Hold out for Mega Fund?
Please may I run something by you. I am currently a second year analyst at GS/MS/JPM in London in a decent group and am fortunate to be top ranked. My dream would be to work at a top activist hedge fund in the far off future and understand that MFPE is (almost) a pre-requisite for such roles, e.g. at Pershing Square / Elliott.
I am getting quite a lot of HH outreach for very decent UMM funds and have had some success in interviews thus far. However, I wonder if it is 'worth it' to hold out for a MFPE even if this requires spending another 12-18 months in investment banking and exiting as an Associate.
I am very comfortable with my team. We have a fantastic culture, my hours are great, my boss loves me and most important I am learning a lot and have top deal experience. I have also followed the British education system so am only 23-24 vs. the 26-28 / 30+ of most other analysts in London, so am not under significant pressure to leave to the first place that takes me.
Given the above, and that I am slightly more comfortable indexing on the 'moonshot' do you think this is a wise decision to take? If I plan to leave in say 16 months from now, I can have the CFA programme entirely completed, closed a couple of really big deals, network and read a lot around PE / HF / the Debt side of finance which I think could be differentiators. It could also help to allow the economy to recover slightly as opportunities may become more plentiful.
A note for the yankee folk is that PE recruiting in Europe is more ad hoc. It is entirely possible to exit into Apollo / KKR etc at Associate 1/2 level instead of recruiting 2 years in advance
In London, and also had British education so was in a similar position to you, albeit in MM. The age point resonates.
I'd say hold, take your time. I had a ~4.5 years IB before leaving at two different shops and it has really helped my network be broader as well as getting more experience.
Thank you very much for sharing your experience. May I ask what you would recommend doing outside of passively accruing experience via. work? I've signed up for the CFA and hope to bang out Level 1 and 2 over the next year or so.
Personal view, but I think you are better off spending your time networking or prepping via WSO type materials than doing CFA. Reading more generally about deals / PE so you can talk 'organically' about things.
This is if you want to do PE, CFA might be more valuable if you want to go to asset management / hedge fund, but I don't know enough about those to comment.
curious how you plan on ending up in activism when the european scene is much smaller as i understand it. Think elliot have a london office and TCI does/did some activist stuff but not a lot of hedge funds in London. Not sure american funds would bother taking a brit either?
Yeah its a tricky one. Elliott and Cevian both have London offices. The ideal case would be to go to a Mega Fund that requires me to do an MBA for VP promote and recruit while at H/S. The hope is that if I can become absolute world class then I'd have a chance
If you're absolute world class at PE, why leave and not try to make partner? What's so much better about an activist Hedge Fund?
If you look at the profiles at Elliott, they only recruit from Bx / KKR. Not sure why you need to spend another 12 months as KKR kicks of in Sept, Apollo in Nov (not sure abt Bx). Probably max 9 months?
Thank you! In terms of preparing for these processes, is there anything specific you'd recommend one try to do?
Assuming you have LBO modelling down cold and have pretty good technicals etc.
Excellent technicals + a good CV.
Someone I know from an EB wasn't invited to the Apollo process (but they invited a MS banker in the same sector). And the first round is just a modelling test so?????
Speak to KEA and make sure they pull you into the KKR process - they run it.
Not sure who runs Bx.
Apollo just recruited in Feb - should be wrapped by now.
Whether you want to do wait out for a larger fund (which activist funds typically recruit from, there's no real need for an MBA), is up to you, but CFA is not worth pursuing (people don't really care about it for the jobs you're aiming for)
Reiterating a few points:
- The activist landscape looks very different in Europe + this whole tiger cub thing is not happening in London. The only big activist player with activism done out of London is Elliott; know many people at Cevian and it's run out of Stockholm/Zurich (London just IR). TCI does some activism but given how they hire it is a moonshot, even if the best guy at KKR they might just not hire someone for years. Then you have various smaller players such as Bluebell, Petrus etc; not sure these are necessarily stronger than PE, also usually have quite significant focus areas which you would need to make sure you are aligned with
- In terms of your next steps, the above point on pre-requisite fund is massively overblown. At Elliott, the main guy who is now managing Europe is ex Apax; they have people from Wendel, Goldman PE, think even Mid Europa or something etc. KKR probably most represented sure, but if you have a strong resume which it sounds like you do and are at strong large-cap/umm firm, you are fine. Know people that got inbounds about Elliott from all kinds of places; KKR/BX to Advent/CDR/H&F and some more value-oriented UMM firms.
- If you are really set on pursuing activism in the US, then fair, would probably think about this slightly differently and more how you outlined. You also need to consider that certain funds have a better track record of moving people around internally, e.g. know some people who moved to NY at Apollo. Also, consider which funds are actually best at placing you into HBS as this is where you need to go (even then, Pershing might just want to hire someone out of a NYC PE assoc program). These are actually oftentimes the operationally heavy funds such as Bain, Advent, H&F etc.
Thank you very much for the detailed response :)! If hypothetically I was set on pursuing top activism in the US, then could I clarify what your recommendations might be for me in terms of preparing to get into a top PE fund? Say you have 12-18 months, what could one do to in that time to irk out as much of a possible chance to get in? Would be:
* Networking with associates in the aformentioned funds
* Maybe do the CFA
* Have extremely strong technical skills / understanding of debt
* Have some quirky shit on your CV like running a marathon
Is there much else one can do?
This is super dependent on the fund. Apollo and Bain have near-opposite recruiting processes. Any pointers? Overall, you really need to nail down on which funds you actually want and figure out why / put that rationale together
Also, there are a number of top processes being launched at the moment. So try to inbound with headhunters to position yourself.
- Yes, not to actually help you in the process, but you need to speak to Assocs or other people who did the process so that you have a very clear idea what to expect. Headhunters will tell you as well but particularly for the more structured processes, those data points are very helpful
- CFA is useless
- for something like Apollo, debt/waterfall stuff is useful; usually though, no in-depth knowledge required beyond the different tranches, expected pricing, maybe pros and cons which you should know anyways after banking; definitely crank out modelling tests, you will need to be quick at those (+ the standard accounting stuff)
- a lot of people fail on the commercial questions; so try doing these case interview things / commercial frameworks for analyzing investments etc
- if you do not have anything interesting to talk about now with an interviewer, changing your personality over the next 12 months to have something won't make a difference; but do not hesitate to mention things you are actually interested in / hobbies, people want you to be authentic as everyone knows how you are supposed to answer these questions
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