London HedgeFunds as 1st/2nd Analyst
Hi all,
Analyst here from top team at London BB. Curious about recruiting for London HF scene given super limited public information and useless Headhunters ("we recruit for Elliott - but ask us again 5 years"). More than happy about any recent insights from people that made the move early in their careers, especially in regards to simple things such as getting in touch, preparation out of IBD and comp.
More than aware how broad my thread is but thought I might get no replies if I already limited to a specific HF strategy.
Best,
Trikolon
The process is highly unstructured which makes it a bit frustrating compared to the US. You need to (i) identify the strategy you want to do, and then (ii) identify the recruiters who focus on that strategy. For example Hinton Rose are the key guys in the distressed/credit space. I was only interested in credit funds so I focused my attention on that and almost all the funds I interviewed with had me do a case study on a distressed issuer which usually involved me receiving a bond OM on a Friday night and being asked to email over a memo on a Monday morning with my thoughts. Usually followed by presenting my memo to PM/CIO and then meet the team drinks/chats to see if fit is good. Comp will depend on the fund/your experience/how cheap the CIO is haha. I would think starting comp in London these days is around GBP 100k base with 1x bonus for a new recruit with no experience. Can scale pretty quickly if you are any good and in the right seat.
MInd if I PM you about European Distressed?
Sure
have you come across people at distressed funds who jumped over from the US to the UK?
In my experience - apart from the pods, there aren’t that many large AUM funds in London and turnover isn’t high so seats at these places rarely come up. Hence why I understand why headhunters are saying that to you. Despite that, think it’s best to start a relationship with them and convey exactly what strategy you’re looking to pursue. Have they been responsive and helpful at all? Given top bank, I assume the recruiters have been relatively open in chatting with you. Hopefully enough opportunities come up. I just wouldn’t bet on all the big funds having a slot open.
...
Things to consider about London.
1/ Turnover is low. Just go on some of the large HFs websites and look at the tenure of the employees/partners. Seats rarely open up.
2/ The market is simply smaller and therefore a lot of people know each other already. A difference vs. the US is that a number of analysts come from sell-side research rather than banking and many people impress as sell-side analysts and get poached.
3/ A significant amount of recruiting is done via referrals or people who have previously worked together at prior shops. Look at the Cazenove network all over London.
4/ Prime brokers maintain lists of good candidates for their existing HF client base or new HF startups. This is free for funds to use if they are PB clients and therefore avoids paying HH fees for doing very little.
Thanks for these insights, appreciate some colour on the London scene.
Is the low turnover also applying to the MMs in London ? Or do you stand a better chance at seeing a seat open there, potentially as a stepping stone before going to a SM ?
There are constantly seats opening up at Ctiadel/Surveyor/Millenium/Baly/P72 in London and they hire from ER, IB and PE. It is just a very different type of investing to SM with different time durations, risk exposures and sector specialisms.
There tends to be limited movement that I've seen in equity L/S between MM and the higher quality SM in London. Yes, there are some examples of it happening but it is rare for SMs I rate - they tend to be picking people from ER and other SMs. Many funds have profiles on their website, Companies House lists the equity partners and LinkedIn exists to show career history of people. A lot of time in SM research is spent doing scuttlebutt research - this is simply applying it to looking at the mental model of what profile types SMs are hiring. Really focus on building a network though - many jobs are not advertised and are word of mouth referrals.
Recruiting is generally completely ad hoc based on need. Jobs often are a bit of a free for all with candidates of different levels of experience considered.
Networking is extremely important for 3 reasons. 1. Many posts are not advertised. 2. Where roles are advertised externally/ through recruiters, you have a much better chance of getting the job if you come with a personal recommendation from someone the PM trusts rather than some random guy a useless headhunter found. 3. It is quite important to know someone who knows the firm/ PM you are applying to, so they can semi-coach you through the process in terms of how to tailor your stock pitch to the PM, etc. You probably though will naturally build a network with people at your BB... hopefully you get on well with people in the year above you who now work at funds where you want to work... reach out to them - this is your way in.
All these roles are very competitive and so if you are one of ten+ random kids submitted by a recruiter, who doesn't know much about the firm... good luck. If you come with a personal recommendation, clearly understand the firm, what the PM does, why you want to be there and have good answers/ stock pitch... you are in a much better spot.
SMs don't hire that much. MMs hire a lot but are not for the faint hearted.
The GBP 100k base with 1x bonus mentioned above is a bit ambitious especially on base, maybe attainable, I would think more like £80k + 1x bonus more likely (and maybe a bit less). Could definitely see c.£200k total comp for good performers at a good place in year 1 though. But remember that at an MM, if your PM doesn't make money, you get 0 bonus and you are lucky if you don't get fired.
Pay can scale in line with that outlined elsewhere in this forum - there is a post on HF bonuses 2020 about comp ranges in USD that has a lot of up votes - I think this holds reasonably true for London.
Pay is very volatile though - you could join an MM, and earn nothing but an £80k base salary for 3 years in a row, and get fired at the end of your third year, if the PM never makes money - this is the downside of the role.
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