Hedge Fund Screening with 2nd Year IBanking Analysts

KevinNYC's picture
Rank: Orangutan | 280

Below is a blog post that a buddy of mine wrote for an organization that I'm affiliated with. Maybe this channel will find it interesting:

You have somehow managed to survive your first full year within one of Goldman Sachs' most elite units, Healthcare Mergers & Acquisitions. You received your largest paycheck ever, you now have new pledges to do some of your dirty work, and you managed to get off work around 9pm, eat a meal that hasn't come from SeamlessWeb, and finally explore what New York City has to offer. Being the overly ambitious individual that you are, you have begun to wonder, "what's next?" On a slow Monday morning, you receive a phone call from a headhunter who has plucked your info from LinkedIn using their "premium account". Congratulations! You been selected to participate in a research associate recruiting event at a top hedge fund. You think to yourself, "Life can't get any better right now! All I need to do is show my face and I can get any job I want now that I have Goldman on my resume.

Each year, hundreds of Wall-Street elite investment bankers are in this position and think they have the unique pedigree to land any hedge fund job they want. While there is no shortage of golden resumes, it only gets your foot in the door. In actuality, the majority of analysts do NOT get a front office hedge fund job and they ask themselves, "why?" Granted, things are still peachy but it is likely the first time that they've been rejected in their life.

Taking a step back, I will briefly explain the hedge fund recruiting process. The recruiting process is obviously very different for the myriad positions at hedge funds, but for most research associate positions that require a high level of interaction with outside senior management teams, such as fundamental debt or equity roles, the process is pretty standardized. Each investment bank ranks their analyst class, just like one would rank a beauty pageant, and forwards this list to appropriate headhunters and other firms of interest. The hedge fund, working directly with a headhunter, creates a master list of the top analysts from each bank and extends an invite to a dinner event. The dinner is usually attended by a few junior and senior members of the firm as well as an HR representative. Drawing on my personal experience, my previous employer would ask no more than two prospective candidates to continue on to the more formal interview process.

At first I jumped at the opportunity to participate in these dinners but the appeal fades quickly. Entering a room filled with thirty investment banking analysts drooling over the same job is like jumping into shark infested waters with chum wrapped around you. Frankly, it becomes hard to tell everyone apart! I am certain that I was guilty of this as well, but it is incredible how the conversations and personalities blur together.

What these young analysts do not realize, is that every banker in the room has more than enough modeling skills and accounting knowledge to succeed in the job, however most do not have the "intangibles" to be a strong hedge fund associate. What I was looking for was a high level of maturity, humility, and independence. These young individuals will be expected interact with senior management at multi-billion dollar corporations with no "supervision". They need to be able to handle the ups and downs of taking risk; the best investors in the world are right only 60% of the time. Furthermore, the work environment requires the associates to create work and not expect work to be handed to them. The analyst who understands and portrays these three character traits will be the one who moves on with the interview process.

Comments (5)

Jan 18, 2011

how is interest in investing measured? is it important?

Jan 19, 2011

"Each investment bank ranks their analyst class, just like one would rank a beauty pageant, and forwards this list to appropriate headhunters"

Am i reading this correctly? Or is this a New York thing, because this certainly does not go down in London...

Feb 10, 2011
DavidKappoKaplan:

"Each investment bank ranks their analyst class, just like one would rank a beauty pageant, and forwards this list to appropriate headhunters"

Am i reading this correctly? Or is this a New York thing, because this certainly does not go down in London...

Really? How they rank?

Feb 10, 2011

Yea, I thought ranking was internal and the only way for headhunters to get that info would be through senior contacts at the bank...and thats probably a disclosure issue. Am i wrong?

Feb 11, 2011
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