PE VS HF

Hi can you guys help me decide between DE Shaw Rotational Associates and an analyst job at a PE MF?

I am confident that DE Shaw will result in a FO role in one of their discretionary strategies.  The fear is that the systematic strategies are the real focus of the firm.

With the PE analyst job, I am worried the job may be needlessly long hours paying my dues. 

I understand the general differences between being a public or private market investor.  My question is more along the lines of which option will be a better career move that provides optionality going forward.

Thank you!

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Comments (11)

May 29, 2021 - 6:29am

Assuming you're just starting out, you gotta realize you're only going to be able to decide which segment you like most once you start working in it. No amount of theory or 2nd hand knowledge will compare to 1st hand experience.

As for me, I always loved ECM. My father was a broker who later transitioned to an investor, my brother is a Sell-Side guy in Institutional Sales for over a decade now in firms like GS and JPM and having held roles such as IB.

My dad loved brokering. My brother loves Sales. I love analytics, research, and investing - which coincides more with buy-side. I broke into an HF and I love it even more. High pressure job, but I can't go a day without checking the markets and research on it (even on weekends and vacation).

The best career path is the one that most feels like a passion/hobby than a job. You're gonna work long hours and do tons of work, and the work is hard. Even harder if you wanna break through and climb up the ranks.

Think about what you like, talk to several seasoned personnel in PE and HF and hopefully that will help you.

  • Associate 1 in IB-M&A
May 29, 2021 - 10:37am

I don't know anyone who moved from MF PE to HF and thought about wanting to move back once they made the jump. What I would be worried about is what desk will I be placed on. Last thing I want to do is be placed in a HF strategy I don't care much about. Especially if I had the opp to do MF PE and then look for a L/S role for example. 

May 29, 2021 - 7:59pm

I completely agree with this.  I'm not guaranteed a certain desk, but I am guaranteed that it will not be one of the systematic strategies that as far as I can tell are DE Shaw's main focus.  Are the numerous discretionary strategies with smaller AUM at a quant fund a good place to be, or would it be better to explore other options through the PE analyst role?  I have extremely limited experience recruiting and none with headhunters. So it is very hard for me to tell if this is a can't miss opportunity or a limiting career move.

  • Research Analyst in HF - EquityHedge
May 29, 2021 - 6:55pm

You're trying to maximize your HF career optionality and aren't willing to pay dues as a MF PE analyst for two years? You're already skipping two years of paying dues and even that isn't enough? 
 

What it sounds like you're saying is that you want to solve for prestige and high pay with no process or hard work. In which case good luck. 

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  • Associate 1 in IB-M&A
May 29, 2021 - 7:39pm

You're trying to maximize your HF career optionality and aren't willing to pay dues as a MF PE analyst for two years? You're already skipping two years of paying dues and even that isn't enough? 
 

What it sounds like you're saying is that you want to solve for prestige and high pay with no process or hard work. In which case good luck. 

I think this is an overly harsh take. Sounds to me that the question is more of "Is DE Shaw a good enough fund for me to start my career and will it open doors to other HFs for me?". If the answer is yes, then why should OP bother 'paying dues' elsewhere? If the answer is no, then fair enough. 

May 29, 2021 - 7:52pm

That's not exactly it. I'm 5 years out of undergrad, with no finance experience. I know the real answer to my question is whether I would prefer the private or public markets, but I don't know the answer to that. I wish I could have internship experience to at least get some idea, but that isn't on the table.

If the PE role is a slower path to the same place, I'd like to know now.  I think by virtue of being an analyst role it provides greater optionality down the road, but if that optionality is due to the fact that it would be a natural career progression to transition to the DE Shaw option after two years then I would likely be better served by taking advantage of the hedge fund opportunity now.

If I were to find out that hedge fund recruiters look to fill associates from roles such as PE analyst, then the analyst role would provide a clear path forward in PE as well as the opportunity to join a hedge fund as an associate in a similar time frame as the 1.5 - 2 years of rotations at DE Shaw.  Another hesitation with DE Shaw now is that while they have $35 billion devoted to their systematic strategies, the $20 billion for discretionary strategies is split between many teams and is all I would be eligible for through Rotational Associates. With no hedge fund experience, I don't know if it is unwise to join a discretionary team at a quant focused fund.

TLDR: Is PE Analyst the right choice because it also provides a path to HF associate with more time to decide public vs private markets or is DE Shaw Rotational Associate the right choice because it is an option that a PE analyst would be lucky to have 2 years from now.

  • Investment Analyst in HF - EquityHedge
May 29, 2021 - 8:12pm

If you're 5 years out with no finance experience, I'm a little surprised you got this traction but great for you!

HFs are sexy again because of last year's performance - that might not be the case going forward. DE Shaw L/S is sector-focused. You will have a dramatically different career if you're the SaaS software analyst vs the consumer staples analyst - in terms of demand for your skills/expertise 5+ years down the road.

I think the PE MF is a no-brainer for optionality.

1) You realize you like PE and make a career of it.

2) you say fuck finance and leave for corp dev, pretty easy from PE MF

3) you go for the tried and true path to a prestigious HF; from a PE MF - you will get looks at Tiger/Viking, and you may not get that from DE Shaw sector seat.

I'll be honest - your background is definitely atypical since you have 5 years of non-finance experience. But if it was good enough to get you to PE MF, it shouldn't bar you from future opps (even though it isn't the typical 2+2 path). 

You're in a great spot - good luck.

  • Quant in HF - EquityHedge
May 29, 2021 - 11:23pm

Sorry to burst your bubble but good friends with a de shaw rotational associate who told me about his experience, he found it disappointing and wants to go to a different firm. Apparently it's back office/MO and they try and sell it as an opportunity to for FO but you always play second fiddle to the systematic strats

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