Q&A: Recent Columbia Business School grad that went to a HF after school

In the above post I detail my "accidental HF analyst" path and why CBS. 

I had no shot at Stanford, as I had no inclination to save the world, no interest in tech (outside of shorting failed Hardware -> SAAS transitions) no ethnic brownie points, and a visceral distate for California (being southern)

HBS I considered briefly but, quite frankly, I had zero leadership stuff on my resume, was averse to the idea of having 50% of my MBA relegated to taking prerequisites (HBS core is 1year without the ability to place out) and found the case method to be largely ineffectual to my style of learning (I sat in on a class at Darden when I'd visited my sister when she was at undergrad).

The other main reason was that my chosen industry is much less prestige conciouss than PE, law and consulting (notwithstanding the need to actually go to business school). Heresay! you might counter, but an autistic doctor (Michael Bury), ex-fratboy traders (Tudor Jones, Julian Robertson), and a series of Brooklyn bred ex-lawyers (Icahn, Singer, Pelz) are among the titans of the industry. Not the case elsewhere. 

The value investing program (though its undergoing a some notable changes in this upcoming year) is essentially eight classes you take in your second year. You apply late in the second semester of your first year and forty people are admitted in the late summer (about six weeks before classes startup again). The centerpiece of the course is a class called Applied Value Investing that centers around doing lots of stock pitches. All who are admitted to the VI program are divided into four groups of ten and take a different section of the AVI course taught by different professors with different investment styles AND VASTLY DIFFERENT content. Its basically four parallel but non-intersecting mini-programs. For example one is focused on high turnover l/s 0.75-1.5 year time horizon type investing. They do a pitch a week. The second was entirely on long-only international buy-and-hold. They only do a pitch every month weeks.  A third is focused on long-only deep primary research (i.e. calling up grunts at factories) this had two reports per semester. I cant recall what the fourth was but I think it was basically Tiger-style investing (3 year longs, 6mos-1y shorts). This class, I believe, is a whole year.

This is supplemented by topic-specific classes such as "compounders" "private credit" and "short selling."

The application process is honestly a black box. There's an organization called the Heilbrunn Center that oversees the program, which, though part of CBS, exists outside of the broader school administration. There are three woman there who, with the input of the AVI professors basically pick their favorites. One has to do a lot of "face time" to make it in, such volunteering at the Graham and Dodd breakfast, having a leadership position in CSIMA, acing the unofficial pre-requisite classes like Advanced Investment Research, and getting on the teams that compete in other business school's stock pitch competitions. HOWEVER, investing aptitude is not required. Interestingly, some of the most knowledgeable and competent investors in my class didn't get in or didn't apply. The paradigmatic example is a guy who worked at Kykinos (Chanos' fund) didn't get in. Another example was the manager of a fund I interviewed with who'd been at Coatue for 4 years pre-Columbia who was denied. My theory on this is that the Heilbrunn center views the VI program as a "bootcamp" for people who didn't have incoming experience and a resume supplement for people such as people from equity research departments at LMM banks who want to go to the buyside. Those who are natural fits for big-time shops are viewed as not being able to benefit as much. This is only hearsay of course. A final thing that one should also note that in recent years there's been some noise from both Heilbrunn and the larger B-school about getting more woman and non-asian, non-indian minorities in, so that should likely change things in the years to come.

Work wise...an absolute bitch. Second year everyone is just raging, having locked down jobs. Meanwhile you're spending 40 hours a week cranking out pitches. But if you like investing (many people on or aspiring to go to the buyside actually don't) it's worth it.

Culture

Columbia in my experience is by far the most party heavy school of the M7. I believe this is a function of a few things. First, the culture is decidely non-academic. For one, almost all the professors are adjuncts (i.e. they work real jobs during the day) so they don't hold academics as anything beyond a conveyance of usual information. Furthermore, the school is populated by a disproportionate number of the international supperrich (who'd prefer to be in NYC than Cambridge). Naturally, they want to have a good time before they go take over some South American textile empire or the like. Among the americans, most are not-ultra high achievers or prestige junkies. Those people went to HBS/Standford or didn't even bother going to b-school because they're in Forbes 30-Under-30. Finally, it's the most heavily male of the M7. Not that woman don't like to let loose, but its an empirical fact that females are more concientious i.e. don't skip accounting homework to go rage. While the following confirmation is anectodal, two girls in my social circle were married to guys who'd gone to HBS and they both said that CBS takes academics "waaaay" less seriously than anywhere else. This sentiment was echoed by people who'd visited from Booth, Sloan, and GSB. 

