Q&A: London L/S + event-driven analyst

Hey guys, haven't been on here for a while, but I'm currently waiting a few weeks to start my next gig and I'm bored. I figured I'd try to give back a little, especially because I know there are people from London on here, and the amount of info available on London HFs hasn't been great historically. Quick background: School: Very 'target', did an IBD summer internship IBD: Call it a lower Tier 1 BB (i.e. not GS/MS/JPM), did M&A for 3 years in London HF 1: Classic concentrated fundamental equity L/S, multi-billion AUM - strategy/style-wise, think Tiger Cubs, Greenlight, etc. Worked for 3 years as a generalist analyst covering US + Europe. Managed a small sub-book in my last year in a kind-of junior PM / senior analyst-type role. HF2: Moving to an event-driven fund where I will remain a sector generalist; interviewed at a lot of places incl. single-manager L/S, multi-manager L/S, event-driven and macro. Happy to answer questions on most topics: recruiting from sellside, recruiting from buyside, day-to-day, career, stock analysis, portfolio construction, my research process, HF strategies, etc. Won't go into lots of detail about things like comp, just because there are so many funds out there and I really don't have that many data points.

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Comments (65)

Jul 13, 2017 - 5:10pm

Hey, thanks so much for doing this. So I have a couple questions, if you don't mind answering:

1) Considering how saturated the HF space is and how many managers are pursuing the same trades, alpha generation is becoming increasingly difficult. Where do you see the future of equity hedge, whether it is L/S, fundamental, event-driven equity, etc.? Do you think it has a good future for new analysts over the next couple decades?

2) Considering the rise of quants & a lot more money managers as a whole, which HF strategies do you think in the next 2-3 decades will be best for alpha generation (macro, distressed debt, etc.)? Which strategies will be most impervious to being taken over by quants?

3) What is your advice for those looking to get into the HF space after 2 years in IB? What something very unique that you can do to separate yourself from the pack?

4) How do people move from one HF to another? I've heard it is often notoriously difficult (and you seem to have some experience with it).

5) How many analysts would you say burn out from the HF space, on a rough percentage basis? Let's say 5 are at a solid $3B multi-strat, how many do you think will be there 5 years later?

6) For those HF analysts that burn out, I know some can use MBA as a pivot, but what about for those who burn out in their mid-thirties or so? No one wants to hire a failed analyst and their skill set is not particularly applicable outside of financial analysis, so what do they do now (assuming they haven't made it really big)?

Best Response
Jul 13, 2017 - 6:01pm

Cool, bear in mind I am going to be biased since I do equity-hedge, but here goes:

1) I think it's indisputably much harder to generate alpha in equity L/S vs. 20-30 years ago. But vs. 5 years ago? IMO not clear. So perhaps we are in a new steady state within actively-managed equities. The new challenge is the continued rise of passive, so the most replicable strategies will be the first to fall. IMO, that will be strategies like diversified L/S, particularly heavily long-biased funds - if you have many positions and many trades, that means you have many datapoints, and computers are better at crunching large amounts of data.

Longer-term, I think passive/active mix will fluctuate and be cyclical, but nonetheless, the average share of active will be lower than it is today, so the future isn't amazing (there should be fewer HF analysts overall). That said, there are plenty of bad equity HF analysts out there today, so if you are good, you should be able to hold down a seat.

2) This is kinda similar to (1) - the least replicable strategies IMO are things like activist L/S (don't think boards will take letters written by a computer seriously); distressed debt (driven by legal system to some extent, and humans still have some advantage over computers in terms of NLP); and event-driven (more 'bespoke' situations i.e. fewer consistent datapoints, ergo harder to create pattern-recognition).

3) Preface: I feel like in the US it's common to bounce after 2 years, whereas in London you usually need 3 years unless it's a distressed fund (for some reason they're usually fine with 2 years).

I think you need to come from a modelling-heavy IB team, to the extent that any excel modelling should be easy for you. Read plenty of investing books: Einhorn, Howard Marks, Joel Greenblatt, Value Investing by Greenwald, Capital Returns by Marathon are a few of my picks. There are some good threads on WSO about books. Be very proactive in terms of reaching out to both recruiters and firms.

4) Most straightforward way to move across HFs is through personal network: prime brokers, sell-side sales / research, and other buyside contacts. Because you have someone who knows you, your work, and can vouch for you. Unless you're at a pod shop or you're a fully-fledged PM, you won't have a track record that you can shop around. Otherwise, you have go via recruiters or cold-email firms - neither is an enviable prospect.

