Looking to break into HF... what offer do I take?
Have SA offers at both a T1 LO (think Fidelity, T. Rowe) and banking (an EB). Trying to think through the best path to break into a hedge fund seat - would think intellectually, the RA seat at an LO would be closest because of a similar responsibility, but HF world could view it as a clashing investment style. What would you recommend for someone looking to eventually move to a HF? And would that differ between SM and MM (imagine at an LO, you probably are pretty uncompetitive for an MM)? Thank you!
Wouldn't longer-duration SM styles be closer to those of an LO?
Take the LO or use both offers to try accelerating for Point72 Academy if you want direct hedge fund placement.
Unfortunately burned out of that process, curious why you recommend the LO over banking?
Depends on your timeline and preference. From what I have seen there are a good amount of data points for whatever reason of people going from EB to HF. That has taken place. That said, depending on the HF strategy, the LO AM may be a good skill set albeit there they generally don’t get performance fees so it’s more about the asset management fee. Generally when you see a young kid interested in HFs they like the big performance fee / promote which is like making a big commission check such as those made by EB bankers when closing deals. That said I think Alex Sacerdote at Whale Rock started on the LO side and eventually moved to starting his own HF. I think a helpful exercise would be figuring out when and what kind of HF you want to join, and then moving from there. If it’s just an exercise in trying to maximize how much money you can make, then there are many many ways to skin a cat and make money. 💰 💸💵💶💴🤑🤑🤑🤑💲🧧💳🪙
good luck!
Thank you so much for your response! Not necessarily in it for the money, per se - while that's obviously a big bonus, I think my bigger concern is whether that LO style of investing really aligns with what I want to do long-term. Know a lot of people tout the benefit of banking as keeping options open. Certainly interested in being in publics - do you think I can cross the side of LO to HF if I so desire?
In theory I don’t see why not. But we don’t live in a theoretical world. Maybe I just don’t have enough info / expertise on the subject for you. Good luck either way :)
Ugh this is actually a very tricky question, both offers are great so congrats for having two awesome options.
Would echo benbiran above - there's plenty of pretty decent exits for folks out of EBs into HF seats especially at really strong SM funds like Viking / Lone Pine / Eminence / Third Pt / Elliott, etc. That said, the skillset you'd get at a LO would probably prepare you 100x better than the banking skillset for actually developing an investment wherewithal.
What I'd add is that should you go the LO route, you need to make sure you 1) keep shorting in mind or try to spend potential free time thinking about good short pitches assuming you want to do HF and 2) have a good reason for wanting to pivot. I think in EB the logical step is some sort of investing seat and generally I find the rule of thumb to be that you need to have a much more compelling story trying to get into public mkts investing seats than you do PE where the story is pretty obvious & linear (I like doing deals/investing so want to be closer to businesses, etc). EB you probably get marginally more looks for HFs just because of the nature of recruiting + you'll probably have a good chunk of recruiters asking you what you want to do, but with the LO seat you may have to be a little bit more proactive and aggressive getting in front of HF folks or recruiters for those seats.
It also partially differs SM vs. MM. I think if you wanted to go the Citadel/P72/Millennium route, the LO seat probably makes a lot more sense and you'll have no issue getting in front of those guys. The bigger SMs can be a little bit pretentious/snobby about hiring through conventional IB channels and will care that you worked at Lazard and went to Yale w/ no prior investing experience. There's also other SMs that just prefer to hire young folks that don't have any investing experience at all so they can be taught and molded. There's no pure recipe for the answer so this is all just food for thought.
I say you can't go wrong with either but I'd likely do the LO just for the sake of work/life balance + similar degree of exit opportunities.
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