S&T vs IB background for breaking into L/S or Macro Hedge Funds
Hi Everybody,
I'm currently in a sophomore rotational program at a BB bank. I have rotations in both IB and S&T. At the end of the summer I'll probably be able to pick what my internship for next summer will be in. Which path makes more sense for eventually breaking into L/S or Macro funds?
Thanks
Anybody? I'm interested in this too.
L/S= IB or Research Macro - not as sure
Which groups would be strongest for L/S? M&A, Sponsors, Coverage groups? I'm a little concerned about the IB route because I wouldn't have the trading background to help develop the "gut feel" for where the market is going. Plus trading seems a little more interesting to me.
trading is a high risk / high reward career path. assess at your own risk. i know lots of young guys who went into trading without understanding their own strengths, washed out very young, and never got back into the business. You don't learn "market feel" for many years.
IB is preferred among L/S funds over trading because you get solid industry coverage and strong modeling skills in IB. Trading is more focused on market knowledge and doesn't provide you the same exposure to fundamental research as IB or ER do.
Cracking article mate!
A few questions In regards to the article;
-when you talk about Sell-Side research do you mean Equity research?
-What path would you take if you just left university?
-When will 2 be out?
Thanks! Part 2 will be out soon and will focus on the niche paths going to a hedge fund.
Yes, sell-side research means either equity or high yield research, depending on if you like equities or credit better. I would go with investment banking if L/S funds are your goal, and if fundamental research on companies is what you like to do for the long-term. If you are passionate about currencies, commodities trading, etc, a trading role in those specific markets would be better. But when comparing an IB analyst role vs. a trading role in cash equities, your exit opportunities will be better hands-down on the IB side.
The majority of the PMs at a Macro fund said research and sales
For a trading role start in S&T regardless of fund type. If you're going for a fundamental analyst role, it's IBD. This is where you'll be building out models so a trading role won't really help at all. As far as "market feel", I have very little after 2 years as a fundamental L/S analyst. We are longer term L/S equity so I rarely spend time looking at intraday trading unless there's a major announcement.
And for macro, sounds like it should be S&T as well, but I also know a couple ex-IBD kids that are at macro shops (generally ex-natural resources kids). Parlay rudimentary O&G knowledge and expand from there, but the other guys were desk strategists / traders on the sellside.
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