1st Year HF Analyst taking questions

Simple As...'s picture
Simple As... - Certified Professional
Rank: Neanderthal | banana points 3,830

Just finished up a couple very long weeks at work and am feeling pretty generous at the moment. So, a little bit about me:

- Non-target former varsity athlete/captain
- Corp Strat to HF
- Won't go too much in to location/fund size, but we are mostly a typical L/S fund and a pretty small team.

So, if anyone has any questions feel free to ask and I'll answer as best I can and as quickly as possible.

Hedge Fund Interview Course

  • 814 questions across 165 hedge funds. Crowdsourced from over 500,000 members.
  • 11 Detailed Sample Pitches and 10+ hours of video.
  • Trusted by over 1,000 aspiring hedge fund professionals just like you.

Comments (74)

Oct 6, 2013

thx for being willing to share.

would love to hear how you made the transition from your old job to the fund. did you get lucky networking (happened to have an alum in the fund) or just cold call your ass off, did you have to learn a ton of stuff at your old job in preparation for the transition, how'd you sell yourself, etc etc. super interested. you definitely haven't followed a "traditional" path to HF so am super interested in hearing your reply

Oct 13, 2013

For this particular job I sent my resume and cover letter to their [email protected] email address when I noticed they posted an analyst position and was lucky enough to hear back from them. In general though I networked and cold-called my ass off for quite a while. I think I might write a short series of posts on what I've learned about networking and my transition from strat to a HF because I won't be able to do your question justice right now. However, my path was eased a little because I was lucky enough to have the opportunity to manage outside money for a few businesses from my sophomore year in college on through when I started this current job (the amount was enough that I didn't look stupid when putting it on a resume).

I didn't have to learn a lot of new stuff directly before starting my analyst role because I had already picked most things up from managing the money for the small businesses for an extended length of time. That being said, it's not likely that someone is going to have to learn a great deal of things directly before starting as an analyst because no HF is going to hire you if you don't already know the basics. They may try to teach you how to think like an investor, but there is very little hand holding (read: none) so you better know the basics well before you start.

Basically, I sold myself as:

1) Someone who is passionate about investing
2) Someone who is smart, driven and results oriented
3) Someone who is knowledgeable about the markets/individual equities
4) Someone who is decently likable and won't destroy the team atmosphere

When you're selling yourself for an analyst position-- in my experience -- it really comes down to, "can this guy make us money?". Plain and simple. i think this may be a part in the "blog series" for lack of a better term.

    • 7
Oct 6, 2013
Simple As...:

....

Basically, I sold myself as:

1) Someone who is passionate about investing

2) Someone who is smart, driven and results oriented

3) Someone who is knowledgeable about the markets/individual equities

4) Someone who is decently likable and won't destroy the team atmosphere

When you're selling yourself for an analyst position-- in my experience -- it really comes down to, "can this guy make us money?". Plain and simple. i think this may be a part in the "blog series" for lack of a better term.

Dude, thanks so much, this was a great reply. Very much looking forward to your articles. Would give you a silver banana split if I could.

Oct 6, 2013

What's your typical day like? How involved are you in investment decision process?

Best Response
Oct 13, 2013

My day can vary wildly, but this is a pretty typical, uneventful day:

6am -- Alarm goes off.
6:30am -- Actually get up and shower/get dressed.
7am -- Leave for the office. I drive every day.
7:30am -- Arrive at the office. Check email/schedule for the day. Read a few blogs/check twitter/read FT and WSJ. May or may not meet with my boss/rest of the investment team depending on what is going on. (This is assuming a company I am following didn't have a call/earnings in the morning).
9:30am -- Watch the open and begin monitoring my positions/research/modeling.
12pm -- Go grab lunch and most likely bring it back to my desk. I try to go out at least once a week for lunch just to keep my sanity.
1 - 4pm -- Meet with my boss about current positions and maybe begin to pitch him a new company. I might pick his brain about a few things. These meetings can range from 5 minutes to all afternoon. If I'm not meeting with him or the rest of the investment team I'm doing some more research at my desk.
4 - 5pm -- Finish up my notes from price movements/anything special I noticed during the day on my holdings and watch list.
5 - 6pm -- workout at the gym in our building.
6 - 7pm -- Wrap everything up from the day and usually print out a Q or K to take home and read.
7 - 12am -- Eat dinner/hang out with friends/gf, read, etc. Nothing too exciting.

Edit: Forgot your second Q.

I am the decision making process. I decide what businesses to look at, develop the thesis, do the leg work, and pitch it to my boss (the PM) as well as set the price target (even though I hate them) and decide when to add, cut, or completely exit the position.

