How to Get Into Global Macro Hedge Fund

bcsisbad's picture
Rank: Senior Chimp | 25

1) What is the path to getting into a global macro fund?
- What BB S&T desks would be the best starting points?
- Or would banking -> PE -> global macro be feasible at all?

2) Besides Moore Cap / Paulson & Co, what is a list of the best ones?

3) Can anyone explain what are their top global macro strategies right now?

4) What are their most common interview questions?

Sorry for the basic questions but this would be very helpful!

Thanks!

Comments (107)

May 14, 2010

Doesn't Paulson & Co follow an event driven strategy?

May 14, 2010
2226416:

Doesn't Paulson & Co follow an event driven strategy?

Paulson has several funds. Their largest fund is event driven. Paulson is kind of like Tudor in that it has branched out into a lot of different strategies. Tudor is global macro, but it also has a PE/VC fund.

Best Response
May 14, 2010
  1. Trading and research are the most common paths. IBD has almost zero chance of getting Global Macro. IBD is better for risk arbitrage, L/S equities, distressed debt investing, and value investing styles.
  2. Moore, Soros, Tudor, Brevan Howard, Clarium, and Caxton Associates are the biggest/most well known, although there are a lot of mid size firms.
  3. Global Macro is the strategy....not sure what you are asking (a firm could be long or short equities, bonds, commodities, and currencies using a variety of instruments.)

Do a search on the hedge fund forum.

    • 3
May 14, 2010

Thanks! Which trading desks would be most relevant to get into these funds?

May 14, 2010
bcsisbad:

Thanks! Which trading desks would be most relevant to get into these funds?

For global macro the best desks are FX and rates because they are the most macro products. Commodities and emerging markets are also good choices.

Search the hedge fund forum and do specific searches on these products to learn more. There are a lot of good contributions.

May 14, 2010

Thanks, lastly which headhunters represent most of these guys?

Thanks again!

May 14, 2010

No idea. I assume you would find that out once you are on a S&T desk and start looking.

May 16, 2010

as for 3) i think OP wants to know what within global macro (e.g. for l/s, some do pairs trades, some just do bottom-up stock picking l and s)

i want to know if any prop traders go to moorecap etc... of course, there ain't the same sort of prestige, but if you're trained well, if your p/l is great, and if you do a lot of reading outside of work and are passionate about an area of economics (after all, they have very good hours), then i don't see how they would necessarily be any worse off in the interviews

May 16, 2010

I work at a fairly large global macro group in a diversified hedge fund. we don't take that many sell-side traders (not because we dont need them, but simply because we don't need that many of them- its not like we're actually making markets), most of our people are research and come from 1. other hedge funds/asset management and 2. research at banks/various other entities (e.g. world bank, imf, even have a couple guys from various think tanks). 3. good grad programs.There is no right path. But if I was in charge I'd prefer people from research at a BB.

word of advice- you're basically researching career paths into global macro and chose to use glib comments on wsoasis from people quoting "Wall Street". Not the most credible source for research (whether of not he is right). there are better ways (just one example- going on linkedin and paging through the resumes of people working at GM funds)

    • 1
May 16, 2010

regarding infos on strategy, thinking and the work itself i would recommend The Invisible Hands: Hedge Funds Off the Record by Steven Drobny.

Im a student so I cant really speak how usefull it is but it definetely is an interesting read that explained a lot to me.

    • 1
May 16, 2010

Inside the house of money would probably be a good read for you too

May 16, 2010

Seigniorage is dead on. If you want more info on this, bondarb also works at a global macro fund, if you track through his past posts I'm sure he's covered everything you've asked. Most of the guys I know at macro funds have the sort of backgrounds seignorage describes. I don't know anyone in macro who doesn't have some sort of econ degree.