IMPORTANT: Something I forgot to add when I first wrote this: You don't need to get into the VI program to get a fantastic "investment" education and you don't need to be in the VI program to land a great HF role. Regarding the first, there are ~2 investment classes open to all students for every 1 VI class. The best class at CBS in my opinion, "Security Analysis" with Michael Mauboussin is open to anyone (though its only taught in the spring). Bill Ackman's class is another example. Interestingly some of the most useful classes in terms of investing skills are hilariously undersubscribed. These include Earnings Quality (basically a "how to find shorts" class) and Paul Kazarian's class on investing in sovereign bonds. Regarding the latter, ~60-70 people my year went into HFs or Mutual Funds and another ~10 when to high end research shops like Bernstein. With only 40 people in the VI program, simple math indicates that, if you put your mind to it, there's a job somewhere for you.

At Columbia at least, literally everyone but two people got banking internships who wanted them. Out of my class of 450 (not counting the j-term kids who missed banking recruiting) roughly 80-100 people landed at a bank. Not all of them at the best bank, but banks. Of the two who didn't get them, both could barely speak English and were painfully introverted. Of those two, one eventually landed a banking job and the other went to Google. So at CBS at least, internationals do quite well. 

Now I should caveat this. Many internationals went to groups that were complementary to their background (Latam group at Citi) or went outside the US for their jobs (London / HK offices) or to groups that were less in demand from top schools (O&G in Houston)

I was at a HF pre-MBA. I don't think the transition would be any harder than someone else with no prior public markets experience. Frankly the MBB shine might make it easier for you at bigger shops. In the end though, your ability to go into HFs (of any size) will be almost entirely dependent on 1. your ability to generate quality investment ideas on a regular basis and 2. to have ideas that are applicable to the investing style of the fund you're looking to join.

My advice: read some investing books, go onto a site like valueinvestorclub.com and learn what goes into a pitch, start writing pitches in your spare time AND MOST IMPORTANTLY make those investments in your personal account. You have no idea how you'll react when money is on the line and nothing teaches you investing faster than actively allocating personal capital and seeing what works for you and what doesn't. If there is one universal truth about investing (other than that interest from Cathie Wood and Jim Cramer are negative indicators) it's that you only achieve real success through practice and seeing what works for you given your personality, risk tolerance, and time horizon.

Long/Short Equity. Mostly positons chosen on fundamental analysis but with a decent portion of the book in event-driven names

Candidate profile: see above

Other Schools: see above

Offers: see above

Thoghts on the VI program: see above

Classmate profiles: the youngest in my class were a combination of sponsored consultants from abroad (mostly Europe and South America) who were taking a break before going back to work, superrich Chinese kids, or dual degree candidates (JD MBAs and MD MBAs). The first and second groups were typically 24-26 while the third group were 22-24.

The oldest as a group tended to be ex-military guys or woman who'd been at NGOs, Nonprofits, or government entitities like the State Department. Both groups were typically 31-35. To this was added some outliers, like a 40 year old woman who'd been first chair of an obscure instrument at (i think) the SF Symphony Orchestra. 

All in expenses: These were 300-400k. I (oh so stupidly) didn't apply for money because I thought it would help my chances to get in. With scholarships the all in costs go from 75% of that to 10%. Apart from scholarships, the biggest offset to this absurd sticker price would be living in Columbia housing. Some places are literally 1100/month, which will save you 10s of thousands if you opt for this instead of private housing.

Thanks man. Love your books.

The hedge fund recruiting process is really two distinct streams that, while attracting the same applicants, are wholly dissimilar.

