Asset Management vs Investment Banking for exit opps into value-based hedge funds

Hello everyone, I am a South American student in my final year at a target uni in London and I currently have 2 full time offers and I am stuck and do not know which one to choose. The offers are:
1) A full-time offer from an elite boutique (Lazard/Rothschild) where I would be doing a mixture of restructuring and M&A in the London office
2) A full time-offer at an asset management fund for a rotational graduate programme in PM tracks and Equity research tracks, also in the London office. The fund is large with more than EU400bln in AUM and more than 16 locations worldwide.

My career goal is to eventually become a PM at a hedge fund here in London or possibly in NY. I am really not sure what I should choose. On the one hand, what I would be doing in AM would be much more similar to a HF job as it would be investing although with a more long term perspective, on the other hand I am not sure how possible the transition from AM to HF actually is (especially here in London) and I am scared to be stuck at a large bureaucratic organization (possibly less clear career path than in banking) with few opportunities to join the hedge fund industry.

As far as the banking offer is concerned, I think it is the safest as it seems like you cannot go wrong with banking as your first job, but I also think that the exit opps here in London are not as good as in NYC and thus I could be putting in all those hours for two years without even having the option to eventually leave for a good HF role with a PM track. Moreover, I would enjoy banking less than investing and I would have to put in many more hours.

To sum up, my questions for you guys are:
1) How easy is it to transition from AM to HF in London? Is it easier or more difficult when compared to doing so from banking?
2) Assuming I do not succeed in leaving AM, how do compensations in AM in my 30s and 40s compare with banking? Would I be earning significantly less in AM?
3) What would you do if you were in my shoes given the that I am sure that my long term goal is to be a PM at a hedge fund?

Thank you very much in advance!

Comments (16)

Feb 16, 2019

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Fingers crossed that one of those helps you.

Mar 18, 2019

bump

Mar 18, 2019

also interested. My thinking is literally identical to yours

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Most Helpful
Mar 18, 2019

Nobody else seems to be interested in responding though. SAD!

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Mar 19, 2019

Have you already made a decisions? To me it seems like IB is the best path to fundamental HF

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Mar 19, 2019

Have you looked at hedge fund advertised jobs to see what experience they require?

Mar 19, 2019

Most HF recruiting is through head hunters so not that useful

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Mar 19, 2019

maybe try to contacting some recruiters then? My guess would be that if you get the skills in asset management and would prefer it then do that. I work in IB and I find it so dull and boring. Literally, less than 10% of what I do could be classed as intellectually stimulating.

Mar 19, 2019

For context, I did M&A in London straight to HF (so obviously I will be biased).

1) IB is easier. It's the most common PM background, and people like to hire themselves. There is a perception amongst HFs that IB is more selective and therefore the candidates are better (probably not true). There is also a perception that IB analysts are better at financial modelling and can work more independently (probably true).
2) Assuming you just stick it out and make normal career progression, IB is likely slightly higher. AM is a far easier life though.
3) Take the IB job. Although I would caution that boutiques tend not to place as well into HFs compared to BBs (because they usually have broader experience). Lastly, IB straight to HF is not that common in London. Many go IB > PE > HF, especially for the top HFs.

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Mar 19, 2019

Hey! Thanks for your reply. You touched upon prestige and selectivity. I have two previous summer internship: one in sales and trading at Morgan Stanley, and one at another elite boutique in London which is also first tier. Do you think this will help me boost my selectivity and thus allow me to go from AM to HFs anyway? Also, you mentioned going to PE before moving into hedge funds, this is something I would definitely consider, I have two questions on that:
1) Which Funds would be better? The banking shop I am in is strong in restructuring so I could get into a distressed PE fund or an MM PE. Would that help? Doubt it is easy to break into mega funds.
2) Assuming I join as a PE associate and do not succeed in making the switch to HFs, what happens then? I assume that if you do not make the switch immediately you are destined to stay in PE for life (assuming they do not kick you out after 2 years) as exit opps for HFs go down and you become more specialized, while in AM you keep building a strong investing based skill set.

Also, as an additional question, how important is networking for breaking into HFs? If I take the AM offer I will leave at 8PM and have weekends off plus have 3-4 weeks vacations, this will allow me to meet new people, go to investing conferences, reach out to people in the HF industry. If I take the banking offer I will be stuck in the office until 4AM and will have little time to meet anyone at all, I will have to rely exclusively on head hunters calling me.

Thank you so much for your help, your advice on the forum regarding hedge funds is always very very good.

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Mar 19, 2019

Also, how much does GPA matter in HF recruiting? How about in PE recruiting? I come from a school which is very target in the UK but my GPA is average. Will that be a problem when it comes to buyside recruiting?

Jun 1, 2019
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