Sales and Trading to Hedge Fund/ AM
I just accepted an analyst position for S&T at a BB with desk placement to come a little while after starting. In the future (a few years down the line) I would like to work on the buy side and be closer to the investment decision. My question is three fold:
- What would be better for someone who wants to be an analyst/PM in the future, sales or trading?
- What specific product desks would be most beneficial in helping me make the move?
- I heard structuring on the sell side is good experience for someone who wants to move to the buy side, what desks have structurers?
Thanks.
Congrats on the new role. Is it a rotational program? If so, you may get an idea of what the answers to your questions are as you begin working in the various areas that they place you in. I moved from sell-side risk management to a hedge fund so my experience is a little different, however: 1. Trading, but sales could help you make the connections needed to lateral (depending on the desk). 2. Depends on what kind of background you have, as well as the type of hedge fund you'd like to work in. 3. This may depend on the bank but I've noticed an increasing number of "structurers" appearing in the equity derivatives space lately.
I pretty much agree with the previous poster.
On 3, I wouldn't necessarily agree. I don't think "structuring" is all that useful outside of the sell side. Just my personal Z$2c.
S&T -> Execution Trader at Hedge Fund? (Originally Posted: 06/17/2012)
How often does this happen and is this a bad move? Can this move lead to a junior PM role easily after a couple of years?
s&t to execution trader does happen. i don't believe you can move up to junior PM from execution trader though since execution traders are basically following instructions and has nothing in common with PM.
Happens all the time matters on the individual.
I guess the real question is, how bad of a move is this?
Will it help in my finance career path if my eventual goal is to become a PM type role at some fund?
IBD would be better
If you're a trader in S&T, execution trading at a HF is a step backwards. (S&T -> junior PM is easier than execution -> junior PM.)
why can't traders exit to hedge funds? (Originally Posted: 12/12/2010)
This question has been bothering me for a bit, and I've read some articles on the subject, but wanted to get some opinions.
Banking is lauded for its exit opportunities into PE, Hedge fund, and VC industries. I want to know why traders are known for having no exit ops, why can't a trader transition to a hedge fund role? Why is banking more suitable for this transition?
My opinion on this is that a lot of math majors and engineers break in through trading. And trading doesn't really teach accounting or skills required for a management role at a hedge fund, but why would a banker be more prepared than a trader.
And finally, do traders rarely go back for MBA's? I've had conversations with plenty of Wharton MBA bankers, but have yet to meet someone who did more than a trading internship. I am interested in going into trading, but also do want to get some sort of masters, most likely an MBA down the road, but fear that it will add very little value in the trading world.
Just wanted to get some opinions on these topics. Thanks for your replies.
they can. try calling some start up hedge funds and they love traders
your exit op is to retire.. you cant do that in banking. traders start up hf's traders do go to grad school..if your trading and get mba to return to trading your an idiot.
i am a trader going back to school
What did you go back to school to do? How’d it work out?
my bank won't even recruit mba's for trading desks anymore. (although i'm sure there are exceptions to this rule) they exclusively focus on undergrads and msf/doctoral grads. traders don't require advanced degrees, except for the quants and those guys need phds or msfs.
trading has traditionally been more of a boiler room type atmosphere, with balls of steel and the ability to take huge risk being prime qualities. the typical trader does not need to know how to write a business plan, and he does not benefit from having worked in a different industry in the past. in trading, you either have it or you don't.
very different than banking or research. traders also seem to get typecast in my opinion. i'm sure lots of them end up at funds, although i don't know enough to provide specific numbers or %s.
thanks. One follow up, what qualities do bankers get out of their two year analyst experience that prepares them for work at hedge funds? I understand completely why working in M&A would definitely qualify one for PE, but why do former bankers seem cookie cut for hedge funds, atleast on this forum it seems to be the case.
http://www.wallstreetoasis.com/forums/the-hedge-fund-experience-good-ba…
Read This.
traders move to hedge funds all the time.
Trading to HF Analyst (Originally Posted: 04/16/2011)
Hi,
I was hoping to tap the combined wisdom of people on these boards for something that's been worrying me lately.
