3 July , 2009

Some of you have been sending me emails, saying: Why are you starting a blog about hedge fund careers? Well, admittedly, I only intend to write a few posts on this blog and then whenever someone asks me how to break into the industry or how to garner hedge fund employment, I can simply point them to the blog. Plus, I like writing, there isn’t as much to do in the distressed market right now (GO GREEN SHOOTS GO!), and the more people I can help out the better.

Now, I started my hedge fund career when I was younger. I won’t specify the age, but I didn’t serve the full tenure at a banking program if that gives you an idea. What attracted me? Well a hedge fund salary (or better yet a hedge fund analyst salary) is higher than an investment banking analyst (and sometimes associate). Now did I sell out by taking the higher hedge fund pay? Of course I did. AND…I did not have to continue working 80-100 hours a week. That was the real reason I joined the buy side.

Hedge fund employment (or even hedge fund internships) are the sexy want of all investment banking and MBA students alike. Why? Maybe it is the pay. Maybe it is the allure. Maybe, like for me, it was the ability to have some semblance of work life balance. The hedge fund industry, for whatever reason, attracts some of the brighest talents and mind in the world. I once told my wife that if all hedgies had instead become scientists, we would of cured cancer, walked on Mars, eliminated poverty, etc. She completely agreed.

Now, you are more than often, going to start out as a hedge fund analyst. There are many paths to become a hedge fund analyst. Let me just list some of the previous professions that friends of mine have engaged in before become a hedge fund analyst:

  1. Leverage finance analyst / associate / vp … particular favorite among my distressed debt investing friends.
  2. Sell side publishing or desk analyst
  3. Generalist investment banking analyst / associate / vp / director…I actually have never met an MD that made the jump
  4. Newspaper / Magazine journalist (two of them to be exact)
  5. Medical Doctor (Michael Burry, one of my “heroes” for lack of a better term, finished med school before starting out on his own with Scion Capital…Google that one will ya!)
  6. A friend came from an actuarial job and is CRUSHING it
  7. Lawyer (all sorts of types)
  8. Broker salesman (Dan Loeb used to work for Jefferies as a salesman)
  9. Architect
  10. Military (actually quite a few)
  11. Many people from bank credit analyst jobs
  12. One or two accountants
I could go on like this forever. There is no tried and true formula or exact science to get you in the cross hairs of all those investment management recruitment agencies. Maybe some hedge fund headhunter will fawn over you if you spent 5 years at Goldman’s Prop Desk after spending 3 years at Lazard’s M&A; group…but if not…the door by no means is closed.

The key to the equation, like most things in life, is how much value do you bring to the table. That is it. If you can generate 25% IRR’s over the foreseeable future, 99% of hedge fund managers would hire you (assuming your prefereed method of capital generation fit into their strategy).

The problem then becomes: How do I get in front of these people, and how to I convey my message to them? None of us at an early age have a real track record to show off. So what do we have to do? We have to sell our skills, talents, and value generating abilities. And that is why I think many investment bankers can make the jump to the magical place (at least sometimes) that is hedge fund land. Why? Because investment bankers, no matter how junior, can sell. Or they have been around M.D.’s long enough that they can at least make a valiant effort at selling. Maybe I am off base here, and if so, feel free to correct me or admonish me, but investment bankers aare obviously competant, have great attention to detail, and work hard. But they are also great salesman (or saleswomen).

So, what tools do we have to sell our skills / talents / etc? Well, we have a lot. We have our resume, our interviewing skills, our network, our idea generating capability, etc. I am going to talk about each of these in details in coming posts. Pretty soon, we should have a decent game plan to get a great hedge fund job (even in this terrible economy).

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