Steps to breaking into HF from an unprestigious background?
I recently graduated from a non-target/fringe semi-target with a 3.7 in Economics. I am starting FT at a lower tier IB (Stifel/Lincoln/Truist) and my goal is to break into an MM or SM fund with a preference for MM.
I recognize that I don't have a target background, but I do believe I have the "intellectual horsepower" required for this industry. I was a two time AIME qualifier and scored a 1590 on the SAT and am very passionate about investing.
I have a portfolio I paper trade that's generated a 28% annualized return over 2 years, and I follow multiple blogs/podcasts/newsletters related to public equities.
My goals for the next 2 years are to:
- Lateral to a better bank
- Pass the CFA levels 1 and 2.
- Become an Approved Member of VIC. This might be more difficult but I've submitted one pitch so far that was rejected. Am currently working on idea generation for a new one.
I was wondering if this would be enough to break into a reputable MM or SM shop, and what other steps I could take to show my interest in markets. I have a few questions for those working in the industry I would greatly appreciate answers to.
- How would you recommend approaching networking? Should I send a pitch with my cold email? There are very few alumni on the buy-side so I've received almost no response to my cold outreach.
- Would you recommend using HH given my background and experience?
- Should I try to break into PE first? How established is the pipeline from IB -> HF if I am not coming from an elite investment bank?
- From what I've read, I prefer the MM model but do you think I'd have more success in recruiting for pod-shops or SMs?
- Would you recommend putting high school accomplishments (SAT/AIME) on my resume?
- Would you recommend an MBA? I would ideally like to break into HF as early as possible in my career but I think I could put together a competitive application to some M7 programs if that is needed.
I know these are a lot of questions but any insight would be invaluable. Thanks in advance!
MM is doable but not "easy" with your background. Being at a better bank obviously opens up more doors. Be careful referencing your paper portfolio, it's more than likely you don't think about stocks the right way and haven't run your portfolio in a meaningful way for any MM PM to take seriously.
SM will vary
Thank you for the insight, especially regarding the paper portfolio. Do you think trying to get approved on VIC/studying for CFA is a good use of my free time or should I be solely focused on lateralling?
Additionally, how would you recommend I go about reaching out to MMs?
HH's usually reach out to you after a year or so in banking from what I hear. Best bet is to find and contact bizdev when you're ready - applying online is decent too ime.
CFA isn't going to get you a job, but it's useful content to learn (level 1). Free time should be spent learning how to pitch stocks properly. VIC is not good for this.
Spend more time on practicing modelling, doing past case studies/coming up with a pitch, learning how to pitch ideas, etc. You don't necessarily need the CFA since you already have an econ degree.. and don't forget to carve out free time for hobbies.. you don't want to burn out so quickly chasing another job
Thank you so much for the detailed response. As a follow-up, should I mainly recruit for funds/positions that trade companies in the sector I cover in banking, or does it not matter as much?
If you go down the MM path, you might get funneled down to PMs covering that sector because of your experience. Unless you strongly want to focus on that sector specifically, be open because you obviously cast a wider net. Really upto you.
Maybe lateral to a better bank in a year. It seems HF recruiting is less structured than PE.
For MMs, go straight to bizdev. There are always teams looking for people and bizdev will funnel your profile / resume to them after you’ve spoken to them. HHs work too (I used one) but it isn’t necessary
For starters you're probably better off in this case switching to ER vs IB given your situation. Every HF posting you'll see on LinkedIn is looking for people with public equities exp and it'll count for more than a subpar IB name on your resume, especially if your coverage is relevant. That'll also make recruiters more willing to work with you.
Thanks for the advice—how difficult would ER FT recruiting be versus lateraling to a more highly regarded bank? Additionally, how often do spots at these shops open up for FT candidates without previous ER experience?
Can't really help on those points sorry, never did ER myself went straight to AM/HF.
switch to ER at a well-regarded firm
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