Black list from BB for taking HF offer?

I completed an IBD summer internship with a BB and got the FT offer and I signed. Later I sent in a shot-in-the-dark application for a HF and after a few rounds of interviews I surprised myself by getting the FT offer. To be clear, I am more interested in the HF offer.

Questions:
1. If I renege on the BB offer after having signed, is there a way to frame it so that I do not get black listed?
2. What does black listed even entail?
3. Any chance the BB finds out and contacts the HF?

Thanks

 

After years being involved in recruiting at MS, this is what people usually say when they renege:

  1. They blame it on family, health, or some personal situation. Or they are a little more honest and they say that they made a mistake and realized this is not what they want to do and want to pursue something else (usually non-banking related).

  2. There is no such thing as a blacklist, meaning that nobody senior will go out of their way to screw you over. They will make you feel like crap about your decision. But after that, life at the bank moves on pretty quickly. That said, in my experience, the only people who really care are the junior-level people ("Can you believe so and so reneged? Heard he took an offer at X. I'm going to tell me buddy who works there that he reneged on us").

  3. Not if you don't tell them that you are going to HF or list it on your public profile like Linkedin, or are an idiot about it and start blabbing to everyone at school about it.

Honestly, it's kind of expected that 1-2 people in the class will back out of his offer or can't join because of personal reasons. There's always some dude. So don't worry too much about it.

 

To add another perspective...

I would really take a step back and think for a while about whether or not it’d be worth it. No matter how people try to spin it... reneging comes with a lot of risk and at the end of the day it puts the firm that gave you an offer in a tough position. I’ve seen some really unfortunate situations come from reneging. I’ve also seen people renege and have no consequences. So you never know.

With that said, if for some reason you are purely set on the HF route (which would be surprising considering it seems like you haven’t worked in the space yet), then might be worth it. Otherwise, I’d keep my word, get the IB experience, and break into a HF post-banking (if that’s still what you want to do)

 

Agree with first poster above, not the second. Go ahead and renege. People irrationally scare you from doing so. I've seen it happen a gazillion times, and have been on the receiving end of it a couple times. It is what it is. Most people just move on. There's too much other crap to worry about in the world than some kid declining an FT offer

 

I was in a similar position. Different stage of my career but I accepted a lateral VP offer in IB, and then during my garden leave, was approached by a buyside firm (someone I knew well who knew I would always prefer it over IB, so he came to me unsolicited when he found out I was available).

My situation was slightly easier than yours because I could argue that I wasn't out interviewing, and this came unexpectedly. But still, not that different from your situation.

I called the bank and just told them the truth. Said I won't be showing up because this offer came out of nowhere and I need to take it. They were a little pissed and headhunter was super pissed (he lost a big fee) but at the end of the day, people know this shit happens. They weren't particularly shocked or confused by it, and I even had the MD reach out to me a few months later to see if I enjoy the new role because he'd still hire me if I'm not happy.

I think if I had gone to a competing IB, it would have gone down differently. But going from IB to buy side you're a lot safer. Especially since any buy side firm is a potential client or at least important industry contact down the road.

I think you just tell them that the HF approached you unexpectedly and you had a change of heart. Some people will be pissed but at the end of the day I don't think they'll black list you. If they do black list you, that's just some stupid list HR keeps that probably won't be followed anyways.

Very little chance the BB contacts the HF, because that is a liability for the BB. Any time a person fucks with another person's employment situation, they run the risk of getting sued.

Biggest difference between your situation and mine, is that in my situation the new employer already knew I had accepted an offer. In our situation, it sounds like the HF didn't know. Did they ever ask? If you haven't lied to them, they shouldn't care.

 

Guys if you take any advice it's this. A HF may be a large client for a BB (assuming it's large given they are hiring an undergrad) so they likely won't reach out just to ruin your career. Take the offer and tell the BB that you are pursuing another opportunity

 
Most Helpful

Going to offer a different viewpoint than others on here and I know I am not answering your quesiton, but think this would be helpful to read.

Are you sure you want to be at a hedge fund longer term? Hedge fund sounds cool and sexy, but in the job can be completely different than your expectations and the pay can be highly variable depending on the funds performance (ie. you could get paid less than in banking). Make sure this is really what you want to do before making the leap.

You need to realize that joining a hedge fund straight out of college will limit your career options going forward unless you go back to business school. On the other hand, if you go BB IB, then you still have countless exit ops to pursue (ie. private equity, HF, biz dev, startup, anything really) and more time to decide what exactly you want to do. Would read the differences between HF vs. PE exit opps to get a sense of the alternative paths.

Also, is this HF well established? Does it have at least $500MM+ of AUM and locked up money? Or is this a <$500MM fund with monthly/quarterly redemptions. You can easily be out of a job very quickly if the fund goes under.

Lastly and MOST IMPORTANTLY, do you know if you identify with the investment style of the hedge fund? You may have a view on how you prefer to invest that differes completely with how that specific fund invests. You may not think this is that important, but it the most important factor in determining whether you will like the fund or not. Should read why I quit a $500K HF gig and you will see why it is so important.

You should realize that you have no professional experience aside from a few internships and that what you want to do may be completely different down the road. Unless you are 100% sure the HF path is what you want to do, then I would reconsider sticking with the BB IBD job.

 

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