Tier 1 LO, No return, path forward?
Hi guys,
Hope everyone's having a good weekend thus far.
I'm a senior at a target, studying CS/Econ. Have worked at LO shops the last 2 summers, my junior summer being a top LO (D&C/Fid/Capital). Over the summer I got some incredible feedback on my work. However, I didn't get a return due to some firm-level issues (similar story for many in my class). I was wondering if there's a path to publics seats out of college still. I have some investors at my internship who'd be willing to write me references on my work and work ethic.
Should I be aiming for pods? Or smaller SMs/LOs? To be clear, I do understand beggars cannot be choosers, I'm just trying to understand if some opportunities are more likely to pan out than others.
The fund I worked at my soph year was really impressed with me and wanted to hire me FT, and due to my relationship with them, there's a good shot I can go back to them. It is not a brand name, but the founder and PM are both very smart, have great performance over ~10 years and will be very invested in my development as an investor. However, I'm afraid I may be stuck there if I choose to go there + the location is not ideal (but I can deal with it, if it means I get to invest).
I'd really appreciate any advice/tips and could really use some guidance here
I’d cast a wide net and aim for LOs, SMHFs, MM pods, etc. In the meantime, I would also approach the fund you interned at sophomore year and start the conversation about returning. Is there someone from your most recent internship you got close to and can reach back out and get “real” feedback as to what happened and if there’s anyone that can put in a good word for you elsewhere in their network that’s hiring?
Hey
So yes, I had a few convos along those lines. The people I spoke with are investors, they provide feedback on your pitch, but that's about it. They were fairly surprised at who got and didn't get returns. Don't get me wrong, the people who got returns were very nice people, just didn't want to be investors at all. So it seems to be a firm talent pool strategy change.
I was actually hoping for some referrals to other places, but nobody has offered voluntarily and I'm wondering if it is poor form to ask. What do you think? I was thinking maybe try on my own for a bit and if I can't get any traction then go back and ask...
I work at one of the firms you mentioned and if you interned at the same one then I’m surprised they’re moving away from hiring IPs from that program given the long standing nature…
I don't think it’s poor form to ask… if your performance was good and they’re surprised by you not getting an offer, they might go out of their way to help you and/or be helpful connections that turn into mentors. Worst they can say is no but no harm in trying.
choosing location over the job you like is the biggest mistake ever. Go learn at the small fund where you know the founders, I am sure they will be much more willing to teach compared to the SM HF.
A lot of LO funds don't even invest in their juniors anymore. They only take analysts with more than 5 years of experience which comprise around 10% - 20% of the talent pool. Like are you kidding me? Giving kids 6 months internship just to ding them when it comes to FT hiring? The entire LO hiring scene is toxic af and you are one of the many victims affected.
Pods hire fast but they also FIRE underperformers FAST. Keep that in mind; one/two bad quarters and you will be out. Many HF analysts wash out within 1-2 years and they never recover. Many LO guys stay in the industry for years and even decades if they make PM. As long the small fund is actively raising capital, you will be fine. The worst place to go would be one that doesn't teach investing skills and don't invest in training juniors to become future PMs.
Many mega funds/LO do not invest to train their juniors. The good ones are those that let interns rotate through different departments (Portfolio management, market risk, Ops, trading). Usually small mutual funds do that as part of their structured internship programme. Big LOs usually just put you with some random PMs without any clear tasks. Probably some boring research tasks that won't help you learn investing acumen.
Intern, please sit down. Pod juniors do not get fired over one or two bad quarters of performance that often isn’t even related to their work. Please do not spread this level of misinformation to a nervous senior trying to figure out next career steps.
Rotational LO programs are also garbage and not at all what you describe. How about you stop giving incorrect career advice to someone else who’s your age? I don’t get why you idiot interns do shit like this
It is very hard to get a credible opportunity to eventually become an analyst at a large LO coming out of college. 99% of even the great juniors end up going to B-School. The senior people will view you as too junior for real responsiblity for probably a decade. If you want to maximize your potential to do large LO as an analyst then I would become a sector expert either on the buyside or the sell-side and then probably go to BSchool (Large long-onlys love to hire from BSchool because they are elitist). Pod shops have the money, AUM stability, and actually have training programs that long-onlys don't have so pod shops might be best. If you can get into a top tier one I'd probably do that if you dont want to have to go to Business school. I've seen people become large long-only analysts directly from pod shops, via business school with a variety of pre-MBA experience, and from sell-side equity research. sell-side equity research at a top bank is probably the highest risk-adjusted path to an analyst role (lots of seats for juniors since they get picked off by pods after 2 years).
I think that's exactly what is happening at the shop I interned. They're shifting their talent pool for IPs to mostly MBAs and not their UG program. Hence they gave returns mostly to non-investment focused kids, so that they can actually add value in other roles down the line. Are the pod shops actually meritocratic in their hiring? I did a few rounds with some as I was recruiting junior summer and got the idea that they cared a lot about who you knew. I very well may have been wrong, just asking
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