May 17, 2010

I work in a portfolio management group that is made up entirely of former sell-side traders...in fact i am the only risk-taker in the group who has never been a market-maker...so that is definitely a path sometimes. But as i have posted many times before people come from everywhere...ive worked with PMs who were previously research people, previously central bank officials, have been life-long buy-sde traders, and many other things. Research is a very popular path to get hired where i work as analyst but rarely leads to being a PM....sometimes they will give analysts small balance sheet within their niche but almost none have the broad product knowledge to really be macro portfolio managers. For eg the New Zealand Economist will be allowed to put on a small position and get paid if his/her call on kiwi interest rates pans out but will never be allowed to trade other markets or get big enuff to make alot of money (relative to what is considered alot in this world at least).

If I was creating the perfect macro PM I would start him on the money market desk at a sell-side bond dealership..i think interest rates are the building blocks for all the markets and they also in my opinion require the most specialized knowledge. Once you really understand the mechanics of the rates markets it makes everything else much easier. Unfortunately this type of job no longer has any "prestige" so its a rare path nowadays.

May 17, 2010

Also in regards to strategies...any hedge fund that is as big as Moore, Tudor, Soros, etc is going to have many many different strategies. Putting over 10bn dollars to work is really difficult if ur not using all the markets..almost all these funds have equities, credit, and even PE/VC along with the more "traditional" macro products of rates, FX, and commodities.

May 18, 2010

Bondarb, what do you mean by "sell-side bond dealership?" A money market desk in S&T at a BB or at an interdealer broker?

I'm not saying I'm going to rush out and apply to all those jobs, but "prestige" isn't a factor in my job search these days.

May 18, 2010

i mean sell-side sales not inter-dealer

May 19, 2010

Hi guys, this post is very helful.

My goal is to get a job at a macro hedge fund and I wanted to get some advice on my upcoming career move - if that move will help me get the macro hedge fund job.

Background: Currently working for a small asset management firm (research and portfolio mangement). Previously, have 1 year associate level experience at a BB IBD and I have an MBA from a top-7 business school. Total post MBA experience of only 2 years.

I am planning to take a research job in the BB equity strategy group and was wondering if this move will help me in macro hedge fund job search - I believe that curently I am missing substantial macro research experience and this BB experience might help

Any advice/suggestions are welcome - is this move a good move

Thanks in advance

    • 1
May 19, 2010

Just to clarify - the BB equity strategy job is in macroeconomic research group
Thanks

May 20, 2010

anyone?

May 20, 2010
bb_research:

anyone?

I suggest re-posting your question as its own forum topic.

Feb 5, 2014

PMs make up a small percentage of the employees at large macro funds...for eg doing quick math in my head at my firm we have about 1 PM for every 15 "other employees". However, the other front-office guys (research analysts, execution traders, etc) are not very "junior" in most cases. Where i work our research guys are generally on par with a head of research-type on the sell-side and their teams tend to have alot of experience. The execution guys usually traded on the sell-side for some time or came up through operations within the firm. We only have 1 or 2 people who i would call "junior" in our whole office (outside of ops) and although I am not 100% sure i think they got there in part through family relationships.

Feb 5, 2014

I've been applying for a research analyst at macro firms with not terribly good success. For reference a link to my resume is below (yes CFA should be 2011 - fixed on nonanon resume).

I'm guessing most funds get experienced dudes from the buyside. Your mileage may vary.

Resume: https://docs.google.com/viewer?a=v&pid=explorer&ch...HL=en

Feb 5, 2014

network + experience

Pretty much sums it up tbh.

Start networking now, get on a macro oriented sell side desk, and then build the network.

Feb 5, 2014

I became a CMT. It will help in both aspects of your networking and experience.

www.mta.org

PM if you have any questions abut the program.

