Junior analyst - what to look for?
I'm looking to expand coverage into new geographies and sub-sectors (moving further up and down the supply chain) and starting a search for a junior to help with this. I currently run a book under a PM and wanted to get input from those that have hired and managed juniors.
Appreciate the help.
1) IB vs ER vs buyside
I'm leaning towards ER or HF/AM experience given they have experience speaking with management, more familiar with KPI that matter, modeling more similar (I/S focus). What are the advantages of IB or PE juniors? Are they just model monkeys?
2) geography
I have the flexibility to hire in any office. Is it a bad idea to hire in another office? I'll be covering more global stocks, so considering hiring outside the US to help with earnings so I don't have to wake up at 2am and travel internationally a lot for meetings/conferences.
3) Non-competes
What's a typical non-compete for juniors with 2-5 years experience? Guessing big variance here.
4) Pay/Bonus
What's a typical base? I'm guessing 125-150k is market range.
How do you determine bonus, formulaic and performance -based or more fixed? I guess this will depend on whether I end up hiring someone to just model or one that is more experienced and will actually add PnL value. I get a bonus and basically have to pay out of that pool for my strategy.
GS TMT, CVP, EVR, PJT, MS M&A, Q are great
I’ve never hired, but am a junior at a L/S (been in the seat 2.5 years now). I’ll add my $0.02
1) yes, the main difference is that IB/PE are model monkeys, depends on the individual though. From what I’ve seen, ER or experienced candidates naturally start idea generation earlier
2) as a junior, I’ve worked with people out of different offices, it works well as long as you’re on the same page and are in touch constantly. That said, I wouldn’t do this with someone just starting in the industry because the learning experience would be awful - would definitely want someone with at least 2 years experience and are naturally ok with a lot of autonomy. Like do not hire someone from IBD and expect them to just go
3) 6-8 months usually
4) sounds about right
Extremely helpful. Fuck, that 6-8 months if true is going to throw a wrench in my plans, I wanted someone to start by Aug/Sep to build models and go thru a couple earnings cycles so they can help generate PnL by Q1.
Highly doubt anyone in ER/IB has non competes at that YOE at all, let alone which conflict with hiring to a HF. AM, maybe but also, doubt.
Ah yeah should’ve clarified like the guys below, the non-compete only applies to coming from another fund. That said I’ve seen non-competes waived depending on relationships. Also if a PM at a pod blows up, his associates with ~2 years exp prob won’t get their non-competes enforced.
Also beware if hiring internationally from the likes of London, notice periods are like 3 months for banking (again, might not be fully enforced, usually can negotiate down).
Would just ask the candidate fairly early on in the process about non-competes and notices (I always get asked this in the initial convo with BD)
..
This would be some 5D chess if OP is just fishing for some information for a buy side interview …
Lol I wish. Basically PM has told me I'm on my own hiring someone and to let BD to know what my background requirements are and to work the bonus math with the new hire however I see fit.
It's all coming out of my pocket so makes sense from his POV. Very autonomous team.
If you want someone to contribute asap, hire out of a fund. You’re gonna have to deal with the non compete and pay them more for the xp though.
if youre not doing this, I’d just hire out of banking. Trying to pick up a sellside monkey and expecting them to start meaningfully contributing early is asking a bit much, you might as well think more long term if you’re hiring out of sellside. With that, I’d probably suggest hiring out of IB instead of ER; generally seeing higher quality candidates from IB these days compared to ER, at least anecdotally and from catching up with our own bizdev team.
We had a similar issue, and after interviewing a bunch of candidates from both IB/ER we ended up hiring an intern instead that did a few summers at various pod shops. Also got to pay at a discount since intern. Issue with IB is there’s going to be a ramp up period for them to understand markets and how stocks actually move
Problem with ER is their models generally aren’t that detailed. If you want someone with an I/S focus breaking into price/vol in regions and how that’s filtering into EBITDA via drop throughs and bridges quickly, you’re going to need someone that’s been exposed to HF modelling styles already, especially if your coverage isn’t price - vol
Very helpful. Kinda ruling out PE background at this point.
Very low yield on PE, you will need to pay them more and they don’t think about businesses the right way for MM. You're paying for investing acumen/biz analysis and modelling skills which makes a lot of sense for some processes, but might not for yours.
I’d start fielding the process, just get a sample of interviews done so you can understand broadly the quality of candidates you’re dealing with.
You can get very high yield with interns/working students, even more so than banking, but the problem is there’s maybe a handful that are worth taking on and getting bizdev to make a posting and process for this will be arduous since you will be going through thousands of applications for 2 viable candidates…
We got quite lucky, we had prior relationships with a couple students across the pond that had quite a bit of MM L/S and modelling xp that came through the case study and interviews talking the right language on what actually matters… Could you replicate this with a process? Probably not, unless you had bizdev filter for HF xp.
Most people won’t commit to this, so you’re just left with IB/ER and you will have to start doing processes to see the caliber of talent coming from here… heads up we interviewed 80 and got nowhere but that’s not to say there isn’t great talent out there. As I said, you’re just going to have to face the hordes and start
I have a good recc. for a UK based analyst if you're still looking. :-)
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