Take HF Offer Out of Undergrad?

Hi, I'm a junior in undergrad, and I have been lucky to receive SA offers at both a HF and at a BB. I am really struggling with the decision between the two.

Would love any input from people who have been on both sides.

 
Best Response
That's something I was thinking about, but am also concerned about my ability to recruit for non-HF full time roles after doing a summer internship in a hedge fund. I.e do I get stuck?

No. It's a summer internship, not your whole career. An internship can only help you get a FT job in a particular field. It will not hurt you in applying for entry level roles elsewhere. You could spend the summer taking classes, backpacking across Europe, working tables, or interning in an entirely different field and still be competitive for other FT positions if you're smart and hardworking. No bank or consulting firm is going to look poorly on your summer HF experience - they frankly just want to see that you're working at all instead of doing any of the other things I mentioned.

 

Corporate banking...is not the same thing as investment banking. Did you actually mean investment banking?

I vote for the fund contingent on them giving you a good shot at converting to a FT role. You'll learn a lot more a lot more quickly working with some of the sharpest people in the business - assuming it is really a top tier fund as you say.

 

I'm also confused about the corporate banking point. Honestly it depends entirely on the bank/group and the fund, and then of course your own preferences. The bank/group matters quite a bit because few banking groups place well into hedge funds. The recruiting process is much more concentrated than for PE. As for the fund, I would be much more inclined to join a fund with a track record of having summer interns who return FT and who have stayed with the fund long-term. I would be nervous about being the guinea pig for a HF that is deciding to hire undergrads for the first time.

Honestly, although again I'd like to know the group and fund, I don't get the impression that you are sure enough about investing to join a HF out of undergrad. Working at a hedge fund teaches you how to work at a hedge fund, and the exit opps are other hedge funds or perhaps long-only managers. On the other hand banking develops a broader skill set and gives you access to many different opportunities. If you're not sure what you want to do, that flexibility is valuable.

 

I think because this is top tier HF vs. corporate banking at a BB, I'd take the HF. If we were talking about IB, then this might be a different matter. However, the BB (IB or CB) will give you better placement generally if you are not explicitly interested in going directly into L/S or Long-only. If you're smart you should be able to convert the CB into IB, but getting a solid FT IB offer after a summer at an HF, even a top-tier one, would be difficult.

All of the above, and especially the last sentence, could be wrong. My opinion has been formed based on the limited observations I've made while seeing friends go through similar quandaries.

 
fishtail90:

but getting a solid FT IB offer after a summer at an HF, even a top-tier one, would be difficult.

Is this a joke? What BB IBD wouldn't want to take someone who could pass a screening at Point72?

Multiple people I've spoken with on the sell-side and buy-side seem to agree that an internship at a top HF will be more valuable than one at a BB or EB (and I'm talking IB, not CB).

Think of it this way - the goal for some bankers, and what seems like 99% of WSO, is to go to the buy-side. But when you're in college, who really knows whether or not you're going to be some hot shot investor. What better way to try it out than by doing it during a summer at a top fund? If you find out that you have some talent as an investor - then awesome, stay at the fund, maybe recruit at even better funds, and start an extremely rewarding career. If you find out that you can't make investment decisions for shit, I find it extremely hard to believe that no BB would not want to hire you FT - especially after you have that experience and prestige on your resume.

On the other hand, many aspiring buy-side kids without the HF offer will do their standard two years of banking, working like monkeys and doing much more mundane work. They'll finally complete their stint and land an analyst role at a HF... only to find out that they fit in the latter category of investors (read: terrible) and will be faced with a much more difficult task of evaluating their career path already years out of college.

Yeah, one summer probably isn't nearly enough experience to know whether or not you're fit to be making investment decisions for the rest of your life. But it's a lot better than being a monkey two years in a row and then finding out that you aren't.

 

Just to present the other side a bit: the arguments that you will learn more / work with smarter people / work on more interesting tasks will be true when comparing virtually any HF ofer vs any IB offer. However, there are plenty of matchups in which I would pick the banking offer over the hedge fund offer, so I do not think that this is the right set of reasons to justify the decision.

As important as learning is, we're talking about 2 years in the span of what could potentially be a 30-40+ year career. The advantage of diving directly into the investing process over working in banking for the first 5% of your career are very likely to be minimal. At the right banking group, you are going to develop a network that could end up being very valuable, and depending (heavily) on the group, you are also likely to have access to some very good funds that recruit banking analysts. This makes the choice of a good banking group over most hedge funds pretty easy.

That said, OP's decision is pretty easy if he is interested in investing, because the choice is between commercial banking and what sounds like a good HF offer. CB is not going to give him access to HF exit opps in the way that a good IB group would, so the decision becomes simple if HF is where he wants to be.

 

So essentially you're saying that it's better to do two years of marking up Excel models and fixing pitch books instead of learning about the investment process, solely because you are going to develop a network that could end up being very valuable? It's not like someone who is already at a top HF is going to have an extremely difficult time recruiting for other HFs that have historically taken banking analysts.