Feb 5, 2014

Thanks guys for the response. Two follow up questions:

a) Several "macro" funds like Citadel, DE Shaw, BWater, AQR, etc (as originally mentioned) do hire junior people (undergrads, MFE's, PhD's, experienced hires with 1-3 yrs relevant experience, etc) for their investment teams. Based on your comment though, Bondarb, would you say this is less true for the more classic global macro players? (To be more specific, when I say junior people, I mostly mean those with 1-3 yrs of relevant experience)

As a followup to that, it also seems that a lot of smaller (though very legit) macro funds do hire smart "junior" people with some relevant experience so they can mold them. I was under the impression a larger fund would be a better "training ground," but again, it seems that these larger funds tend to hire people who already know how to make money... Would you agree/disagree with that assessment?

b) Would a sell side macro oriented desk (let's say FX) be a good stepping stone? Not so much for positions as execution traders, but rather as someone on the investment team (i.e. research analyst or junior pm or whatever title is typically used). Seems to me as an outsider that such an experience on a sell side desk is valuable in the sense of learning the specifics of the instruments traded and getting an intuition for certain markets, but may not provide training for developing a view on global themes or a thorough understanding across asset classes (as opposed to a prop desk which presumably develop those skills). For anyone who may be on the "inside" please correct my impression if it is incorrect.

Thanks guys

Feb 5, 2014

I think your are missing the point Penny. In all reality it truely doesn't matter what desk your on, or which firm you started at, or your background (IB,HF, Prop Firm). The name of the game is results. Nobody will hand you shit. No matter where you go....if you leave that place known as the #1 guy everything else will fall into place. I know I make it sound simple but that is the nature of the beast.

Feb 5, 2014

For the MBB question, you could potentially network your way into a global macro fund. I think you'd have to go get your MBA and/or CFA to show them that you really want to change career path and get into investing.

Other than that I'm not sure of a clear defined path to global macro. Google some firms and see if they have investment professional bios. I don't think ER would be good. Trading is probably your best bet.

--
"Those who say don't know, and those who know don't say."

Feb 5, 2014

Become an economist

Feb 5, 2014
AlphaGeneration:

Become an economist

Would I need to do a masters or PhD to do this?

And for S&T, would there be any particular desk or field that deals with more macro trades rather than individual companies?

Feb 5, 2014

Generally, it seems most people in funds with that strategy have more of a trading background than research or banking.

Feb 5, 2014
A Posse Ad Esse:

Generally, it seems most people in funds with that strategy have more of a trading background than research or banking.

I agree with this, with the caveat that macro research groups are a good feeder as well.

Feb 5, 2014

FX traders sometimes, quants, economists, people who by luck of the draw started out there....sometimes they want fundamental equity/fixed income guys but with an ability to realize macro themes. it's a motley crew from what i have seen

Feb 5, 2014

//www.wallstreetoasis.com/forums/how-to-get-into-glo...

The short of it is, there's no single answer to that question. The original global macro funds were started by both people on the equity side (Soros/Robertson/Steinhardt) and people on the commodities side (Kovner/PTJ/Moore). A lot of the newer funds were started by people with BB prop experience in rates/fx/commodities.

Feb 5, 2014

Bankers don't make it into macro funds then? I know there are always exceptions, but everything I've read and seen seems to indicate that IBD is an ill fit for macro strategy.

Feb 5, 2014

Not that I can gather. It's just a very different skillset.

Feb 5, 2014

A banking skillset is NOT useful in global macro. At the fund that I work at, our Macro team consists of a lot of guys who worked at the Fed, IMF, and some specific commodity firms (Cargill, XOM)

Feb 5, 2014
KevinNYC:

A banking skillset is NOT useful in global macro. At the fund that I work at, our Macro team consists of a lot of guys who worked at the Fed, IMF, and some specific commodity firms (Cargill, XOM)

Interesting, especially since I was really interested in working at the IMF/world bank/bank of canada (central bank). What kind of positions did they hold at the original? and how long were they there for? and did they need some kind of MSF/MBA to make the jump?

Feb 5, 2014

Where I work we have quite a few former IMF/central bank people also. Mostly older guys who had pretty senior positions...like senior economist at IMF, high up guys on the NY Fed money market desk, etc.

