Hedge Fund Interview to Job Conversion Rate
For the TLDR of my question below: it would seem based on the number of people that go on HF interviews, going through 6 interview processes myself at differing funds with moderate success in getting to later rounds is not necessarily indicative of something seriously wrong in my approach/interview skills, though, is the analysis flawed/skewed by the number of people who never progress to later stages of HF interviews/are very behind the people who do get the offer?
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Hi All,
Trying to get color on how your interview processes were, or how they are at your current fund - and what that should mean for people not getting the offer albeit going through a number of fund interviews.
I've been on 6 credit related hf interview processes the last 10 or so months, 3 above $5B, and 3 below $2B, with 3 going to effectively final round case study, 1 2nd round case study, and 2 being a no after 1st round. My background is 5 years post college, 2.5 now in a credit related role at a MM bank. Given a non-target/non-core background CV recruiters haven't been too helpful, and I've had to source a few interviews on my own. The 3 the recruiters sent me on there were ~20+ first round candidates for one spot, with 7-8 moving to second round, and for at least 2 other funds, they never ended up hiring anyone even after passing on me.
Given the amount of people targeting $B+ hedge funds, are the odds really ~1/20 (based on how many are at first round) in getting the offer, or I question whether most people never land at a hedge fund who want to? What I'm trying to take-away is, is not getting an offer after 6 searches alarming (since theoretically it shouldn't take that long for those THAT DO end up getting a HF offer), or is it not since so many people are going through the same search so the odds need to play out a bit (and hopefully you build upon the rejections).
Also, since I don't have the benefit of knowing the HF headhunter process, do the IB analysts who want HF get a whole bunch of interviews lined up in a short amount of time, or is it much more spotty as I'm experiencing?
TLDR version: 1.5yrs search, 10 credit fund first rounds, 4 on-sites, 2 offers. One was a startup CLO manager and probably doesnt count, so 3 on-sites and 1 offer. Never used a headhunter.
You & I have spoken about this before, but I'm interested in what others have to say so I will share.
When I first tried to move, I started about 6months into my corporate banking gig. Took 1.5yrs to land an offer. This was partially due to 1) my lack of capital markets experience & my job covering primarily IG names; 2) lev fin being the preferred background; and 3) I was/am a really awkward kid.
I without a doubt sent 100+ resumes out via linkedin, bberg, and indeed for equity long-only, equity long/short, and various credit managers. All in, I probably ended up talking to around 10 shops, all of which were credit and/or distressed HFs. The interviews were concentrated in the last 6 months of my corporate banking job. I only ended up visiting 4 places for final rounds & cases, and all 4 of them were in April/May 2013.
Of the 4 that I visited, I received 2 offers (although I only count one of them). Only 3 of the 4 were established/multi-$B managers. I got 1 offer from the 3 final rounds at larger managers that I went to. One was a startup CLO manager. I got an offer from the startup, but the bid/ask was way too wide and had to pass.
Regarding the larger funds: each of them interviewed 20+ people. 2 of them (that I didnt get offers from) did cases during the final round. 1 shop (that I currently work for) had people do a 3hour case study before even talking to them. All 3 brought 5+ people to the final round and hired 1.
My takeaways: Peak season for these seats is probably April/May, its all about persistence & luck, and on a probability-basis you are looking at a 20% or lower conversion once you get to the final round.
I will update this again when I exit my current gig. However, my preliminary finding is that its much more competitive for experienced roles, probably because the quality of talent is significantly higher and there are far fewer seats for experienced analysts. I'm having trouble getting past HR screens for jobs posted on bberg/linkedin, and I think its because my fund is not a household name. Recruiters are much more helpful now, likely because they make up for my lack of brand-name.
Good to know us awkward folks got a shot.
Shouldn't be hard to do. The industry attracts all kinds of weird dudes, and you don't have to look very far to find them.
Also, on headhunter timing: it depends. Many of the credit seats are filled by banking analysts during the PE "frenzy." Those are lined up and filled very quickly in February, but are for the credit side of places like TPG, Oaktree, etc.
Most HF roles (not associated with PE shops) are more spotty. They are on an as-needed basis.
My PM talked to 50 before he hired me (1 spot). So it should be a 2% chance if you believe him.
This is crazy, and what led to my thought that there are lots of people who are qualified enough to get the HF interview, but never get the offer.
What a stupid metric. That's not a conversion rate. Conversion rate would be how many places you interviewed at versus how many offers you get. Just because a firm interviews 50 kids to fill one slot, doesn't mean a kid has to interview at 50 places to get 1 offer.
