Networking into a Hedge Fund? It's Unstructured.

Introduction
Excluding the back and forth regarding the differences between fundamental hedge funds (from here, "hedge funds") and quant-shops (with apologies to Ray Dalio), feedback from the IBD to HF article mostly inquired about how to go about networking your way to a hedge fund interview.

The well-known path to an interview is by way of headhunters contacting you. However, there are other avenues one can pursue in lieu of relying on an interview slot being handed to you on a platter because you went to Harvard and work at Goldman Sachs.

Given that recruiting season is in full swing, we thought it would be best to post this sooner rather than later so that those interested in the hedge fund path be prepared. It should be noted that unlike the mega-PE funds, hedge fund recruiting is much less cyclical and structured and much more opportunistic.

Unlike buyout shops, hedge funds do not need a foreseeable number of fresh bodies each year to throw at LBO processing work. Instead, they hire as they need to. Typical reasons can vary, but it might be because their AUM has grown enough to need expanded coverage, or because one of their VPs finally got paid what he considers quitting money and decided to bizzounce.

Whatever the case, the fact is that there is much less of a "tried-and-true" process to landing a slot at a hedge fund than there is for PE. It has a heavier emphasis on timing and lady luck.

Thankfully, luck favors the prepared, so here's how you can network your way into one:

Overview
We've already covered the basics and some other applications. This post will focus more specifically on how to use it for hedge fund recruiting. In particular, this will be most relevant for those either in banking or equity research positions looking to make the jump.

To start, there are broadly two routes to landing a hedge fund interview:
1. Directly via your network
2. Through a headhunter

**Most** hedge funds are not going to post their jobs online. Instead, they rely almost entirely on word-of-mouth. Hedge fund managers are among of the best connected figures on the street. This should make sense - they have to be in order to stay informed, and they are going to be because they control such a large amount of money on their own.


1) Direct Introduction via Network

This is where someone in your network is able to set you up with some face time with someone at the fund you want to work at, be it an interview or a phone call.

Your contact will either be aware of specific hedge fund openings and put you forward for them, or they will know someone who works at XYZ fund and is happy to set up an informational interview with them, which as you know can eventually lead to a formal one.

The person referring / introducing you is essentially lending you their credibility in order for you to get your foot in the door, so if your resume is less "flashy" in a headhunter's eye than others, then this is the most effective route to an interview.

The people in your network who are most likely to know about openings or be able to make direct introductions are EDs and MDs - the guys who have corner offices overlooking Times Square. They are veterans of the Street to know all the right people and as bankers that is what they are paid for (hence why they don't bother with excel work).

This is not to say that connections can't come from that analyst whose last name rhymes with "ankfein" or that associate who was loved by everybody in his business school class... But. In general the more senior someone is on the Street, the better connected they are.

If you're at a bank that allows you to openly explore exit opportunities, then you should find ways to let people know what you are looking for. If people know what you want, then if they hear anything relevant to it they are more likely to tell you about it. If they don't know what you want well... then you are SOL.

Know what you want. During your search it's important to maintain a realistic outlook (beggars can't be choosers) and that should not stop you from being able to articulate your grander career aspirations.

You should be able to explain your goals in a well thought-out manner. In addition, it should go without saying that if you aren't aiming high then you need to raise the bar and become inspired to raise it every day. If you are able tell your story convincingly and sincerely to people who can help you achieve your goals, then they are more likely to "buy-in" and want to help you if they can.

(Caveat: Do not "rehearse" your story, you should be able to tell it as you would a funny college drinking story)

For those at banks where exit opportunity interviewing is more taboo, shouting about how you want to work at Citadel next year isn't going to do you any favors. Instead, you need to take a more subtle approach.

Besides models, one of the things that bankers love to talk about is their careers. Discussing your desired career path is likely to come up organically during office bantering sessions. In these scenarios, simply explain your goals when asked about them as described above.