5) In my short experience, I don't think analysts generally 'burn out' in HF the way they do in IB. It's more common to be found out that you simply don't have what it takes, e.g. not comfortable taking risk and responsibility; unable to think independently from consensus; can't handle pace of public markets; caught up in behavioural biases; insufficiently competitive.

Following your hypothetical, I would say 2 out of 5 get found out in the first 3 years. But once you know you're in the right long-term career, it's far more rare to burn out. As an analyst, you're constantly building your knowledge and refining your processes - so the job should become easier (or at least more efficient) as you go along.

The exception is multi-managers - plenty of PMs who come from directional L/S, L-O and SS do not last. But again, I guess it's not really 'burning out' because you just get fired.

6) Common to go to L-O, ER, SS equity strategist. Possibly PE if you've only been doing HF for a couple of years. Sometimes you see guys who go back to IBD (shudder).

Jul 13, 2017 - 6:53pm

Appreciate your time.

By way of background, I'm currently in a PE gig and am looking to attend a European MBA (LBS, Oxford, Cambridge, etc) for a 2018 intake and then hoping to secure a role at a distressed fund thereafter. Hoping to get some insight on European/London hedge fund recruiting in general/things to keep in mind.

My expectation is that it'll be a lot of networking to secure a role, but anything I can do in addition to that (do euro HFs want pitches as part of hiring?), expectation of technical skills/starting knowledge would be helpful to know.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw
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Jul 13, 2017 - 7:44pm

I have limited knowledge of European distressed but I'll try and answer the best I can. Also did you do IBD before your current gig?

I feel like networking to break into HFs in London / Europe isn't as easy vs. US because of cultural differences, but obviously do as much as you can. Would definitely try reaching out to firms directly - and it can be helpful to send pitches with cold emails as well (but they need to contain some original thinking / research). Also use job boards (mainly eFinancial), and reach out to recruiters (but they seem to have become less relevant in the last couple of years in London). Also based on anecdotal experience, I feel like many distressed funds want to hire people with an European language.

Definitely worth working on pitches - you'll need to have ideas to talk about in interviews anyway. Ideally some variation in terms of sector and style. Could develop 1-2 of them into full investment memos so you have something to show the funds you apply to in terms of your writing ability.

With technicals, at the interview stage, it's typically things like what makes a good / bad company, and what makes a good / bad investment. Then it's down to having an appreciation of risk / reward across the cap structure, and an appreciation for markets, i.e. why different instruments can be mispriced relative to each other - try and find some case studies to look at. I assume you will have read Moyer and the other distressed textbooks, which will cover off most of the process-based technical knowledge (albeit it is US-focused and I have no idea if there's a more European-centric equivalent out there).

Jul 14, 2017 - 1:13pm

Thanks. In response, I did not do IBD before PE, but commercial banking. Also a CFA charterholder.

Any thoughts on how picky funds are with European languages? I'm planning to study French with the aim of getting a practical knowledge of it going into my MBA. I've heard that there's a preference for garlic belt languages given all the NPLs there at the moment.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw
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Jul 13, 2017 - 7:43pm

Thanks for doing this. You already touched on jumping from IB to HFs a bit above. I have a few follow ups (I asked these questions in another recent HF AMA but value different perspectives here):

  1. What are your thoughts on recruiting on-cycle vs deferring a year until after you have more transaction/deal/modeling experience as an IB analyst? What aspects/experiences of an IB analyst role contribute most towards success in HF interviews?

  2. Thoughts on going IB > PE > HF vs making the jump straight from IB to HF w.r.t. ease of recruiting/interview opportunities? I imagine this is relatively fund specific, and I also realize that this may be different in the US vs the UK, but still would appreciate any general insight here.

  3. I'm US based but would love working in London. How difficult would it be to recruit for HF opportunities in London as a US IB analyst?

Thanks!

Jul 13, 2017 - 8:14pm

1) We don't really have as much of a cycle mentality in London because historically it's 3 years analyst with automatic promotion to associate, so there is less pressure to get a buyside seat within a specific window of time.

Generally I'd say recruit as early as possible and get interview experience, you don't have much to lose. If it ends up taking a year longer to land a seat, it doesn't really matter in the grand scheme of things?