    • 8
Learn More

814 questions across 165 hedge funds. 10+ Sample Pitches (Short and Long) with Template Files. The WSO Hedge Fund Interview Prep Course has everything you'll ever need to land the most coveted jobs on the buyside. Learn more.

Oct 6, 2013

How can I break into HF from Rutgers?

Mps721

    • 1
    • 2
Oct 7, 2013

I assuming by varsity athlete you mean NCAA, not high school. That being said I have a question for you. My freshman year I attended a D1 school and was on a sports team there, I then decided that I needed to go to a better school and am no longer playing at the D1 level (or any varsity level, im only playing club now). I dont want to look like a quitter--im not, my reasons for transferring were academic and socia--but how do you think I can leverage this past experience now? Should I still include it in my resume?

Oct 13, 2013

No one is going to think you're a quitter. Make it part of your elevator pitch. I'd leave it on under your GPA from your transfer school, but that's without seeing your resume. Take all this worth a grain of salt it's just my personal opinion.

Yes, I meant NCAA

    • 4
Oct 7, 2013

How and why did you jump from Corp Strat to HF? (Seems like an unusual path)- Does your fund specialize in the same sector that you were hired from doing Corp strat in? Or were you hired as a specialist from that sector due to your corp familiarity with it? Was the jump necessarily difficult, and if so, what was/has been the hardest part?

Thanks for doing this!

Oct 13, 2013

Went a little in to how in a previous answer. Why? Because that's where I wanted to be, basically. I went in to Corp Strat as a fall back at the time of graduation and had been trying to make a switch ever since.

No, I don't cover the same sector. We have four total analysts -- three cover a sector each and I am a generalist.

Yes, the jump was difficult. The hardest part by far was getting interviews. Once you get in an interview room it's [kind of] equal footing for everyone, but before then having a non-traditional background is not a positive.

(I have a feeling I'm not answering your question that well. Let me know if you want me to elaborate.)

    • 4
Oct 7, 2013

Interested in how you broke in. Also how non-target? Would we have heard of the school?

Oct 13, 2013

I only know of one other person in a "high finance" role from my undergrad and he needed a top 25 MBA to get there. Probably not, but it is usually in the PR top 100 or whatever. It's a smaller LAC.

Oct 7, 2013

I need to come up with a stock pitch for my interview in 10 days... I can model well but I'm also pretty risk averse so I never really bothered with stock picking. Where should I start in terms of looking for ideas

Oct 13, 2013

I would recommend to read the link that StryfeDSP replied with, but you're going to have to give me some more information about the interview/fund/position for me to really give you a good answer. However, I usually structure my pitches like this:

Industry Overview (read: why is the industry attractive?)
Company Overview (read: why is the company attractive?)
Catalyst (read: what is going to change to alert the market that is is wrong about its current valuation. Be sure to include current valuation.)
Valuation (read: how much do you think the business is worth?)

    • 5
Oct 7, 2013
Simple As...:

I would recommend to read the link that StryfeDSP replied with, but you're going to have to give me some more information about the interview/fund/position for me to really give you a good answer. However, I usually structure my pitches like this:

Industry Overview (read: why is the industry attractive?)

Company Overview (read: why is the company attractive?)

Catalyst (read: what is going to change to alert the market that is is wrong about its current valuation. Be sure to include current valuation.)

Valuation (read: how much do you think the business is worth?)

My background is in growth PE and I'm interviewing for AM and value HFs as a 1st year, so the pitch time horizon should be 1 year. For my stock pitch, I particularly need help with finding a stock to look at.

in PE, I did all the modeling and due diligence, I just never got to source ideas. Most of the time my MD outlined what companies he needed some work on, and a clue to why he chose them, but I never understood how he's generating these insights and filtering away the bad ones.

Basically, I only have experience in the later half of the investment process where you bring in the heavy tools, but not the beginning where your connecting the dots, generating an idea, and deciding which hypotheses are worth fleshing out.

So far, i've been mapping out recent trends in news against a few value stock screens. I'm thinking if both the screen and the news match up, that'll be a smart place to start?

Oct 13, 2013

Sourcing ideas is pretty difficult to explain. I get ideas from really anywhere and do not use screens. Here is a video that should be helpful to you:

http://www7.gsb.columbia.edu/video/channel/heilbru...

    • 3
Oct 7, 2013

Do you guys utilize 3rd-party indy research(non-bulge bracket)? How do those resources factor into the bigger picture of the investment process? More for idea generation or thesis confirmation?

Oct 13, 2013

Yes. They do not factor in to the bigger picture. I use SS research to gauge market opinion and see maybe see if there is anything I missed on the industry and/or comps. I'm being completely serious when I say this -- My boss would fire me on the spot if I told him I used SS research to confirm my thesis.

