IB v.s. ER for Hedge Fund Dreams
If the ultimate goal is to work at a fundamental hedge fund, would IB or ER (summer analyst aiming to get to HF right away, or analyst program hoping to make the jump after the two years) be the right spot to be? I find ER to be much more interesting on a surface level, although I understand that a lot of the modeling/reports you put out is just regurgitating what everyone else has to say about things. But similar in IB, where your models are just trying to hit valuation targets, no? Banking, though, just seems to have the prestige that ER does not, and wondering if that carries into exit opps, specifically for HF seats.
Bump
Going to be next to impossible to go from any SA to FT at a HF unless it's a tiny firm.
This is debated on here to no end, HHs typically draw talent from IB because it is an exceptional talent pool and you come out with very strong technical skills. ER is still a great seat, but the top recruits for these HHs are generally drawn to banking.
I'd say the modeling difference is that an IB analyst has built countless models (even if they start from some sort of template, there is a LOT of bespoke shit that ends up going into those deal models) versus ER modeling is a lot of updating the same model that's 10 years old. That said, ER will give you public markets knowledge, industry know-how, and if you're at a top BB or EB group you can definitely move to a HF. I'd stay away from MM and definitely diligence where previous juniors have gone - often certain ER analysts have strong connections with specific HFs, so that's always good to have.
My 2 cents, if you have ruled out PE/corp dev and much prefer ER to IB, do that. IB is a lot of tedious hours and ER is a slightly better lifestyle. You will still be able to land HF if you're good at that role and are a strong junior.
Very helpful stuff, makes sense. I am more interested in ER, so will probably go with that but might consult some kids in some clubs I’m a part of.
why would these shops offer SA programs if they don't intend to convert any people anyway?
lots of places offer SAs and never convert any FT. Maybe they need extra help during a busy period but don't want to fully train an analyst. or maybe they only hire associate level+. Hard to say but it does happen.
to be clear my first sentence was you can't really do IB/ER SA -> HF FT. if you manage to land some HF SA they may very well keep you on for FT.
Lol so that means an intern can actually be of some help without being a nuisance? Haha
And yea i was curious at those buyside shops (even the big ones like Oaktree) which only hire associate and above - so who tf are the analysts? Do associates do essentially analyst level work or what?
Yep exactly. At most PE shops the associate has a lot more ownership than in IB, but they are still the junior and do all of the analyst-level work
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