If the subject doesn't come up organically, then your next best option is to engineer conversations so that they are inclined to ask you about what you want to do. You can spin a conversation this way indirectly by asking them for a resume critique or general career advice. These topics will naturally lead them to a point where they are likely to ask you what kind of jobs you ultimately want.

Assuming you have been able to do this to some degree and played your office politics right, then you can also take these dialogues one-step further by directly asking people for help. The way to approach this route is to ask your connection straight up. Ask him if he knows of any openings or is willing to connect you with someone at the fund you are interested in.

MDs aren't so blind that they don't realize that most analysts are constantly thinking about their exits, so as long as you've done good work for him then he should understand and be willing to help out. If you're not quite at that level of comfort, then you can also approach the "ask" indirectly as outlined above.

Bottom line: You will never get anywhere without asking.

1. Headhunters

As mentioned, a large portion of the hedge fund recruiting process is outsourced to headhunters. If you want to land an interview then you will be required to know how to utilize them. Headhunters have access to the broadest range of opportunities, particularly at the bigger name funds, so if they know and they like you then you will have many more options to choose from.

The number one thing to keep in mind when dealing with headhunters is knowing how they get paid. They are there to make money first and help you second.

They may be incredibly friendly and have pretty faces, but at the end of the day they are not there to be your friends. They are paid by the fund they are searching for based on a percentage of the base salary for whichever position they are able to fill. It does not matter to them who fills what slot, as long as the slot is filled and they get paid.

How to Deal with a Headhunter
Once you are able to get in front of a headhunter you should have a firm grasp on your story. Notably, it's better to describe your goals in a more generalized manner - they want to know that you are comfortable interviewing for whatever open slots they have access to, which won't always include your dream job.

Be aware that a large number of headhunters are attractive women (being a 7 seems to be mandatory at some places). This should make sense if you have ever interacted with the HR department at a bulge bracket bank. Headhunters are like the major league version of that.

This is not to say that you should discount them. Chances are that the headhunter sitting across from you was at one point in banking, research, private equity, hedge funds, or some combination thereof. They know their material, a lot of times better than you do.

Therefore, do not attempt to "game" headhunters outside of your natural comfort zone. They can sniff out any disingenuousness from a mile away and it will hurt you. You should absolutely use sales techniques if you have internalized them, but this is not the time to try out anything that isn't second nature. You are not there to get laid. You are there to get paid.

That out of the way, there are three broad paths to connecting with headhunters, listed here in order of effectiveness:
1. They contact you
2. Someone in your network introduces you to them
3. You contact them

Path #1 - Headhunters contact you
This path is primarily passive.

Because of how they get paid, a headhunter's motivation is to find candidates who are "sure things" and check all the right boxes. They know from experience that those are the ones who are most likely to interview well and get offers, giving them a payday.

This is why they target GS / MS / JPM analysts and will often reach out directly to them, sometimes even blindly based on guessing email addresses. It should be noted that analysts at certain elite boutiques - GHL / EVR / Moelis - are also increasingly sought after.

The other reason headhunters will email you directly is from referrals. They have contacts at each major industry group at each BB (often the staffer). They will ask the staffer to recommend the best analysts. This is where the intra-office networking described above and your ability to navigate office politics will also pay off.

Path #2 - You are introduced to a headhunter
This path is the same as the Direct Networking described above. The only difference is that instead of asking your connections for introductions to fund professionals, you will ask them for introductions to headhunters who target the space you are interested in.

Again: You never get anywhere without asking.

Path #3 - You contact a headhunter
This path is the one you have the most control over. It involves cold emailing any headhunters who you know works in your desired space and who you can get the contact information for.

Basic email structure:
Hi [HH],

My name is [NAME] and I work at [BANK] in [GROUP]. Prior to this I went to [SCHOOL], where I studied [MAJOR]

I'm currently looking for [TYPE] jobs, specifically [DESCRIPTION].

I've attached my resume in case you would like to know more about my background.

