Incoming IB MBA Associate set on a future investing in public equities - advice on how to best prepare?

Hey all,

As the title says, I will be starting soon in my role as an incoming MBA associate in a TMT coverage group but have known for awhile that I have wanted to be in a HF role but that my best path because of my non-traditional background would be through banking first.

That being said, to those of you who have transitioned from IB to a HF seat, and especially those who have made the jump from MBA Associate (if any) to a hedge fund role – I would greatly appreciate any insight and advice on a few things:

Having the benefit of hindsight,

  1. What should I focus on in my upcoming role as an IB associate in a coverage group that will better/best prepare me for a hedge fund recruiting and on once I hypothetically convert an interview to a full time role?
  2. What can I do outside of work (the little free time I can hopefully find/create) to best prepare me for those interviews / the real job.
  3. Best way to find opportunities at funds? (LinkedIn networking, reaching out to recruiters, recruiters reaching out to me)?
  4. How long would you suggest is optimal time to spend in the IB role before trying to make the move?

Also interested to hear any other things you all may deem that are important. Again, I really appreciate any/all feedback. Thank you!

 

I’m curious, why didn’t you pursue buy-side out of the MBA? I believe if you grind the first year, learn from the analysts and dig into the models it could work. The only issue I could see are the hours being extreme to where you wouldn’t really have time or energy to come up with stock pitches or really recruit. Which is realistically what those interviews are like, pitching a stock. I guess you could use a company you possibly worked on to make it easier…if you have free time it would be to build stock pitches and prepare a pitch with a model you can present if you were to get an interview. Plus side is you’ll get valuation experience in your new role which will most certainly help. 

 

Thanks for the response, I appreciate it. I didn't pursue buyside out of my MBA because I chose the MBA path extremely last minute and ended up going to a school that waived the gmat for me and that isn't top tier but still respectable. It was hard enough to recruit for banking from there but it served its purpose. Appreciate your points on how to move forward through this next role - I have been doing a lot of work in terms of researching and formulating an investment process and looking at stock pitches to get a sense of the kind of research that stands out so hopefully that will continue to help as I start to create my own

 

Makes sense. Best of luck! I think if you came outside of finance you’ll enjoy the banking experience learning about business and should give you confidence + a solid framework for investing to an extent. 

 

I got into my seat through the standard pipeline so don't have direct experience. But focus on stocks in your free time and have a few well thought out pitches ready to go by the time you start recruiting. Definitely get in touch with recruiters but given your non-traditional background try to make your own luck. Talk to friends in the industry and try to talk to their connections. Once you get to know people and impress them with a pitch or too, doors will naturally open up. The best part about finding a job in this industry is that you can demonstrate passion and ability to do the job fairly easily coming from the outside - by having good pitches. Best of luck

 

Thanks so much for your perspective and advice - I really appreciate it; I definitely already do that (focusing on public markets) so that's great to hear. Just a follow up on what you wrote; How do you know when you're getting better at pitches? Do you suggest posting on SumZero, Value investors club, etc and letting people pick it apart? I guess my question is that how do you know when you actually become good / decent enough at pitches if someones not in that world yet? Again, I really appreciate your response and insight! Thank you

 
Most Helpful

1. In banking, I found that I could spend 80+ hours a week working on a transaction but not actually even understand what the company does, how it makes money, what the unit economics look like, what the value chain looks like, etc. In HF, understanding businesses and how they work is fundamental. So take the time to understand every aspect of the companies that you are covering. 

2. In your free time, you should put together a PA. I know that there are trading restrictions, but you should do your best do get approval and put real money to work. If not, a paper portfolio is OK as well. 

3. Best way is to reach out to your bschool's alums who are at HFs. Next best is to just find a list of HFs and start cold emailing. Recruiters will not help you. You are not their target profile. I would also focus on smaller HFs

4. I would start looking at the start of A2. 

Other things I would note is that you need to figure out what your investment style is, if you haven't already. That is very important because a fund's investment style needs to mesh with yours. For example, you can't go to a MM and start waxing poetic about a company's moat. 

 

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