Most important aspects of the IB experience for me are: ability to work independently (esp. modelling); being trusted to communicate with clients (both written and in-person); valuation / analytical work; and ideally have transaction experience with listed companies

2) I'm generalising so much, but I'd say IB > PE > HF is easier than IB > HF. Mainly because PE on the whole has a much more structured recruiting process, and there are way more seats available for banking analysts. Once you're in, PE > HF is a well-trodden path. Also there are some (usually higher quality) HFs that only recruit people with prior buyside experience, so PE guys arguably have more options available.

Conversely IB > HF often opens the doors to some crappy funds which just want to hire an excel monkey to grind out models. You can end up not learning that much about investing, and not getting much responsibility.

My personal stance was that I knew I wanted to do HF, so I figured I might as well try and take the shortest route there and skip PE, but it meant I had to be very picky with funds, so I spent a great deal of time recruiting for my first HF job. Aside, I would say IB > HF is a little easier in US vs. London.

3) If you have the right to work in the UK (or Europe - but who knows how long that'll be relevant in the UK), it's certainly possible. Otherwise, very unlikely.

Jul 14, 2017 - 5:04am

Makes sense. It's interesting that you think event-driven is less 'generic' than L/S concentrated value. I was under the impression that the event-driven equities space is every bit as crowded especially with the smaller universe of opportunities and less flexible investment horizon.

Jul 13, 2017 - 10:13pm

Thank you for doing this AMA, SB'd. You may not know/have any opinion on this since you do equity hedge.

I am wondering, do you think there will be a lot of room to generate alpha in fixed income and credit opportunities going in to the future? I have asked a few people about this and a lot of them think there will higher opportunity to generate alpha in fixed income/credit as opposed to equities, was just wondering your take.

Appreciate the AMA it has already been very informative.

Jul 14, 2017 - 4:52am

Well firstly, I wouldn't say there is 'a lot of room' to generate alpha in any conventional strategy going forward. Secondly, it's important whether you define alpha as being before or after fees.

From a human vs. passive / quant / AI perspective, I would say distressed debt is still attractive as an asset class, as I don't think computers are welcome on bondholder committees (yet). But from a human vs. human perspective, you could argue that the space is getting a little crowded i.e. too many managers, so it's really not that clear-cut for me.

But If you're talking about vanilla fixed income funds, then alpha (esp. net of fees) will get harder to come by as there is a lot of room for passive / quant to increase share. It's such a data and maths intensive field that I have to imagine that quant-type strategies will outperform long term.

Similar story with equities where the less replicable strategies have better short-term prospects for alpha. But everyone is trying to pile into them, which will reduce that alpha opportunity.

So long story short, my take is that when you look at asset classes as a whole, alpha will be cyclical. Unless you can truly do things that no one else can, e.g. RenTec / Madoff until he got busted.

Jul 14, 2017 - 6:16am
  1. I like to be fairly methodical. Condensed version: I generate my initial ideas from (1) sector coverage; (2) fundamental screens; (3) thematic ideas. Once I have a potential idea, I'll spend a few hours reading the 10-k, latest Q, transcript and maybe an initiation note.

Then I decide if it's worth pursuing further. This is usually based on whether I think I could have a variant view to the market that is (a) valid; (b) significant to the share price; and (c) will not be overwhelmed by other factors.

I'll go through a few sell-side models to see how other people model the company. I'll adapt one of the models for myself, or build my own if I hate them all. Then I'll spend most of my time on the few key factors that drive the stock - maybe it's an upcoming product launch, or a poorly-understood accounting issue, or a change in the industry dynamics - it could be anything. That entails lots of reading, and sometimes calls with management, competitors, suppliers, customers, or industry experts. If my thesis is still standing, I'll model out a few scenarios and calculate a target price. Then I'll go through a checklist of mainly behavioural factors to try and minimise my biases.

Then I'll write-up the investment case, typically with a focus on measurability - what specific things need to happen for my thesis to be proven right; and thesis-breakers - what things would compel me to admit my thesis is wrong and exit the position.

  1. Firstly, fees. Secondly, I don't really know the exact details of how hedge fund aggregations are calculated, but I don't think they adjust for net beta exposure.

If you take an index like the S&P to be a benchmark, it's going to be 100% long, and you're comparing that to funds that might be running 30-50% net long. That's arguably a fundamentally different product from a risk/return perspective. Sophisticated investors understand that, which is why HF AUM has not collapsed completely.

That said there are plenty of crap funds out there who have no business managing money. But I don't think HF underperformance is quite as bad as the media make it out to be.

