IB:PE :: Trading:HF?

gshell

17y

bleh i mean are those typical career paths

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zala rules

17y

gshell:
bleh i mean are those typical career paths

Yes, those are the typical career paths, and the analogy is "legit" I guess. But just remember that it's not that cut and dry. Plenty of traders fail and are not good enough to get a job at a hedge fund. And IBD analysts can exit to hedge funds.

One thing I can guarantee, though, is that people never go from the trading floor to an LBO fund. At least, not junior people.

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orbithal

17y

I don't have experience in the field, but from what I have read it seems that what you're saying is generally true. I'm sure there are a lot of exceptions though

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idkoop

17y

Best Response

kind of, though there are far more hedge funds than there are s&t analysts that would exit to them, and there are far fewer private equity firms than there are IBD analysts. also, PE is not market neutral (guess how many of these guys will be around in the next downturn) while funds can have strats. to make money in any direction or keep themselves market neutral. keep in mind, IBD kicks out their analysts after two years (most legit S&T shops will sign their analysts on as permanent employees), so they have to find a job, or go to bschool, or go bust. but these guys are essentially cheap monkeys, kept on to add process value, and there's no guarantee for PE, even from a BB, much less so for a MM. IBD analysts might exit to a HF with fundamental strategies, though probably rarely if ever to something like global macro or quant. equities. its just the nature of what they do; IBD learns on a pretty narrow dimension some of the accounting behind companies, while Traders learn financial markets (even if they trade only one product, the principles are generally applicable to others)

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goldson23

17y

idkoop:
kind of, though there are far more hedge funds than there are s&t analysts that would exit to them, and there are far fewer private equity firms than there are IBD analysts. also, PE is not market neutral (guess how many of these guys will be around in the next downturn) while funds can have strats. to make money in any direction or keep themselves market neutral. keep in mind, IBD kicks out their analysts after two years (most legit S&T shops will sign their analysts on as permanent employees), so they have to find a job, or go to bschool, or go bust. but these guys are essentially cheap monkeys, kept on to add process value, and there's no guarantee for PE, even from a BB, much less so for a MM. IBD analysts might exit to a HF with fundamental strategies, though probably rarely if ever to something like global macro or quant. equities. its just the nature of what they do; IBD learns on a pretty narrow dimension some of the accounting behind companies, while Traders learn financial markets (even if they trade only one product, the principles are generally applicable to others)

So your saying Trading prepares you better than IBD does? I have never heard that, I have always hear Trading gives you a very small skill set that is not transferable to many places

mrbubba

17y

That is what people in banking tell you. Trading is much more broad than banking. Some desks actually do PE like activities. Some credit desks require a lot of fundamental analysis. Then some desks, you just make a market in treasury securities like a true cowboy, or at least they might want you to believe that.

Sabrine

17y

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