Realistically, can I become a Research Analyst at a Hedge Fund?

koko87's picture
Rank: Chimp | 14

Greetings Fellow Chimps, Apes, and Humanoids,

I've taken a long journey down my finance career thus far and I've reached a juncture where it's finally time to pursue my passion of becoming a research analyst at a Hedge Fund.

:::pause for uproarious jeers and hysterical laughter:::

For the past eight years since I graduated college, I have been working at a boutique institutional broker dealer in New York City that services Hedge funds and Mutual funds in their trading. For a multitude of factors, I hung around always hoping I could switch to the buy-side into operations and then into research. Three years ago I was persuaded to stay after being promoted to senior vice president with a decent pay raise plus a hyuge profit sharing incentive to bring in new clients but alas, the company pulled the plug on our dying trading business.

Now with 6 different securities licenses to my name, the CFA Level I passed, and the years of expereince as a prime broker, I want to channel my time into finishing the CFA and ultimately move into the hedge fund space as an investment analyst.

I've read the advice and potential routes to break in: network like crazy and perhaps have a hedge fund client hire you. The former I've pursued and will continue to pursue. The later, never panned out, because the funds I serviced were so small they wouldn't want to take on another body--and plus what value could a broker with zero investment experience add? (a loaded, rhetorical question they'll ask)

At my shop, I saw a variety of different investment strategies employed by different kinds of funds. I saw what worked. I saw what failed. I also saw what initially worked and then disastrously failed. Knowing my mindset and my naivety from 2011-2018, I could've easily succumbed to the same career- ending failures if I had made the move to the buy-side earlier. Seeing the pitfalls of many portfolio managers, I've come to form a better understanding on what kind of investment vehicle I would want to be a part of.

So am I naive now thinking that I can get into a hedge fund as an analyst? Here's my plan: pass CFA Level II this June, take a financial modeling course this summer, hone-up my VBA skills, produce my own research reports, pass Level III in 2020, and then get a job as an analyst.

Also, please kindly consider that in August I turn 32 and that I now have enough savings to support my living expenses all the way through until completion of this venture. I could even perhaps get a contract job for 6 months (if I can't get a full time ER job) from July to December until I need to start studying for level 3. Also, with the exorbitantly high cost of tuition, I've ruled out pursuing a MBA at the moment.

Please bestow upon me with your knowledge, wisdom, and understanding.



Comments (8)

Jan 30, 2019

Honestly I think an MBA would be your best bet. Even though you're technically in financial services, you're more of a career changer than a lateral given the lack of applicable experience. You're also going to be perceived as more expensive than hiring someone more junior coming in with SVP next to your name and being an older candidate. I would think MBA > ER> HF or MBA > IB > HF would be your highest chance of success unless you have a strong network you can leverage, which it sounds like you may if you developed good relationships with your clients over the years. Either way, good luck.

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Jan 30, 2019

Unfortunately i think Secyh is right, MBA will definitely help you reset. It's going to be very hard to go in straight. Try to think of the MBA as an investment in your future. Yes, it will absolutely suck to drop 180k chilling for two years, but it will rebrand you. Whichever path you choose, wish you the best of luck

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Jan 31, 2019

Do you have a family that you need to support?

Jan 31, 2019

No, family to support--just dating for now.

Jan 31, 2019

So also no plans on starting a family in the near future? I know this might sound really personal, but I think you'll agree that your current background, even with an MBA, doesn't necessarily lend itself on its own to a position within a large, prestigious hedge fund with stable AUM. Based on your work history, it seems like you have a solid grasp of the risks of going to a smaller / newer one.

Do you know what kind of strategy you would be interested in? Activist, L/S Equity, Private Debt, Distress, Structured Credit, Quant, etc. all will have different work requirements when you're thinking about that first job after MBA which will set you up for your preferred HF. Before getting into any of that though, I would think hard about why exactly you want to join an HF. If it's legit because you find the work interesting, there are plenty of sell-side roles that offer very similar experience with a far more stable path for earnings growth.

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Jan 31, 2019

i have a good friend who is a research analyst at a hedge fund....his suggestion is to get a job in equity research at a bank...they are often hiring...because people leave after a few years to go to a hedge fund. And that's exactly what you should do...try to get a spot as a research analyst at an investment bank...and then after 2-3 years, you'll be able to lateral to a hedge fund (if you want, and if you have the chops)

just google're welcome

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Most Helpful
Jan 31, 2019

MBA would far and away be better Even then, the likelihood of you getting a HF job is minuscule, but you could potentially get a SS role for 2 years post-MBA, and then transition, which would be your best bet. Good luck

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Jan 31, 2019