Lev Fin ----> Hedge Fund
Looking for some advice and hoping someone from the industry could chime in.
For context, I graduated in 2023 from a non-target (think Boston University / Purdue / Boston College). Majored in finance, did a training program at a large commercial bank (think WF / BofA / Citi). Hopped on a mid-lower tier Lev Fin desk after 6 months in CB. Been on the desk for ~8 months and am one of 3 analysts. Getting a really bad bonus despite my group's record-breaking performance (highest revenue in group history, partially because a high tide lifts all boats but also because my team has been grinding like crazy). Looking to move to a buy-side role and have always had an interest in hedge fund strategies.
How common is it for someone to get a seat at a hedge fund from Lev Fin (looking for L/S / Macro / Multi | AUM $1bn - $10bn)? More specifically, how common is it for someone to move after 1-2 years on a Lev Fin desk?
Based on the most helpful WSO content, transitioning from a Lev Fin role to a hedge fund, particularly in L/S, Macro, or Multi-strategy funds with AUM between $1bn and $10bn, is feasible but can be competitive. Here are some key points to consider:
Transition Feasibility: Moving from Lev Fin to a hedge fund is not uncommon, especially if you have strong analytical skills and a solid understanding of financial markets. Your experience in leveraged finance can be valuable, particularly for credit-focused hedge funds or those that deal with complex financial instruments.
Timing: Transitioning after 1-2 years on a Lev Fin desk is possible. Many hedge funds value the foundational skills and experience gained in investment banking roles, including Lev Fin. However, the competition can be stiff, and having a clear understanding of hedge fund strategies and demonstrating a genuine interest in the buy-side will be crucial.
Networking and Preparation: Networking is essential. Engage with industry professionals, attend relevant events, and leverage any connections you have. Additionally, preparing for technical interviews and case studies is vital. Hedge funds often have rigorous interview processes that test your analytical and problem-solving abilities.
Compensation Expectations: Be aware that compensation structures can vary significantly between hedge funds and investment banking roles. While you mentioned a disappointing bonus, hedge funds may offer different incentive structures, including performance-based bonuses.
Skill Development: Continue to develop your skills and knowledge in areas relevant to hedge fund strategies. This could include gaining a deeper understanding of macroeconomic trends, equity analysis, or multi-strategy approaches.
In summary, while the transition from Lev Fin to a hedge fund is achievable, it requires strategic networking, thorough preparation, and a clear demonstration of your interest and capabilities in hedge fund strategies.
Sources: Q&A: Currently at a Credit Hedge Fund, 8 figures for late 20s/early 30s HF employees, Q&A: HF Analyst @ $5bn+ Fund - Breaking In and Transition to Risk-Taking Role, Megafund vs SM Hedge Fund, https://www.wallstreetoasis.com/forum/private-equity/going-from-mm-investment-bank-to-mega-fund?customgpt=1
Bump
People move out of LevFin within a year all the time - though I tend to see moves to sector coverage or PE typically, not HFs
But keen to hear if others have
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