Switching to a Different Hedge Fund: The Interview Process

born2trade's picture
Rank: Orangutan | 332

Hi all,

For all the experienced hedge fund analysts out there, what was your experience like regarding moving from one hedge fund to another in terms of the interview process? Haven't seen much content on WSO regarding the topic.

As some background I did 1 year in ibanking and have 2 years of HF experience as a sector analyst (covering multiple sectors) and spend a lot of my time on idea generation and have what I think is a solid track record given my experience/age. Not actively looking for a new fund but staying opportunistic and want to be prepared if a great opportunity came along.

The only hedge fund interview I've had was when I was in investment banking interviewing for my current hedge fund and other funds. However, I'm guessing the questions you'll get as an experienced analyst are completely different versus when you are trying to break in to the hedge fund world.

Specifically, what questions did you all get as an experienced HF analyst? Does the PM focus on walking through your investment rationale and ideas you've contributed as an analyst? Did you get a modeling test (or is that not relevant for an experienced analyst)? Case study? Were you expected to pitch ideas outside your coverage universe/current fund holdings?

I imagine that you are spending most of the interview discussing how you think as an investor and the ideas you've contributed to your current/past funds - is that a fair assumption?

I greatly appreciate any commentary/help!

Comments (7)

Jul 14, 2018

Curious as well

Jul 16, 2018

I've interviewed experienced analysts for the fund I work at. The main difference vs. interviewing a sell-side research analyst or someone from IB is that I would expect the stock pitches to be a lot crisper, to have a better understanding of the risks of an idea and to have a better developed variant perception on a company as to what your analysis points to that either means earnings/cash flow are going to exceed expectations and/or the multiple will re-rate.

I'd expect modelling tests - we did this simply to check if their approach was similar or adaptable to our own and as a test of how they thought about a stock. We typically set them a stock out of left field with mostly poor analyst coverage so they could not 'cheat with sell-side help' on the model and the underlying assumptions just to judge their thought process. We would typically pick a stock outside of their coverage universe for this test for obvious reasons.

Every fund is different - some have rounds and rounds of interviews to decide. I've heard of 20+ interviews which just seems immensely frustrating as a candidate. I'm almost convinced that some funds use it as an easy way of fleshing out new ideas.

Hope that helps. Feel free to DM me for specifics.

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Jul 17, 2018

Awesome, thanks.

Jul 19, 2018

Yeah I would say it is heavily focused on talking through ideas in depth, your investment philosophy, why you want to make a switch, and case studies. All much more in depth and intense than someone coming out of banking would receive.

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Jul 19, 2018

If you interview without a job, people like me who are interviewing you will assume you were asked to leave. In addition, looking for a job is difficult and takes a tremendous amount of time. If you are 10 months in with no prospects, you will begin to feel the strain financially and emotionally which naturally leads to bad decision making. Lastly, we are very late cycle. If the economy does turn, then funds will shut down hiring and you will be out of a job for a long time -- even if you hate your PM and can't stand work, at least you will have a seat and a regular paycheck to tide you over.

Jul 19, 2018
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