The first stream is comprised of roughly ~5-15 "famous" funds in NYC depending on the year and market conditions. They have multi-billion dollar AUMs, are multistrategy, have fully-staffed HR and IR teams and have founders/CIOs that your father has likely read about at some point in the Wall Street Journal.  At some point in the fall during your first year, they will have a "presentation" in some classroom where a PM of mid-level seniority will give a no-nonsense 10 minute description of his fund (though everyone knows about it already), an quick overview of the amount of slots open and details of the role, and then will field questions for 20 minutes or so. Going to the presentation has no effect on your ability to get hired. It's just a chance for further explanation on things that can't be found out readily on the internet. Sometimes even this doesn't happen and there's an email with a pdf attachment that outlines the role. This gets sent to the CSIMA list serve from the Heilbrunn Center (who liasons with HFs rather than the career services office of the broader business school).

Afterward, there's a cattle call for resume drops, accompanied by 1-3 stock pitches. These are fielded by the HR and IR teams and they pick out the top 5-6 applicants based on pitch quality and resume. If you don't have to take some kind of cognitive test, the next step is you going to an obscenely fancy office in midtown (framed oil portraits, Persian rugs, abstract marble sculptures) for at least two interviews with various PMs or senior analysts who'd you be working under. These might be on the same day or multiple days. Then you take the subway uptown to wait for a response. 

If you get an internship, you'll most likely be in a pod shop that has some correspondence with your background prior to business school. They'll tell you at the beginning of the interview process if this even has a chance of getting full time offer. 

The other stream is for single or dual manager shops with AUMs ranging from $100m to $2.5b. They just post on the CBS job board. You write a cover letter, upload your resume and stock pitches and wait to hear back. If you're smart you do some LinkedIn networking so there's a face to the resume. This assumes of course that you've already researched what the fund's style is and pitched them a stock that suits that style. Perhaps half the time, if you do well in the first interview, the fund will ask you to do a case study for them. They give you a stock ticker and you write up whether you think it makes a good investment. These are a pain in the ass if you take them seriously. As someone who spends 100+ hours on an idea before I make a decision, doing multiple of these is hellacious, especially if your friends have already locked down jobs and are in party mode. One trick is, if one fund gives you a ticker and another has an open ended write up ("Here's a list of our holdings. Pitch us something you think would fit our style") then you can double dip by submitting the same case study to both. An alternative is to pitch some deep value liquidation story (more cash on the balance sheet than market cap and total liabilities for example), which is an easy write up. As a rule, be wary if a fund makes you do more than one case study because its likely they are just looking for free research. 

A third "back entrance" is by doing very well in an investing class. Because the professors are adjuncts who run their own funds, if you really impress them they either try to higher you or surreptitiously get your resume from the resume book (all b-school students have to upload one to a central database) and you get an email from them saying "a friend" wants to talk to you. 

I didn't consider joining a HF with a strategy that differed from the standard L/s format (although for I did strongly consider going to a single manager long-only shop). First, generally speaking the ones who do more exotic things like quant, Macro, Merger Arbitrage, hostile activism and the like don't need the skills that even the investor-focused b-schools like CBS teach. As such they don't even recruit at CBS. Other than cold calling/emailing, one has no means of figuring out if any of these places are even hiring. Second, even if I wanted to, I don't have the skills (I'm shit at trading for example) or the 150+ IQ needed to go to those kind of places. Third, I just like stockpicking for reason. I will say though that within the l/s universe there's a massive range of strategies. Some only use options, some only invest in Eastern Europe (prior to this Febuary), some only invest in over the counter stocks.

On the GMAT, yeah I studied for the gmat while I was working at the smaller fund. Frankly I overdid it. My routine was, workout in the morning, work 8-630, go home, eat dinner, and study (just doing practice problems) from 730-1030 and go to bed. On Saturdays and Sundays I would take two practice GMATs (the app you can buy in the Macstore was indispensable). Did this for four months straight except for the week before the test (I scheduled two in advance one month apart in case I didn't like my score on the first one but only had to take it once). 

I did not apply as a deferred candidate. I did front load my b-school traveling though. I took 3 months off starting Jan 1 and lived in my buddy's basement in Salt Lake and skied a 70-day season. Went back to work in April full time (I was technically "working" in Utah but only for 4 hours a day and was paid by the hour at the same rate as when I was interning), finished in Mid-August when I moved up.

Unrelated but If you get the chance to do that, either by working on the mountain or crashing with someone, DO IT AND DON'T THINK TWICE.

