What’s the hedge fund job search process for investment banking analysts?

By July 25, 2016Job Search

Hedge fund job search in investment banking, starting with first year analysts, typically consist of 2 groups of funds: the mega-funds including Citadel, Point72, Millennium, Fortress, Bridgewater, UBS O’Connor, etc, vs. the mid to small funds with lean teams.

Mega fund recruiting is similar to the private equity process. Most of these hedge funds have internal recruiting teams, or are represented by tier-1 headhunters such as Glocap. Mercury, Pinnacle, Heidrick & Struggles, etc. They have a projected number of openings they want to fill for the summer next year, and they typically begin reaching out to investment banking analysts in February to March of the current year. The process used to start at around April to May, but has been pushed forward every year to compete for top talent against competitor funds and against private equity.

You will begin hearing from these headhunters in February to March, and you need to prepare for the process a couple months before that. That means you should start during Christmas to read up on hedge fund strategies and prepare your investment pitches. You should also network with people at these funds and get on the tier-1 headhunters’ radars starting in January to get an edge on recruiting. Interviews for mega funds are typically 3 – 4 rounds, with 12 – 18 interviews, and include a modeling test or a pitch.

That’s the process for mega funds. Let’s talk about the mid – small funds. These funds have lean teams and don’t have good visibility on their hiring needs until someone leaves after the bonus season of the current year. Bonus season is usually January to March. When they have a hiring need, they’ll engage a headhunter in January to March and begin to recruit for an immediate start, but are flexible to hire analysts after their bonuses are paid out in the summer. These funds are usually smaller long/short funds, or have a niche proposition – have an industry focus or use a specialized investment process.

For these funds, get your pitches ready to go because the job search process is ad hoc and can happen fast each year during January to March. But the better approach is constant networking. Start networking with smaller funds that you are interested in, and when they have a hiring need, you’d be at the top of their list.

There are few mega funds and the industry is fragmented with thousands of smaller funds, which is why the hedge fund recruiting process is much more unstructured than private equity.

Author Kelvin Jiang, CFA

Kelvin Jiang has a decade of investment experience in public equities, private equity, distressed debt, and leveraged finance. His journey spans across Calamos Investments, Thornburg Investment Management, CHS Capital, and J.P. Morgan. Throughout his career, Kelvin has screened and interviewed candidates extensively for the buy side. Kelvin earned an M.B.A. from the Kellogg School of Management and graduated magna cum laude from Columbia University. He is a CFA Charterholder. In his spare time, Kelvin is an avid commentator on NBA trade rumors and Oscar-worthy performances.

More posts by Kelvin Jiang, CFA

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