Q&A: S&T or Banking switch to a HF

Hi everyone, as a big fan of WSO and the skills it provides juniors and experienced hires.  Happy to do a Q&A and answer as many questions as I can.

My background starts with a rotation program stint with Fannie Mae prior to the MBS crash. After that landed in sales and trading at HSBC primarily in FX, covering corporates, private bank and retail clients.  I continued in sales and trading at Morgan Stanley covering institutional clients. Finally, I got a break into the buy-side at Totem Point a traditional long/short fund. I also have start-up and venture investing experience, which has indirectly played a huge role in my career.

I have been fielding a lot of questions from a lot of bright people about making the switch to the HF world of late.  Figure we can make this forum the theme, but feel free to ask anything you want.  What I can say is a career can be traditional and non-traditional to get where you want to be. Let's have a little fun together.

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Comments (17)

Feb 1, 2021 - 1:22pm

Great question. It's an interesting phenomenon that has come up before with VW in '08. However, there is no fundamental analysis being done by the retail investors.  So don't think it's a great use of peoples time and capital.

Feb 1, 2021 - 1:02pm

Thanks for doing this! Where you in FX at Morgan Stanley too or something more closely related to long/short?

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Feb 1, 2021 - 1:47pm

Another great question.  From what I have seen banking has a more structured route to getting into PE, VC and HFs.  However, I have seen many talented S&T colleagues have successful careers at HF's.  The S&T transition is more seen by the traders than the salesperson.  They may have already serviced their future HF employer from the sale side or they have outstanding trade ideas that can create alpha for a fund.

My suggestion is as you move along in your career have those WSO star skills ready, but find an asset class you enjoy that also has growth to it.  Using your WSO skills and career experience start developing your own views, trade and investing ideas to display to an HF.  Noticing reactions by HF, being vague about your interests or asset class won't lead to a desired outcome.

Feb 1, 2021 - 11:29pm

Congrats on landing the gig! Thats a good question.  I think with internships you have a limited timeframe to display your skills, which hopefully leads to an offer down the line. I would definitely collect as much information online, youtube, twitter, macro forums and WSO around these products.  Try to learn the economic fundamentals around the variety of products offered in debt and equity. I would try to find out or guess on Linkedin who may be the senior people in the group and follow their research, substack articles or things they follow in the economy.  Practice speaking about the products and research you have done with local friends/family. This way you are comfortable speaking to your new team about the markets and ask great questions about the products.   Hopefully this frees you up to network with a strategy and content at the bank.  Best of luck!

  • Analyst 1 in IB - ECM
Feb 1, 2021 - 6:00pm

Seems like ECM gets a bad rep in terms of exit ops. I would like to switch to a hedge fund in 2 years (I'm a first year). How can someone in ECM stand out without the modeling someone in coverage will have?

Feb 1, 2021 - 11:57pm

Thanks for the question.  I wouldn't focus too much on reps of a group. That being said, I do understand the hurdle you potentially face. Still there is no one stopping you after work from using your WSO skills to pick a handful of market names you are excited about and modeling them out.  Create your own personal investment thesis and assumptions.  You can hopefully network with a few PM's expressing that you would like to share your ideas and views.  Its better then just asking for a coffee without an objective.  At the bare minimum you are creating modeling reps that will come in handy for the future.

Feb 2, 2021 - 1:12pm

Great question for this forum.  I had an appreciation for a PM for a few years from his academic thought process and long term value investing skills.  Many of the skills advocated at Columbia Business School.  A bit of luck I ended up covering his firms residual FX exposure.  Ok, so one may say so what? I had always been an investor since 2009 in early stage start-ups and helping founders. Call it a passion hobby, but this activity through the years allowed me to have a dynamic conversations about ideas with an open minded PM. So along with traditional capital markets skills, I would say my own organic skill building in investing and problem solving with founders brought a different perspective with real skin ($$$) in the game over years.  That being said, I had to take a positive long term view of my career and understand that transitioning would require taking steps back to take long term steps forward.  So my transition is non traditional and requires a view, uncertainty and risk.

  • Prospect in S&T - Equities
Feb 1, 2021 - 11:38pm

Thanks for hosting this. What do you think about hedge fund opportunities from more niche trading desks such as exotics or derivatives?

Feb 2, 2021 - 1:51pm

No sweat, happy to field some ground balls. I think first being in a niche exotics or derivatives trading desk shows risk management and complex problem solving capabilities.  Depending on the funds you are targeting, I think if you can display handling their core competency asset class that would be a solid starter.  Where you can stand out though is using your exotic derivates skills, which may be second nature.  If you can provide consistent new exotic trade ideas on a PM's desk maybe showcasing multi-asset views that could be very powerful.  Also research derivative and exotic traders that made the leap to a HF and try to land an informational.  They can help refine the strategy and approach.

  • Incoming Analyst in S&T - FI
Feb 3, 2021 - 4:05am

covering clients - were you on a sales desk?

seems like it would be "harder" for salespeople to move to the buyside, how would one go about moving from sales -> HF?

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