Feb 5, 2014

No set path. Look at rates (esp. at JP) and FX trading. Economic research (which JP is also good at) is another option.

To be honest, I have not heard of many JP to hedge fund transitions; the ones I've read about are GS of course, and Citi, CS, DB, MS to a lesser extent. They may well exist, I just might be out of the loop.

Feb 5, 2014
dgvvvrt:

No set path. Look at rates (esp. at JP) and FX trading. Economic research (which JP is also good at) is another option.

To be honest, I have not heard of many JP to hedge fund transitions; the ones I've read about are GS of course, and Citi, CS, DB, MS to a lesser extent. They may well exist, I just might be out of the loop.

I love this post:

Dude, look at JP. No, seriously, JP. Except that no one from JP ever does what you are hoping to do. But other than, yeah, go long JP.

Serious answer to the question though:

Lots of different avenues. I interviewed with one a few months ago and my background is all equities and debt. This firm was looking to hire for a specific geographic focus that I have experience in and said they would train me on currency and swaps. So there's more than one way to skin a cat. No one is going to be an expert at all asset classes and geographies, so there isn't a set background.

Feb 5, 2014

FX and Rates

Feb 5, 2014

The guy will be interning at JP this summer...relax

Feb 5, 2014

Based on what I've seen I have to wholeheartedly agree with Ravenous.

Feb 5, 2014

Cheers lads, appreciate the replies - very helpful.

Feb 5, 2014

Kingsmead
Goldstream Capital
ITC Investment Partners
Karma Capital
Maso Capital

Just a few recent launches in Asia.

Feb 5, 2014

Thank you Rothyman

Feb 5, 2014
HH:

ER in reputable long-only fund
Qualifications: CFA, FRM, CAIA
Going to do a Phd in economics starting from Sept (takes three year to complete)

Q

  1. What kind of Phd gets done in 3 years?
  2. How on earth do you know in advance how long it will take you? If you're just guessing , 3 years is a terrible guess.
Feb 5, 2014

Hi GS,

Q1. What kind of Phd gets done in 3 years?
-> In China (or in Asia in general), if you got a master degree, you could finish off your phd in 3 years time. The max would be 5 years.

Q2. How on earth do you know in advance how long it will take you? If you're just guessing , 3 years is a terrible guess.
-> 3-year is a guidance provided by the uni.

/HH

Feb 5, 2014

check out Dymon Asia Capital

Feb 5, 2014

Big shops are Dymon, Fortress (SG), Brevan. That's really it. There is also Counterpoint and Complus (much smaller). Not a ton of Macro in Asia... Some of the big globals might have an office with a few traders but that's really it. Macro by far much much bigger in London and NYC.

Feb 5, 2014

-

Feb 5, 2014

Asia time zone isnt very ideal for macro relative to london or NYC but many/most of the big funds have at least a small office somewhere in Asia.

Feb 5, 2014
Bondarb:

Asia time zone isnt very ideal for macro relative to london or NYC but many/most of the big funds have at least a small office somewhere in Asia.

Being in Asia time zone can be an advantage for a more Asia themed global macro strategy. Adam Levinson talked about this in a Bloomberg profile article last year.
http://www.bloomberg.com/news/2013-07-16/red-bull-...

China is different than the rest of Asia thou as one would have to deal with the whole onshore RMB vs offshore capital sources situation.

Feb 5, 2014

Brandon you are right. But you have to remember that Levinson has one of the biggest funds out here and very strong Fortress support, even though he is spinning out (but will still have some affiliation with them). The one thing about an Asia-centric macro strategy is that liquidity drops off quite a bit in a number of countries/instruments and the fx markets here are much much smaller than that of London/NYC flow-wise (not to mention others). Levinson's portfolio is also very equity heavy - I know this for a fact- he has a notable fundamental team on the ground here in Asia. His edge as he mentions is that he doesn't really sleep much and works something like an extra half day or more per week. He trades Asia, works out/does other stuff in the early/mid afternoon "lull", then Europe comes on and he covers a bit of the US as well.