Additionally, just because you're at a HF doesn't mean you can't ever do anything else in finance. Have an epiphany and want to be a consultant or work in Corp Dev? There's a thing called getting an MBA. Who do you think H/S/W is going to accept for their MBA program - someone with real, applied investment skills who learned from some of the best, or someone who has proven they can stay up all night marking up Excel models and fixing pitch books.

 

This is an obvious choice - go with the HF. Don't listen to the banker trying to make himself feel better about not having had the same opportunity. You will learn 2x at the HF and skills that will be very valuable whatever you want to do. Yes, it will be more of a pain to get another offer if they don't take you full time, but the learning experience more than outweighs this.

 

i woudl go for the fof. fof is diff from hf, but i think it would probably be more interesting than doing ib.

caveat, i graduated in june of this year, so i am not exactly a seasoned banking pro.

 

Disagree. Do banking. There's a lot of discussion on the merits of fund of funds on WSO but my opinion is that you won't learn the valuation and analysis skills you'd need to work for an actual fund.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

Hey guys thanks so much! I think I'm gonna go ahead with the IB program. I don't have a finance background academically so I think it's best to get as much training as possible, along with a bigger network of people to work with and greater deal exposure.

 

how small is the hedge fund and what will you be doing? A lot of these "small" hedge funds will hire junior guys with no experience for back office type of work. Also, where do you want to be in a few years? Do you want more of a markets job or a deals job? Personally, I'd go with M&A, but the HF opp could be the right choice depending on the circumstances and your goals.

 

The hedge fund has $1 bn AUM and I would have a front office role. By small HF I meant employee wise. I ultimately want a markets related job rather than PE but don't want to limit myself to working for this specific fund for the rest of my life. Will the M&A experience give me more leverage to move to different HFs in the future rather than starting out there? Thanks for your advice.

 

um...1 bn aum plus its a front office gig...i would take that in a heartbeat especially if you dont want to do PE but rather a market related position. and who gives a crap if you work there for the rest of your life if you like it?? if you dont like you should be able to leverage a front office hedge fund gig into a lot different things, including banking if you really wanted to go down that route

"Life all comes down to a few moments. This is one of them." - Bud Fox
 

@"bumblebees" - I wouldn't reveal what fund it is on here, whether it is Point72 or not. You don't want one of their recruiters to see you posting about which offer to take. Most would be understanding of having choices, but some might get pissy that you would even have to ask.

"Decide what to be and go be it." - The Avett Brothers
 

If you have no other options, I'd say it would be worth a shot. I've had friends in similar situations. For some it panned out, others end up collapsing after a year or two of poor returns. The buy-side experience still looks good on the resume and realistically it would be much tougher to get into a HF out of undergrad under any other scenario.

 

Most important thing is to figure out if they'll actually hire you after your SA stint if you do a good job, and what kind of work they want you to be doing and what kind of professional development/mentorship they have planned for you. With a fund that size they do not necessarily have headcount. If they plan on hiring you after your SA, then definitely go for it if it's your best option. No way to answer this without knowing your other option.

Pretty much everyone in high finance is intelligent, it's generally not something you stumble in to.nadd to that years of experience and you can learn a ton by working close with people like that. Question is whether they are planning to let you do that and that's 100% dependent on the person.

 

If they were not willing to give me a return offer, what would my options be then? Could I recruit to a different HF for full-time given the experience?

Since a couple people referenced what my other options are, I've got a few BB, EB, and MM IB processes coming to a close sometime over the next month, a large growth equity firm, and a huge AM doing ER. All over the fucking map, I know, but beating down everyone's door for an opportunity is what I have to do at this point considering my GPA is on the lower side. It's still acceptable, but it won't wow anyone.

The reason this internship is so appealing is because I would be jonesing to head to HF after a few years in IB or AM anyways. The fact that I could start where I want to end up is, obviously, extremely appealing.

 

I think most posters on this board can attest that no single career path is set in stone - totally depends on the person and circumstances. Typically, I have seen BB - i-bank roles lead to some top notch HF shops.

It can be difficult to move from sub-$50M hedge fund to top shop but definitely not out of the question, especially if you buckle down, get you CFA while working there, network and learn as much as possible. If your end game is HF, then you will obviously learn the most relevant info while interning at a HF. Plus you will be much more articulate on the subject at interviews.

Its hard to argue that IB experience will be better HF prep than going straight to a HF. However, top HF's tend not to hire straight out of undergrad and like the fact that BB i-banks have already weeded out many candidates through their own recruiting process.

Sounds like you have some good options either way, good luck.

 

This is just an internship?

Why are you even thinking about this? Its only a shortterm commitment & its probably gonna be 10x more fun than anything else that gets put in front of you.

Array
 

As in investing, it is difficult to judge this option without knowing your opportunity set. If the oppty cost of this small HF is IBD at GS or a deal work at a top MM PE shop, this is not a good choice. If your oppty cost is to forecaddy at your local golf club, this is a fantastic option.

Per @xqtrack, if you are a rising junior, this is an excellent gig as you will get all the positive optionality inherent in interning for a small but potentially sustainable/growable hedge fund, while also dramatically improving the chances that you'd land something a little more institutional in your rising senior year.

 

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