    • 5
Oct 13, 2013

Sorry it's taken me so long to get to your questions. I'm traveling and I wanted to take the time to answer your questions as well as possible.

Oct 13, 2013

I think I'm going to do a short series going more in depth on networking/cold calling, interviewing, choosing the right place to work. If there is anything else anyone wants me to write about just let me know.

    • 5
Oct 7, 2013
Simple As...:

I think I'm going to do a short series going more in depth on networking/cold calling, interviewing, choosing the right place to work. If there is anything else anyone wants me to write about just let me know.

This would be really helpful. especially "the right place to work". all of it would be good honestly, but directed specifically towards HF

Oct 13, 2013

Thanks for the feedback. As of right now I have the following tentative list:

1) Networking 101
2) Preparing for the HF interview
3) Tips for the HF interview
4) Choosing the Right Offer
5) On the Job

Let me know if you all think of anything else.

    • 1
Oct 8, 2013
Simple As...:

Thanks for the feedback. As of right now I have the following tentative list:

1) Networking 101

2) Preparing for the HF interview

3) Tips for the HF interview

4) Choosing the Right Offer

5) On the Job

Let me know if you all think of anything else.

looks great, pm me when you post them so I can get them on the homepage

WSO's COO (Chief Operating Orangutan) | My Linkedin

Learn More

814 questions across 165 hedge funds. 10+ Sample Pitches (Short and Long) with Template Files. The WSO Hedge Fund Interview Prep Course has everything you'll ever need to land the most coveted jobs on the buyside. Learn more.

Oct 7, 2013

When you say you managed money for a small business, how much did you manage? Under/over 250? 1MM+? Dont have to give an exact number if you dont want to, just a general idea.

Oct 13, 2013

It was a group of small businesses. Greater than 1mm at the outset.

Oct 13, 2013

However, I must add-- The amount of money is secondary to your ability to speak intelligently with an interviewer about the market/stocks.

Oct 7, 2013

Consider a post on maintaining relationships and leveraging them. There's a great deal of posts on how to generate contacts and meet for that first time.

Oct 13, 2013

I was already planning on making it a large part of my networking post. Thanks for the input.

Oct 7, 2013

Thanks for taking the effort. As long as you apply Networking 101 to HF people only, that'd be great. Too many general ones out there already.

Also some posters don't ever really get to posting all 5 of the sequences they listed. Would really appreciate it if you did:)

Oct 13, 2013

They might get broken up a little with earnings season right around the corner, but I've already got them all outlined. I'll do my best to get them all on here.

Oct 7, 2013

Thanks. I'm just curious which sell side BB is getting the most votes in HK and why?

Oct 7, 2013

I am just starting out in sell-side research as a senior research associate. I got the job because of industry experience. So I have a couple of questions - 1) Are there things I should be doing outside of my job that will help my resume when I try to break in to HFs? 2) I went to non-target but have very valuable industry experience. Will I need an MBA to break in to HFs? 3) Typically, how much experience is needed on sell-side before a switch to HFs becomes possible?

Thanks for your time.

Oct 13, 2013

Congrats on the new job.

1) Learn how to think like an investor.

2) It depends.

3) I don't know. My guess would be that it depends.

Oct 8, 2013

Solid post- looking fwd to reading the rest of your responses

Oct 8, 2013

how much weight would you put on the CFA when interviewing someone? Does anyone in your shop have the CFA? Do you feel like it adds any value?

Thanks in advance

Oct 13, 2013

Personally, I would not give any weight to the CFA in the resume review period or in an interview. However, I know plenty of people who do and plenty of shops in which it is a prerequisite for working there.

Yes, about half of the people in my firm have the certification or are in the process of getting it. I am not one of them, however.

The CFA can add value by helping you to get your foot in the door. However, it will not make you a better investor in my opinion and that is really what it's all about. Having a great command of academic finance doesn't really mean a whole lot if you don't pick winners.

    • 5
Oct 8, 2013

Assuming that you could specialize in any industry which would it be and why? I understand that industrials have a strong correlation with the overall economy, whereas other industries have their own pros/cons (too much coverage, low trading volume, unique opportunities for thesis generating, etc).

Thanks in advance

Oct 13, 2013

I would (and do) prefer to be a generalist. If I was forced to pick an industry, it would probably be consumer or maybe tech. There is obviously a lot of good that comes with specializing in an industry, namely the contacts you make within the industry, but I want to be able to pick whatever business I want to follow or buy. Possibly the main reason, though, is I hope to one day become a PM and -- rightly or wrongly -- I believe that having experience valuing and owning businesses from several different sectors will only enhance my chances of being successful in such a position.