Feb 5, 2014

I agree with the relative lack of liquidity in Asia compared to the U.S. In fact Levinson himself said that $2b is the sweet spot for an Asia themed global macro strategy and he wouldn't be able to manage much more than that effectively.
As to not getting much sleep, that is the reality of working with Asia and the U.S at same time.
I find it helpful getting into a habit of being able to sleep in intervals of a few hours at a time throughout the day and night and being in an ever vigilant state of mind so are able to wake up and become lucid quickly at anytime. And all those energy drinks help too. I wonder if Levinson had ever tried four loko (the caffeinated version) and how that might have affected his performance.

Feb 5, 2014

-

Feb 5, 2014

That explains why Adam Levinson looks like this:
http://www.bloomberg.com/image/ihD_QrDWNZdk.jpg

Now that is a fierce poise. Although with the kind of money he is making I doubt he cares much whether others think he is a twitchy prick or awkward.

Feb 5, 2014

i actually think he looks good in that picture :S

Feb 5, 2014

BO/MO; trading assistant etc
pm me if youd like

Feb 5, 2014

i have experience

Feb 5, 2014

Bulge bracket trading or masters/phd in economics are the most common paths.

Feb 5, 2014

Common sense is the most important thing. You don't need a quant background, funds run differnet strategies.

Feb 5, 2014

You don't need a quant background for discretionary macro. I would go as far as to say you only need to be numerate for quantitative macro. Louis Bacon majored in Eng Lit, Kovner in Pol Sci, Soros in Philosophy and PTJ claims that the summer courses he took in writing were far more beneficial for macro trading than his Econ degree - the list could go on forever.

Found those tags amusing, stay off ToS, that's retail bro...

Feb 5, 2014

I think the days of people from humanities backgrounds breaking into macro funds is pretty much over. Everything is becoming more technical. Nowadays, if you're not STEM, getting even a bulge bracket trading job is very difficult.

Feb 5, 2014

@ Macro, hahah i'll see what i can do, can't quite afford the bloomberg terminal justtt yet.

@mbavsmfin, partially agree but really disagree. Markets aren't static and quantitative finance holds so much "real" predictive power. Macro trading has a large qualitative/critical thinking component to it that I highly doubt any algorithim could ever replicate.

I guess why I started this discussion is because there is no direct path(s) to a macro fund. However, in the era we live in (obsessed with education) i guess i'm curious what are some of the most common paths. Macro trading is a very personal/individualistic endeavour and in my opinion there isn't any degree/specific education path but what are some of the most common paths in most recent times

either a stint in BB FICC or prop trading?

Feb 5, 2014

What if you have economics background, and is assistant fund manager in global investment at a pension fund (70% invest in fund of funds, 30% invest directly but only in ETFs etc.).

What this be possible to get into global macro hedge fund?

Feb 5, 2014

guys u dont need a quant degree to break into a macro fund.... far from, unless u count those in risk which i think u could still work around. plZ stop telling urself this stuff.

Feb 5, 2014

I don't think you need any kind of advanced quant degree to break into the macro world or excel there. To me it is really about finding people who are smart and disciplined enough to become knowledgable about the markets and trading but also creative enough to think about things differently and create unique trading ideas. Unorthodox backgrounds easily can become selling points if presented correctly.

Feb 5, 2014

But don't most macro funds (or at least the ones I've heard of) recruit mainly from sell side macro trading? And doesn't sell side macro trading generally require a quantitative degree to even get a job? Obviously you could still get into a macro hedge fund without a macro trading background, but if they mainly recruit from macro trading wouldn't the key take-away be that it is good to have a quantitative background if you want to stand a decent chance? Also, what do you mean by an "unorthodox background"? Like what types of careers/majors would constitute an unorthodox yet impressive/sellable background? The reason I'm asking is that I'm definitely interested in going to a macro fund, but I'm not the most quantitative of minds and I'm not at a top target so it seems the chances are stacked against me.

