Small SM HF analyst — Career on thin ice after a few missteps
Hi all,
Looking for advices as a couple of my career choices have put myself in a tough position. I'm based in Asia, but appreciate wisdoms from other markets as well.
Background
- 5 yrs out of a top-target college in Asia
- BB ER associate for 2 yrs – decided to leave as day-to-day wasn't fruitful
- Moved to a boutique IB (consider it tier-3) – Higher comps + cover my desired sector. Analyst was ex-BB and a long-time mentor
(I now know this is a bad move. Back then the plan was to return to a BB after 1-2yrs, unfortunately market wasn’t cooperating) - Worse still, after 2yrs the firm nearly went bust; I was one of the last few to get laid off
- Had a much tougher time recruiting due to the tier-3 brand name.
- Ended up landing at a 2-yr-old start-up SM HF (sub-$100mm AUM). PM’s legit and mentors well, but fundraising is ice-cold, so comp is obviously capped
My goal has always been to develop a long-term career in fundamental investing. Ideally with an elite brand and decent comps — whether HF or LO.
Reality check
Been blasting out applications to larger SM/MM and a few LOs—radio silence. Also actively networking around but no bites so far.
Then stumbled on this WSO thread (https://www.wallstreetoasis.com/forum/hedge-fund/joining-a-small-hf) about most guys at sub-$100mm shops eventually wash out after a few years of mediocre earnings. Feels a likely outcome to me ngl.
What I’m hoping for
Advice for me to stay in the game and bring myself back on track. I see a few possible paths going forward:
- Current HF killing it, breaks through $100mm and scales – Ideal but environment/strategy make it unlikely (imho)
- Network into a bigger fund – preferred outcome but hard to even land an interview so far
- Trying to return to a top-tier SS ER to rebuild brand? (i know it could be hard too)
- MBA? (with my profile though, would the degree really reopen doors?)
- Open to any other ideas I might be missing
Honestly have been quite confused these days. I know I made a silly career move and I'm paying for it. Any advice, thought, or reality check would be hugely helpful.
Buyside publics is a terrible career now. LO is a sinking ship. SM has no exit opportunities for “sr analyst” (no risk tasking, too senior, not as tight sector coverage) when the fund eventually fails (no inflows). The only people with funds come from family money or socerign wealth connections. Quick to churn. Better to know this now.
Try a lottery ticket at a pod for 12 months. Then go to a better industry
Buyside publics is a great career now, if you can add value. Go to a pod - there are so many out there you will likely be able to land at one. Focus on mastering the process and generating P&L that can be attributed to you. It will be a similar job to your current fund, but with the benefits of scale passed down to your team (i.e. much better infrastructure support / brand / stronger launching pad for your buyside career) and a much stronger likelihood of scaling in the success case.
Let me know if your PM needs help raising capital, can help for emerging publics managers
Thank you. Just shot you a DM.
Received - sent reply
I was in a similar spot to you at a subscale fund though not as small as yours with a PM that led me onto false promises. Unfortunately, today’s environment is tough for fund raising. So despite your PM being legit, if you decide to stay, brace yourself for more years of being underpaid. I suggest starting to look ASAP.
I can’t opine on whether you should stay on the buyside, go back to the sellside, etc. That’s really upto you. But don’t be hasty.. the last thing I wanted to do was to take a misstep with no recourse to a career I wanted. Decide what you want to focus on first. I see your preferred outcome is just a larger fund. Other people commented pods but just simply applying to pods won’t get you a job.
I struggled to get interviews at first because I had a no name firm on my resume. What I did do (and you should too if not already) is to make sure your resume advertises the best version of your job and yourself. You would be shocked at how much you can improve.. use chatgpt as an aide but don’t rely on it.. think about smart ways to convey what you have achieved so far. I probably went through 10 iterations of my resume before I had one ready to be sent out. I saw some resumes from the hiring pile at my current job to see who I was competing against.. and I was surprised at how bad it was, sometimes even with good pedigree on there.
Appear smart when you reach out to HHs. They don’t care where you work, they get paid to place you anyways.. but appear smart so they send you to their best clients that you want to work for. I got opportunities through HHs (and interviewed) at quite a few “selective” funds (or so they’re referred to on this site) despite my background. And don’t just rely on HHs too.. apply online. I always thought workday was a blackhole until I started hearing back for interviews at super legit funds.
