Q&A: Hedge Fund Analyst Out of Undergrad
Background: Target school, studied engineering. Summered at a multi-billion $ hedge fund doing fundamentals l/s and currently at another multi-billion $ hedge fund full-time. Willing to answer anything that does not have to do with my personal past experiences (to preserve anonymity).
Comp in the junior levels? What is street pay if you have peers in the industry too? Single/multi manager? Recruiting process? Thanks
Varies based on group performance and market conditions. However, junior levels tend to be less discretionary so a lower % of pay is based on performance. Ratio skews towards performance as you move up. Most good places vary from $150K to $200K for Y1 out of undergrad all-in compensation. Holds true for both single and multi in the initial years. Holds true for multi and single-manager. Multi starts to vary a lot more in Y2 and Y3 based on individual performance, group performance, fund performance, and relationship with PM.
Recruiting process for me was OCR + typical preliminary interview(s) and then superday. Questions were fit/interest in investing-related, accounting-related, or involved pitching.
The only fundamental HF I know of that consistently hires undergrads pays north of $200k. Probably varies a ton from place to place.
are you generating trade ideas? if so, do you have any ownership of those trade ideas...and whats your track record been?
Yes, but I'm also still learning. I would have some ownership of the ideas, but usually ideas are often researched in teams in which case credit might be split with team members by contribution and/or seniority.
How would you describe the level of responsibility you've been awarded since starting? How much freedom/autonomy do you have over your day-to-day process? Are you mostly building out ideas for your analyst/PM? Have you been able to get some level of guidance training (at least when first starting out), and how did you go about doing so?
How long does it typically take to make PM?
Assuming you are talking about a multi-manager structure with multiple PMs. No idea tbh. I've heard of some very young PMs who started off as analysts. The speed of ascent is definitely limited by performance. I assume at the bare minimum, a PM will have developed basic coverage expertise in a sector or space, which would take about 2-3 years at minimum. This also gives the person some time to establish a track record as a successful analyst.
Thanks for doing this! Couple brief questions on both your personal philosophy and your current fund's L/S strategy:
Style? (Value, Growth, etc.)
Time horizon?
Your ideal strategy?
Avg time period from starting research to initiating a position?
Favorite 2-3 investors?
assuming you might've managed to intern at HF and get in first year based on industry contacts? If I am wrong, what tips would you have for those trying start out in HF?
I've a year long internship in S&T at a BB (in London). But long term I want to work to PM in HF. Is that move across likely coming from S&T background or should I try and move across to M&A if I get given a FT position after?
Move to M&A.
What is your day to day work flow like and what sort of projects have you been involved with?
After working in a trading type environment for the past year (not as an analyst) I am beginning to wonder if the nature of Hedge/commodity fund analyst is changing to be more technical in a programming/data scientist type way. Ie. building code or programming software to scrape data and building out reports/trends vs building traditional fundamental models.
Not going into specifics but its a mix of both building models and building/analyzing datasets. Much more the former than the latter.
"summered"
+1. Keep up the great work.
Thanks for doing this.
Can you please describe the process you went through for your ft position? Recruitment? Interview process? Preparation?
Do you have any regrets about going straight to the buyside and in particular straight to public markets?
I think going into PE first is probably safer in terms of a transferrable skillset to other industries as an operator/investor hybrid. Definitely do not regret not going to a bank.
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