Depends. At established place with an AUM over 500m, the base is comparable to the new banking Associate salaries (175k). The bonuses are naturally, much more variable in both size (10k to 350k depending on performance) and whether they come at all (I won't be getting one this year because of high water mark rules)

At a startup fund (not a bad option if you believe in the strategy (and think the manager can raise enough money to make it to escape velocity) the salary is lower 100-125k, but you get in on the ground floor and the bonus pool is MUCH larger. If you're at a 75m fund with just you and the PM, and you do 20% to the benchmark's 10%, you could clear 500k (300k post tax). If the fund scales to 200m and its still you and the PM, with the same numbers you could clear 750k or get carry. Fit (investment style and interpersonal rapport with the PM) is massively important here though and there are legions of journeyman analysts who bump around from one place to the next and never gain traction. 

In terms of progression, at a big fund think the scale of banking associate for the first 3 years. After that, salary is basically capped but your bonus allocation goes up or they tap you to run a sleeve.

At a small or startup fund, you might stay the same for the whole period (at least before 70s inflation) but get carry in lieu of salary increases. 

The one major caveat is that your job security, even at a large place, is much less than at bank or consultancy. Even if you're a contributor, you might just be sacked one day because the PM thinks he can do the job himself with 50k on outsourced models and expert networks.

So the only long only I recruited for single strategy and it was very similar to HF recruiting. But at CBS at least, the recruiting for the Mutual Fund managers (fidelity, t rowe, franklin, etc.) is actually quite similar to banking recruiting. There are coffee chats, glad handing "tell me about the culture," diversity statements and the like. Stock pitches are a lot less relevant (they give you a case study where you get five years of financials, an industry report, and 4 hours to do a full model from a blank excel doc with five years of projections and a two page report on why you would and wouldn't invest in that stock). There's also brainteasers, if you can call them that, like "how would you determine the market size for a new type of sneakers" and lots of behavioral questions. At HFs by contrast, especially the smaller ones, it's all about personality and thinking style (you don't get interviewed if the pitch isn't good).

Speaking only for CBS, these places where not as impressive as landing a job at say, a Tiger Cub (pre-2022...)or a Lone Pine spinoff. The general consensus was that they 1. Involved less skill than a HF because they were closet index trackers (they're required to invest in all stocks in a given industry/sector and just change the weightings in response to differing opportunity sets) 2. There's a fixed promotion track (three 3y year cycles in different industries, 5 years a junior PM, then sr. PM) 3. They were very corporate and offered very little latitude for developing your own style. They're very much looking for fresh minds to be molded into the style of the overall firm. Many who went there didn't have investing experience prior to b-school.

What was nice about them is, like a bank, you can get upper upper middle class (10m net worth or so) through sheer endurance, and any company CEO takes your call.

The calibre of people were, if there was a common characteristic amongst them relative to those that went to HFs, more clustered around the middle of the bell curve. "Company men" was the term I heard thrown around a few times. They also seemed of a more cautious tempermant. None were the kind of people who you saw launching their own funds in 5-10 years. That being said, they're still getting bonuses this year so jokes on me. 

Citadel (Surveyor) does a formal recruitment process and Point 72 does a resume drop. Millennium might have at one point but they didn't during my time there.

I didn't see many with that background, at least not in the sense that is commonly desired on WSO. There might have been a few, but I just didn't know them. The one that I can recall of the top of my head did some BB then Cerberus. He did a search fund afterwards.

I see more than when I started. I think this is possibly due to the bull market accelerating from 2016 through 2021. Generally, they attended semi-target or non-target schools (Vandy, UT, SMU, UNC, UF, Penn State, Bama etc.) but absolutely killed it (4.0 GPA, 2+ years on the undergrad investment fund if there is one, internships at funds all three summers etc.). If I had to guess, these kids just really love investing and made it a point to do whatever it takes to get into an HF. Furthermore, because banks don't default recruit at these places, they don't have the mental model that banking is a requisite step for a HF career (it assuredly isn't) so they just go for it. 

Now, these aren't Tiger Global, Baupost, or other "brand" name funds. They're frequently small to medium single manager strategies in cities outside of NYC, SF or Boston. They're also not ultra-sophisticated in terms of strategy. If I had to guess, these shops would be long-biased (50-80% net), unleveraged, "we buy great businesses at reasonable prices" ultra-vanilla places, and don't shell out on any sort of fancy research platforms other than Bloomberg or Factset. This was basically the fund that hired me out of undergrad. They're probably also not making bank. Likely 80k + 10-30k bonus if its a good year. However, they're getting experience which is worth more.

