like a good pitch, but I still think pitches are quite important. Case rounds will pick apart your technical and investment analysis skills in more detail.
I can't speak to other funds. For our process, personal story and rationale for going into HF are important because we have a small team and it's important that this person can fit in culturally. For us, out of 10 candidates, usually 2-3 will usually not be a good fit for us personality wise. If we know that it's not a good personality fit, we'll continue with the rest of the interview like normal but there is little to no chance of recovering.
For the other 7-8 candidates, I'll ask them about their experience with investing and then ask them to talk to about the ideas that they are most excited about on the long side and short side. In practice, there is usually only time to talk about two ideas at most. For us, these discussions are very illuminating because you can tell immediately how much investing experience and what kind of investor the candidate is. For candidates with little to no buyside experience, we aren't actually judging the candidate on the idea itself, if that makes any sense -- rather, we are looking to see if this candidate has the foundation to fit into our firm's investing mold and eventually be successful within that. For example, we are longer-term oriented. If a candidate's pitches are short-term focused, it's hard to indoctrinate and reorient that candidate into our style (which, to be clear, is not to say that the candidate is bad, his pitches will not work, or that he will not have a successful HF career, etc.). Out of the 7-8 candidates, usually 3-4 will make it to our next round which is the case study.
For us, we'll give them a case study to work on at home and then meet with them again to come in to present it. In theory, the case study should be the most important because it's the most substantive. However, in my experience, the case study usually confirms what we intuited about the candidate from their pitches. There is always 1-2 candidates who seem to stand out a bit more from the case study -- they are just a little bit more thoughtful, or thorough, or creative, or facile at presenting and answering our impromptu questions about the case study. At that point, we are probably picking among two candidates and, to be very honest, the job can go to either -- so it comes back to personality, who we like more, and who we think will thrive here over the long-run.
This makes alot of sense and is very helpful. I naturally get along well with most people and tend to do well with fit questions, as well as rationale for wanting to make the pivot to buyside/HF. I think for myself, unfortunately, I'm also looking to find a place that can help me develop basically all those things you kind of talked about that you screen for in the interview process. It sounds like a lot of spots want someone that either has previous buyside experience (totally get that) or someone who doesnt, but seems like they know what they're doing (totally get that as well) - I think i'm self-aware enough to know I'm smart enough to be a good investor and willing to do the work that is necessary to make that happen, but am by no means a savant and ready to contribute right away - I know I'll likely be a liability for the first year or so? So i may have to reframe my thought process since I'm looking for someone to take my raw intellect and background and mold me into a sharper investor.
I appreciate your comment, this all makes a ton of sense and helps me think about the game of chess going on from the other sides perspective as I navigate processes. Thank you!
when you say cultural fit, what do you mean exactly and how do you assess that fit?
Quia sapiente id eum odio earum ea facilis. Ad fugiat itaque odio harum unde.
Minus quisquam accusamus corrupti quos. Quidem blanditiis tempore in eos voluptatem est. Id ipsum dignissimos hic magni qui nihil eveniet. Cumque totam voluptates molestiae est dicta et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...