I'm about to start trading EM equities at a BB bank, I've got a solid resume (oxbridge for undergrad, a masters in a finance-related field from a top ivy league school, internships (trading) at BB, McKinsey, and a few other relevant firms) but my main concern is how I'm going to be able to make the jump from trading what is a very simple vanilla product to becoming a research analyst at a HF (preferably something equity related) and not pigeonholed as an execution-only trader guy who's gonna be bashing at a keyboard and yelling at brokers for the rest of his life....
I'm starting to think I should have gone into I-Banking/Research/Asset Management. Any advice on whether I really am in the wrong place? And, if so, what I can do about it so that when the time comes I can make a case for myself as someone who can generate ideas / do good research / understand fundamentals? I'm thinking about looking for a part-time course in accounting, maybe try and get an accounting qualification? Worth asking the BB whether there are opportunities in other divisions?
I realise that this is not a terrible problem to have and it might seem picky but any advice is much appreciated,
Thanks
If you wanna move to the buyside, you need to move to a FICC trading desk from which you could get buyside opps into macro funds further down the line, or into IBD/Research. It will be very difficult to move from EM Equities trading on the sellside to a HF.
The accounting qualifications won't help at all.
Wow, this is horrible advice....except for the accounting part, accounting would be of zero use.
Have you never heard of an Emerging Markets hedge fund? There are hedge funds that cover every product and every region. Hell, if you make money, a large fund (probably macro, but doesn't need to be) will just hire you to trade international equities. The large macro funds trade every product under the sun--mortgages, loans, distressed debt---they don't just "take macro views on commodities and FX" like so many people on this site seem to think.
You want to know how to move to a HF---make money. You want to do fundamental analysis--what is stopping you from doing that at the bank while you manage your book (we are talking 2-3 years from now). Once your at the bank you can move into research if you really want to, but you are better off just staying on as a trader and become a trader with a more fundamental/ medium to long term view . If you have read Inside the House of Money or any Market Wizards book you would know that all different trading and investment styles can make money.
If you do well at your job, you will find that all doors are open to you.
Thanks for the advice.
Appreciate the comments guys, not sure which is more correct (probably bits of both) as these are two pretty opposed viewpoints.
Out of interest, why would the accounting skills be so useless if I wanted to go into a fundamental equity-oriented HF?
x
I see your point that others skills will be more developed than mine but using that as an excuse not to try and narrow that gap doesn't seem to make too much sense?
But if, as you say, accounting qualifications are not the most useful thing to have, what can I do, outside of the workplace (for at least the first year of my career, after which I will likely aim to move into a more valuation oriented role)...? Read a bunch of 10-Ks a la Buffet? Read a bunch of books on valuation/financial modeling/security analysis? Try and, as Gekko suggested, make the way I trade more fundamental based despite the ultra-short timeframes and limits for losses that one is subject to when trading at a bank? Take on of these 'wall street financial modeling courses', although I am extremely skeptical about this last one.
Again, any advice appreciated.
x
Thanks again for the advice, I have absolutely no problem dropping 'back' a year to apply to a different / the same firm but into the right role for me and some experience of trading certainly can't be a negative.
Having spent time on the desk I'll be joining I have to agree that there is no way their minds are wired in such a way as to trade from a fundamental perspective so I doubt arriving and letting them all know that I didn't like the way they did things and thought I had a better way would go down too well.
Wondering, what's your view on Research vs. IBD? Have friends who have gone through the IBD route and come out with the job they want in a HF but have told me to try and avoid banking if I possible can, at the same time, I know what most of the buyside thinks of sell side research...?
Will definitely get on top of the accounting/valuation/modelling technicals as soon as I get some spare time over the summer
Thanks again
x
Trading to HF (Originally Posted: 01/21/2010)
Hello,
Just had a quick question on how a trading background translates into the hedge fund space. If your ultimate goal was to be a PM, would a trading background be beneficial? In another words, what are the usual exit ops for a trader.
Any input/advice would be appreciated.
Thanks
Trading can lead to a global macro or commodities hedge fund, or to execution only trading at an equity/debt hedge fund.
Most HFs that require fundamental valuation of securities (i.e. focus on equity and debt), hire analysts (who later become PMs) out of investment banking.
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