H/S MBA & recruiting chances from lesser known hedge fund?

Hey everybody, 

I'm a current IB analyst at a top boutique bank--think PJT/CVP/EVR/Qatalyst/Moelis.

I've recently been extended an offer at a very good, but small L/S hedge fund with about $3bn in AUM and a long track record of very consistent returns. It's an amazing fund with great culture, but isn't exactly a "name brand" hedge fund. 

While the fund seems like a perfect fit, I'm hesitant to take the role because I'm afraid that it will negatively impact my chances of getting into a top MBA program (namely H/S), as well as future recruiting prospects since it's not a name brand fund. 

Originally, my plan was to go for MF PE to UMM PE, and then get an MBA, after which I'd join a HF... but this role was presented to me and I was fortunate enough to do well in the process. 

If I have a good GPA, an ~745 GMAT, a top boutique bank and an excellent, but lesser known hedge fund on my resume, and engage in extracurricular activities that b schools would look at favorably, do you think I'd still have a good chance at getting into H/S?

And beyond that, I don't have really have a sense for what's next after starting my career at that sort of fund. Say I wanted to leave or move geographies eventually, would I have trouble recruiting at other funds without name brand recognition?  

Comments (23)

 
Feb 3, 2021 - 2:04pm

If your LT goal is to get into a HF, I see no point of doing PE and MBA. Graduating from H/S/W tells me nothing about your public market investing skills, working at a $3bn L/S hedge fund absolutely does. The latter creates way more optionality for your (presumably) ambition of going to a brand name fund (if the brand really matters to you). 

With that said, the activists do like a PE background because they know the businesses better than even the CEO in certain cases, if that's what your dead-set LT goal is, forget everything I just said and pay your dues at a MF PE to at least "fit the mold" for Pershing Square or Starboard. 

Follow me on Instagram: @dickthesellsider

  • 1
 
Feb 3, 2021 - 4:31pm

I agree with the posters above. People pursue an MBA as a means to achieve a career goal. Sounds like in your case, the MBA is the goal itself, which makes little sense.

By the way, a $3bn HF is not small.

In all honesty it sounds to me like the dream job landed on your lap and you are too clueless to realize.

 
  • Prospect in IB-M&A
Feb 3, 2021 - 9:04pm

I don't see why you can't spend 1-2 years at the L/S fund and re-recruit for PE if you want the name brand on your resume. One thing to keep in mind is that you shouldn't think of HF and PE recruiting as parallel processes... PE (and specifically MF PE) will hire a new class every year and do so consistently because there is a defined program and pathway ( also they kick you out to get your MBA... unless you're one of the chosen handful in the MegaFund world that move on to vp/principal without an MBA. With Hedge Funds there are no defined recruitment timelines or classes that come in every year consistently. Most hedge funds will hire on a need basis depending on turnover rate and the firm's specific headcount goal. A tiger cub could hire 2-3 people in 2020 and then not hire again until maybe 2023-2024 (this is just an example here). What this essentially means is that getting a seat at a strong l/s fund with a smart team should not be looked upon as something easy to come by. I think it is important to keep this differentiation factor between HF and PE recruitment in the back of your head so that you can make the best decision for yourself. 

 
  • Analyst 2 in IB-M&A
Feb 3, 2021 - 10:13pm

Thanks guys, this has all been very helpful. 

The main reason for considering an MBA is that I went to a relative non-target and thought that it may be good for optics and network long term, particularly if I am good at this and do eventually want to try and raise my own fund 

Outside of that, when I think about which funds excite me the most in terms of strategy, it's typically L/S hedge funds that have a growth equity component, i.e. Dragoneer, Coatue, Altimeter, etc. It's unclear to me if this fund, which although it performs well and has decent AUM, will limit me down the road should I try and recruit for a shop with a strategy similar to the ones I listed above sometime in the future. What seems like a more concrete path would be IB -> tech focused PE or growth equity -> Possible MBA -> Dragoneer et al.  

Within regards to exits, this fund has such low turnover that I can't even really track where people have left historically so it doesn't really seem like there's a precedent. I think the low turnover is a good sign, but it just makes it difficult to benchmark career optionality. 

 
Feb 4, 2021 - 12:04am

You should check out Glynn Capital too, they are hybrid / crossover (whatever you call it) as well, and Vista has a public strategy. 

