14 July , 2009
Before we move on to networking, getting the hedge fund interview, building a case study (my form of a cover letter), etc, we need to build the hedge fund resume. This is part #1 in a Two-Part Series.
Schools of thought aside, I want to lay out a practical guide / system, that will increase your chances of getting the hedge fund interview. Of course, this is not a full proof, shoot the lights out, get every job interview you apply for, system. Nothing is a magic bullet. You may have the best resume on the Street, and a fund manager could have just been short squeezed to hell in the PAH3/VOW trade, and your golden ticket resume is now in the trash. Do not take it personally.
I am going to focus in on what I think is the most effective layout of a hedge fund resume. The details will be up to your experience (in and out of the market), your background, etc. At this point, do not worry about formatting or if a 10pt font is better than a 12pt font. In the end, that is not going to matter. As long as the formatting is not blinding to the eye, and uniform in nature, you should be ok.
At this point, you should have your name / contact information at the top of your resume. The next section will be the career section. Studies have shown you have an average of 10 seconds to please the eye of the reader of your resume. In other words, you can’t screw this up.
In my opinion, the best way to lay out your hedge fund resume “career section” can be summarize as such:
- You want a very concise, maybe 2 sentence description of your job responsibilities. Make it understandable, and as I said concise – especially in the cases where your job responsibilities are self evident. Everyone knows what an investment banking analyst does. Maybe you need more description if you are a basis trader at a global financial institution. Nonetheless, keep it tight.
- Follow that, with a number of bullet points. Now these are not any old bullet points (in other words bland, vanilla, or unappealing). This is where you need to showcase that you are the best. I am reading an interesting book right now on Julian Robertson and his Tiger Cubs (you can find the book here: Julian Robertson: A Tiger in the Land of Bulls and Bears). A point the author constantly makes about Julian Robertson is how competitive he is. This is what hedge fund managers love. Supposedly, Ricky Sandler of Eminence Capital fame, hires lots of athletes for this sole reason. Investing is intellectually challenging. You have to prove you can cut it. So how do you do that? By comparing your successes to others. What sounds better? “Completed investment banking tasks including building financial modeling, conducting on-site company due diligence, and preparing investor presentation materials.” or “Ranked highest among my investment banking class in regards to building financial models, conducting on-site company due diligence, and preparting investor presentation materials.”
- More bullet points, comparing you to your peers. If you have no peers to compare yourself to, start quantifying your accomplishments, and compare them to some benchmark. For example: “Performed due diligence and submitted buy recommendations to the trading desk. Over the 18 months at XYZ bank, these recommendations returns 25% on an annualized basis versus a 5% return for the S&P.;” Hedge fund managers like numbers. Show them, when it comes to numbers, you cannot be beaten.
- I know the general consensus is to not use buzzwords. While I agree, where is the line drawn? Is “Hidden Catalyst” a buzzword? How about instead of calling them buzz words, we call them, “Hey…look at me words/phrases.” You want to pepper these into this section. If you have a subscription to Value Investor Insight, these are ALL OVER the place in there. For example, from the most recent issue: “margin of safety”, “prudent and proven management teams”, “trough margins and normal business cycles.” And that is only from the first 1.5 pages.
- Here is the most crucial part. After, you have your job description(s) and bullet points in place, you need to display a list of investments / situations you have worked on in the past in which you were wildly successful. Do not lie about these investments. How do you do this? After your last bullet point, you want to have a sub-section entitled something like “Past Investing Situations” or something to that effect. Under that sub-section, you want to list 2 or 3 investments that have worked out for you. There needs to be a story to the investment. And the story cannot be “Asset was trading at 5x EBITDA when comps were trading at 9x”…anyone can run a screen. How about this: “Sept 2008: Short Copper: After a global mine-by-mine analysis of worldwide mine capacity and production, it became clear that the price of copper was unsunstainable due to a drop-off in worldwide demand combined with excess stock-piling at Asian and Australian ports in the 3Q2008. Position was put on via XYZ method at ABC price, and closed at DEF price, resulting in a gain of some percentage.” If that were true (and some readers I know, did that exact analysis), it is an incredibly powerful statement. Plus, if you did get the interview, you would know some much about copper, it would knock their socks off.
Remember, the key to Point #5 listed above is really to sell yourself, and your abilities as an analyst. It also may picque the curiousity of the hedge fund manager to get a sense for how you think about certain situations. You want to list 2 or 3 of these (preferably 3 if you have room), and they should have occured in the last 12 months – the more topical the better. The best ones are current positions you have on and have very high conviction for. Hedge fund managers love ideas…that is the one of the first things they are going to ask you: “So, what do you like?” … If you have an insight on a certain stock and say something to the effect: “Long this stock at $20 with an intrinsic value forecast of $70-100 based on these factors that the market doesn’t appreciate or know about” well, I promise you you have GREATLY increased your chance for an interview.
Work on these point above, and in the next post on hedge fund resumes, we will talk about how to form the remainder of the resume, add some personality to it, and tailor it in the case you are sending it to a specific hedge fund job listing.