Best/Most Realistic Route into Hedge Fund

Hi guys,

I was hoping you could provide me with some insight where at all possible.

I currently have two options, work as an analyst at a large HFoF or attend a MSc at one of the semi-target/target universities in London. My goal is to transition into a direct investing role within a hedge fund, more specifically, an equity hedge fund.

The HFoF role would pay £65-80k but the work is quite monotonous and the skillset is quite different to a direct investment role within a hedge fund. Is there an argument to pursue this role given the current climate even though it is not that enjoyable.

The second option is the MSc. The MSc costs £35k. I have spoken to multiple people who have done the MSc and some have been offered internships within investment banking, but a lot (majority) haven't. I spoke mainly to white males (for context). Investment banking is obviously a more straightforward route into hedge funds, but given the huge emphasis banks are placing on diversity hiring it could be quite difficult for me to obtain a job there (I'm a white male unfortunately). Is there an argument to pursue the MSc and try push my way into an IB position and pursue a hedge fund role through this pathway?

I hope I phrased this properly. Please let me know if you would like me to expand on anything.

Which option is best for both my long term and short term career in your opinion? Is there any options I am not, but should be considering?

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Comments (17)

Most Helpful
  • Quant in HF - Other
Jul 24, 2020 - 7:19am

You will have an extremely hard time convincing HFs that you have any relevant skills coming from a FOF. I would be wary of getting pigeonholed into that space if you decide to go there for your first job (know of 2 people stuck in this scenario right now). Is the MSc a pure finance one? That may be a better choice, although you're essentially paying 35k to give yourself more time to network and sort out a good job rather than going there for extra skills etc, so you'd have to make sure you definitely don't squander that time.

  • Prospect in HF - Other
Jul 24, 2020 - 8:42am

Thanks very much for you opinion! That seems to be the general consensus. Do you think doing the MSc is a gamble worth taking? Or would it be a more intelligent career and life decision to take the HFoF and earn an above average comp? It's a really tough one.

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  • Prospect in HF - Other
Jul 24, 2020 - 4:09pm

I'm 23 with an undergrad in computer science. No real solid finance experience on CV. Graduated last year. Anything else you would like to know?

  • Prospect in HF - Other
Aug 2, 2020 - 1:43pm

Does this affect your opinion on what I should do?

Jul 24, 2020 - 6:55pm

Outside of the very large shops, most funds are fairly unstructured in recruiting. If you want to get a seat you need to convince someone you're either A) going to add value on day 1 or B) will learn everything you need to add value in just a couple months. That doesn't mean you need to be Seth Klarman to get a job, but you should be able to talk through an investment pitch deeply, and they shouldn't be able to ask any questions you haven't already thought about. At that point it's a networking numbers game.

Learning these skills takes a significant investment of time. Just the accounting and modeling alone can take a while. That's why funds like kids that have 2 years of 100hrs a week monkey work at IB, they've (a) been filtered to at least be somewhat intelligent, and (b) have at least a basic understanding of finance.

At a HFOF you're not going to learn those skills, and you'll get the opposite filter attached to you. At MSC you don't have any filter one way or the other, but you don't pick up the skills either. Then again, at HFOF you get paid, and MSc you're paying tuition, but either way you're going to have to learn a lot of material on your own.

Array
  • 2
Jul 25, 2020 - 7:45am

Doing an MSc is very dangerous for you right now. I've done this and the MSc is useless for hiring purposes (unless you did English and did an MSc conversion to CompSci). The cost is ridiculous. It's 35k + the 60-80k you didn't earn. An MSc won't teach you much - certainly nothing you couldn't learn yourself. You will spend 1 year doing stuff that again won't be that useful and too theoretical. Don't even get me started at coursework.

You have a good degree (CompSci), get experience. Companies are looking for and hire for experience. Academic requirements have been going down in industry in any case. It used to be the case for certain jobs they asked for a PhD. Then it was PhD or MSc. Now a lot of the jobs I am seeing ask for a technical degree of BSc or above.

  • Prospect in HF - Other
Jul 25, 2020 - 2:40pm

How do you think I make the transition if I stay in the HFoF? What should I be doing? Thanks for the insight!

Aug 3, 2020 - 1:19pm

There isn't a unique way so I don't know what you should be doing. I'm just telling you that I've been in a similar position where I wanted to switch career a little bit. I did a strong MSc and it did nothing for me when it came to hiring. Sure, I learned a bunch of stuff but I could have learned this myself without paying the price. What I lost is a shit load of money and the opportunity cost of learning other stuff.

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