Breaking into a Hedge Fund from Middle Market ER

I'm curious to learn more about the exit opportunities that one could expect as a sell-side ER analyst/associate for a middle market firm (Jefferies/Truist/Blair/Cowen/Stifel/Piper). Specifically, I am wondering what quality of placements these firms get with hedge funds or asset managers.

So far, I've spoken with a few associates on the Street and I've been told that hedge funds care more about the individual's skills and knowledge of investing or analyst group rather than the name brand recognition of working for say, a bulge bracket. The general belief that I've heard is that IB and PE firms care more about BB because of deal experience and name brand since they are relationship-driven services at the end of the day, whereas HF really only care about quality of work and performance.

That said, I'd be interested in hearing if there is truth in the belief that MM and BB ER have similar hedge fund exit opps all else equal; or would it be important to lateral from a MM to a BB for better looks from the buyside?

Thanks in advance!

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Comments (10)

May 17, 2021 - 3:45pm

Yes, I think ER has similar exits, provided you are not with an atrociously promotional and low-quality shop (we all know the names of those places). 

With that said, it actually hurts you if you work for an analyst who is notorious for being promotional without any real insights and do questionable rating or target price changes (Jefferies falls in that camp). However, you can alleviate those concerns and demonstrate your intrinsic skills with solid stock write-ups. 

Instagram: @dickthesellsider | Substack:

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  • Intern in IB-M&A
May 17, 2021 - 3:51pm

Lol I can second this from first hand experience. I am an incoming IB intern at Jefferies and my dad is on the buy side in the public markets. He logged onto his Jefferies account and showed me how the ratings didn't make sense for xyz reasons lol. I just consoled myself with the fact that I was going to the IB side of things which is currently kicking ass.

As another insight, Jefferies recently shut their energy ER division in US which I think they did so as to not be forced to give out neutral or sell recommendations on clients that bring in a lot of IB revenue (with energy being a top IB group at Jefferies, this might have negatively impacted those relations).

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  • Analyst 1 in AM - Equities
May 29, 2021 - 9:26pm

how much do u make all-in now? how many years did u work in er?

  • Analyst 1 in IB - Cov
Jul 4, 2021 - 11:20am

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