Feb 5, 2014

So many misconceptions on this website so stop repeating 1.

I know many non quant guys on macro desks at GS, MS, etc etc. Most of them only have a bachelors and it's non quant. To reiterate BondArb point, macro is probably one of the more discretionary trading roles out there so creativity, gut, knowing macro correlations and most importantly, knowing how to manage risk are all things looked for in macro traders.

Feb 5, 2014

just want to touch upon another misconception that i wish i had known about earlier:

working on the sellside isnt a prereq for macro. there are many people running risk at macro funds who havent spent a day making markets and these days the guys who are jumping over to macro funds from the sell side are usually desk heads etc. i think the emerging trend, if there is one, is to report to a guy with a lot of street cred and hope they take u under their wing - start as a research/ strategist or ops guy for a well known pm or fund manager and take things from there. as for getting there, plz see bondarbs advice above (and old posts). you gotta be pretty fucking awesome...

    • 1
Feb 5, 2014

agree with all of what you said.

think people should be aware, though, that starting as a strategist at a solid macro fund is not impossible but rare. mid/back office positions are a lot more common, but realistically, if you're a talented guy, you REALLY have to love macro to take that bet. you'd essentially be giving up a fairly high expected value with comparatively lower vol route (i.e. IBD to fundamental mutual/hedge fund, or even BB market making), to pigeonhole yourself in a back office position that may or may not pan out to managing money someday.

Feb 5, 2014

'Macro desks' can range from the most exotic stuff to spot fx. As a non-quant you probably won't get onto a swaptions desks but there are far less quanty 'macro' products out there.

Feb 5, 2014

Saw this a while back. Doesn't directly answer your question but may be useful to you.

http://www.wallstreetoasis.com/forums/best-entry-l...

Feb 5, 2014

Thanks, I've seen it before but that comment by brotherbear is pretty epic!!

Cause who wants to be in the 99%?

Feb 5, 2014

203 from Dauphine > Warwick > everything else at Dauphine... but in the grand scheme of things that's not going to play a huge role in getting your foot in the door at a macro fund.

Feb 5, 2014

Fd

Feb 5, 2014

I don't think the discretionary part will ever disappear, the market can't just be run by algos....

As far as breaking in I don't really know. Prop trading at a BB used to be the best way but now that that's gone, maybe BB rates/FX trading, strategist roles in macro products...

Feb 5, 2014

Hfx

Feb 5, 2014

i know a couple guys who recently went from BB rates trading (govie desk, swaps desk, vol desk) to some of the larger global macro funds, whose names you would know. The bank prop desks used to be the more natural route, but since most of those don't exist anymore, the market making desks of the big banks are the "easiest" route in.

Very few people will get the chance to actually take risk on the BB risk taking desks, and since those desks don't really interview that many people, its always a crapshoot. There are only a few hundred people in the real risk taking BB seats at any given time, which really is not that large when you think about how many people want to get in the door.

Feb 5, 2014

First and foremost, you couldn't find a more creative username than that? Really?

Feb 5, 2014

there's lots of economists there

Feb 5, 2014

global macro and event driven are very different strategies.
Check out some of BondArb's posts for the global macro side.

Feb 5, 2014

I realize they are different strategies. I just am not sure what you consider the Pauslon type fund where they make large macro type bets

Feb 5, 2014

Also this is directed at Bonbarb. I read your posts that alot of Global Macro people come from FI S&T, but i was wondering if those Macro shops tended to be shorter term trades vs. the longer term trading style of Paulson/Soros?

"Successful investing is anticipating the anticipations of others."
John Maynard Keynes

Feb 5, 2014

Also curious, do most people come from a spot/forwards or a derivs/vol background (or is it a healthy mix)?

Feb 5, 2014

UChicago Math/Econ.

Feb 5, 2014
Feb 5, 2014
Feb 5, 2014
Comment

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."

Feb 5, 2014
Feb 5, 2014