Hedge Fund Pre-MBA Experience?

I know that Private Equity is a significant boost for MBA admissions, but does anyone have a sense for how admissions committees look at Hedge Funds? It seems like far fewer end up going to business school from hedge fund positions.

I'm 18 months into a job at a large multistrategy fund ($10Bn+ AUM across strategies - I focus mostly on credit / distressed debt investments) after spending two years as an analyst at GS/MS. I don't hate my job, but I think I would enjoy working in private equity much more, particularly at a smaller, more operationally-focused firm and an MBA from a top school seems like the best way to do this. I'm potentially interested in a JD/MBA as well, but the cost of that is daunting.

I'm specifically focused on H/S, but opinions about other schools are welcome as well. I have a 750 GMAT / 3.9 GPA from a top 20 school so I think I have a decent profile, just wondering how adcomms will think about my work experience and story. Thanks!

Comments (18)

Jan 24, 2016

What is it that you don't like at the credit/distressed shop?

Jan 24, 2016
kpmonkey:

What is it that you don't like at the credit/distressed shop?

It's not that I dislike my job, just that I think I would prefer work in a more transaction and hands-on role. I actually miss the thrill of working on a deal from banking, and I like the idea of actually working with the companies I invest in rather than just being a passive party.

Array

Jan 24, 2016

I see, thanks for that. In distressed, do you not have exposure to the companies' management?

Jan 24, 2016

H/S are in play, will largely depend on how your fund historically places there. Very strong for the rest of the M7

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Jan 25, 2016

It really depends on who you know or can get in touch with. It is very possible to get a hedge fund job out of MBA, you just have to prove that you can make your PM's life easier and more efficient. I would suggest making a list of contacts you know who are somehow connected to the industry.

Jan 25, 2016

Definitely possible out of Columbia and Booth. I don't know anything about LBS so I won't comment there. You have to be smart, really want it, spend lots of time writing stock pitches, network like crazy and not get discouraged when everybody else has job offers and you have a stack of rejections. If you aren't dead set on a hedge fund job it will be hard to ignore the siren song of other great opportunities from a top MBA but if it is what you really want then it is certainly achievable.

As a side note, most hedge funds are looking for people with IB modeling experience not S&T experience at least where I interviewed or spoke with people.

Jan 25, 2016

It's possible, undoubtedly...

Jan 25, 2016

Hi MG, Is this the route you took or just the route you have seen some colleagues take?

I ask because I am thinking to apply for the LBS MBA commencing 2017. My dream goal would be to work as a PM for a macro fund (FI focused) but having visited LBS and spoken to the careers officer it seems a lot of Banks recruit for IB/PB roles and for HF you are left to search for yourself.

For a HF to take you on would you need prior relevant experience ?

Cheers

Jan 25, 2016

thank you everyone for the replies.After searching myself for more info I have found that HF recruiting is a lot less structured compared to IB like AMSmith implicitly stated.

I guess that if i get the decent WE that will get me into one of the aforementioned MBAs I would have to hit the ground running generating investment ideas for my post-MBA career ambitions!!!

Jan 24, 2016

Don't have much to add other than an anecdote about a complete non-target, as in the strictest definition of the word, who started at a top distressed hedge fund and landed at Booth/Kellogg/Columbia. However, this person had no IB experience, not even through an internship, and had a lower GPA.

Jan 25, 2016

I looked at the process in depth and spoke to a lot of people after four years at a hedge fund (went straight to buy-side). I had a higher GMAT/lower GPA but overall a similar profile. I ultimately decided not to go to business school. These were my quick anecdotes.

-A given level of PE experience tracks way better than HF experience. A decent performance review at KKR/Carlyle/etc means a lot more than being a rockstar at SAC/Millennium. AdComs are not real business people, they are essentially HR types in a non-profit setting.
-Its harder to talk about a complex thesis that made the firm a lot of money that partaking in a transaction. Trying to explain the fulcrum security in a bankruptcy case to is going to go over people's heads.
-The vast majority of HF analysts are not managing or leading other people. Many incredibly successful investment team members don't have title changes for ten years. Comp and responsibility can scale far faster than any other field, but the business cards stay the same. Ironically enough, the titles matter just as much if not more than comp to adcoms.
-You are going to need really strong extra-curricular activities. Charity is probably best. You are going to be stereo-typed as a cold-hearted, evil money machine (particularly if you are male). Focus on how you want to switch industries, be part of a team environment, etc.

Not trying to be discouraging, but maybe offer some thoughts in addition to best wishes.

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Jan 25, 2016

I'm not in HF's but have a fair amount of friends who are so take this with a grain of salt, but I don't think you see as many HF'ers go to b-school because you can rise through the ranks without an MBA much more easily than in PE (and to an extent in ib, leaving aside direct promotes becoming much more common). I'm sure there's some correlation to adcoms not understanding a complex HF strategy and it's easier for them to hear a candidate say they worked on an lbo of a household name but I think it's also easier to stay in HF's without further schooling. But that could just be me looking in from the outside and thinking the grass is greener.

The thing I would primarily take into consideration is that it's tough to break into PE post MBA without previous experience, especially at the MF level and other top funds (it's even really tough at smaller funds today). It's not out of the realm of the possible but you'll be competing for slots against people who worked at KKR and BX and name brand MM's before, even if you're at HBS, so the competition will be fierce. Id just take that into consideration when deciding to leave your HF, not get paid for 2 years and blow whatever an MBA costs and possibly not being able to get a PE job, or at least at the level you're thinking of.

Jan 25, 2019

I know this is a dated thread but figured it might be helpful since I have some stats. Granted, this is from only one year and one elite school, but I would say either PE is vastly preferred to HF/Investment Management or few people from that background apply. As someone that's been through the process, I will say that many of the questions on leadership and teamwork are probably much harder to answer from a HF background and harder for LOR writers as well.

Based on a Stanford resume book of those interested in finance following business school, in the one class there were:

**28 kids from private equity backgrounds as their last job (actually a lot of non-mega funds, including two from a niche fund with a founder on the GSB board). This was a mix of IBD and PE backgrounds. As someone that's worked in the industry a lot, wasn't actually that impressed by their resumes (they seemed very generic besides high GPA/GMAT)
**3 had worked in investment management/HF positions. 1 did the typical 4 years at T Rowe straight out of undergrad, 1 did 2 years of banking and was then at a small start up HF, and then I think there was one other HF person.
**A handful (I think 5) that either were coming from S&T, banking, or other roles at investment banks
**2-3 that worked at funds in more mid/back office (HR or IR/strategy/non-investment roles)
**0 that ever worked in sell side equity research

All I had were resumes, but I was not that impressed.