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:
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.
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:
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]
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.
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.