[REQUEST FOR CALL / MEETING]

Sincerely,
[NAME]

The key here is to convince the headhunter that they can place you. Position yourself in a manner that makes it seem like you are a guaranteed hire.

Maintaining Contact with Headhunters
Since hedge fund recruiting is not cyclical, you want to have ongoing dialogues with as many headhunters as possible. That way, when something does open up you are more likely to be the first to hear about it.

It never hurts to help headhunters in any way you can. Specifically, if they email you with a slot that you aren't interested in, try to refer them to people who might be a good fit.

Finally, even once you land your next spot, two years down the road you never know what could be out there, so it's always good to keep headhunters you are in contact with updated on your career and in the loop with an updated resume.

Bottom line: Know how headhunters are paid. Plan accordingly.

Conclusion

Networking is essentially exchanging favors with people. When someone asks for a favor, always do your best to do it for them. When you ask someone for a favor, be polite, humble, gracious, and never go in with the expectation that they will say yes.

Bottom line: You will never get anywhere without asking.

Comments (26)

Mar 11, 2014

how do you befriend headhunters?

"The cheaper the crook, the gaudier the patter"

Mar 11, 2014

Other can chime in, but the idea is that you want to be the easiest sell. This is why a lot of headhunters are obsessed with stats to help filter out the easiest candidates to place (EG: ivy, perfect GPA, perfect SAT etc.)

So when you meet them you're essentially meeting with "Human Resources" except in this case... Competent human resources.

1. As stated above don't try to bullshit them with some cheesy lines/flirting or anything like that.
2. You give them a broad scope of things you are interested in Ex: If you are meeting with a headhunter that primarily focuses on hedge funds you can spin your pitch by saying you're interested in "all hedge funds" and use your deal experience to pitch a specific area. Example: You did medical M&A then you can spin your experience to merger arb funds.
3. You have to come off as a great interviewer. Make no mistake when you're meeting a headhunter you're not meeting a career center person, you are essentially going through your first round of interviews.
4. Work the spin. By the time you are recruiting you will know (ideally though word of mouth at your bank) what headhunters are good for XYZ sector or ZYX type jobs. This way when you know their general list of jobs you can pre-sell yourself. (This is similar to point 3) You already know what they do so you shine the light on items on your resume that make sense in the eyes of a hiring manager.

That's the jist. Others can chime in on additional ideas on how to become friendly with them. The truth is that a lot of it is simple behavioral interview ability + previous credentials.

Finally, to nip the bud in advance, there is no major point in going over what headhunting group is good for what type of job because... If you work at a larger bank, the senior analysts usually keep an excel sheet that tracks all of the people in the immediate area. This is then sent around or printed off so you can easily get the list that way if you work in IBD already. Of course... if this doesn't work, as mentioned, simply email them directly by going to their website.

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Mar 11, 2014

I did the path of reaching out to headhunters and it was really beneficial. You have to be fairly good at selling yourself but if you can and convince them that you are not going to embarrass them, you can get a foot in the door for front-office HF work.

Mar 17, 2014

I wonder where do you usually find recruiters? Besides LinkedIn and eFinancialCareers?

Mar 17, 2014

FB is another place, but you will usually need to be introduced through a mutual friend.

Mar 28, 2014

Honestly, the best place is use the search function on WSO and google recruiters/head hunters and just reach out and be proactive with the company. Fill out their forms and so forth and follow-up as soon as you can. Its a numbers game but be sure that the person on the other side of the phone knows you're interested and what you are interested in. This can go a long way from you being a name in a pile to you being someone the headhunter would put at the top of a pile.

Mar 11, 2014

In general the more senior someone is on the Street, the better connected they are.

Mar 12, 2014

Hahaha. It is redundant.

The thing is there are some rare cases where you end up going through someone more junior than an MD.

1. As you all know direct reference is best
2. If the director had a background in say XXX PE fund you wanted to work at... The MD worked in say a hedge fund, you're probably better off going through the director
3. Some corporate hires (guys who were industry) that switch into Wall Street are also great contacts and can be lower on the totem pole (VP to director level).

