Point72 Summer Academy vs Top BB IBD Summer
I was fortunate to receive offers from Point72, and top BB(GS/MS/JPM IBD) for junior summer. What is the best option? I think I want to enter HF and don't have too much interest in PE. My worry is that I'm constraining myself too much with Point72 and IBD is a known quantity.
I looked at previous thread about this, but they are both old and not very helpful.
I hear the Point72 internship program doesn't have a guaranteed return offer and that the return offer isn't always for an investing role. If you are actually a god at an investing and know that's what you want to do for the long term then i'd say take that role (comp and lifestyle should be better, and more time to build your reputation and career in what you actually want to do), but if you want the security and are willing to wait two years to exit into another top HF, take the BB offer.
Agree but golly i wish I had a summer learning about investing from p72... that would have been great experience (all else equal)
IB doesn't have guaranteed return offer do they?
Goldman, MS, and JPM should have return offer 60+% of time, Point72 return offer is prob closer to 30% like DE Shaw
Point72's Academy is highly regarded and you could probably move to any firm/IB after. If I were in your shoes I would go with the Academy. Also, if you have any modeling/stock pitching experience you should be able to get a return offer. They focus on recruiting a wide range of majors and a lot of the other interns wouldn't have opened excel before the internship.
Curious as well-- my thought is that if you would take Blackstone, Carlyle, KKR over top IB group, then top HF would be similar? Not sure tho...
Point 72 isn't top hedge fund though (size yes, exit/comp wise no)
If you are not that interested in PE, I would choose P72 8/7 days a week. They are highly regarded in the financial world and if things don't work out you could always try to lateral back into IB. There are more people with GS/JPM/MS IBD experience that P72 experience.
With IB already being a good first step for HF down the road, I'd want to know how much added value comes from doing the summer at Point72 instead.
Since Point72 apparently isn't making as many return offers (I'm getting this from comments above) and that risk is magnified further by the fact that some of those are not investing roles, I'd be very focused on where the rest end up. Do they go to other funds? Do they at least get to end up in IB/ER so they're no worse off than had they not done the summer at P72?
For me to choose P72 instead, I'd want to see that the vast majority of P72 summers end up with something that keeps them on track: either an investing role at P72 or other fund, or an IB/ER role.
Also, be wary of P72's quant ambitions (what they call Cubist). I don't know how much of this affects the summer prorgram, but someone with a passion for fundamental investing won't want any part of Cubist
Confirmed conversion rate from summer to ft is high, around 70%
Disclaimer, I haven't worked in IBD before, but frankly anyone who went to a not-too-s*** school can get into IBD based on what I've seen, while you need to have somewhat of a real understanding of how markets work to get into a hedge fund.
A few years ago when I was a recent grad, I knew people who had to find a full time job after their junior year return IBD offer got rescinded, and they all did more than okay (some even went to much better firms). If it's anything like that still, since you were able to get a bunch of summer offers already, I feel like you should take the risk and go with P72. It will be much more relevant and useful for your future hedge fund aspirations, while IBD is pretty mindless work.
Pretty much every single IBD analyst who went on to PE/corp finance at the 2 year mark that I know has pretty much no understanding of markets, unless they had a specific interest in it along with a strong background in math/physics/stats.
Wow I’m actually surprised by the number of people recommending P72... I’ll make a case for taking IBD.
You will get a much broader and transferable skill set at a top BB IBD than you will at P72. You may think you know what you want now, but reasonably good chance your mind will change when you are in the real world. I can tell you from experience it’s quite rare that people dont change their minds at all since college.
Sure P72 is a common name people know, but not sure it’s as “highly coveted” as some are making it out to be. It’s a standard multi manager hedge fund with a very short term horizon, specific risk parameters (net neutral, beta hedge, etc), high churn rate, etc. Generally interchangeable with something like citadel, millennium, etc. I think a lot of people under-appreciate how specific this type of public market investing is. This nothing close to your standard Warren Buffet value investing strategy. The skill set (beyond basic finance knowledge) is not readily/obviously transferable to many (if any) other jobs. Plus, from experience it is actually very easy to get an interview at P72 when you are in banking... much much much easier than PE recruiting so I can almost guarantee you that door will stay open for you down the line.