Jul 14, 2017 - 5:24am

Hey thanks for doing the AMA!
As mentioned above, there's been a lot of consolidation in the HF and PE space in London. I've noticed a lot more job postings such as 'Risk Arbitrage Analyst' or 'Research at Risk Arbitrage Fund'. As someone working at an Event Driven fund, do you think this space is gaining more momentum in the HF industry as managers look for alternatives to L/S or do you think this a trend which will die down soon?
Appreciate the info!

Jul 14, 2017 - 6:31am

Yeah, I'd say risk-arb is seeing some momentum right now. A lot of funds try to market the strategy as a low-correlation, 'yield'-type product, so that can be attractive in a low yield environment. The downside is that some risk-arb funds have probably lured in a lot of less sophisticated allocators who don't understand risk-arb that well, so those funds may pay the price further down the line.

I think allocators will continue to seek alternatives to L/S for the near future. There is some pent-up nervousness about the outlook for L/S because a lot of funds make most of their money on the long side and we've been in a bull market for an extended period now. There also aren't that many funds who have successfully managed money through a downturn, so that creates some nervousness too.

Disclaimer: I'm obviously extremely biased because I just moved from L/S to do event-driven and risk-arb. Ask me again in a few years.

Jul 14, 2017 - 1:05pm

Thanks a lot. quick question: I have a non-traditional background but just proved to an HF I've got the analysis to help. Senior people at the fund requested my resume, though I do not know if it implies they are actively considering. Any suggestions on next steps, if/when to follow up, etc.? I'd like to maximize my chances with said HF and I'd rather not keep social proofing for consideration by demonstrating my investment theses.

Jul 17, 2017 - 12:16pm

Thanks. I literally have had people tell me to go as aggressive as possible on this and others who have said to hold back a bit (that I already made my splash in the original email to garner the request). They are a big name, so not sure they even need to advertise the open position. But I did show my calls would have made them 4x the S&P.

Jul 15, 2017 - 6:04am

In general, not very favourably (although like everything in finance, there are exceptions). At the junior level it's mainly about the experience level - M&A and even ER guys have simply worked more hours at the end of a 2-3 year stint. There's mentality - there's a feeling that L-O guys need to be 'retrained' to unlearn the things they know about investing / Asset Management. Lastly there are still widely-held biases that M&A is the most selective and hardest to get into, so that's where the brightest people come from.

At the end of the day though, most people are biased and want to hire themselves. So if you have a L-O background, you are likely to be much more successful interviewing with a HF PM who came from L-O, etc.

Jul 16, 2017 - 8:18pm

"Then I'll go through a checklist of mainly behavioural factors to try and minimise my biases."

Could you post the checklist or summarize it? How did it develop over time?

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Jul 16, 2017 - 8:51pm

Here's a good place to start: http://www.psyfitec.com/p/the-big-list-of-behavioral-biases.html

I initially went through a list similar to that one and narrowed down to the biases I felt I was most susceptible to. I run through my personalised shortlist on each position to think about how I could have slipped up. I also refine the list over time based on my own mistakes as well as learnings from other people I know.

I also have a list of what I call 'bad investment theses' which are based on common ways that investors slip up. A few examples: long positions that are overly reliant on NOLs (everyone can calculate these); SOTP valuation (ditto); ex-cash valuation (ditto); paid to wait (this is just an excuse for "share price didn't go up"). Short positions that are overly reliant on a single metric e.g. ROIC (some other people care about earnings) or EPS (some other people have longer time horizons or care about other metrics). It's really just about eliminating false heuristics.

I find stuff by Kahneman, Mauboussin and Montier to be helpful too.

Jul 17, 2017 - 10:23am

This list of "bad investment theses" is excellent. I have worked as a L/S equities analyst for 3 years and got trapped in some variation of these earlier in my career.

Question: How does your investment process for risk-arb differ from what you outlined before for fundamental research (if it differs at all)? Do you use outside consultants such as legal firms, market consultants, etc?

Jul 16, 2017 - 10:29pm

Thanks for doing this AMA.
I would like to ask about the mobility among strategies.
I have 4 years experience and I am working in Asia at one of the largest Asia home grown hedge funds (multi billion US$ AUM for the whole group). The team I work in also employs a highly concentrated value equity L/S strategy. I don't have prior sell side (IBD nor ER) exp, I started out in a smaller local fund and got the chance to jump to this larger shop.
So far we are doing fine and I enjoy it a lot. But I also feel the pressure on the overall equity L/S industry.
Do you think doing a top MBA (M7 or the higher ranked S16) can increase my mobility to other strategies such as event driven? And do you think having MBA adds value in general given I am already in the industry?
Thanks.

