Working at my university endowment out of college?
I'm a graduating senior at a HYPS school and I have an offer to work at a top EB out of college, where I interned the summer before. However, I also have the opportunity to work for my schools endowment as an Analyst. The job seems amazing, I really like the people at the endowment too, definitley less work than IB, I get to give back to my school, and I get to live near my college which is in an area of the country I really like. Additionally, it seems like a great opportunity--I'd get to work on the endowments in house strategies as well as talking to HF's and PE shops that get our money, so a good mix of modeling and investment related work. Lastly, I looked at people who used to be analysts at our endowment as well as at similar HYPS endowments and they all seem to have awesome job opportunities after a ~2 year analyst stint, particularly at hedge funds, which is where I want to be long term (exits include Farallon, D1, etc). Pay, which matters less, is also about the same as my EB offer. Im thinking about taking the endowment offer--thoughts?
100% take it. It’s a great job and has a lot of tangential benefits as you called out.
The only watch out is that your skillset will be perceived as less technical than IB, so if you ever want to get into PE or something, it will take some networking or a top MBA. That said…endowment jobs are pretty much the ideal balance of comp, WLB and interesting work. It’s a career path that I wish I hadn’t left (and once you’re out, hard to get back in).
Thanks for the advice! I don't think I'll ever really pursue PE--my undergrad degree is in computer science, and if I'm not in the HF space long term, I'd probably just switch to tech. Regarding HF exit opportunities, do you think its reasonable to say I'd get looks from top single and multi managers?
curious to hear others thoughts because at an endowment my perception is you’re really not doing anything that prepares you well for stock picking in the public markets, whereas at an EB, you’re grinding corporate strategy.
I’ll caveat this by saying i know some that have had very successful exits out of endowments, but endowments are more of an exit if that makes sense
I think HF would generally be a tough exit - the core skillset at an endowment is asset allocation and manager selection, which doesn't cleanly translate to security valuation or short term trading. I think you can overcome that with strong quant skills (CS is a good start) and networking (which is pretty readily available in the space). You'll also get great exposure to hearing how investment theses are developed if you're working on the HF side. Additionally, some endowments do some direct investing, which would allow you to get hands on experience in security selection and modeling (if it's done in a rigorous manner).
However, one thing to keep in mind: a lot of funds will be nervous to consider you as a candidate, as they'll want to maintain a strong relationship with the endowment.
All that said - I still say to take it. Sounds like a top tier place, great comp, good WLB, interesting work - what more could you ask for?
I call complete bs on people lateralling from an endowment to a HF. The skill sets do not cross in any way shape or form. The most common exit for an endowment is going to work for big pension funds. I can’t imagine you’d be doing any meaningful modeling as well so I’d curb your expectations about that.
I also agree with the above poster that the endowment is the exit. Usually ex PE or HF folks who are done with the rat race and want a cushy job. You’ll have no chance beating out those types for a director + gig.
Was SHOCKED that people reporting to the CIO of my university's investment office (not even HYPS) regularly pull in $1 millon+.
Upon learning that, I wipe my azz with alumni donation requests I get in the mail.
Notre Dame?
Would echo people above and say working for an endowment is the exit but going down other routeswill be very hard. Pretty sure I know who you're talking about at Farallon and I wouldn't expect that route to be super repeatable.
Had two friends with the same offer to go work for an HYP endowment and both chose to ultimately go down a more conventional / direct investing path (one MF PE, one a SM HF).
Do you think it might be better to recruit for a SM hedge fund now? I've interned at one in the past and generally recruiting seems to be quite ad hoc--given that a lot of people are leaving SM HF's I might be able to get out of banking if I play my cards right I think?
For a lot of reasons, I generally think going down the tried and true path of joining MF PE / PJT RX out of undergrad remains your best bet. Joining a SM HF out of UG is a large bet both on (1) the hedge fund to do very well (imagine joining certain TMT-focused funds in 2020/21 when they were on top of the world before dropping 50% in 2022) and (2) yourself to do very well, both of which are risky bets, in addition to how few good seats there are out of UG.
Caveat that I'm (obviously) writing mainly from my personal experience and I never really considered IB, though I do think the non-PJT RX EB vs SM HF equation is meaningfully harder than the MF PE vs SM HF
To be more specific:
1) In terms of learning how to conduct fundamental analysis, structurally it's a lot easier to go through PE first, diligence a business with extremely granular information, get some perspective on operating, etc, before jumping over to public markets where you have way less information, instead of diving right in and trying to predict / pattern recognize what's going to happen with a business's earnings when you haven't been as in the weeds before.
2) The network of people you meet in PE / IB is super useful; you'll get much less of that in a HF--I'm a fairly social person, and frankly just thought that the social aspect would make the job way more fun (even though hours suck) compared to going to a HF at the age of 21.
3) There's a bit of a branding / stable equilibrium thing where because the consensus view among top UGs is to go to MF PE / top EB, their branding becomes stronger, good HFs, often explicitly, only want to hire out of MF PE, good candidates want to go to MF PE, rinse and repeat. By contrast, even very good SM HFs runing $3bn+ have limited name recognition if you want to pivot seats, or even a different strategy (L/O, MM, etc). (Obviously if you get a seat at Baupost or Tiger out of college branding is not an issue).
4) I went through this myself when interning at a few HFs--it is very easy to be on top of the world / the top finance kid in your HYPW class; you realize that means little when you're thrown into public markets and drinking from a fire hose every day. Some firms train / teach you well but it's hard to diligence a HF seat out of undergrad because it's hard to know what training / mentorship will look like.
I'm personally quite risk adverse though, so it is all up to your preferences / feelings about the seat you have ultimately. It is also really, really hard to know which strategy / career you truly want to pursue when you're in college, even if you have a passion for public markets, so the optionality of IB / PE is enormously valuable. That said, the upside, in terms of better hours, more interesting work, way faster increases in responsibility / comp, can obviously compensate for the downside in many cases.
Happy to chat about specific shops via PM, don't want to post that in a public forum.
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