Hardest hedge fund technical questions
What are some of the hardest technical questions that you've been asked in a hedge fund interview?
What are some of the hardest technical questions that you've been asked in a hedge fund interview?
+42 | Compiled Bondarb's Comment History | 9 | 6h | |
+38 | T2 Hedge fund or T1 LO/AM? | 13 | 20h | |
+31 | Non-GAAP Income Statement | 6 | 2d | |
+22 | Thoughts on MMF | 17 | 9h | |
+22 | How do you get up to speed as a consultant on finance? | 5 | 5h | |
+21 | MLP portfolio manager guaranteed payouts? | 19 | 9h | |
+20 | Top LO AM culture, comp, exit opps, etc. | 4 | 3d | |
+18 | How to Structure Bonus Comp for Analyst | 5 | 1d | |
+16 | Cost of leverage at MM funds / pod shops? | 14 | 13h | |
Joining buy-side directly at boutique AM or ER at BB for HF future? | 9 | 6d |
Career Resources
“Pitch me a stock”
Outside of the stock pitch
"Pitch me another stock"
Point made. Were you ever asked PE interview-type finance technicals?
"How's your father?"
Father is good! Just bought another yacht and dating the same side chick. Thanks for asking!
No matter how many years on the job two things still f me up technically that shouldn’t and my heart rate increases when asked on the spot questions about either:
- FX
- Leases (every time I get it they Fing change it completely)
There’s a modeling test usually, weaker technicals will shine through on pitch and discussion. Technicals are the language, investing is writing a play. If they press you on a unique/obscure case - they’re probably looking for you to admit when you don’t know something. funds that hire very junior do a modeling test, otherwise if you’re on your seventh technical question about three statements etc. you have an issue. If financial/accounting technicals are the reason you don’t get the job, there were/would have been many other reasons had it progressed.
Frequent, interview destroying landmines I would worry about - 1.) you’re pitch is weak and the interview knows the stock better than you 2.) a dbag asking obnoxious brain-teasers 3.) some random philosophical question where they’re clearly probing for some worldview and you have no idea what they’re looking for
Thanks Anchor. Are there some commonly-used brain teasers you know of which can be prepped for / looked up online?
Thanks for your thoughts mate.
Do you know if the modelling test is typically the standard ~3-hour jam you get in PE / IB lateral recruiting? Or is it more like something you can take away for a day or two (or longer)?
Too many/varied, but I got tripped up on bayes/probability ones - best I can do, sorry. Worst part of the process IMO, but the stress mgmt aspect is as important as the right answer. Brain teaser Qs can be abused or used thoughtfully - looking back, I’m very glad I didn’t work for the people who were obnoxious w/ then
They asked Bayes / stats questions in fundamental equities or are you talking about quant?
Fundamental, just stuff like marbels in a bag or poker hands and such. It’s not like I couldn’t get with a pen and paper, but just cranking out a formula would have given the speed/smoothness they were looking for.
I‘m very bad at mental math due to aphantasia (no minds eye / mental visualization). Neither of these things have had the slightest impact on the job IMO, but I do feel like I failed a lot of interviews by Fing up brainteasers. That’s fine though IMO - if they’re looking for the best human calculator and that’s important to the role, it wasn’t a fit. Those instances were extremely discouraging at the time, especially when you have to trudge back to the bank and turn comments afterwards. Now I’m thankful for every interview killed by fit or brainteaser - ending up in the right role is worth sting of rejections - if you’re honest with yourself about what is in your control and what your relative weaknesses will actually be, and you don’t give up and if you’re capable, IMO it’ll usually work out for the best.
One fund cancelled my first round after I finished the personality test, email came in 5 mins later, no other contact “hi, great to meet you at coffee hour here’s a personality test that won’t be a sole deciding factor of course and take-home case, please find a time that works to meet the team!” - I take test, five minutes later “please don’t worry about the case, we’re going in a different direction” - later I had to take the same test (and answered honestly again) for another fund and that’s where I ended up. I asked later for the test results, as part of me still wondered why my personality was so abhorrent the other fund would cancel.
After reviewing it was pretty clear the test was accurate, and the profile was an obviously mismatch for Fund As strategy and unique match for my later fund. It’ll all work out, remember: it only takes 1 yes.
And after you’ve worked at one, performance trumps pedigree and buckets and your group and all that old stuff - at least for anywhere worth working for.
Years later, Fund A was recruiting me for a lateral and I told them off the bat - several years ago I rejected on the basis of a personality test - please review the test and if that’s going to be a gating factor, let’s not waste our time. They said “no that’s silly, old HR gone”. Did several rounds and cases w/ them (probably wanted to told-you-so them). At reference check stage they asked my references weird questions very obviously framed around the personality test I took years ago as a 6month seasoned IB analyst. The test was still accurate though and they still didn’t make an offer - I’m glad they didn’t - and it reinforced my view. It works out right if you’re capable and put in the effort/grit.
How many stock pitches (full-length, valuation, etc.) should one have prepped before entering a HF process? 1 deep and a few high-level? 3 deep? 5?
Can’t speak from experience, but from reading these forums, I think 4 will suffice for L/S: 1 long, 1 short, and a backup of each in case (a) fund is already invested or (b) something happens that makes your thesis stale.
I'd suggest two deep dive and an additional 2-3 quick pitches. My last interview round for an experienced position (3+ yrs) was 1 deep dive report and 3 quick pitches on a one pager
They can ask obscure questions like how many golf balls can fit in a plane or some random logic / probability questions. Ive had a hard experience as once I did a 40 page report and got no comments back which was annoying. I think they just took my idea.
We found your WSO profile. Would you like to explain your posts?
Quae nesciunt itaque consequatur ullam est qui mollitia et. Qui excepturi dolores a quaerat. In architecto nulla est accusamus pariatur pariatur. Fuga et unde incidunt. Officia expedita numquam ut accusamus voluptatem eaque ut.
Sed illum rerum sit laborum corrupti perspiciatis voluptatibus. Est distinctio vero aut laboriosam cumque perferendis ex. Quia nihil dolore voluptates eligendi dolorem.
Aut illo esse cupiditate. Recusandae qui fugiat velit tenetur ipsa et voluptas. Qui laboriosam facere aut sed adipisci. Consequatur nesciunt qui sunt dolorum. Sint eum ex natus sequi quas.
Necessitatibus perspiciatis minus iste esse. Unde perferendis natus perferendis. Deserunt qui et maxime autem. Dolores eaque dolor sapiente vel in aut et possimus. Omnis fuga ab magni quo ipsam vero et suscipit. Excepturi et omnis corrupti iusto. Id quos doloremque repellendus dolor suscipit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...