In short, I would take top tier BB IBD for the a) more generalized finance skill set and b) interpersonal/soft skill experience. Think this makes more sense unless you are a savant Michael Burry type character who does not think you would do well in IBD. Or, at the very least make sure you understand what you are getting yourself into at P72 and know you are not training to become the next Warren Buffet. Just my thoughts, coming from someone who has done IBD and now at a hedge fund. Happy to expand on anything.
Interesting to hear the other perspective. I realize the exit opps might be more limited out of P72, but do you think someone who spends 2 years at P72 out of undergrad wouldn't be able to lateral to PE? What would the exit opps out of P72 be?
Seems similar to jumping straight to Bx, Carlyle, Apollo out of undergrad?
No real experience so just speculating- appreciate any thoughts
Moving to PE would be much more challenging from P72 than and good banking group. It is not at all comparable to starting at BX, etc.
While people earlier have commented that banking analysts have limited understanding of markets, which is true, on the flip side a P72 analyst would have limited understanding of transactions, process dynamics, and even various “softer” skills.
I think it would be really hard to go from P72 to PE, or at least much harder than from top tier IB to PE. There are no standard P72 exit opps.. P72 IS the exit opp.
It’s not similar to going to megafund PE out of undergrad. The comparable thing would be going to an elite single manager tiger cub (or equivalent) fund. Third Point, Coatue, etc type places. Not sure if they even do take kids right out of undergrad.
I really think you should spend more time learning/understanding the P72 strategy/structure (or general market neutral, multi manager fund). I don’t mean to come off so negative towards P72 (if I am..), not a bad place to work at all, but definitely a very specific type of “investing”.
To me, working at a multi-manager platform is like being a pro video gamer. You practice a narrow set of skills very intensely for very long hours. Those skills don't have a wide range of applicability outside of other multi-managers. The upside is, you can get good at this video game relatively quickly, and get paid lots of money very early in your career. You don't have to be a genius either, the best MM PMs I know had above average academic credentials but not stellar. There's just some gene in there that makes them really good, might be just hard work, or a feel for bets, or mental discipline. It's a feasible path to getting wealthy quickly that's open to people from a wide range of backgrounds (lots come from mid-market sell side equity research jobs that most people here would look down their noses at - doesn't matter as long as you can make money).
On the contrary, other funds like your tiger cubs are typically restricted to people who have been on a very specific high-achieving path for a long time (top undergrad, top banking, PE, top MBA). If P72 is your only experience, you'll find it tough to switch to this route. It's like a video game and the skills don't directly translate. However, it is entirely common for tiger cub analysts to move into MM shops as long as they can adapt to the risk frameworks. MMs just care about whether you can make them money, not so much about pedigree.
Tldr: Going to p72 straight out will likely close some of the pedigree-focused routes for you (or make them more challenging) but you will have the chance to make gobs of money quickly in this video game. Going to banking will keep those pedigree routes open, and you will always have the chance to move to p72 down the line, always. I'm not advocating one over the other, it's completely a matter of your preference.
SB’ed. If you’ll allow me to nerd out a bit and continue the analogy..
P72 is like becoming a really good Fortnite/League of Legends player. You can switch to other teams in the same game (millennium, citadel, etc).
However, those skills are not transferable to Age of Empires (PE/single manager HF/etc). Sure you will know how to turn a computer on and move the mouse, but that’s pretty much it.
So, what did you end up choosing? And how has your career developed since?
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I think you’d have plenty of options, if you know you want to do investing, take it - why would you spend two years getting beaten to a pulp and hopefully sneak away enough time to go interview for hedge funds exhausted and strung out when you can go straight there. You’ll get sufficient or better modeling experience at P72. Man what I’d give to have never even learned PowerPoint.
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