Paid Hedge Fund Internship vs. Unpaid I-bank internship

n679753's picture
Rank: Chimp | 8

Hi guys,

I just wanted to get your opinion on this. I'm a college sophomore and have two offers - one from a hedge fund (AUM - 1.5B) and a boutique i-bank. The hedge fund one is paid, but very little (small stipend at end). The i-bank one guarantees that I will be able to work on some live deals during the summer.

Which one would be better for recruiting season next year? I imagine the investment bank one will be superior, but will the unpaid aspect of it be worse? Any thoughts would be useful.

EDIT: Wanted to mention that I'm pretty committed to doing IB next year, and that I'm at an HPW school so I should have access to recruiting next year.

Comments (18)

Mar 19, 2015

If the HF pay is very little I'd take the IB for the relevant deal experience.

Mar 19, 2015

If you want to do IB, then pick the IB one. It's very unlikely that you are going to ask you if you were paid during your internship when you interview next year. The only downside is having to pay out of your pocket. Also depends on the boutique, deal flow and location.

Mar 19, 2015

Take HF internship for your freshman and sophomore summer. IB for junior summer.

"I do not think that there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature."

Mar 19, 2015

If you can't even find the IB's name on the top 25 list on Vault, do the hedge fund internship.

Mar 19, 2015

What's the reasoning behind that?

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Mar 19, 2015

Kind of have to agree with KingKong, if the shops you're interviewing with next year have never heard of this boutique, its likely that anything you do there won't hold very much weight to them. However, they'd probably be pretty interested in hearing about your internship at a hedge fund.

Mar 19, 2015

I guess the prevailing opinion has been to take the i-banking shop because chances are both of the firms will not be known to the BBs I'll be interviewing with next year. Can someone with experience in terms of recruiting for SA offer their opinion?

Mar 20, 2015

What do you want to do long term? Realistically if your sophomore year experience is critical to you networking your way into a junior year ibd SA stint, then you should probably take the ibd role this summer. However, if you're at a target with a good network I'd probably take the HF internship.

Mar 20, 2015

I'd go with the HF one deff. Thats a nice size fund to make contacts at. Maybe you can intern there again and move in full-time. Plus if its some random botique, it may not be great.

Just my opinion

Mar 20, 2015

100% go with HF internship. 1, its paid, and 2, the HF is most likely a client of at least one of the large investment banks. Kill it, do well, your PM will get you a junior yr IB internship, if that's the path you want to pursue.

This is assuming you will get meaningful responsibilities at both shops.

Mar 20, 2015
Whiskey5:

100% go with HF internship. 1, its paid, and 2, the HF is most likely a client of at least one of the large investment banks. Kill it, do well, your PM will get you a junior yr IB internship, if that's the path you want to pursue.

This is assuming you will get meaningful responsibilities at both shops.

I had a similar internship in undergrad, but at a small PE shop. The head guy worked at GS/MS/JPM, had a HBS/GSB MBA, had a Rolodex as big as a plane, etc., but did not do jack for me come SA recruiting time. Sure, maybe I was just a terrible intern, but I got plenty of excellent feedback from him, my direct superior, and all the associates there. Just saying since if he/she goes with the hedgefund position, he/she will be banking on that PM to go to bat for him/her.

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Mar 20, 2015

I'm generally skeptical of unpaid internships, especially in finance. 1.5B HF sounds like a decent size, whereas an ibank that cannot afford to shell out a few grand for you for the summer sounds far less reputable.

What's your role in the HF and the IB, and what type of HF is it? If you're back office in the HF and front office in the IB, then the IB is obviously better. If you're middle office in the HF and front-office at the IB, but the IB is really more of 2-10 person firm, then the HF is probably better. Any front office role in the HF is almost always more desirable than a boutique IB.

Mar 20, 2015

I believe both of them are front-office roles. I'm at a top target so I'll probably have access to recruiting networks for next season. With that in mind, would the hedge fund internship be better? I'm pretty committed to doing IB next year, however.

Mar 20, 2015

Chances are, that IB internship will involve nothing more than grunt work with no modeling, no CIM-building, etc. At least that is my experience with these unpaid internships that "guarantee" you live deal work. I would still take that over the hedge fund internship, though. As long as you network and interview well during SA recruiting, you should be set.

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Mar 20, 2015

I think the HF is better, given that it's a big fund with over $1bil in AUM. I like boutique too but given the size if the HF, you might be able to take on a more substantial responsibility.

Mar 20, 2015

I don't think it is that clear cut. Assuming that this is a simple L/S HF, as a soph, your chance of contributing at said HF is very limited. I am not even sure what you would do. At a boutique, at least you might learn about PPT or Excel or something related to the technical aspects of the job.

Mar 20, 2015

My experience is that what you do sophomore year generally doesn't matter much, as long as you did something that was relevant to finance. Either the banking or the hedge fund internship fall into that category. So I don't agree with the point above that you'd be banking on your PM to help w/ recruiting if you went with the hedge fund - you'll have access to OCR, with a strong resume and networking you don't need to exploit your sophomore internship contacts (although it could help). I would go with the fund because it is likely to be more interesting and it gives you a different perspective since you are likely to do banking junior year/FT.

Jul 7, 2016
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