    • 8
Oct 8, 2013

SB'ed.

Oct 9, 2013

Thank you so much for the thread! Definitely appreciate it.

I was just curious as to what you thought of going into a hedge fund right out of undergraduate and the 'exit opps' or career progression - for example, I'm currently looking at offers in non-BB banking (think Nomura, Macquarie, Jefferies, and boutiques) vs a non-NYC $2 - $5 billion hedge fund, with the caveat that the hedge fund offer is in a very specific vertical (think REITs, MLPs). It definitely seems to be a good learning opportunity, but I'm worried that starting out in such a specific industry could limit future opportunities if I'm not 100% sold on the sector.

Thanks again!

Oct 13, 2013

Take my thoughts on this with a grain of salt, but my impression of the general consensus about going to the buyside directly out of undergrad is that you give up some optionality in your career. Having a banking stint on your resume is sometime seen as a prerequisite for working at some places. That being said, had I had the choice between a banking stint and a buyside job coming out of undergrad (I had neither) I would have taken the buyside gig and never looked back. If you're confident in your abilities as an investor/analyst than having a career hedge shouldn't be your biggest concern.

I'd rather have someone else answer the second question. My guess is that it would be easier for you to move around while staying as an REIT/MLP guy, but don't know how much traction you'd get trying to move around as a generalist or some other industry. My guess is that how knowledgeable you are about other industries, your resume as a whole, and how you interview would have a hand in your ability to switch industries while switching firms.

    • 5
Oct 7, 2013

do you have any volume requirements on the stocks you pitch? If so, what are they? Also, generally speaking, what are vol requirements for stocks by fund size?

Oct 13, 2013

No. I can't give any color to that other than that I would say volume requirements would most likely differ among investment strategies/mandates and desired holding period rather than by the size of the fund.

Oct 13, 2013

Solid post man

    • 1
Oct 14, 2013

TL;DR privileged white preppy gets a HF job

alpha currency trader wanna-be

    • 3
Oct 13, 2013

Here is the link to my first blog series post for those who may be interested:

http://www.wallstreetoasis.com/forums/networking-1...

Oct 13, 2013

Here is the link to my second blog series post:

http://www.wallstreetoasis.com/forums/the-asymmetr...--preparing-for-the-hedge-fund-interview

Oct 7, 2013

Lets say you and a friend are shooting the shit and he mentions ABC Co. to you. You're interested to see if it could be a viable investment and take a look for yourself. What is the process you use to decided if you should start a deep dive vs shelf it etc? Do you read through all the docs first? Do you look at a base model, see where it is trading right now? etc...

Also, from start to finish what is your research process?

Oct 13, 2013

Coming your way soon.

Edit: Forgot to answer your first question.

If a friend should tell me about a name during a normal conversation and it catches my attention then I might begin to look at it in this order (most likely on a very casual basis):

Most recent K
Most recent 2 or 3 Q transcripts
1 or 2 SS initiation reports
2 or 3 competitor Q transcripts
Visit the store/use product if applicable
[Throughout I am probably going to talk about the name with someone in the industry that owns it or knows it well].

If I like it in some way at this point I will start my actual research process.

Oct 7, 2013

Understand you're busy but very interested in your research process.

Oct 13, 2013

I'm planning on having it up on Sunday night. It's taking me a little longer because of earnings season.

Oct 7, 2013

Completely understandable just don't want this thread to die.

Oct 13, 2013

Ended up getting it done a little earlier than expected. Hope you enjoy!

http://www.wallstreetoasis.com/forums/on-the-job-w...

Oct 7, 2013
Simple As...:

Ended up getting it done a little earlier than expected. Hope you enjoy!

//www.wallstreetoasis.com/forums/on-the-job-w...

thanks! really good stuff.

Oct 26, 2013

How much do you earn as a first year analyst?
Do you like the job?

Oct 13, 2013

I'm not going to answer questions about comp directly. Sorry. Don'tMakeMeShortYou gave some good example in his AMA threads, though.

Yes, I like it a lot.

Oct 28, 2013

way back on the first page you mentioned you checked several blogs as part of your morning routine. which do you check and why?

Oct 13, 2013

Sober Look
Distressed Debt Investing
Abnormal Returns
A VC (specifically MBA Mondays, but everything really)

Oct 28, 2013

How much modeling would you say you do versus qualitative research and writing? How do you think this would stack up against the amount of modeling you would do in PE?

Oct 13, 2013

I'd conservatively say that it's 80:20 in favor of qualitative research. It can be kind of shop dependent, though.

