PhD student with questions regarding long term HF planning

Current PhD student exploring a specific field of HF as a career. My PhD program is in biomedical engineering at a great university. I am almost at the end of year one (four years total), and I am committed to finishing. Prior to starting the PhD, I had strongly been considering VC, but the career progression, compensation structure, and impact seem to be considerably more attractive in HF.

Specific funds I am looking at are RA Capital, RTW, Baker Brothers (very little public info), Deerfield Management, and Orbimed. As a generalization, these funds hire PhDs directly, usually to do equity research. These funds are all specialists in the life sciences and invest at multiple stages of companies (including private in many cases).

Some questions I have are:

  1. I have no computational background, but I could integrate this into my thesis. At this stage, the project is mostly hardware and wet lab.

    Could this feasibly set me up for a role as a quant? I have always been good at math, but I think this is probably an entirely different league from my ability. My undergrad was in biotechnology, so not related. Is quant learnable or innate?

    I realize quant trading is entirely different from what the funds I mentioned above do, but I am interested in weighing this path as a completely separate option.
     

  2. I am curious about what starting my own life sciences specialist HF would look like and what steps are most important for making it possible. This has important implications on my next career moves.

    I know that starting a HF requires a multiple year investment track record, a strong network of potential LPs, and good market timing. I'll be 26 when I finish my PhD, and I'll want to start my own fund as young as possible when the timing is right.

    With that goal in mind, what is the most reasonable career move for when I graduate my PhD? I have read that consulting and IB are popular segues into HF, but given my position and goals I think it would be better to go directly to a HF

  3. When I do go to a HF, should I target the specialists I mentioned above, or am I better served at a MM where a bigger brand could make me more attractive to LPs later on?
     
  4. If I go directly to a HF, should I expect to be put on the sell side (equity research), or is a buy side role achievable out of the gate? Are there things I can do before finishing my PhD that would make this more possible (e.g. HF internship or some way to demonstrate an investing track record)?

Apologies for the long and specific post. Any insight is welcome

5 Comments
 

Based on the most helpful WSO content, here’s a breakdown of your questions and actionable advice:

1. Quant Path Feasibility

  • Transitioning into a quant role from your current background is challenging but not impossible. Quant roles typically require a strong foundation in computational skills, programming (Python, R, C++, etc.), and advanced mathematics (stochastic modeling, statistics, etc.). While you’re good at math, quant trading often demands a level of expertise that goes beyond general aptitude.
  • Integrating computational work into your thesis could help, but it’s unlikely to fully prepare you for a quant role unless you dedicate significant time to learning programming and quantitative finance concepts. Quant skills are learnable, but they require rigorous training and practice.
  • Since the funds you’re targeting (RA Capital, RTW, Baker Brothers, etc.) are life sciences specialists, quant trading may not align with their investment strategies. If you’re serious about exploring quant trading, consider internships or certifications (e.g., CQF) to build relevant skills.

2. Starting Your Own Life Sciences Hedge Fund

  • Starting a hedge fund requires:
    • Track Record: A proven history of generating alpha in life sciences investments.
    • Network: Relationships with LPs (limited partners) who can provide capital.
    • Experience: Deep expertise in both life sciences and finance.
  • To position yourself for this goal:
    • Gain experience at a life sciences-focused HF like RA Capital or Orbimed. These firms will provide exposure to the investment process and help you build a track record.
    • Develop relationships with industry professionals, potential LPs, and biotech executives.
    • Consider roles that allow you to evaluate private and public investments, as this aligns with the multi-stage investment strategies of the funds you mentioned.

3. Post-PhD Career Moves

  • Direct HF Entry: Given your background and goals, targeting a life sciences specialist HF directly after your PhD is a logical move. These funds value PhDs for their scientific expertise, especially in equity research roles.
  • Specialist vs. MM: Starting at a specialist fund (e.g., RA Capital, Orbimed) is likely more beneficial for your long-term goal of launching your own fund. These firms provide deeper exposure to life sciences investing, which aligns with your expertise and aspirations. A MM fund might offer a broader brand, but it may not provide the niche experience you need.
  • Sell-Side vs. Buy-Side: Many PhDs start in equity research roles, which are technically sell-side. However, at life sciences-focused HFs, these roles often blend into buy-side responsibilities, as you’ll be directly involved in investment decisions. Demonstrating an investing track record or completing an HF internship before graduation could improve your chances of landing a buy-side role immediately.

4. Pre-Graduation Preparation

  • Internships: Pursue internships at life sciences-focused HFs or VC firms to gain hands-on experience and demonstrate your interest in investing.
  • Investing Track Record: Start a personal portfolio or participate in investment competitions to showcase your ability to analyze and pick stocks, particularly in the biotech sector.
  • Networking: Build relationships with professionals at the funds you’re targeting. Attend industry conferences, reach out to alumni, and leverage LinkedIn to connect with people in the field.
  • Skill Development: Learn financial modeling, valuation techniques, and biotech-specific investment strategies. Resources like WSO’s Investment Banking Prep or Biotech Finance guides can be invaluable.

Final Thoughts

Your plan to target life sciences-focused HFs aligns well with your background and goals. Focus on building relevant skills, gaining experience, and networking within the industry. Starting your own fund is an ambitious goal, but with the right preparation and career moves, it’s achievable.

Sources: Hedge Fund Careers: Getting a Hedge Fund Job Out of Undergrad and Beyond, Q&A: MD/PhD --> MBB --> MegaFund, The PhD Experience, Q&A: PhD -> MBB (with some steps in between), Biotech finance: from IB to VC / HF to funded startup

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 
Most Helpful

What in the Lord’s name are you doing sir. The steps you can take at this point include knowing the difference between sellside and buyside lol as well as recognizing if you didn’t even know that nugget, the chances of you raising and launching your own fund is just about zero. The landscape is not hard to figure out? Ask AI to archive these boards alone and you will get quite far in building knowledge.

also lol @ looking at working for Baker Bros. And I’m looking at dating Margot Robbie. Good luck to us both at landing impossible gigs

 

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