I have an interview lined up with a typical event driven / special situations hedge fund for the next week. I invest on my own and my style is fairly easy to follow: value-driven, require margin of safety, clear catalysts, buy something that's hated / tumbled. I had interviews with several typical L/S fund and all went well. I have no problems discussing current markets, investment philosophy, my stock picks, etc.
Two questions:
1) Is the prep work any different for an event-driven HF?
2) I checked their portfolio, and it has JPM ,C, AAPL, MSFT, and all kinds of companies that are certainly not going through a bankruptcy or restructuring, and won't be acquired in the near nor far future. How do these investments fall into the event driven / special situations category?
Ask about how they fit in the portfolio, you'll find out why and it'll show that you did your required research on their holdings.
Know their performance in the last few years. Also, just like anything, you have not just to research them, but their peers too. What are their holdings (if avail.) ? Previous two comments also make sense.
1) Preparing shouldn't require much incremental effort. In general pitching "value with a catalyst" works well for all buyside interviews. 2) They're parking money.
I'd also add that damn near every equity fund in the world says they invest with "special situations with catalysts" regardless of how focused they are on "hard-catalyst" situations (distressed, merger arb, spin-off, activist, etc) versus just "this is under valued and here's my 'catalyst' that will unlock the value."
You could make the case that MSFT and AAPL will eventually have events that drive them higher. MSFT w/ballmer getting hit by a bus and AAPL w/a dividend or big buy back.
I think the key would be to show that you are in tune with world events of relevance, as well as a knowledge of macro-economics and the global intertwinement of individual economies.
I would not expect that to come up at the type of fund he described.
Good luck!
Event-driven trading at prop shops (Originally Posted: 08/02/2013)
A friend is interviewing for an event-driven trader role at a few prop shops. He said it's supposedly a hybrid of trading/research, whereby one identifies both macro trends and special situations and capitalizes on them through stocks and ETFs. I was a bit surprised since I never thought prop shops actually deployed such strategies.
cool
10 bucks it is at First NY
could be infinium
A lot of Proprietary Shops will use this approach as part of their Trading "toolbelt" in order to make money in the markets. They call them "Catalyst" plays and trade on stocks that have fresh news on them that are trading on high volume.
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