For a relatively solid candidate (obviously depending on how good of an interviewer you are), it's probably somewhere in the 5-10 range. It takes maybe 1-3 interviews to get your bearings. It takes 2 or so to really hit your stride. And then you pretty much have the interview down... knowing what to expect, how to answer questions the best way, knowing your pitches inside out etc... So if each of those interviews were sequential, you'd boggle the first few. You'd do okay at the next 2-3. And you'd do very well at the last handful, out of those last handful... its a bit of a crap shoot between fit and the stories your competition is telling, so maybe you'll land 1-2 offers.
And by interview I mean inclusion in a recruiting process. So you are meeting with 5-10 firms, to yield 1-2 offers. The PE process is much more predictable and its a more intuitive interview, so you generally hit the ground running and so a solid candidate could very well convert +50% of their processes.
Good point...every once in a while it's good to take what bros are saying and do a sanity check
So given a couple interviews at large funds I've been on had 20-25 first rounders, would you say that most of them don't end up landing an offer at any fund, unless the same pool cycles through a bunch of funds? Also was talking on average, how many individual new processes does it take most candidates to convert into an offer, to be able to extrapolate whether my experience means there is something gravely off about what I'm doing on interviews.
While I agree with your point about having your story down, being able to talk about your deals and know hot topics, for the most part I've been asked something unique each time that in no way could you have guessed would come up based on previous interviews. Also the linear aspect of getting better each time at hedge fund interviews seems to not be the case - at least with me, since the last one I was on was so different than the other ones I was on. i.e there was a mini-case study of bond math based questions I haven't done in awhile vs never encountering a heavy math based case interview.
Breathe, you'll be okay.
15-16 processes over 5 months. 1 offer, which is where I am at now.
Don't feel bad, it can be tough, especially when you don't have buyside experience (because you don't know what you don't know). I was very close to giving up and I'm glad I didn't.
What I wanted to hear. Did you change your approach/answers to questions at all during the interviews?
It was more that I learned along the way. One fund had me do a case study on a name and I didn't get an offer but that case study ended up becoming my pitch for the fund I ultimately ended up at.
Honestly today I think I would have to interview much much less if I wanted a new job, but the difference is now I have experience and know what people are looking for. When I was in banking, not only did I not know how to invest, I didn't even know how to do an investing case study. There's not a lot of guidance and you have to teach yourself and so you learn throughout the process, and you aren't used to thinking about this stuff. I almost always got past the first round in every interview process I had, but usually flamed out in the 2nd rounds. I only got to 2 final round processes, one of which is the job I have.
All that being said there is a lot of luck involved. I only happened to get in touch with this one headhunter BC at drinks a fellow analyst mentioned them to me and I thought they sucked and it turned out they were the a major recruiter for this fund and none of the other headhunters were.
As somebody mentioned -- it really is a two way process; a lot of the funds I could have ended up at would have been horrible places for me.
To echo what was said above, it is a numbers game. Don't get discouraged or take it personally.
This is all that matters. Quantity, quantity, quantity. Eventually something will work out and you will get better at the interview process along the way.
I look at it this way...The conversion rate is pretty damn high when the candidate and the fund are aligned in their way of thinking. You just have to go through a lot of funds to find that alignment. (Or you have to wait until the funds you have strong alignment with decides to hire.)
I've seen extremely talented people crash and burn because there was a material mismatch in philosophy/thinking. But when they interview at funds within their "wheelhouse", they get scooped up pretty fast and/or have multiple offers.
As you go through the process never forget the interview process is just as much about you finding the right fund as it is about the fund finding the right investment professional.
Also depends how you got your interview...headhunter bro on one side and personal connection / nepotism on the other side
Thanks all, this was insightful - . Less about feeling discouraged, but more worried that as time goes on and you don't get enough interviews to cycle through the numbers game you become too senior too quick for a lot of banking -> HF or the non HF lateral roles. Thus my question on do the IB analysts have 15-20 solid hf interviews at their leisure within a year, or do a bunch of them get to the end of banking program without getting a HF offer even though they wanted one.
We've spoken off-line obviously so sorry for incorporating that, but if I recall you've turned down/begged off a few processes that weren't quite what you were looking for. This isn't to say that you were right or wrong to do so, but I think psychologically it can be easy to get discouraged by the nos from the other end while forgetting that you've been in the position to be the one turning things down too. It actually reminds me of dating a bit, ha.
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