Hey guys, I’m a second year analyst at a large tech-focused tiger cub. I used this site a lot while in school so I felt it’d only be right for me to help out and answer any questions you guys had.
Here’s a bit about myself:
typical math competition kid while in middle/high school, and consequentially decided that I wanted to major in math
went to a target school generally uninterested in discretionary trading, or for lack of a better term, “pure” finance (MIT/Stanford/Caltech)
interned at a prop shop my sophomore summer & decided that I wanted nothing to do with algo trading
worked in MF PE for 2 years after college
transitioned to the tiger cub after my stint in MF PE
Will try and answer every question so feel free to ask anything
Were you a boarding school nepo kid, no offense but I was wondering if you really earned everything by your own merit
I went to Stuy and my parents are Asian immigrants if that answers your question lol
Word of advice: this is prob too much info and you are at risk of doxxing yourself. You will soon learn the HF world, especially among large funds, is very small.
As a Bxsci alum and the same immigrant background, lets go man!
An Asian? Doing math? Impossible
Respect bro that’s truly some inspiring stuff. Question was kinda rude but was curious myself haha
Fellow stuy alum go you
i know who this is, whats up king
just cause you couldnt get into his seat and work at HSBC doesnt mean he's a nepo Baby
skill issue
you fucking piece of shit. but hey, no offense! we're good!
this comment reeks of incompetency and laziness.
What are your thoughts on IB to PE to HF versus a longer IB stint (A2A, potentially VP) to HF? Curious on how much your PE skillset is regularly utilized. Thanks.
I do utilize my PE skillset occasionally since I work at an l/s fund, however, I don't think it provides a major advantage over those who come from IB since public and private investing are fundamentally different (and have very few overlaps).
Despite this, the top SM funds hire exclusively from MF/UMM PE / Business School / other top SMs because of the amount of talent within the 3. They don't really have an incentive to recruit from IB and generally prioritize those with buyside experience. For that reason I discourage staying at a sellside role if your goal is to eventually transition over to a top SM HF.
Congrats on the success, you should be proud!
Ignore title, I am finishing up my first analyst year at MF PE. I always wanted to try public markets but I am worried about the volatility, hopefully this never happens but where do you see yourself in case things do not work out and you get fired/pushed out? What do you think are common exit paths?
Thanks!
If I ever get laid off then my options would first and foremost be other HFs. There isn’t much stigma from being fired because it happens so often (cough cough Coatue). As far as other exits, most are primarily investment-related roles, but the options are more limited than in PE for example due to the specialization required for working at a HF.
Can you elaborate a little bit more about the HF recruiting from MF PE? How was your process? Is it true the Tiger Cubs hire basically for an immediate start?
The fund that I’m at generally only recruits when a position opens up, and fortunately one did when I was working in PE. I’m not sure of how many people they interviewed for the role I currently work at though, or if they even interviewed people outside of the MF I was at.
I started ~1.5 months after I got the offer, and yes they do prefer their new hires to start soon.
Can you talk more about the interview process? Also, can you elaborate on the "proprietary research" team at these tiger cubs?
The interviews consist of primarily stock pitches (both long & short), technicals, and behavioral questions (won't go into more detail than this). You're also expected to demonstrate your investment acumen throughout the process.
I work in the investments team, so I don't have too much interaction with the research side (PMs send requests) so I'm unsure of specifics, however I can provide some insight. My funds' research team consists of regulatory/policy researchers and a few industry specific researchers. The proprietary research team is quite lean, and we generally conduct the majority of the research within the investments team before reaching out for specifics.
What’s the WLB like? I’m still looking over various fields within finance to see what might be right for me, so I’d appreciate any insight you could give me.
Does the firm invest in public + private, and if so, do you get to also work on the private side and do you find your public investing skill set transferable?
The firm does make private investments, however I don’t work in the private arm.
Is it your impression that WLB is any better in the private arm? And do you think that there’s a good reason to want to do private at a SMHF versus going to a growth shop or VC?
What would you say is the main differences in working within HF private, vs PE or VC?
Controlling/non-controlling stakes? Exit horizon?
Fully understand you only do public and might not be able to answer…
Appreciate opening up thank you!! A few questions, sorry if it's a lot!
Classic one first- what do you think your PM's/fund's/ your own edge is in the markets. Do you think you guys have a process that is somewhat different in any way to the majority of other funds like maverick, tiger, Viking, or even a Citadel (if they were allowed to take some longer duration bets). Or is it more just similar process + scale + resources + talent = success?
