A couple of the sr. associates / vp's who used to be on the buy-side (specifically L/S) would say it would take them about ~1 week to ramp up on a name (including model and thesis). Does that same timeline apply to a Long-Only? I had a final interview at a middle market mutual fund where they gave me a stock to pitch them that also was 1 week in length, but still haven't been sure if that was just for the interview process or if that's legit how long it should take to ramp on a name that is not in your sector of expertise. Anyone able to outline their usual ramp up process on a name / sector?
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Based on the most helpful WSO content, the timeline to ramp up on a name can vary between L/S and Long-Only (LO) funds, but there are some general insights:
L/S Funds:
Long-Only Funds:
Ramp-Up Process:
In summary, while the 1-week timeline is common for both L/S and LO funds during interviews or for initial ramp-ups, the actual process in practice can vary depending on the fund’s strategy, urgency, and depth of analysis required.
Sources: Long term, concentrated, deep fundamental investing, How long does it take to formulate a investment idea / stock pitch, Hedge Fund: The Investment Life Cycle, Looking for seed money but no idea on the how/what/who, Hedge Fund: The Investment Life Cycle
It depends on the fund strategy and turnover. Generally low turnover, high conviction places spend more time on a name.
I've been at a LO where they only spend a few days to one week on a name, another fund spend 1 month when initiating on a name, another fund I've been spent 2 weeks on a name...
Also heard from friends he only need to work on 3-5 names a year, which means spent 2-3 months on a name...
I think it really depends. Curious about others' LO and L/S ramp pace too.
I appreciate the insight, I was being to think a 1-week ramp actually isn't that rushed of a time. I know a couple L/S analysts who say it takes them 1-week to ramp up on a name. Do you mind sharing what your steps look like when ramping up? Are there steps you take (i.e. read 2 initiations, 2 10-K's, 3 earning notes...)? I think what has changed my mind from thinking 1-week isn't enough time is I've started developing a process/steps to take when first looking at names and just got more efficient with the reading I do.
Different game being played, right? If L/S then could be almost entirely focused on the next 12 months with an eye on the terminal value or vice versa at a LO. Shorter duration like that almost necessitates a broad coverage since there’s a million things that can move estimates up or down while longer duration ideas are more thematic/directional in nature so you have to do the big picture work which takes time.
depends on how fast your fingers move
Very different in different models.
As a generalist in low turnover / thematic / LT focused LS - I spent 2 hours on lots of ideas, 2 days on maybe 1/3 of those and then 2 months on things that ended up going into the book (esp on L side, S side turned over faster so necessitated being a bit more agile).
In L/S pod model I had 2 months to initiate (ie have model and initial thesis / view) on 40 names with help of an associate. Imo not enough time but that seems to be the expectation now.
Not worked in LO but having explored it / had the convos was told something like 6m to ramp on a coverage universe (maybe 20-30 names).
At a LO - can confirm, they are expecting me to ramp up on c. 30 names in 6 months.
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