I know there are a few threads about this topic, but none really focused on undergrad and HF. I'm looking to try to break into a HF out of undergrad and am trying to gain some credibility. Will this help at all and is it worth the time?
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I’m not in the industry but I would think if you are able / allowed go get a CFA while still in college that may help you stand out. I could be wrong but I thought that there was a work requirement in order to earn a CFA? I may be wrong. If not and you are able to graduate college with a CFA already earned, I would think that may help for the funds who look to hire CFAs and appreciate the designation. I think my professor who taught Corp Val in college had a CFA and I have a friend from school who may have earned a CFA since who is in the hedge fund industry
Oh yeah that's another question I have, can you kind of BS internships in order to meet the criteria for the work experience requirements?
I have no clue about CFA stuff. I would think BS’ing isn’t going to be a good idea no matter what. Not sure I know of anyone who likes BS besides like manure farmers or whoever else has a use for BS. I doubt the CFA people are looking for BS. Good luck man :)
You can only take the level 1 exam your final year of undergraduate so you can not graduate with the charter as it also requires 4 years of full-time work experience of which are required to be in a role/roles that influence investment decisions, as well as 2 other exam levels. I recently broke in without it and like [dickthesellsider] said; come up with investment ideas and cold email them out, but be prepared to grind, it really is a numbers game.
You are better off coming up with original, compelling investment ideas and network the crap out of it. It's all about opportunity cost of time - it's better use of your time IMO to build real skills.
I hear that and agree it may be a better alternative. It might be better for some people. For others the CFA route could reasonably be a better option. Idk. I think I have seen some fund managers (maybe more in the mutual fund world or who have come from the mutual fund world) who seem to highly value the CFA, maybe even more than an investment idea from a college kid
Also the CFA may teach / provide real skills in terms of financial analytical skills. It’s possible. Idk. Just kinda questioning what I think may be an underlying assumption in this post that earning a CFA provides no real skills. Maybe. Idk
This person asked about breaking into HF, so that's my take. Mutual fund / long only, different conversation.
Studying for level one right now. The fund I am wanting to work at will require it, so I am going ahead and knocking it out. It depends on the fund, some could give a shit less, but some may put your resume up front if they see a level one while you are still in college. Especially if a lot of the senior levels have went through the process. I know to obtain charterholder status, you have to have work experience. It will 100% help your technical knowledge regardless
I'm amused by all the undergrad people that refuse to take the time-tested path of getting into a HF, namely a 2-year stint in IB.
It doesn't seem to occur to most that maybe, just maybe, IB might teach you a thing or 2 about finance, modeling, and working under pressure. Not to mention the incredible network you build out of 2 years at a Gs or MS. But it feels like there's little tolerance for the tough lifestyle even if only for 2 years.
Call me old-fashioned, but I think so many of you are pursuing the wrong strategy with this "avoid IB at all costs".
Seconded. Most people like to cut corners and hasten their progress. Though often it does more harm than good.
Currently working at a LO AM right out of college. Did two internships in IB during college and after getting approached by my current company about an open position, I applied, was given an offer, and accepted. I've heard from others that it is fairly possible to move to an HF after such a stint in LO, but this path is not well tested, since joining LO out of college is extremely rare as such positions are very few in number. For example, my class of hires firmwide (of 1000+ person investment group) was only 8 people.
I'm curious if you think such a move (LO AM --> L/S HF) could be possible. I wouldn't be surprised if you do not think so, but many on this forum who I have talked to believe it to be the case.
It's definitely possible. Obviously the longer you stay in that LO and in that strategy, the more you will be perceived as a specialist in the field and the harder it will be to transition into something substantially different (i.e. distressed investing etc).
If it comes to a point where you want to jump into a particular HF, you obviously need to be smart about positioning your experience in a way that is consistent with the HF's style.. it will be near impossible to talk your LO experience into a "short only" HF, but for most traditional fundamental net long HFs, I'd think you do stand a decent chance. Again just need to try and put on the HF hat and think about variant perception in your ideas, catalysts and so on. Most HFs are likely to focus on these things a lot more than most LOs.
Totally get what you are saying, just trying to see if there are other ways to break in. Recruiting for IB spots now, not really opposed to doing the stint
I'd encourage you to think not just about "getting in", but about maximizing your chances of success.
You will receive much better training in IB, you will build network, and you will mature professionally.
You go join a HF out of college, you are going to be working with 1-2 guys max that don't have the time nor the will to train you. Meanwhile you're new in NYC and you know nobody because you never had an IB class of colleagues. If the fund goes belly up, you know no one and it will be very hard to find a new shop.
You go to a Hf after 2 yrs of banking, if it doesn't work out you can recycle your career a dozen different ways.
Really great and simple insight, especially the part about working under pressure.
Here is my anecdotal contribution, from a none IB background and the merits of IB training:
I didn’t go through the IB route but fully resonate with getting the job done quickly and accurately under strict time demands. Luckily, my sense of urgency came naturally without the IB culture and was derived by my own competitiveness and personality/temperament. How and why, it likely stems from my view of this role as more than a job but a bestowed responsibility to protect and grow capital, but that’s a another matter.
There will be many fire drills and how a team handles them is a large determinant of a funds overall performance. No single position is a smooth ride and during turbulent times are where pressure mounts up and tough decisions needs to be anchored on strong fundamental analysis of a business. This is a team effort and one weak link can result in a difference between a money making and money losing position. The funds will always minimize technical errors in research so there will always be a strong emphasis on the valuation work done at the junior level. The idea generation and investment view will only be done when the prior, rudimentary valuation work has been done, and IB does this even better than equity research.
Not everyone needs IB to gain this attribute of being able to get through the technical and mechanical parts valuation, but as you mentioned, the two year stint has been time-tested so is the best clear path forward. Most funds just don’t want to fuss over training the mechanics and needs junior guys to flesh out the numbers for the more experienced guys to assess the opportunity.
If I interviewed someone in undergrad who spent their time studying for the CFA instead of following the advice of dickthesellsider, I would question their ability to assess value. Which is, you know, a pretty important skillset needed to work at a hedge fund.
Lol
Knowing how to code will fair you much better than the CFA cert.
Maybe my article could be of value to you: https://www.wallstreetoasis.com/forums/qa-and-yet-another-post-on-how-t…
No. Learn to code and/or take graduate-level math. A monkey could pass the first CFA.
.
I would certainly be a plus, if you are actually able to do it (it can be a long process). At least being familiar with the concepts would be helpful later on.
It won't hurt. But it's not the end all be all. It's a good idea to signal that you're at least willing to take it.
But forget about breaking into HFs straight out of undergrad unless you're very well connected or from the top top schools. Most funds will want to see at least a couple years of experience.
Honestly nothing hurts me more than seeing a fellow non-target obsessed with a cfa. A sure sign at my school of “I couldn’t make it to IB/other high finance role” or “it sounds like cpa, I sure hope it’s the finance equivalent”. Then proceed to swagger cfa candidate on their LinkedIns
Let me guess you were part of the 78% for the most recent L1 exam?
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