At my fund there is a research group, trading group, ops group and 3PM's for six of our funds.

Traders usually stay put. They are advised by the research division and hold morning meetings with their PM and usually the most senior research team member. They'll discuss everything from reviewing that day's asset allocation and trading strategy to new trends in whatever market you trade in. (long/short/ risk arbitrage, event driven, etc.)

The normal succession is as follows: From junior research analyst, to analyst, to senior analyst, to associate research analyst. You would work with a team and your director/head of research for that particular area (there can be two associates in a research group.) Research is the fastest way to becoming a PM.

If you came in at the entry level, most make it to the associate position and then bounce to either go to school or work as a co-head of someone else's research group or something like that at another fund.

Traders are lifers and usually stick around until either they get tired of trading and go on to do something else, retire altogether, or the fund blows up.

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time
 
Best Response
vadremc:
At my fund there is a research group, trading group, ops group and 3PM's for six of our funds.

Traders usually stay put. They are advised by the research division and hold morning meetings with their PM and usually the most senior research team member. They'll discuss everything from reviewing that day's asset allocation and trading strategy to new trends in whatever market you trade in. (long/short/ risk arbitrage, event driven, etc.)

The normal succession is as follows: From junior research analyst, to analyst, to senior analyst, to associate research analyst. You would work with a team and your director/head of research for that particular area (there can be two associates in a research group.) Research is the fastest way to becoming a PM.

If you came in at the entry level, most make it to the associate position and then bounce to either go to school or work as a co-head of someone else's research group or something like that at another fund.

Traders are lifers and usually stick around until either they get tired of trading and go on to do something else, retire altogether, or the fund blows up.

for the record, my fund is a big fund and is nowhere near that heirarchical. You're either a PMD or not in terms of title. Other than that, there are new investment professionals and investment professionals who have been around longer and teach the newer ones. No title difference.

Also, from my experience, not too many people leave HF to go to business school b/c the opportunity cost is SO high...

 

After business school would one come on at a certain level (e.g., IB makes you an associate instead of analyst)? Is there something similar in HFs? Similarly if you go right from an IB analyst program to a HF where might you start?

Trying to consider all options from the analyst program.

 

HFs don't tend to be as hierarchical as banks--i.e., there's not an established analyst-->associate-->vp progression. You'll start as a junior person on your desk, and things will develop from there. I can't speak for all hedge funds (I don't know who could), but my sense is that an MBA doesn't get you a ton.

 

He's right. No set hiearchy. But when they're looking for accomplished grads, they pluck relatively young mid level guys from BB's because they're experienced and they've had their MBA's in hand for some time.

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time
 

You may have overlooked a few things. First, I am a first year in the HF world and secondly I'm in the middle and back office side of operations.

If you worked at a HFund, you would know there is no "industry standard" when it comes to compensation. Next time ask me for more clarity before you question my compensation marks or the validity of the information I provide...

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time
 

There is below market and at market. Industry standard = market competitive...

So why wouldn't you qualify your comment with that important distinction.

Saying "I work at a HF and here is how it is" makes people assume you're on the investing side of the business.

Nothing wrong with ops, but the perspective is by definition going to be very different than people who sit on the other side of the business (i.e., me).

 
Also, from my experience, not too many people leave HF to go to business school b/c the opportunity cost is SO high...

That's definately a reasonable assumption since HF/IM is an ends for most people (versus banking being a means). It's tough enough getting in the industry so why leave and give up two years worth of bonuses?

With that in mind, some funds do encourage their analysts to go back to school and will pay for everything. You'll go back to the fund for your summer internship, and have a full time job waiting for you at graduation.

 

why would you get an MBA though? its not goign to teach you anything that you are going to need at an investment firm. most b schools are a complete joke, in terms of academics. and the opportunity cost is still high as you are missing out on 200-300k in salary+bonus or more???

 
why would you get an MBA though? its not goign to teach you anything that you are going to need at an investment firm. most b schools are a complete joke, in terms of academics. and the opportunity cost is still high as you are missing out on 200-300k in salary+bonus or more???

I asked a similar question to someone that works at a top fund and is currently attending H/S. His thoughts were:

  1. The founder holds an MBA and is a big supporter of the school he is attending. Literally all the analysts are sent there to get their MBA.

  2. The founder really wants to see his analysts succeed and one day run their own funds. Getting an MBA is will help their brand.

  3. You build a lot of quality contacts.

  4. It's fun.

Money really didn't seem like a big part of the decision making process.

 

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