In my recent Q&A thread I was asked how I transitioned from a corporate strategy role to a hedge fund analyst position. I struggled to give what I thought was a sufficient answer given the context of the question so it kind of inspired me to write a short series about my experiences beginning with what I have learned about networking. As of now my list of topics consists of:
1) Networking 101 – Hedge Fund Edition
2) The Asymmetric Risk Profile -- Preparing for the hedge fund interview
3) ABC – The Successful hedge fund interview
4) I Choose You [To Be My Boss]
5) On the Job with Simple As…
These posts will be published over the next few weeks sporadically because of travel and the demands of an expansive coverage during earnings season. But, without further delay I’ll get to the actual point of this post:
Networking 101
A simple search of the word “networking” on WSO yields 6899 forum topics and 501 blog posts. Therefore, it is safe to say the topic has been covered sufficiently over the years. However, the most important part of networking, which happens to also be the most overlooked, is maintaining and leveraging the relationship in to a meaningful recommendation or actual job offer.
This part of the networking process is especially important for those attempting to enter the hedge fund industry without the benefit of a headhunter or OCR because of the unstructured and ad hoc nature of the recruiting process. As an example, the time between my first interview and job offer at my current fund was eight months. Growing the relationships I built through each stage of the interview process was paramount to receiving an offer.
It sounds simple, but I have found the key to networking is to be a value - add for the person with whom you are trying to network. It all starts with the original meeting/interview and builds from that point. I firmly believe that a person’s approach to anything must be intuitive and adaptive rather than fixed and mechanistic [credit to Howard Marks], but I do have three hard and fast rules for successful networking:
1) Make it a conversation rather than an interview
a. The topic of the meeting will inevitably turn toward the markets or individual securities. You want to use this as an opportunity to show your knowledge, ability, and passion for the industry. Add insights about the market/securities and make the meeting a conversation among equals rather than firing canned questions one after another.
The individual will enjoy himself/herself more and you will have the opportunity to make a positive impression. This is not a license to force some poor soul to listen to your diatribe about economics or market theory, but a real way to show you are an intelligent individual with a passion for investing. Offering up small insights and asking smart questions about topics that come up in the course of the conversation will go a long way towards making a positive impression and setting the foundation for a meaningful professional relationship.
2) Do Not Simply Ask for a Job/Introduction
a. Simply by contacting the professional you are signaling that you are interested in a similar position and working at his/her firm. Rather, focus your time and energy on making a good impression and showing the person in a real, tangible way that you are worth the investment of time, energy and reputation. If you make a good impression the rest will take care of itself.
3) Keep the Line of Communication Open
a. Keep in touch with the person every so often by continuing to add value for them. You probably talked about companies he or she follows or things about industries or the economy on which they focus. Periodically, send them an interesting link or bit of information that could be helpful to them. It is OK to say something in the email along the lines of, “I’d love to hear your thoughts about [insert what you sent] if/when you have time.” but do not expect an answer or get frustrated if you do not receive one. Remember the key here is for you to add value for them, not the other way around. Chances are he/she has already seen the information you will send, but showing your ability to procure good sources of information and that you are constantly paying attention to the market will go a long way.
One caveat I feel I have to mention is that it is obviously important to speak intelligently with the person and provide only good sources of information. Sending the greatest piece of information or providing an amazing insight in a conversation is unlikely to get you an offer on that basis alone, but sounding like an idiot or sending an absolutely terrible piece of information can ruin your chances. Therefore, the old adage “Quality over Quantity” should be your mantra when networking with HF professionals [or anyone else for that matter].
As always – questions, comments and dissenting opinions are not only welcomed, but encouraged.