1) My PM was legit too so I decided to mention it on my resume by saying “analyst at XYZ firm launched by [insert PM’s background]” and that gave the firm a lot more credibility instead of just saying “analyst at XYZ firm with ABC aum and strategy.” In fact, I started getting interviews because people knew my PM (which is always a risky move but I didn’t really care at that point).
2) For your job description, if you had put on names in the book, describe them concisely under an “investments” section but very well put together in a way you sound like the second coming of buffet or soros. Every interview I did had multiple followup questions about this section, some of my interviewers liked how smartly the investments were made/setup, buying me a lot more credibility.
1 and 2 started getting me interviews at some very well known funds.
3) If you decide to do the above step, know your names (along with diligence process and outcome) inside out and be ready to 1) talk the interviewing PM’s language 2) defend your thesis and answer any questions. Worst thing you can do is try to BS.. they will sniff that out. Do your research and make sure you sound like the smartest person they can hire. At least make it to the case study/final rounds as the favourite candidate so any mistakes/misjudgements on the case can buy some leeway… I was told during multiple processes that I was the favourite candidate whenever I approached final rounds.
4) Make sure your case study is 200% over what they ask for. Try to do the best you can with the resources you have. Go above and beyond, be thoughtful about what matters. No 50 page memos just for the sake of it. Be able to convey your ideas in a concise manner. Do hard but smart work. Leave an amazing impression. I’ve been in processes that didn’t turn out in my favour (maybe for personal fit, location, etc.) but I’ve had the same PMs return my messages and offer to help find me something later (whether it was a fake offer or not who cares.. but I got at least a few people back on the phone actually offer to help). In a couple cases I was asked to entertain a position at those funds again
4) Approach every interview as if you are going to die if you don’t get the job. No more half assing interviews and saying it was just a practice interview while you await your dream interview. I did maybe 10 interviews within a span of 4-5 months and made it to final rounds at 8 of those. Was lucky to be in a position to be able to turn down processes and choose what I wanted.
I realize it’s a tough time but often the fix is right in front of you. If you want, I’ll take a look at your resume and suggest changes if necessary.
Really appreciate you laying all this out—everything you described is exactly what I’m running into right now.
I'm prolly on my 4th iteration and still not seeing much traction, so more than happy to send it over for review. As you're anonymous, do you mind dropping me a DM or a handle so I can reach out?
Especially still tweaking the structure of my "selected investments" section. Right now I have each name 2-3 concise lines, but not sure if it reads strong enough. So would love to hear your feedback or tips/samples. Thanks again!
Dmed you
Hi there. Applying to b school and interested in public investing as well, coming from a VC background. Would love to look at your case studies too to get a sense of how to go above and beyond. Thank you
There was no magic reason I went above and beyond in my case studies. I simply focused on what mattered and drove my thesis whether that was business fundamentals, valuation or anything else. I let my thesis drive the trade recommendation. No fluff, no 50 page writeups.. my most successful ones (where I got dinged on ultimate fit and not the case or when I got offers) were no more than 5 pages (maybe 5-10 including an appendix when required) but I could really get the core within 2 pages, leave the rest out, and still be fine.
I cannot emphasize this enough.. focus on what matters i.e what got you looking at the name in the first place and what drives your thesis. Start with the recommendation up top. Identifying what matters alone gets you 50% of the way there.. the remaining 50% is your own creative analysis on how to make sense of the info/data you have to come up with a variant view to build your thesis. Too many people spend too much time building the most complex 1000 line model and describing the business and every single cycle it has gone through.. that’s only helpful to show you can model and research but doesn’t differentiate you when 100 other candidates can do that as well.
And once you present, be ready to speak well, convey your ideas in a concise manner, defend any pushback but at the same time acknowledging any drawbacks/risks and offering mitigating factors. You have to be convincing but not come across like a bull in a china shop.. nobody likes an arrogant know it all.
This was a great read, thank you for taking the time. Excellent tips.
People saying 'just go to a pod' are severely underestimating how hard it is to land a seat at a C/M/P.
I would poke around SS ER to work for a top II analyst.
I'd like to think an MBA would give you some optionality.
Pump. Facing similar situation.
Bumping to follow thread as Asia is a hard, hard, hard market to be in esp for public equities. Shit situation for everyone regardless in HK/SG. Depending on coverage, there may be some opps - I'm assuming you are not exactly Korean/Jap speaking because those tend to have a lot of inbounds.