Jul 17, 2017 - 12:32pm

I'm strongly against MBAs in this situation because you wouldn't even be making that big a change by switching to another equity hedge strategy. The basic dynamics and skill set required is the same. The only skill set that would be value-add for event-driven is probably IBD - and an MBA can't replace that.

I think at 4 years of experience, you'd still have pretty good mobility and you can supplement by reading books / case studies / investment research from other strategies you're interested in. There are a couple of risk-arb books out there, and you can get research on sites like SumZero (although the quality is VERY variable).

Jul 17, 2017 - 7:40pm

Thanks for doing this. Few questions:

  1. What type of analysis were you doing as part of the value l/s? Similar to what a baupost or TCI would do? How deep were you going into the details (segment by segment super detailed model that takes a week to build with the help of industry experts or something more simple)? How long would you spend on the analysis of an investment idea....few hrs , a day, a week or few weeks?

  2. How will the type of analysis/level of detail differ now as part of doing event? Is it a pure arb opportunity or arb mixed with other types of events?

  3. How did you manage to move from a fundamental value l/s to event driven? Risk arb is a very very specific type of strategy that requires a particular mindset, unlike any other strategies and you need to know quite a bit about the regulatory and antitrust processes so did you do some prep on your own?

Jul 18, 2017 - 5:22am

No problem.

  1. Level of detail was varied. Some investment theses require that segment-by-segment, product-by-product approach, and some (IMO most?) really don't. On the larger positions (5-6%), might be 3-4 weeks initial work before entering position. I would say we did the same kind of deep-dive work you describe (contacting experts, suppliers, customers, competitors, former employees etc.), but only on the key elements of the thesis, rather than every single facet of the company. Definitely no 300-page decks.

Other times, we might have an edge on a name just because it's a competitor or supplier to one of our portfolio positions, and it might only take 2-3 days of incremental work to put on a position.

  1. Answered this a couple of posts above. Will be a mix of merger-arb and other events e.g. corporate reorgs, cap structure arb, regulatory, and the occasional distressed opportunity.

  2. Good question, as it's not a natural switch. I used to think risk-arb was a terrible strategy (pennies / train tracks) in my early L/S days when I had a very purist value investing mindset. But then I learned more about the product, met more risk-arb people and actually thought it was pretty compelling (I have a preference for low vol / low drawdown / high diversification).

I had the advantage of having done a lot of public M&A when I did IBD, so I have a pretty good foundation in terms of process / regulatory / antitrust. So event-driven was attractive in the sense that I could combine those skills with the fundamental analysis stuff I developed whilst doing L/S.

Jul 18, 2017 - 6:21am

Thanks for doing this!

I also come from a similar background - SS ER 2 years and will be starting at an event-driven fund as a generalist. Some questions if I may:

1) Job security - As a junior in a HF do you come under the line of fire when fund is under-performing or is the PM more at risk?

2) Tips - Any advice for acing the job in a junior role? Would love to listen and learn from your experience.

3) Fundamental Work - Any books or websites to recommend to pick up the basics of merger-arb, cap structure, corp restructuring? Would imagine it's not just simple valuation.

4) Quantitative Skills - Are funds increasingly adopting a 'quantimental' style of investing? How would to be part of and capture that trend?

Thanks so much again for doing this. Really appreciate it.

Jul 18, 2017 - 7:42am

1) The PM / CIO is the ultimate risk-taker, not the analyst. So overall fund performance is their responsibility. At a fund where PM and analyst work together in close-knit pods, your job security can depend entirely on the PM being employed. At other funds, analysts have more protection (i.e. a PM could get fired but their analyst could still have a job).

Obviously if you screw up really badly on a position, then the outlook for job security won't be great. But the reality is that HF job security primarily depends on factors you have little control over - fund performance and AUM flows.

2) Read a lot, especially when you're out of the office, to build informational edge. Develop your own methodical research processes over time, which will help you earn more responsibility and freedom once people realise you can be left alone to do analysis. Also very useful to build network with corporates, investment bankers, and other buysiders.

3) Risk Arbitrage by Wyser-Pratte; Merger Arbitrage by Kirchner; Merger Arbitrage by Melka / Shabi. Moyer is somewhat useful on the restructuring side.

