MM IBD/MM ER to move to HF?

Ah, the age-old question of navigating the high finance jungle! Based on the most helpful WSO content, let's break this down:

1. MM IBD vs. MM ER for HF Path:

   • MM IBD (Investment Banking Division): Traditionally, IBD is seen as a strong launching pad for a variety of roles in finance, including hedge funds (HFs). The skills you develop in IBD, such as financial modeling, deal structuring, and a deep understanding of financial markets, are highly valued by HFs. Moreover, the network you build in IBD can significantly aid your transition to the buy-side.
   • MM ER (Equity Research): ER, especially if you're covering a sector that aligns with the investment strategy of the HF you're targeting, can also be a direct path to the buy-side. The analytical skills, sector expertise, and ability to forecast and value companies are directly applicable to many HF roles, particularly in long/short equity strategies.

2. Lateral Moves and Further Education:

   • Lateral to BB: While not always necessary, moving to a Bulge Bracket (BB) bank can enhance your profile due to the broader exposure, more significant deals, and stronger brand recognition. This move can be more relevant for those in IBD, as BB banks might offer more direct exposure to the types of transactions and modeling experience sought after by HFs.
   • MBA: Pursuing an MBA can be a strategic move, especially if you're looking to pivot or elevate your career in finance. An MBA from a top-tier school can not only provide advanced knowledge and skills but also access to a powerful network. It's a common path for those looking to transition into more competitive or niche areas within the buy-side, including top MMHFs or SMHFs.

3. Direct Transition vs. Lateral/MBA:

   • Direct transitions from MM IBD or ER to HFs, including MMHFs and L/S SMHFs, are possible and happen quite frequently. The necessity to lateral to a BB or get an MBA before moving to the buy-side largely depends on the specific HF's preferences, the competitiveness of the HF landscape at the time of your application, and how well your current experience aligns with the HF's strategy.

In conclusion, both MM IBD and MM ER can serve as viable paths to HFs. The choice between the two should be guided by your interest in deal-making versus analyzing stocks, your sector preference, and the type of HF you aim to join. While lateral moves to BBs or pursuing an MBA can enhance your profile, they are not strictly necessary for everyone. Focus on excelling in your role, building a relevant network, and developing the skills that align with your target HF's investment strategy.

Sources: Point72 Academy SA 2021, IB->PE->HF or IB->HF, Why move to PE/HF at all?, LO to MM HF?, https://www.wallstreetoasis.com/forum/investment-banking/eb-vs-bb-long-term-and-exits?customgpt=1