Tried to avoid making assumptions so people don't write off the lower level contacts.

Mar 12, 2014
WallStreetPlayboys:

Bottom line: You will never get anywhere without asking.

This. I am still early in my career and I was a violator of this crucial tenet when I first started, and was frustrated by how "things weren't going my way". Things will never go your way, unless you make it your job to make whatever it is you truly want happen. Ever since I realized this, and started actively putting myself out there, my whole life started changing.

Ask and you shall receive (not always*).

SB to you sir.

Mar 12, 2014
brosephstalin:

Ask and you shall receive (not always*).

a one-way ticket out of the firm, maybe

all kidding aside, agree - but dude ur name is brosephstalin, maybe asking is not always a good thing ?

speed boost blaze

Mar 12, 2014

haha, point taken. Stalin wasn't one to ask, he was one to take what he wanted. Valid point though, asking definitely isn't always the right option, but when it is, it has to be done strategically, not on a whim or out of desperation.

Mar 16, 2014
brosephstalin:
WallStreetPlayboys:

Bottom line: You will never get anywhere without asking.

This. I am still early in my career and I was a violator of this crucial tenet when I first started, and was frustrated by how "things weren't going my way". Things will never go your way, unless you make it your job to make whatever it is you truly want happen. Ever since I realized this, and started actively putting myself out there, my whole life started changing.

Ask and you shall receive (not always*).

SB to you sir.

First I would like to commend @"WallStreetPlayboys" for the post.

One point that young people don't seem to understand is that going from site to site at small funds and applying to all the open jobs is not the best way to get into the industry because most of the jobs are filled before they are posted. As OP said, being friendly (you are not friends) with head hunters is an excellent venue into the industry. FME, knowing the hiring managers is the best way to get the job that you *want*, especially at a large firm.

Many people think of connections as a one time deal where they can rely on that person as straight money without doing anything for the other person. Generally speaking, they are wrong. Some people will pay it forward, but most people will not help you unless they think that they can get something out of the deal. Wall Street is cut throat. That being said, making connections with people is an ongoing process much like farming; if you don't water your crops, they will die.

Finally, the larger firms do often have many job postings for varying levels of experience. However, unless you have a degree from an ivy league school the odds of getting an interview are very slim. This is where may smart kids from semi or non target schools differentiated themselves with the Bloomberg Aptitude Test (BAT) test, which got the HFs to come to them. Check it out. Better yet take it and land yourself a HF job.

Mar 16, 2014

Agree with you on everything you said, but I was simply curious about the BAT bit. Is it really any useful? I know Bloomberg (at least in the UK) go from campus to campus across the entire country to get students to take it though.

Mar 12, 2014

Great post; I've been following your blog for a while.

I too have to agree with your last comment: 'You will never get anywhere without asking." Of course, you have to be 'qualified,' but that's a necessary condition, not a sufficient one. I would have never landed my offer if I didn't hustle for it.

Mar 12, 2014

Yes it seems that the younger generation only feels comfortable asking for something when things are spiraling out of control. They get flustered and come off unpolished.

This is not meant to be an insult but is an observation. As if people are being trained to only ask if they are in trouble. This is not the right way to do it.

If you're qualified you should continue building out those branches. Eventually you'll be the one lending the olive branch and the cycle upward continues.

So continue networking appropriately and your iPhone will fill up fast.

In the end most successful people realize that the best way to brighten their day is by helping someone else succeed. Remember this when reaching out to some higher end individuals. If you have the background... Well you got nothing to lose because you are not wasting their time.

Let's be honest, everyone is trying to get to that next level in life or else they wouldn't even be on this forum!

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Mar 14, 2014

Incredibly helpful

Mar 16, 2014

Great write up. I was wondering if you mind sharing about networking into a hedge fund for an internship. Thanks.