Key lesson: equities in Dallas (or Nashville, Columbus, Philly, etc.), in defiance of Liar's Poker, can actually be a smart career move

Not at all. There was not a single person at CBS that went into trading of any type. Generally speaking, trading is one of those careers/skills that business schools look down on/are threatened by. Why is this? Because trading is something that a b-school, no matter how full of shit, can't pretend to be able teach in a classroom. It must be learned "on the job." Furthermore, the people who are (typically) very good at trading are decidedly un-academic. Soros is the notable exception. Interestingly, someone asked this question during an information session when I was looking at Columbia and the spokesman said something to the effect of "there hasn't been a Sales and Trading Club at CBS since the early 2010s."

Now, I would guess that you might network your way into some kind of trading gig at while at b-school for the following reasons

1. An underrated benefit to going to Columbia (or any top b-school) is that people are MUCH more likely to take your call/email...while you're at school. Unlike someone who's working, there isn't the default assumption that this person is looking for a job and the whole "college is for experimenting" stereotype has its professional equivalent in the public's perception of MBA students.

2. You have a lot of free time on your hands. You could literally meetup with 10 people in a day that could help you.

MFs do not recruit at CBS for the same reasons they (mostly) don't recruit at HBS/Stanford/Wharton. The people that typically go the MF route were on that route before they were even accepted to business school. The one MAJOR exception are the MD/MBA kids. Because of their very unique skillset they get poached by the biotech / healthcare practices at the big shops. (I'm assuming you mean mega PE funds. Large HFs do recruit at CBS).

Don't be deterred though. I pointed out in the first response of this thread if you have previous IB and PE experience, then its doable to strenuously network your way in. This is especially true if you're willing to leave the NYC/SF/BOS bubble.

A final word: my biggest realization as I've gotten older and actually gone through the first few stages of a finance career is that, contrary to what is frequently said on this forum, there are not any fixed rules. Some of the biggest successes (by the metrics of WSO) in my class at CBS were kids who went to very non-target schools and had no connections/family wealth whatsoever. The biggest washouts (by the metrics of WSO and, likely, themselves) were kids that went to HYP etc, and had wildly unrealistic expectations about the extent to which their undergrad diploma and the prestige of their first post-college job translated into the ability to make lots of money for an employer. Of course there were washouts and from typical underachieving backgrounds that had no business being at CBS and prestige junkies that (as of now) shot the lights out both pre and post-MBA. But, after controlling for grit and likeability (massively underrated), so much of what people on this forum think matter to success didn't in the slightest.

Sorry for the sermon at the end...Adderall just kicked in.

Really "average" profiles were Americans that went to target but not elite schools that had desirable but not elite post-college jobs. However, they did very well at those jobs. The paradigmatic example would be the white, female Deloitte consultant who was at a post-MBA role before b-school. The school's bread and butter is putting above average people (relative to the total pool of America's college educated population) into IB and MBB consulting, being an outsourced investing school for funds in the city, and being a charm school for future oligarchs from the developing world. 

I should note that nobody was truly average across all dimensions. Each of my classmates...

1. at least one non-gmat characteristic that, at least by the standards of the admissions committee either a single thing that would be considered a "wow" factor (family name  on some part of the building, a very interesting pre-MBA job, coming from a really out-there country, highly specialized career goals that only Columbia could solve etc.),

2. had a combination of multiple "not-bad" things that added together into a compelling profile (2y LMM IB + 2y LMM PE...in Thailand, high flyer at GE South America, etc.) OR

3. Were workhorses from the US that actually wanted to make Sr. MD at a BB or become a partner at Mckinsey. 

That is to say, there were no white male sales reps from Oracle that had 690 GMATs like you'd find a say, Ross or Kelley (not hating, just employing a stereotype heuristic here).

N.B. If this was in response to the "pep talk" bit at the end of my previous post, what I mean by "washouts" were, for example, a HYPS girl that worked at a fancy non-profit before CBS who ended up at Piper Sandler.

