Curious to hear everyone’s thoughts on this. HFs tend to recruit a lot of people from IB but I’ve also seen an argument being made that breaking in via S&T is easier. I’m interning at the DCM desk of an NYC MM bank this summer so I’m unsure as to which programmes I should apply to. My goal is to work as a PM in the future and although I feel as if my profile is more appealing for landing IB, trading interests me more.
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By far the easiest path is:
1) Get good grades (3.5+) at a good undergraduate school
2) Start investing small dollars on the side and/or join your school's investing club
3) Complete finance/analytical internships Freshman/Sophomore year
4) Land a summer analyst offer at a well known investment bank end of Junior year summer
5) Work your ass off and get that full-time offer and accept it
6) Work 1-2 years as an investment banking analyst and start searching for hedge fund gigs (or look for private equity associate roles and then move to a HF after two years)
The above is the easiest, most traditional/proven path to land a hedge fund role. You shouldn't try to join a hedge fund straight out of undergrad, you just don't have the skillset and nobody at a hedge fund is going to take the time to teach you how to do the work. Two years as an investment banking analyst is all you need to get the basics down (excel modelling/technicals/analyzing financial statements/etc.) - then go the HF route.
You need to make sure you can prove why you want to do public markets because every firm will ask you why you want to join a hedge fund. It is much easier to answer this question if you have maintained a portfolio on your own or can talk about an investment club you were very active in in college. Once you break into the industry it is much easier to hop around, but breaking in is the hardest part.
Can read more on steps to land a job at a hedge fund here.
Well its good to hear I have done steps 1-4, but my summer analyst position is at a not so well known bank. However, avg deal size is $100 to $500 mm with offices worldwide despite less than 300 employees which is why I said its a MM. I'm a UK student interning in the US so a return offer will depend on my visa situation which I am not confident in. In the case I can't get a return offer, I will try my hardest to break into IB this year by recruiting for SA positions again as a final year. I was doubting if I have taken the necessary steps to break in, but your words have reassured me. If you have any more advice I'd greatly appreciate it.
The HF path is commonly portrayed as a straight and narrow road from IB analyst to HF Portfolio Manager. The reality is there is a single straight well paved road that is long, well traveled and mapped out, but there are hundreds of winding, crooked, unpaved trails that get you there much better but are completely obscure and not really understandable in advance. Ultimately your goal is to reach the highest possible career level your skills can support. You want to become a good HF PM not simply get there as quickly as possible and then flame out. Out of all the successful traders I know, maybe 25% have walked the long but well defined path from IB, and 75% have basically cut their own trail with none of them ever walking the same road.
Some examples of nontraditional paths I've seen:
PhD -> HF analyst -> Sub-PM -> PM
Top Undergrad -> Chip Engineer -> HF analyst -> HF Sub-PM -> HF PM
Top Undergrad -> Oil/Gas Major-> Personal Bankruptcy -> IB for 4 months -> HF PM
Military -> PhD -> NASA -> Retail ->Computer Repair-> Oil/Gas Major -> HF Senior Engineer
Not Top Undergrad -> Reservoir Engineer -> HF Analyst
PhD -> Factory Worker-> Commercial Pilot -> Flight Attendant -> Utility Company -> IB -> HF Senior Analyst
Military -> Consulting -> Oil/Gas Major -> HF PM
I want to point out that a lot of people above would be considered failures at earlier parts of their career (like going from NASA to Best Buy or from a PhD to Flight Attendant). Some of you will remark that all the paths to HF really only started either in IB, Consulting, or at an Oil/Gas Major, and the rest of the path was just nonsensical. But you'd be wrong for several reasons. First, the skills you need much later in your career cannot be easily taught on the job because the training is too time-consuming; you would need to learn it at a much earlier stage before you ever realized that it would be useful. For example, a software engineer who learned to repair computer equipment from working retail in best buy could keep outdated off-warranty servers running for a garage band HF in the pre-cloud-computing era. Sending skilled analysts in a personal airplane to photograph sites is more nimble and effective than having those same analysts look at satellite photos taken from outer space. Second, you can only achieve great success if you're willing to also embrace great failure and risk. Great opportunities often look like terrible ideas and vice versa: if you say yes to all your opportunities you will fail a lot but also succeed a lot. Third, even what normal people view as "traditional paths" are more winding and crooked than they appear in career summaries. IB/PE -> HF analyst -> Sub-PM -> PM is the most traditional path. But how many people have faced setbacks for at least one step along the way? Maybe you need to be a junior analyst at multiple firms, maybe your first few trade ideas suck and you'll have your sleeve shut down, maybe you'll get canned as PM a few times. The common theme is that it's important to not give up, stay in the game, and keep swinging at pitches.
