Investment Banking first or small Hedge Fund?
I have an option to return to a BB (think GS/MS/JPM) Investment Banking analyst coverage job full-time next fall after graduation, but also an option to start at a junior analyst level at a small (500M) hedge fund that currently only has 1 PM and 1 analyst. Pay at the HF is would be significantly lower the first few years (~75k all in), wondering what the best option would be long term? Any input helpful.
HF Pros: - More interesting work - Certainly better lifestyle - Exposure to all levels of how a fund operates
Cons: - Far less optionality afterwards - No analyst class social circle/network - No 'bank alumni' to draw on - Less pay - You might have to pick up some administrative work on such a lean HF team - HF could collapse/shrink due to investor withdrawals - If you leave finance altogether the bank is a more recognizable name
Unknowns: - Is location a consideration? - Do you have student debt that will accrue interest? - What's your long term goal? - Is it a general L/S fund or more specialized? - Which set of people did you like more?
I think the 'safe' bet is definitely to take the coverage group. You'll surely have options to go to funds that size after your stint
Would you have suggested the same if he had the opportunity to go in a medium size (think 10bn AUM) hedge fund in London/NY?
A 10bn fund would be much, much, different and if you had an investment analyst offer I would probably recommend taking that over the coverage team. To reiterate, there are still many unknowns and this is an 'on average' recommendation
Thank you for the reply. I am currently in the situation of choosing between an internship at a BB IB M&A team and an internship in a 10bn AUM HF for next summer, so your posts were really useful.
Very Useful Comment bro, I was very confused between a very small hedge fund(10 Million USD) internship offer which could turn into a FT role and a MM Domestic I-Bank which also can turn in FT role with 2x the duration of Hedge Fund, all my doubts are clear now, choosing I Bank. Again Thanks
Dude, take the Bank offer.
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