What is idea velocity like/ how long do you usually spend on a single idea before you get comfortable pulling the trigger. (I think my real question is trying to understand how deep you are able to get on the names, and how many names you cover at a given moment).
What parts of the investment process and philosophy were unknown to you before arriving, which then had significant impact / you now try to incorporate a lot? (Said another way: did you learn a new approach and way of looking at things after joining that had a big impact in the way you work?)
Not just your experience specifically, but If you want to opine on as well: What do you think is the most important aspect in the hiring process that helps a candidate to stand out and lock down an opportunity. Quality of pitches? Familiarity with processes/ fluency in understanding the "game" of investing in public equities? (Not concerned with pedigree or fitting the path here)
Small bonus question: surprised they asked technicals in interviews after a few years of any experience? Is it more like hypothetical modeling questions, or still classic technicals you would see in IB?
Sure thing, I'm happy to help!
1. For the sake of preserving anonymity, I don't want to go into detail too much as I work at a fund you mentioned or a fund very similar to the ones you mentioned (won't specify which). The "similar process + scale + resources + talent = success" part is pretty accurate though.
2. We spend anywhere between 2 days to a month depending on the idea and how much research we have to put into it. On average, it is around a week to 2 weeks before we decide whether or not to proceed. Idea generation is a whole different beast though. To be frank, my ratio is currently around 85/15, meaning I research PM's or colleagues' ideas 85% of the time and look into my own ideas 15% of the time. I usually come up with 2-4 generally actionable ideas a quarter, but the names that my PM gives me are normally extremely under-researched (as I'm expected to handle the brunt of the research), and as a result, often not as actionable. I typically cover 10-15 names, and I get extremely deep - we do tons and tons of DD.
3. Prior to joining my current fund, I had zero l/s equity experience. I worked at a high frequency prop shop while in college so discretionary trading was very foreign to me. However, I did put in a lot of effort to learn the ropes quickly, and I'll quickly summarize the approach I was taught. For long investments, look towards: restructured companies (often due to new management) that undertake cost cutting, selling/ceasing operation of non-core businesses, and share repurchases; high earning, and reasonably valued, companies that have relatively predictable growth, high capital returns, and sustainable competitive advantages; and lastly, highly cash-generative companies which, although may have limited growth, are using their cash effectively for debt reduction, acquisitions, or share repurchases. I can pm you my philosophy on short investments as well later (excluding it as it'd make this post too long, and I don't feel like typing it all out now anyways).
4. Both quality of pitches and your potential. My fund specifically (can't speak for the other tiger cubs) doesn't care about whether or not you're familiar with investment processes since you'll be trained anyways. They prefer to identify talented candidates, and there are many questions throughout the interview process to probe whether you can think outside of the box and bring new perspective to ideas.
5. There is little to no modeling in the in the interview process, it is mainly just classic technicals to assess your basic fundamentals.
Really appreciate the comments thank you! I know you may not be able to get too specific but gonna throw out a few more if that is ok!
How many positions are in your specific team’s portfolio? Typical 20-30 longs and 30-40 shorts?
Are you guys targeting something like 100% upside on the longs over a 2-3 period? If so, how closely do you try to time inflections in quarterly results to inform that LT horizon, or do you really remain flexible to softer catalysts and a gradual perception shift over a longer time period.
Just to confirm on idea velocity- that 2 weeks is only before deciding that there is a potential alpha load worthy of more research right? The typical things that go into “differentiating” due diligence- all the expert network calls, industry specific conferences (not sell side), management interviews, sourcing the right industry specific data, etc. - seems difficult to get all of that done in under two weeks?
So I am far from the regular path and most large funds are impossible me now, but I am currently working my way still through some decent opportunities at other L/S funds.
With regards to interview questions that probe for “raw talent” vs. testing a candidate’s familiarity with investment philosophies and processes, is it possible to elaborate at all? Not the specific questions but just trying to get a better understanding of the “talent” characteristics you can screen against in interviews if not pure stock ideas/ technicals/ understanding of processes and philosophies
Can you please PM me more about your long & short philosophies? Especially shorting/sniffing out (di)stress. Fellow Stuy alum just starting out at a HF and very eager to learn more about ways I can add value as a newbie/lowest rung on the totem pole.
could you PM me your philosophy on short as well please? TIA!
interested in learning the short philosophies over PM, thank you!
