Worst outcome for IBD to HF?
Hi Folks,
Happy new year!
I have been working in IBD for 4 years (2 years of which in top tier boutique, i.e. Lazard/Rothchild, etc) and have been hunting for an investment analyst role in HF. While I am proficient in most of the banking work, e.g. financial model, IM, profile, etc, I am aware of the fact that HF and IBD require very different skillsets and mindsets.
I am wondering what is the worst outcome you can ever encounter when you switch from IBD to HF?
I assume that after a year or two at HF, if I find out that I am not talented in picking stocks at all, it would not be difficult to go back to IBD (understanding that this 2 years at HF will not be counted)?
Happy to hear out any stories you might have to share.
Thank you in advance
The worst-case scenario could be you are fired in HF during a recession and no one is hiring. But if you have 4 years of good experience in top IB, normally you should be able to move back to IB.
I see your location as Asia so my NA-biased comments might not be applicable but worst case scenario is you're fired within your first year. This is more pod-specific scenario as SMs typically have the ability to outlast poor performance (so far). So you could wind up with 4 yrs IB, 6 months MM experience. I've anecdotally heard of someone having 3 PMs in a year (Surveyor) due to the pods getting wound down.
Of course, the upside case is you go to a SM and 10yrs down the road strike out as the next Sundheim...or go to MM and strike out as the next Plotkin. Most everyone entering the HF industry thinks that they're headed to the top 25 HF earners list until reality hits them after 3-4 years...
Good luck and hope you find the right seat!
seen people fired after 6 months to 12 months, especially at pods. then they sit on their ass for 3 months and go get a mba or do some corporate gig making $80-$120k. happens more than u think.
Why not just go to another random buyside firm?
Lol.... u think they didn't try?
I've seen resumes of people/interviewed people that did IB, went HF, lost job 1-2 years in and have been unemployed for 2+ years following. I'd imagine this is lower probability, even among those let go, but nonetheless its surprising to me that it happens at all.
Wow...unemployed for 2+ years after having done IB. Brutal...
What's keeping them unemployed for 2+ years? Are there options they aren't pursuing?
The worst outcome is you get fired and have to find another job
This +SB. Plus Asia is small and with that experience (ie. 4 years in banking) and hopefully some network and the fact that proven talent is perpetually in short supply in the region, OP, you should be fine in getting another job in IB or somewhere else in the industry. Plus there are tons of funds in Asia and you could slot in. I'm not saying they will be good funds by any means...
The thing about HF jobs that everyone on this board keeps forgetting is that HFs by nature (and therefore HF jobs) are super volatile. Let's ignore the whole things not going well at work and the OP failing bit... There are also bad bosses/PMs who will screw you, be overly demanding, churn through analysts etc. (there are lots of these), there are firms that are bad and can't attract assets or keep them, there is fund performance, there are also macro factors like markets which can wipe out a lot of funds... fast. The consequence of all of these things is, OP, that you lose your job.
Most of the above factors are out of your control. And almost always will be so in a HF seat. Everyone faces the same issues.
Good Luck
Hate to break it to you pal, but Lazard/Rothschild aren't top tier boutiques in Singapore / Hong Kong.
There seems to also be a worse downside case pending what kind of fund you go to. HF skillsets are niche in nature but some are more than others. For example, quant trading seems very very niche and hard to pivot over to a start up. On the flip side, an absolute value firm (though still niche) provides a skillset that is more applicable for start up or corporate roles.
Quant trading tends to be a much easier pivot into data science/tech.
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