This is hands down the best answer I’ve ever read to the what’s-the-best-way-to question so frequently asked on the forum.
Factual and full of wisdom.
Honestly - if your working in dcm - take time to learn your hf clients - who is buying what debt / why - as you know there are tons of hedge funds that participate in debt capital markets - maybe reach out to them after the internship and talk about why you would rather be on the investing side over banking
This thread has a lot of answers but makes us all sound like AI drones, maybe this is why AI wants to replace us. “I want to be a PM at a HF”, is one of the most annoying and naive things prospects ever say.
Why not tell us what really interests you? Do you enjoy your schools fund looking at equities? Do enjoy your work in DCM? Do you enjoy being near traders? Do you enjoy data analysis? Do you enjoy reading history books?
Found out your true interests and passion. You will find a route to the HF world much easier as said above. Keep trying to be a drone on a resume (you best damn well be the beat best drone ever).
I'm going to somewhat hijack. I'm not entirely sure what I'm interested in. I've wanted to go into every field on this site somewhat in the last 6 months. Most recently (and confidently), consulting has been my thing. I like working with more experienced/senior people, find business interesting (I see it as 'solving a problem' on a macro scale) and find that the soft skills combined with the analytical skills matches my skillset (and my general life philosophy - I'd rather be better than average at everything rather than amazing at one thing). I've also been interning as a data / automation intern the past year, and enjoy visiting different areas of the business for different projects (keeps the work varied).
My hobbies are related to the arts (film, music etc) or sport/exercise (football, jiu jitsu, snowboarding). I'm a believer that working directly on a hobbie is the best way to turn a passion project into 'work'. I want to create a track because I WANT TO not because I have rent due. Also, besides maybe an analytical role in football, a lot of careers in these areas aren't very rewarding or are high risk.
How would you go about finding your thing if you were in my situation? Internships are the obvious answer, but I'm concerned that now days to get spring weeks / internships, you need to be committed/interested a long time prior.
I'm studying a Maths/CS degree with components of A.I, so really the worlds my oyster in terms of accessible careers. I just want to find one that works for me.
Thank you.
I kept the post concise so that I don’t bore other users with additional details. I realised I wanted to work in HFs because I’ve been taking positional bets in industries that interest me for a couple of years now (yes ik HFs and retail trading/investing are vastly different). Believe me I wouldn’t bother going through the IBD pipeline if I wasn’t at the very least happy with the work I would have to deal with. I still appreciate the comment tho, I understand the importance of being someone interesting people want to work with as opposed to a copy paste finance undergrad who likes stonx cause he watched the wolf of wall street and missed the whole point of the entire movie.
Keep it vague you going to get the standard. Be the best drone money can buy. I recommend listening to the IDW discussion with Ritholtz. Beyond that I recommend following HF Reflections on twitter (though hes prolly done with twitter). Mentioning should I do IB or S&T, makes you come off naive.
Now, you still have not explained to us how you indenfied/found these industries. Did you creat valuation model? Did you read a blog? Did you look at trading charts? Is this an sector learned in school? Are you interested in the actual product (5 porter analysis) or did you solely see it as a stock?
It has nothing to do with being interesting, I could careless if you are interesting (thats bs for bankers working at 1am) It has to do with are you going to grind day/night, can you find an edge/alpha? When you want to be a deep value guy at one of the many funds they mention on here well yah then you have to IB->PE etc…cause those dudes need those skills. Maybe you want to be a MMHF dude who reads a ton, learning how to value a business and likes the momentum of the markets. Maybe you read a ton of history/economics and like how macro is about large world decisions and politics. Etc..
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