Two year analyst programs at hedge funds
I have noticed that a lot of hedge funds offer two-year analyst programs similar to banking for post-IBD positions. What is the rationale behind that, and is this some sort of a red flag with regards to the kind of experience one might get? I can't shake this feeling that they have two year analyst programs so they can focus less on developing you and get to churn & burn you like in banking. Anyone have any comments on this?
Exactly, think about their incentives when funds only sign you up for 2 years... Churn and burn...
would like to know
In my experiences places that do an explicit two-year program have a fairly PE-like organizational structure (multi-level heirarchy with a high analyst>[senior analyst]>Etc ratio). Oaktree and Cerberus come to mind as a stereotypical examples. I wouldn't call it a red flag per se but most places I've heard of/know of with that structure/analyst program style are also considered to be on the high end in terms of hours.
Hey Kenny, thanks for your continued help on these forums. Actually, some of the hedge funds that I was referring to with 2 year programs are $1-5 billion funds with 10-30 investment professionals...
Very possible they're different from those places, but I would point out that the profile you've given is definitely not mutually exclusive with a hierarchical structure, and also that $1-5bn/10-30 professionals means they're a) larger than average in terms of AUM and b) not especially lean in terms of headcount.
One thing you could do is look at the websites or scan linkedin for employees of the specific funds; that may give you a read into the structure of the investment team in terms of titles and structure.
I imagine you are based in the US, but in London this is something that has become more and more popular within the past couple of years. Hiring practice in general here is becoming a lot more similar to US hiring practice, mainly as a result of more funds setting up offices here in the past few years. This includes 2 year contracts, which vary from "hard" to "soft". Hard contracts are 2 years and then you're out; soft contracts are more along the lines of if you work hard, people like you, fund still doing okay then they keep you on, or alternatively you are free to leave after 2 years if you want to go and do something new. Generally it is more common to find the latter than the former, arguably because the MBA still isn't as highly valued here so business school isn't a major ambition for a lot of people. I know of several people who have been given permanent contracts after the 2 years were up, incidentally. Furthermore, most funds offering these contracts are still pretty lean offices here with less than 10 investment professionals in most cases, so no major hierarchy either.
You can get more of an idea from the fund culture as to whether it is going to be a churn and burn affair or not, but I would say in most cases a fund would be looking to keep people on as they are going to put a lot of time and effort into teaching you to be an investor and they are generally going to want to retain that expertise unless something goes drastically wrong.
lol never heard a hedge fund with xx-year program, it's for those other job sectors like commercial banking or investment banking, but not in a hedge fund, PE nor VC...
PE funds all do 2-year programs post-IBD (pre-MBA) though... Am I misunderstanding something?
Very difficult to train/develop an analyst in only two years.
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