Mar 17, 2014

Thanks Chris. Yeah, FB might be even harder if do you have many friends already in the field. So LinkedIn and eFinancialCareers are both good places? Do you have additional tips while reaching out? I have been pretty passive in the past and always wait to be contacted by recruiters. After reading this articles, I think it's time to take initiatives.

Mar 17, 2014

1. Reach out directly to hiring managers.
2. Reach out to university alumni.
3. Reach out to corporate alumni.
4. Reach out to anyone that you have something in common with including volunteering, fraternity, or sports (sports, esp. college sports, are great way to get to know people and have fun at the same time).

Best Response
Mar 18, 2014

^ i'm guilty of giving dumb answers in reply to dumb questions and occasionally trolling but your posts on legitimate threads like this make me cringe...

However, unless you have a degree from an ivy league school the odds of getting an interview are very slim.

They're as slim as you make them. Let's stop making kids feel bad about not attending an Ivy. Students from non-targets/semis already have enough on their plate as it is with regards to putting alot of energy toward networking. Don't need negativity and naysayers. And there are plenty of schools w OCR outside of the Ivy's (in case you didn't know...).

This is where may smart kids from semi or non target schools differentiated themselves with the Bloomberg Aptitude Test (BAT) test, which got the HFs to come to them. Check it out. Better yet take it and land yourself a HF job

Seriously??? That last line makes you sound like a glorfied salesman. How is the BAT a differentiating factor at all (let alone in a competitive recruiting environment)? Anyone can go take the test, the material isn't rocket science. If you're at a semi/non-target and you have professors/faculty touting the BAT like it's going to be some sort of ticket to a HF, they're wrong (or being inauthentic). And if it just so happened to be that a few kids had "HFs come to them" after taking that test then obviously a faculty member helped that opportunity materialize and the student is really naiive if they think otherwise. And if that opportunity/interview/meeting/whatever isn't a good experience for both parties or doesn't translate into getting some tangible experience then students w HFs coming to them are being strung along and are blind to the facade that's being put on.

1. Reach out directly to hiring managers.

You're telling college kids to arbitrarily reach out to hiring managers??? And even if you did happen to know who does the hiring, that point completely contradicts your point above arguing against "connections as a one time deal where they can rely on that person as straight money without doing anything for the other person". Are connections not supposed to be about putting time and effort into organically getting to know the other person, their experiences and background as much as possible regardless of if they're hiring/not hiring or if they have that authority at all??? And even if I knew a person in a position to hire, I'm not going to approach them if I have zero interest in getting to know them outside of their ability to hire/what they can do for me. I don't want any opportunity where I know I'll have no inclination to give back, but that's just me.

but most people will not help you unless they think that they can get something out of the deal. Wall Street is cut throat.

Seriously? You make the industry sound like everyone's in it for themselves only. Yeah maybe you'll encounter some ppl like that who have no interest in paying it forward but you can't make blanket generalizations based on your narrow perspective to college kids serious about the industry (or any experience for that matter). I'm sure there are plenty of nice ppl out there who go out of their way to help students out or at the very minimum give them the time of day/acknowledge their efforts if students are being authentic in their interactions. I had that picture painted in my head at first (based on complete hearsay) which made it really intimidating for me to want to network/reach out to anyone in the industry as much as I wanted to. Maybe you just have a really bitter network of ppl - I don't think that's the norm and you don't need to parlay how cut-throat you think your network is to discourage students.

I don't know your background or experience. You're free to dispense whatever floats your boat and obviously readers need to take everything with a grain of salt. Just wanted to point out everything I find utterly wrong about your posts though. Hope your mission on encouraging 13 year olds to pursue finance is going well.

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Mar 21, 2014

Miss money penny for an aggressive win! Haha SB worthy (again although aggressive).

This post is clearly for an experienced hire. If you're trying to contact dynamics out of college.... You better be some Paulson lookalike

Apr 17, 2014

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Apr 17, 2014
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Apr 17, 2014