Take the offer, but wait to hear back from other schools. If you want to, renege. No need for "transparency" with the admissions team. (I put that in irony quotes because, lets be real, MBA admissions is not in the least transparent in most cases).

1. Massive congratulations. The fact that you you're a first generation college student and immigrant that got accepted to CBS deferred means that you have the supernormal level of grit and persistence to make in life (however you define that).

2. Because of #2, you likely have a very high chance of being admitted to other top programs.

3. Assuming you're ok with losing the deposit AND incremental prestige matters to you, then you can treat the deposit as a call option on another school. There were, of the top of my head, at least five people that would have been in my class but who went to other schools after "committing." There weren't any negative consequences. First, it's not in CBS' interest to make a huge deal about a people who turned them down. It would be a PR nightmare for one, the equivalent of a crazy girlfriend/boyfriend you dumped standing outside your workplace and screaming that they'll get revenge. It would also discourage people who would apply early, think about reneging, and then not reneg from applying because of the possibility of being hounded. Second, for a B-School that has a hundreds of millions in its endowment, it would be exceedingly petty to pursue a few thousand. Finally, like full-tuition international students, it's likely that the school uses any reneged deposits to fund scholarships for kids like you who deserve them.

4. Now, a bit of moralizing/boosterism from your old uncle Ballsacajawea...due to point #1, you have a story that, quite frankly, every single employer in the US can get behind. Even the most jaded "I only hire potential rainmaker" finance douche will take a look at you and WANT to hire you. It makes them feel magnanimous and, frankly patriotic, because to them, in all likelihood you the embodiment of the American dream. If they came from privilege, it will reassure them that the system from which they benefitted isn't the corrupt cesspit described in the NYT. If they didn't, they'll see a fellow outsider who made good, perhaps even a young version of themselves and will consequently look out for you. But also, no matter what the background of the person hiring you, there will be no doubt in their mind that you're not some pampered product of helicopter parenting that breaks down the first time they yell at you. They'll know even before they hire you that you'll work from dusk till dawn to get the job done in a way that they'll never know with someone like me without taking the risk of extending an offer. At big firms, multiply this sentiment by the number of people who work in the HR department.

As such, you're the closest thing to a lock (and rightly so!) to top jobs, and the incremental benefit from going to HBS/GSB/Wharton vs. CBS is miniscule in your case, where for others it might actually make a difference.* Taking all that into consideration, if high finance is your ultimate goal, there is something to be said about going a school in the capital of high finance and being taught by the masters of the universe who do everyday what you want to be doing when you've finally "made it."**

5. Some tangential advice...when you have the resources, I would highly recommend investing time in getting tolerably good at 1-3 WASPy hobbies. It's not fair, but people like others who share the same interests as themselves. You'll have no problem getting into the door because of the reasons listed above. But, once actually at the workplace, a crushing work ethic is doubly useful if your superiors see someone who they can theoretically chill with when you're a bit more senior. This is DOUBLY true if you come from a background that is stereotyped as being pushy overachievers (East Asian / Indian Males). Sorry, but its true. 

My first round interview at for my MBA internship literally consisted of us talking about our favorite places to ski in Utah (the PM was from there and had framed trail maps of various mountains on the wall in his office). Spent 50 minutes talking about my 3 months being a ski bum while living out of my friend's basement. Didn't talk about my stock picks until the last five minutes. This is an extreme example, but more often then not, I found myself discussing preppy pastimes during the early stages of the interviewing process and/or when in the office after getting hired. Therefore, devote some time to getting good at squash (cheap, unintimidating learning curve), golf (you can get tolerable hacking away 1-2 times a week at muni course) and skiing (the only activity where you're in the top 20% of all participants if you practice 2 weeks per year.) Obviously your work output is the most important, but, frankly, you've got b-school locked down (at least at CBS) and no one will begrudge you a bit of leisure time here and there, especially after 22 years at the grindstone.

6. Massive congratulations again!

*In HFs at least, I've seen no meaningful difference in placement results from these schools, if not a slight advantage to CBS because of proximity and the reputation of its public markets investing curriculum. In banking, there is a decided advantage in CBS' favor.

**PE curriculum is actually top notch, though the placement is not as good as HBS/GSB/WHarton