From Audit to Consulting to...... an Activist Hedge Fund?

Alright. I am looking for some advice on how to better prepare myself for a role with an activist hedge fund.

I have an Audit background (BBA and MA in Accounting + CPA + 2 years of audit work. I am now in Consulting (Big 4 Advisory), and have just begun studying for Level 1 of the CFA and would love to run an activist investment strategy or work at an activist at some point in the future.

My next plan of attack is to work in either Restructuring or Transactions Support (M&A) at the Big 4 firm I am at and take it from there.

At this point if anyone has any advice, it will be greatly appreciated.

I haven't seen all that much on activist hedge funds on WSO and would love to hear what people have to say.

Thanks.

 

What kind of consulting do you do? If it's an it/controls type of "advisory" i would try to make a move sooner than later. CPA is big but you're not helping yourself out sticking around for too much longer. Get into transaction work asap.

 

Thanks for the response. I do Risk Management/Performance Improvement Advisory. It is more process type stuff. I agree the next move should be into Transactions Advisory, and sooner than later.

Does anyone have any comments on Transaction Support (M&A) vs. Restructuring? What skill set will I want to learn from these roles, and which better positions me?

Thanks

 

Audit/consulting to activist hedge fund is a BIG leap. Not impossible, but it's going to require some major effort on your part.

Rather than worry about the "right" path, focus on the big picture and the number one question potential employers are going to have for you:

"Why do you want to be an activist investor?"

Then, start getting experience that proves your answer. It's not enough to say "Activist investing sounds really interesting." Your experiences need to line up with the experiences the activist funds are looking for.

The skill sets those funds are looking for are going to vary widely by firm (from banking to accounting to legal and everything in between). So start researching activist hedge funds by looking at who's been in the news lately. FDO has received a bit of press lately on this subject.

 

Hey - I definitely appreciate the response. That is a good mindset to have, and will help me tailor my future experiences.

I have always seen the value in activism, and I recently finished reading Extreme Value Hedging, its one of the few books out there on HF Activism, and has helped refine my interest in the subject.

I will however need a better answer than that for any prospective employer.

Thanks.

 

I would pick restructuring over transaction support and try to transition to the restructuring division of an IB. HLHZ would be a very good place to move to an event-driven fund from. Like jqbuyside said, I would look into the backgrounds of activist fund managers and see what makes them tick.

I say restructuring because it's a somewhat more niche skillset and will make you more unique than a guy with simply financial due diligence experience.

 

Thank you for your comments.

I agree the Restructuring might be the better way to go. So now, I have to get into the Restructuring Group (at the Big4 Firm I am at). And the plan would be to be there only until I could jump over to a HLHZ, etc.

So what are similar restructuring shops that make sense? Are there sub-areas of restructuring that I would want to avoid, or try to get into?

I appreciate the help

 
Best Response

As far as pre-IB experience, there are a lot of dedicated shops in the US like Alvarez & Marsal, AlixPartners and the like as well as the rest of the Big 4. Big 4 restructuring in the UK is a major feeder to the IBs and also straight to distressed PE.

Common wisdom is that a creditor-focused place like HLHZ will appeal more to credit funds while a BX or Lazard which is focused on debtor work will be closer to PE and turnaround funds. Activist funds come in all flavors much like Orol's book describes it so figuring out what you like is up to you.

As far as what areas of restructuring, I think the closer you are to looking at the balance sheet and getting actual deal experience the better. Evidently, how you spin this will play a big part in getting ahead.

 

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