Know this is an older post, but any chance you could ping me your short philosophy? Thanks!
Would a fund like yours ever take someone from a top banking program?
If not through headhunters, would direct outreach work? Does niche sector experience help?
Thanks
The fund I work at never takes people directly from IB (afaik). It generally takes people after PE or business school. Direct outreach unfortunately won't work unless your resume is mind-bogglingly impressive, and to be completely honest, that sometimes isn't even enough. My fund is primarily TMT focused so a focus in other sectors isn't very important.
Would your fund consider someone from a top LO like capital / D&C / wellington?
One more for you. How severe is the hire and fire culture at elite L/S funds? Does it live up to the reputation? Trying to get a sense of why one would leave the predictability of a PE program, just given that the cash comp isn’t that much of a discount and seems to be potentially stronger on a risk-adjusted basis given path to midlevels.
Varies fund to fund but it is quite volatile. My fund is essentially the closest thing to a meritocracy so the best performers get the highest comp while the worst ones are usually laid off after a bad few quarters to year(s) (depending on how long they've been with the fund). Many also tend to forget that people fired from elite SMs still have quite a few opportunities at other great funds most of the time.
People leave PE because of how slow and boring most of the deals are. So many big deals take years to come to fruition, and additionally, so many of the companies that you're analyzing are mind-numbingly boring. At the end of the day, you'd be happier doing something that you enjoy even if it's a little more volatile than its alternative (unless you're extremely risk averse). I prefer the competition and intensity from the adrenaline of working at a HF compared to the emptiness I felt while in MF PE.
Comp at most tiger cubs and other elite l/s SMs blows PE out of the water on good years. You can make a lot of money at HFs early on in your career, but it takes so much more time at PE shops especially if there isn't a direct path to partner.
Also, ambition and the desire for a new challenge/goal plays a big role.
In a previous post, you mentioned that around 85% of time is spent on PM ideas. If this is the case, how are your performance measured (if bad performers will be let go after a few bad quarters)? Do they strongly track the performance of your own ideas (the other 15%), or is it more how good your PM thinks you are at the research etc?
You also mentioned that most of the names are very under-researched, does that mean that there is little to no available equity research coverage on the name? If yes, would these names not be either very small in mcap or very illiquid stocks?
.
How do you rationalize all your work essentially coming down to luck
why don’t you go tell that to the investors who throw billions at us :)
What are your long term goals? Do u want to be a PM?
Ideally want to start my own fund if I’m successful as a PM for 5-6 years. Others from my fund have done the same, albeit it is still a very difficult path.
Aight so say you're a top analyst at a top SM and you want to be a PM. How? You can only start your own fund or join a huge asset manager, right?
No, you'd get promoted to PM once a spot opens up. The tiger cub I'm at is a bit different from the norm, we have multiple PMs managing their own books in different sectors. However, we do have a centralized focus on TMT.
Ah yea true, had a brain fart for a second. Congrats with everything in your life so far, thanks and all the best!
Ok, you can take the advice or not but at this point you have given enough info on this thread that it’s becoming more easy to identify where you work. Given the other PII you have splattered on this thread I imagine anyone at your firm reading this thread will have no trouble identifying you instantly.
as I said… be careful. No offense but this thread reads in a self congratulatory way and I don’t get the sense that you have been humbled by the markets yet (which is common among juniors). Maybe that is not the intention but that’s how it comes off.
How did you break into MF PE with an algo trading background? Are kids with this background viewed as smarter/more capable and preferred over kids doing IB SA?
I believe it was because my background was pretty difficult to attain.
The prop shop was JS/Citadel Securities/Optiver, and I had a near perfect GPA in a quantitative major from Stanford/MIT. I also did extremely well in the interview process (or so I felt I did).
I think it was a culmination of the three factors, and they may have been looking for someone outside of the traditional path, and found me. The rest of my analyst class was very Harvard/Wharton heavy for reference.
I don’t necessarily think that they believe algo trading is preferred over traditional IB SA’s, since I was the only one with an algo trading background in my group. I’d honestly recommending doing the standard H/W -> IB SA path for the best shot at MF PE.
Why would an algo trading and math whiz kid ever be interested in MF PE and later discretionary stock-picking? Why not interested in becoming a quant?
