Shareholder Activism Investment Banking -->> Activist Hedge Fund
I know that it's really rare and difficult to go from a shareholder activism/defense group in any investment bank to private equity, and almost always you have to transfer to a coverage group to get modeling and other experience that PE firms need/look for.
However, is the path from shareholder activism investment banker to activist hedge fund possible or feasible? In my mind, as the banker, you have a deep understanding of the strategy, techniques, and intuition of activist investing, so would hedge funds like Elliot, Starboard, etc. value that, or would they still need you to get coverage or PE experience?
Probably makes you less competitive - my understanding is a lot of these firms today have dedicated engagement teams that sit alongside the investment team whose role is to specifically plan out all the things you highlighted when they go activist
You can probably try and go into that role but being in the investment team will probably need more typical business underwriting / technical experience is my guess
I can comment directly on your question. I was at GS and knew several junior people who tried to do what you are attempting / asking about, specifically by getting to Pershing or Elliott. Short answer is it is not possible - Elliott / Pershing / TCI / Name your top activist fund all hire people who did two years in top IB groups then went to top PE shops - period. If you stay in activism defense until you become a senior person, anything is possible. Elliott hired the guy who ran the practice for GS 5-6 years ago, presumably because he added value in some way. If you are looking for the traditional way to a seat on the investment team at one of the top activist funds, there are no detours - you need to get into a top product or coverage group.
That makes sense. What does the difficulty in transferring between groups look like? For example, is it harder to transfer from a product/coverage in a mid-tier MM bank to a EB/BB bank, or is it harder to transfer from a Activism group role in a T1/T2 bank into a product/coverage group of the same bank?
Internal mobility will always be easier than switching firms, but your success is going to be predicated on how strong a performer you are and there being a need in the group you want to get to. Many people get pushed out of GS because they try to lateral into a different seat and aren't good enough at their current jobs. High performers never have this problem unless there is some hiring freeze going on, the firm wants to keep them because it loses top talent to the buyside all the time.
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Senior analyst at an activist fund here. The strategy of activism is something you learn well at an activism defense banking job. What you don’t learn there is how to be a plain vanilla fundamental equity analyst. Could you move to an activist fund from your role? Sure, it’s possible but not probable. Even if you made it, my opinion is you’d be missing a critical part of what makes an activism analyst good. My recommendation is to join a long only shop or long-biased HF, do two to three years there before trying to get into activism.
Active engagement is a painful way to make money and not worth the brain damage.
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