I can't add much color about modeling in PE, but my educated guess would be that it depends. If your PE fund adds value mostly through financial engineering than I would guess that your job is going to be more modeling intensive than say a shop that focuses on adding value through operational improvements. However, this is just an educated guess as I don't have much experience with PE. Would love for an experienced PE guy to chime in here to add more color, if possible.

Dec 17, 2013

Enjoyed the post

Feb 20, 2014

@OP: Great thread, and thanks so much for helping out.

I was trying to open the links you have mentioned in this thread, but they seem to be broken links.

http://www7.gsb.columbia.edu/video/channel/heilbru

http://www.wallstreetoasis.com/forums/on-the-job-w

Could you please post the link again, if possible. Thanks a lot!!!!

Feb 21, 2014

late to the party, but this is great stuff, thanks.

dollas

Feb 27, 2014

Late as well. How often are you on conference calls following your initial DD?

"The absurd is lucid reason noting its limits." - Albert Camus

Oct 13, 2013
Iapetus:

Late as well. How often are you on conference calls following your initial DD?

If we don't have a stake in the company then as often as necessary to continue to get up to speed. If we have a position in the company and I'm just doing maintenance then as often as necessary, but likely twice or so a quarter.

Mar 3, 2014

Might seem like a simple question but what would you say is the best way to keep in touch with contacts after you land a job? When going through school it's fairly easy to keep people updated on your internship search etc. Any thing you learned In this regard?

Oct 13, 2013
turk1:

Might seem like a simple question but what would you say is the best way to keep in touch with contacts after you land a job? When going through school it's fairly easy to keep people updated on your internship search etc. Any thing you learned In this regard?

What always worked best for me was to send them relevant articles, etc. It shows you're interested in the market and if you're able to find quality stuff it implies that you're at least decently intelligent. Don't expect a response, but it'll definitely keep you fresh in their mind.

Mar 4, 2014

Thanks for taking the time to do this @Simple As...

I've always preferred the process of networking, getting to know people, and being vouched for when an opportunity arises and the person likes me. Reaching out to guys at HF's is a little more difficult, though, as the pool of contacts is obviously smaller than a bank, but still possible. That said, I'm trying to fine-tune my networking skills for HF's. In undergrad, you could just say you were interested in X, Y, and Z and can you forward my resume to HR. It's different in my mind when trying to connect with HF's.

I'd like to get your opinion on some things I've thought of. If someone reached out to you asking to meetup for coffee/drink/lunch/etc., would you be annoyed if they brought along a pitch? Would you only care to shoot the shit and not discuss investments with them? What might impress you about that person to the point where you'll keep them in mind whenever a position opens up? Would you be put off if the person wasn't actively looking for a position now and just wanted to be considered down the road?

Time is on my side now that I've got a job, but I essentially want to diversify and speak with several L/S funds now to put myself in the best place for when an opportunity does come up.

Any help is appreciated!

Mar 4, 2014
HFer_wannabe:

If someone reached out to you asking to meetup for coffee/drink/lunch/etc., would you be annoyed if they brought along a pitch? Would you only care to shoot the shit and not discuss investments with them? What might impress you about that person to the point where you'll keep them in mind whenever a position opens up? Would you be put off if the person wasn't actively looking for a position now and just wanted to be considered down the road?

Personally, I'd be annoyed if you didn't have any investment ideas to talk about. You don't have to show up with a written pitch, but at least be able to talk about what you think is interesting/actionable. Ideas are the currency of the industry. Most investors I know are happy to talk their book and want to hear what people they respect are working on. It's how you become top of mind down the road when a position opens up, but it's also how your build your own network of folks who will share things with you.

Oct 13, 2013

In my opinion you don't need to bring an actual write up, but you should be able to talk about some companies you like/dislike and the market in general. Take a look at their 13f and try to inform yourself about some of their positions also.

Just let the conversation go where it may. It's not a bad thing if you end up talking stocks for an hour and it's not a bad thing if you end up talking football for an hour. You always want to try and find some common ground, though.

It's all about knowledge of businesses and the market and the quality of your thoughts/analysis. Basically, you're asking someone to attach their name/reputation to your candidacy and possibly performance on the job. So it's all about proving to someone that you're ready to do the job and do it well.

Not at all. I'd actually just go in to the networking process looking to build relationships and learn and let the rest take care of itself. Obviously you don't want to be too passive, but I'd just look to learn from people in the business and bring up forwarding your resume when it's necessary.

    • 1
Dec 8, 2015

"You adapt, evolve, compete, or die." -Paul Tudor Jones

Dec 12, 2015
Jan 20, 2016