I'm surprised the BB role didn't put you on any radar? Any possibility of trying to go back there or have some networking over there?
It's a really bad market where even your typical pods aren't hiring - some insights is that even those grad programs aren't hiring much, and the existing pods aren't looking to expand their teams across all 4 C/P/M/B. The revolving door will make it highly likely there will be seats, but if you cover consumer/TMT (esp. China), I would say it's truly tough luck. Even my friends/HHs in the space don't have public market opps.
Sorry I couldn't be of much help too (am somewhat in the space via friends/former opps) - just keep your head up and wish you atb!
Edit: Typo, wanted to chime in if you studied or have the CFA, no harm trying to go for some networking events etc. The small fund to small fund track is never ideal but if no better opportunity comes up, perhaps another small fund may offer an opportunity to a proper sleeve/PnL sharing or better economics someway.
Thanks for the color—spot on. HK is flooded with analysts right now, supply’s miles ahead of demand according to the HH. I wonder which verticals do you think have better opps? I used to think TMT/consumer because there are simply more seats, but maybe that just means way more people fighting for them.
For context, I left the BB near the bottom of the cycle, so openings were scarce and my coverage was pretty niche. A move back to a BB / another fund is indeed on the radar, if a seat frees up.
I didn't do CFA as I had a finance degree, but I did network around from time to time. Are you also based in HK? Happy to connect offline if you don't mind.
Yep on the first part - was crazy with many mainlanders looking to exit since about early/mid last year due to the crackdowns on finance. Equities in HK revolves around the same few names/mainland firms so it makes sense to take them in too.
For the below, just some thoughts of my own and what I see (feel free to correct me or @others to add on), I would say TMT/consumer is definitely the largest segment by far and there's the most seats.
The below is largely from a pod lens - China and Japan has a ton of tradeable firms in that space, and they meet the volume requirements etc. But at the same time, TMT/consumer is the most "understandable"/"mainstream" sector so naturally there's also the most people gunning for them. And in the early years for public equities, everybody is considered for them as you have HHs/BDs reaching out to every Tom, Dick and Harry from IB/PE/ER too. Only in later years when running risk do they start being a lot more picky.
From a non-pod lens also, India is starting to pick up (thought ofc AUM deployed-wise, it's a small drop in the bucket relative to China etc.), so being Indian is an edge, though it's the same few sectors of consumer being large.
Getting to the part of the best verticals: I think it lies with industrials/financials/healthcare. The crux of them is that they all share a few traits: relatively unsexy (okay tbf biotech and whatever pharma for healthcare certainly is sexy but most people won't think about them due to the expertise), hard to understand (financials speaks a diff language from the rest), or hard to trade (industrials is very linked to macro).
That said, for Asia, there's definitely a lot of opps within the industrials and financials space if you take a step back from China/Japan/Korea (excl. India cause it's just not that significant yet). Just look at the largest firms publicly listed in SEA or the deals happening in the space - predominantly dominated by banks/real estate/industrial/infrastructure firms.
Both industrials and financials have dedicated teams, and PMs looking to branch out from their consumer/TMT sectors may tend to consider some firms from there.
On healthcare - you have quite a bit of biotech/medtech/hospital equities lying around. Hard to understand, hard to trade, but whew the alpha is wild if you do know what you are doing sometimes. That said, it's also the hardest to hire as there's a huge preference for the prior background in sciences/biology (bonus points if you have a medical background), and most generalists don't tend to do well in this field. I remember a certain large fund wanting to hire someone for healthcare, but it's been years with no luck.
All in all, the above 3 industries are ones which I don't see much pipeline from IB/PE too - largely because those doing industrial/financial/infra deals just stay within IB/PE - infra PE shops are making hella good money if you are in the right places. Financials IBD pays well as it's the same DCM deals or M&A across the region.
When it comes to smaller funds, FOs, mom and pop shops - technically they all seem to have more of a global focus and don't really focus on Asia if they can choose not to (I mean US is still the largest and sexiest of them all). It's only really the bigger firms with LPs to answer to that devote their AUM and attention in the space simply because their US office is alr doing all the trading in the US equities place.
^ FYI, the above is just my 2 cents and (limited) exposure to the space as well. Hope it may be of use, and happy to connect offline if you like. I'm sadly not based in HK, am in SG but happy to show you around if you ever come.
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Is that because the Asia equity market is so choppy and more based on macro? And a lot of the LP money has pulled out of Asia after underwhelming / bad performance ?
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