If you work at a decent sized (FYI - 3 billion is decent sized) hedge fund, that's great optics. 

Follow me on Instagram: @dickthesellsider

 
  • Analyst 1 in IB - Ind
Feb 4, 2021 - 12:30am

Don't have personal advice to offer but as a junior was wondering if you took the GMAT senior year of college / recommend that path  

 

 
  • Analyst 2 in IB-M&A
Feb 4, 2021 - 1:04am

I think it ultimately depends on your goals and where you end up for your first job out of college, but yes, I took it my senior year or college. If you're going to end up in IB or any firm or fund that has bad hours, then I recommend taking it your senior year. 

I honestly don't know when I would've been able to take it had I waited until I started in IB... and if I go to PE, I think it would've been much the same. 
 

Additionally, if you have a reasonable profile, I'd consider applying to a 2+2 program. For some reason I didn't, and I regret it. Most of my friends that did got into reasonable programs and a couple with similar profiles to me (similar school background and at same firm) got into H/S/W

 
Feb 4, 2021 - 9:19am

I was recently in your shoes and ended up taking the offer. Here are my thoughts: 

1) Name brand is important, no doubt about it. But in this case you may be underestimating how well-known your fund is, especially to industry participants. The HF world is pretty small and tight knit, and the people who run them know each other quite well. A 3 bn AUM fund with good performance and a solid long-term track record will certainly be well-respected. MBA adcoms may not know the firm well but other hedge funds will. It is therefore possible with some luck and skill to jump to a 'name-brand' fund without an MBA. It is also possible to jump to a partner-track role at a smaller fund, which is what many analysts at the Coatues/Vikings/Mavericks of the world do anyway. Difficult, of course, but not impossible. 

2) You mentioned getting an MBA in order to try to raise your own fund. But raising a fund is less than half the battle. Performance is infinitely more important. I would prioritize going to a shop that will teach you how to be a good investor first. 

3) Culture is extremely important, especially at the junior level. I would take almost any offer over a churn and burn shop like Coatue. Pick a place where you like the people, where juniors get mentorship, and where there is room to grow with the firm. 

4) Getting a top L/S role from a MBA program is not a guarantee. I've had friends with top pedigrees (target school -> BB -> MF PE -> H/S/W MBA) go to great funds and others who got stuck at so-so funds. I wouldn't say there was a huge difference in their skill levels either; given the fact that hedge fund recruiting is largely ad hoc much of it came down to luck. 

TLDR: Top pedigree or not, it is rare to get a seat at a fund with good culture, good returns, and good scale. I would heavily consider taking the offer. IF brand recognition is very important to you, I would recommend continuing to recruit for a 'name-brand' L/S fund now. Four years of public markets experience is infinitely more useful than the 2 years PE/2 years b-school track. Even a year of public markets experience would be if you wanted to stay in the industry. 

 
Feb 6, 2021 - 11:05pm

Well, u definitely succeeding on that front lol

Follow me on Instagram: @dickthesellsider

 
  • Analyst 2 in IB-M&A
Feb 6, 2021 - 11:26am

I don't want to give away too much of my background, but I'm fairly confident I can land an offer at one of those firms or upper middle market to megafund firms like LGP/Ares/TPG/etc. 

I think this mostly because 1. My network and 2. I'm fairly confident in my level of prep, my "story", etc. 

All that being said, I agree it is compelling. 
 

I have spoke with other and former analysts and have confirmed the comp (slightly lower than what I'd be getting at some of the aforementioned firms, but way less hours), culture, etc. 

I guess I'm just wondering if I'd be at a disadvantage when trying to eventually move to a firm that does public and private transactions (ala dragoneer as previously mentioned) or would those sorts of firms strictly want someone who has had private transaction experience from PE, growth equity, etc? It seems like on LinkedIn most people at those funds come from a PE or growth equity background, but that also could be selection bias 

 
Feb 6, 2021 - 4:21pm

I think you would be at a disadvantage but it is not insurmountable. I have interviewed and advanced far in the process at some of the firms on your list without PE experience. The key is establish a strong rapport with headhunters who can put your resume in front of those firms. After that it's up to you to convert. 

If you are aiming for funds that do a combination of public and private investing why not recruit for them now? I know Dragoneer hires ex-bankers and ex-consultants. 

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