Sorry if you've already answered this elsewhere
Gotcha, thanks!
Do you see more tiger cubs branch out to credit/structured credit? Similar to Viking
I have no idea, sorry
Coatue already has and while not a Tiger Cub, Dragoneer has as well.
Currently intending at one of the large MMs (P72/Citadel); was wondering what you thought about their programs and prospects wanting to move to SM funds making more thematic bets if they joined an MM as an udnergrad
Moving to an SM from an MM is very difficult, but can be doable. In the past, most SMs wouldn’t give MM candidates any looks, but now there are quite a few SMs that want to hire analysts from pod shops @ MMs (both Citadel and P72 work for this).
The top SMs will only hire from MF PE, other SMs, and Business school, so those are out of the question as of now. If you do want to make the transition, I’d recommend for you to join the best SM you can get coming from an MM, crush it there for a few years, and try to pivot to an elite SM once a seat opens up.
Not correct.
How is comp at your fund structured for analysts/pms? Is it discretionary or is it formulaic where maybe u get a certain percentage of alpha generated?
Really enjoying this thread and it certainly sounds spot on, but I’m honestly puzzled as to how someone in your position doesn’t realize you are almost certainly doxing yourself narrowing down funds and schools (even if there’s a red herring or two in there). It’s a small world and seems like a questionable judgment call. I personally don’t have any inkling and respect the willingness to pay it forward - but I’d remove some identifiers
So what if he doxes himself tho? He's not saying anything bad or illegal. Just compliance issues with the industry and firm?
Entire background is a red herring
How does the diligence process in HF compare to that in PE? Currently in PE and trying to get a better sense of the breadth and depth of DD analyses done in HF (understand they also vary by fund).
Thanks for doing this-- Could you expand on choosing to go into traditional finance vs Ph.D./Quant/SWE/Consulting etc, and maybe more about what the process was like not coming from a conventional Harvard/Wharton target pipeline to MF PE?
I study engineering at one of the schools you mentioned (MIT/Stanford/Caltech) and am transitioning towards IB/PE/HF roles -- would love to hear your insight as not too many go down the path at my school.
This thread reminds me of a quote from Seth Klarman:
"Successful investors must temper the arrogance of taking a stand with a large dose of humility, accepting that despite their efforts and care, they may in fact be wrong"
Don't rest on your laurels, young blood. Someone more careful and humble than you will eat your lunch.
How much money do you make?
Thoughts on the SM L/S model? I'm also at a SM transitioning to long-only; curious to hear where you think the future of the business lies.
The quant route looks way more lucrative. Plus, fundamental investing is kinda boring.
Hmmm why are excel apes so angry at my comment?
That's why you're in quant
The toxicity and jealousy under this post is just too much
Lol i know, people are so mad for no reason
I think it's more so that this guy is clearly bragging, at least a little bit, all while making his identity very easy to find
Thanks a lot for sharing! Definitely appreciate your insights.
Would love to know what’s your approach from distilling all these information (cause you def do a lot of research and DD) into actionable insights/key theses?
I think for ER and Public Equities in general it’s really quite overwhelming.
And also what’s your approach on modelling? Ur it very key to L/S Equity as a whole or is it more of a tool to play around with to test certain assumptions you make?
Greatly appreciate your time!
A word of unsolicited advice, you may want to tone down your comments here. You gave enough information to be identified relatively easily and the responses to some of these questions comes across as cocky/arrogant to straight up naive. The reality is that you’re a junior analyst at a good fund, calm down.
What's the general pipeline to the tiger cub (i.e. is the MF PE --> tiger cub route common)? Curious because I'll be going into IB Rx and am wondering what (if any) the general sentiment toward Rx is at your firm, especially given that it is tech-focused. Thanks!
Do you think SS ER is still valid to reach a good l/s fund? Also what about if someone went straight to a l/s sm fund out of undergrad as opposed to doing ib/pe?
I'm not saying the entire AMA is a lie, but I'm pretty is that OP is lying about interning at JS/Citsec/Optiver. They mentioned "coding mindlessly while looking for signals drove me crazy" which doesn't sound right for a few reasons but (1) traders at these firms are not coding all day, they do work on projects but do not code nearly as much as the devs building the systems or the researchers who are actually looking for signals and (2) interns at these firms are in classes, doing mock trading, and shadowing, not "mindlessly coding."
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