I see a lot of different opinions when it comes to how to break into the hedge fund industry. Is there just not as clear of a path as there is for other exit ops?
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Work in investment banking- what are paths have you heard of? Pretty fairly consistent on this board everyone says that if you want to work at a top fund you do 2+2 top IB and PE…
I’ve seen suggestions to do equity research or even sales and trading and then going to a hedge fund.
You realise there are more types of hedge funds than just concentrated equity long/short.
This is what IB 2+2 PE is normally targeting.
People in ER and S&T go to HFs all the time. MMs exist, macro funds exist, credit funds exist.
What route is best for you depends what you have in mind when you think "hedge fund".
why is ib better than er？
only SM prefers ib
MM favors er and MM has much better performance than SM
You have it right, but because MMs require you to perform, most of WSO regards those MM seats as less desirable.
People prefer owning GOOGL for 5 years at a SM with no stress.
bump
i mean, yea, if i can own FAANG for 10 years and make $10m a year doing no work i'd do it too...it's obviously the more desirable seat...
I mean I can either work night and day with an insane amount of stress on 1k line models pulling in every single data point I can find to squeeze a 3% return whilst being insanely paranoid about every single tick, and argue with my PM on P&L attribution before I get fired next year, or spend my time flying to factories and tech offices to discuss big "competitive moats" whilst not adding value but not caring too much about performance because the CIO knocked it out of the park a decade ago when channel checks were differentiated so the AUM/IP ratio is still insane enough that in a year we were up 18% because the market was up 21% I still make millions. Joking obviously, but sounds nice! Obviously the only people qualified enough to do that are people who did Collegiate/Deerfield -> Harvard/Wharton/Stanford -> GS/MS TMT -> H&F/TPG/SL/APO. While we are here, might as well throw $3bn dollars at every startup in one sector because can't lose right? My thinking is this, if people are ordering more food delivery, I just need to fund every delivery service on the planet. Give me my 3/40 fee please, thank you.
IB is not the best path for HF.
Your best bet is Equity Research or Equity Strategist
It's funny how quickly things change on this board. 2-3 years ago if you suggested anything but IB as the perfect "first job" you'd be laughed out of the room and anyone choosing an MM over a SM would be painted as ridiculous. Using broad strokes here -
SM L/S equity: IB -> PE is the primary
MM L/S equity: Direct Hiring (P72/CAP) > ER = IB->PE
Credit/Distressed: IB = Credit S&T
MM "Other" (Macro/Derivatives/Commodities): S&T/trade shop
Quant: campus recruiting
When you say IB->PE as the preferred pathway for SM L/S, does PE usually have to be MF?
What is CAP?
He’s referring to grad schemes. p72 = Point72 academy
CAP= citadel associate program
For shot at MW - if you are a really good auditor who " does not drink the cool aid " and loves SouthPark.
https://twitter.com/muddywatersre/status/1670781441192652802?s=20
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