Hey Everyone,
I am currently a 1st year analyst working within a back-office function at a larger, bulge-bracket firm and wanted to know if anyone has, from a comparable function, been able to successfully recruit, and receive an offer for, a buy-side function (PE/HF)?
For context, having quite literally read every book on the Heilbrunn Center's recommended reading list (admittedly not the coolest ice-breaker) and being able to comfortably build a three-statement LBO in under two hours - not that this is a 'qualifier' per se but moreso it speaks to my, let's call it, introductory understanding of financial accounting - I wanted to know if it is possible to be competitive without having the traditional IB/ER background?
Hey IshijahDel, I'm the WSO Monkey Bot and I'm here since nobody responded to your topic! Bummer...could just be unlucky but one of these topics will help shed some light:
If those topics were completely useless, don't blame me, blame my programmers...
I know someone who went back-office at a credit fund to research analyst at a top HF. Don't stop working. Do CFA, teach yourself modeling, etc.
I've found that the biggest challenge, moreso than the technical skills - with repetition, anyone can learn to model' - is getting in front of the 'right people.' I am confident in my technical skills - building LBO, merger model, etc. - the challenge is recruiting.
I have also gotten feedback, both from mentors and friends in PE, that there is very little incremental value in obtaining a CFA.
Possible; I did it
However, you need IB. I did BO - FO - HF; 2 years BO, 2yrs FO so 2 extra years but, in the grand scheme of things, it's nothing.
Model is a fundemental factor, and you can definitely learn it independently, which was the case for me. But I made sure to put in the effort (spending weekends to consistently build out models etc). Even with that, interviews were scarce without IB experience.
Get IB under your belt. It will serve you well not just for this recruiting for but for greater things down your journey
This is the route that I am currently pursuing. In addition to practicing modeling, I spent (spend) a fair amount of time reading 10Ks, Prospectus Filings, Indentures, Credit Agreements, etc. for companies that I follow. I wanted to be confident in my ability to extract information, formulate an investment thesis, and identifying where I would want to be within the capital stack.
I just want to echo that you need something to back your story. Get IB exp or the CFA charter. IB exp will get you the interviews and your practices and CFA charter will exemplify your capabilities
What are your top investment ideas?
i did. cfa was helpful in my case, i'd go as far as to say critical, but i was on the macro side so it certainly helped beef up my knowledge of other asset classes. certain other topics like interest rate parity, valuing an IRS by hand, option valuation, etc. if you are doing bo for a more structured product, do more, go out of your way to understand the product type, build something for the desk they don't have, find other ways to add value. then you can use that in interviews to demonstrate your initiative. take the mentality of there's always something you can learn from any job. a great experience doesn't always fall to you so you can always make the most and learn from any experience and go above and beyond.
Maybe an obvious question, but considering how you've made the transition as well as my curiosity....In your opinion, is the value of a CFA heavily weighted by what you're currently doing? For example, if you were working in a front office role and wanted to go to HF would the CFA be necessary?
I'm trying to make my mind up on the CFA. My high level thoughts are that it seems to be a bit of a necessity for the buy side for a number of reasons. I think it shows interest, dedication, as well as knowledge. I also think buy side shops want their investors/potential investors to see 'CFA' next to names. A number of guys I work with have it and many took lvl 3 recently, their opinions vary greatly.
depends on your situation, but yea, it's certainly a helpful not critical thing. but in my situation, had i not done it, no way i would have had the knowledge to get hired.
you should probably clarify to the posters here that having the CFA designation is not as heavily weighted as to "critical"
It is definitely a positive value-add to your resume, but having the charter, or the lack thereof, will not tip the outcome from one way to the other. I'd put it more of an "extra credit"
I was having a conversation about this with a HF recruiter recently and I was slightly surprised that he concurred with what you're saying. Given the fact that I work on an S&T desk, it obviously doesn't scream modeling and fundamentals to hiring managers. I actually started off in ER as an assistant, but there was a need within my current group and the money was better so I took it.
The interesting thing is that I have what I would call proficient or probably beyond modeling ability (I know this isn't rocket science). I work very closely with the senior analysts, even during non working hours to learn and also spend a considerable amount of time teaching myself. I've read almost all Damodaran has, but that doesn't show on a resume.My thinking is if I want to move to the buy side I'm going to have to do the CFA to actually have a chance. I just don't see how my resume would suggest I have fundamental skills without it. I'm guessing the CFA is more applicable to long only shops or AM.
Any opinions on my specific situation? Thank you in advance.
Last summer I had a back office internship at a middle market investment bank and just recently signed an offer for a well known credit hedge fund. My role in the internship was essentially FP&A, which was a lot of excel and accounting which was very helpful. I networked my ass off that summer meeting with senior level employees of all areas of the bank and kept in touch through my senior year. When it was time to find a job after graduating (non target) I must have sent out hundreds of emails to set up meetings/phone calls/etc with ppl I had met or had some sort of connection to. Eventually these people put you in contact with their colleagues further expanding your network. By having these conversations with professionals I was constantly told not to worry about what I don’t have (FO/HF experience, target school degree) but rather on what I do have going for me and sell employers on that. One person I had met with send my resume to some colleagues and eventually I got invited to the first round of interviews for the firm I just started with. I prepared my ass off with technical knowledge to prove I was qualified. More importantly I was just myself and tried showing interviewers my character and personality to be someone they would be happy to work with. I think showing interviewers that you are willing to work hard and eager to learn along with that you are real person that share their interests goes very far.
I eventually did well enough in 3 rounds of interviews and got an offer and accepted. I firmly believe that the only reason I got the job was based on my attitude during the interviews: confidence in what I DID bring to the table and a positive, eager, and pleasant personality.
Definitely possible but it took a lot of networking and extra effort. Also, focus on what you do have going for you- DON’T SELL YOURSELF SHORT. I learned many important concepts and skills in finance while at my back office internship. Leverage what you have learned and accomplished along with your personality and networking skills and it can be done!
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