4) Short answer: yes. For now it's more on the risk management side (a lot of factor exposure analysis), and idea screening (again, factoring). I think it's more within L/S rather than event-driven. In event-driven, ideas come to us, and we usually have fewer factors to analyse b/c typical event-driven portfolio should have less cross-correlation vs. a typical L/S portfolio.

At this stage probably most useful to just get educated on application of quant methods, perhaps via your prime brokers. I suppose you could learn Python if you really wanted to get hands on with manipulating large data sets.

NLP would be really interesting in terms of analysing regulatory stuff, so that could be an interesting tool for the future.

I'm pretty skeptical on quant applications on the idea generation side for traditional fundamental strategies.

Jul 19, 2017 - 8:46pm

Thanks for the answer. You mentioned in an earlier reply that you thought going from equity l/s to MBA back to equity l/s didn't make sense; when does it make sense for folks with prior buy-side exp? I am 1yr into a role at a large L-O shop and still am trying to figure out what asset class/strategy I would like to pursue long-term. Thinking pretty seriously about getting an MBA in a few yrs (Columbia B-school would likely be my top choice given their focus on investing) and am curious what you think are the pros and cons of going back to school are. Thanks!

Array
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Jul 20, 2017 - 6:16am

I think of MBA in terms of (1) will it open doors that you don't have access to; and (2) will the benefit outweigh cost and lost earnings + work experience during the program.

For finance, I think you need to have a really clear idea of what you want to do post-MBA, otherwise you can't target the right doors to open. I've seen more than a handful of people who went IBD > MBA > back to IBD and I guess that's the example of what not to do.

With buyside specifically, I honestly think that with enough hustle and some luck, it's possible to transition between any combination of L-O / HF / PE. So, I kinda feel MBAs don't represent great value. It's not like doing an MBA guarantees you a job at Greenlight / Third Point / Tiger cubs, or even necessarily improves your odds meaningfully. Those guys who get jobs at top funds benefit from luck too.

Then there's the earnings side. If you're already starting from a pretty high level of comp in a job with good progression (i.e. PE / HF), it'll be hard to recoup the lost earnings (again, because an MBA doesn't guarantee you a top job). For L-O where pay might not be as great, perhaps there is more justification.

I think if you work in an industry like healthcare or tech, where there are many dedicated buyside strategies devoted to those sectors, then an MBA can be very compelling because you will actually acquire some new skills and gain a network you don't have access to. Whereas if you're already on the buyside, you already have those skills, and it's really easy to network with people in finance because you work with them every day.

Jul 20, 2017 - 8:16am

Thanks for taking the time to do this AMA. Are people who have a central banking background (finc markets research / money markets desk / FX desk) desirable for macro orientated HF?

Thanks

Jul 21, 2017 - 7:50pm

You mentioned above that the LO asset managers are not viewed too favorably at L/S funds. I'm working in high yield research now at one of the bigger fixed-income asset managers, and want to make the transition over to a distressed debt/special situations hedge fund. Do you think that background would be competitive vs. the IBD or leveraged finance guys?

Jul 23, 2017 - 6:51am

LevFin / restructuring guys are usually the natural choice for those roles, but you have the advantage of prior buyside experience and should play that up, and there are funds who will prioritise that - just the case of finding the right one. Also good to target funds where there are people from the same background - as I mentioned in an earlier response, people like to hire younger versions of themselves.

Aug 21, 2017 - 2:47am

Work-life balance is more dependent on the individual fund and PM, rather than strategy. There are so many variants of L/S and event-driven that I think it's difficult to generalise work-life balance. Regardless of strategy, there is always more work that you can do (researching new positions / doing more work on existing ones), so it depends a lot on the firm's culture.

Generally, if you have to cover other time zones, that is a big factor. IME funds that hire a lot from PE/banking have worse work-life balance for obvious reasons.

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Total Avg Compensation

November 2021 Hedge Fund

  • Vice President (20) $488
  • Director/MD (10) $359
  • NA (5) $306
  • Portfolio Manager (7) $297
  • 3rd+ Year Associate (21) $288
  • Manager (4) $282
  • 2nd Year Associate (28) $241
  • Engineer/Quant (52) $238
  • 1st Year Associate (64) $187
  • Analysts (195) $166
  • Intern/Summer Associate (17) $122
  • Junior Trader (5) $102
  • Intern/Summer Analyst (215) $82