Q&A - HY/Special Situations Analyst at $30bn+ HF in London

Long-time user of WSO under a different account, believe it's time to give back.

Background in LevFin/restructuring at a BX/GS/JPM, now sit as an investment analyst within a distressed/HY/special situations desk at a very large HF.

Will be attending the upcoming London reunion if of any interest!

 
Best Response

Long process, was also involved with 4-5 other shops as well which was not easy to manage when you're pulling IBD analyst hours, introduction was through a HH but I was very active with recruiting once I'd made my mind up on leaving.

I studied in London and went to the LSE and I don't think it had any effect on me getting recruited or not once I'd hit the interview (at least not at the HF, HHs do place important on this however).

Reasonably rough ramp-up period but nothing not seen on the other side, I'd say clocking in 75-85 per week on average given how steep the learning curve is, thinking medium term it'll be more in the ~60 range. Loving the work, but I'm quite surprised how unprepared one is initially coming from IBD. Yes, you're a whiz on excel, can read through financials and build a model but I'd say this is 20-30% of each trade we make.

 

Just under 2 years, bit early but my thought process was that I wouldn't know that much more if I stayed on for a year longer and that it was time for a change.

Sure, so with my particular fund it was 2x initial meetings with the PM, 3x case studies (2 take home and 1 in office) which consisted of putting 2-3 pages together on a name they'd give you with a quick model and another 2 ideas you'd have to search for and pitch. Following this there were 2-3 more rounds with other PMs and 2-3 analysts with a quick offer following the final round. Very case-like interview process with a lot of fit involved given they knew I wouldn't know much when I joined anyway and just wanted to make sure that (i) I was a normal person and (ii) I could get the basics right.

 

Thanks for doing this.

Quick question with reference to your post above and the use of the word 'trades' - What is the average holding period for your investments? Aware that this might be misleading and might range from small amounts of time to relatively large amounts.

Also, what would the remaining 70-80% of your work load be if 20-30% is modeling/excel? Trying to draw comparisons between your split and mine.

Looking forward to catching up on the 3rd. Cheers

 

Hi,

Thanks for doing this. Can I just ask what you mean by a case-like interview process? Do you mean similar to consulting cases? If so, what framework would you use for an investing type case?

 

thanks for doing. as someone with interest in this space:

how does your fund separate itself, given the large amount of capital focused on this space and the sparsity of great opportunities ?

how has performance been?

what’s your view on the market over the next 2-3 years?

 

For Europe, there's been huge pick-up in fund raising for direct lending over the past 4-5 years which I believe to be totally saturated with margins 150-200bps lower than they used to be historically and seeing how fragile the system is we place a very large premium on liquidity therefore we do not compete in that space. We do not run a carry book and therefore focus on catalyst-driven situations across Europe where we can go long/short and play both debt and equity (although >60% of the book is into corporate debt, with the balance into banks and equities).

Will not comment on exact performance but I'd say that we have had a good year if benchmarked against most other HFs with 2-3 "home-run trades".

 

...

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]

Saw the linkedin profile of an old aquaintance of mine, he is currently a "Senior Analyst, convertible bonds and Special Situations" at a fixed income asset manager with options to move to a hedge fund, 30 year old guy. Started his career at a small bank as a credit analyst at a small bank, then went to a no name business school for his MBA before making the switch. How common is this?

We're not lawyers. We're investment bankers. We didn't go to Harvard. We Went to Wharton!
 

Thanks for doing this!

1) What headhunters did you use? Hinton Rose seems to be the go-to shop for Distressed, but any other good ones? 2) How did you make up your mind re jumping to a DD HF rather than PE or sth. else. I am in a similar position right now and am trying to make up my mind as both DD and PE sounds quite interesting to me. 3) Any recommendations for interview prep? There is obviously so much more materials for PE recruiting but DD is quite limited. Apart from obviously reading Moyer and the HL case, any other recommendations how to prep?

 

Thanks for doing the AMA!

Quick question on LevFin/RX: how realistic is it to break into either coming from a CF/business modeling background from a big 4? Any advice you might share on making the jump?

 

Thanks for doing this. Not so related to the type of questions people ask you here - and ofcourse if you don't feel comfortable no need to answer - but recently I've been reading/analysing troubled European banks a lot. What's your opinion on these? Thinking Deutsche, CS and maybe some Greek banks (Alpha Bank for example) can be potential home-runs with a 1-3year timeframe. For DB and CS, I really like their leadership and for the Greeks they're just awefully cheap. What keeps me from pulling the trigger is a capital raise/secondary offering. What are your thoughts?

Colourful TV, colourless Life.
 

Thank you for doing AMA!

What is your opinion on the future of SSG with BBs? JPM sold theirs in 2014

If you could give an advise, how can one prepare for SS if you are coming from IB ?

 

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