Charlie Panoff is a hedge fund recruiter at Objective Solutions International (www.e-osi.com), an international finance and technology search firm.
Tell us a bit of background about yourself.
I started in the industry when I was 19. It was right as the market started to turn bad, and I did it for a few years. I was good at it, but it was very hard to make money. I was making a lot more money than I ever thought I would at that age, but I wanted to further my education and further my level of experience and knowledge.
So I ended up leaving and going to a large company. I worked for Institutional Investor News for a few years. Then it came time when I reached my peak of earning potential and star power there, and I called OSI because I always had a good relationship with their president, and said, “All right. I’ve learned what I need to, and now I’d like to come back and make some more money.”
Initially, when I was doing this, it was strictly technology jobs and I had to learn a lot. In my time in Institutional Investor, I ended up learning a lot about the financial world. I actually focused on the hedge fund world there — selling their alternative investment news product and their hedge fund daily product and a couple of the Journal Of Alternative Investments, and setting up large access deals, and speaking with lots of different people. I got to meet a lot of people in that world, and took that back to the recruiting world.
I focus on the combination between technology and business, when it comes to hedge funds, and in the private banking world, I recruit bankers with books of business, figuring out what their books are comprised of, and seeing where they would best fit.
What roles do you specialize in?
Really anything on the C-level, in the hedge fund world. Also, we do have that development and technology team that sits on the other side of the office from me. They focus on pretty much everything from entry level all the way on up, in terms of development and infrastructure development, and stuff like that. We do have a couple of guys here that focus mainly on quantitative strategy and trading positions, and those things, again, are from entry-level all the way up.
My time’s split with the hedge fund account management, where I’m dealing more with the client-side, as opposed to the applicant-side. On the private banking side, it’s all different levels and titles.
What types of firms do you typically work with?
Figure about 40% of our clients are smaller, well-known hedge funds that have anywhere between $1 to $10 billion under management. And then the other 60% is probably comprised of large investment banks and private banks that are involved with huge brokerage houses — your Citigroups, your JP Morgans, your UBS’s, and all those types of places.
And then there are larger asset managers that do have hedge funds as a piece of their business model, but more on the $100-$200 and up billion range. Obviously, the mindset in a place like that is a lot different than a place that has a billion dollars in a hedge fund.
What are your top sources for finding people?
One, schools. A lot of times people will not necessarily say it, but you can get a feel in the conversation that they like people out of certain schools.
More and more of these internet networking sites are popping up: LinkedIn, Zoom, Jigsaw, and all those types of things — those can be extremely helpful, they also can be extremely misleading because people enter their own information — the guy that’s two years out of school who claims he’s a CTO.
And then obviously, posting ads in various niche websites.
But I don’t think that anybody should post their resumes on a place like Monster or Career Builder, or even use the ads on there, because quite frankly it’s a black hole. Of the people out there, most of them aren’t working. And in a market like this, you have to wonder why. Obviously in 2001, 2002, beginning in 2003, nobody was working. The job market was awful. Everyone was looking for a job. Everyone had gotten laid off for something or another. But now, forget about this sub prime thing that’s happening, the market really is booming.
You are seeing some impact of the sub prime situation?
In some areas, they are certainly not as urgent to hire because they’d like to keep a little of the money they have. Everybody knows that there is going to be a bottom to this little mini slide, and everyone’s going to want to have as much money as possible to buy back in.
I only see good things to come out of it in the long run. The housing market and the mortgaging world have been skyrocketing up. Now that it’s going to dip, all those people that wanted to buy are now going to be able to, and then with that comes investments in pretty much everything at a lower price. It’s affecting it, but I don’t think too negatively.
Is this is a candidate’s market?
Yes and no — for people right out of school, yes. There’s always going to be a need for bright, intelligent people out of good schools. And I see guys coming out of master’s programs that are getting three, four, five offers within a few months, and they have to sit down and decide where they want to go and what they want to do.
In terms of the mid- to senior-level stuff, I’d say it’s about a neutral market. In terms of high-level positions, it’s always been and always will be a company’s market as opposed to a candidate’s market.
We are seeing more and more people in smaller hedge funds getting counteroffers, only because sometimes they haven’t had people sign the proper confidentiality agreement or non-compete agreement, and they do have some industry secrets that they are bringing with them just because they’re in their head.
Any advice about negotiating compensation?
Well, I think in most hedge funds, if they want you, they’re going to offer you whatever you ask for anyway, as long as it is not out of the realm of what you’re making now. A lot of people will just buy out the bonus that you could potentially be getting. The biggest piece of advice is “don’t lie” because someone will find out about it, and you’re liable to lose any offer at that point. You’d be surprised at how many people try to do that.
We don’t really do much checking up, but it’s a very small world out there. Somebody will quickly know by your skill set that you were making less than what you say you were, because they know how certain companies work. For instance, if you’re going from Morgan Stanley to a small hedge fund, there’s probably going to be someone at that fund that knows someone at Morgan Stanley, and they know how the compensation structures work in a place like Morgan Stanley. Everything is graded in terms of this position; we’re budgeted for 125 to 150 on a base. Somebody comes in says that they’re making 175 on the base, and they show up with a certain skill set that they claimed to have, but isn’t as sharp as they should be — someone’s going to pick up a phone, make a call, or somebody’s just going to know.
Are there standard career paths in the industry?
The perfect career path would be you get a degree in Computer Science or Electrical Engineering, or something of that nature, from a top scientific school — doesn’t necessarily have to an Ivy League School — but a top-tier firm will hire you, say, a Morgan Stanley or something like that. Cut your teeth in the financial world as a developer for a little bit, really get in tune with the systems that are made and built, and how they intertwine with quantitative strategies and the way certain desks run their business.
Then go back to school, get a Masters in Financial Engineering or Statistics, or something in the science/finance world. Not an MBA which a lot of people think is necessary to be a quant — that’s certainly wrong. And then you go to a place like a hedge fund and you sit at the desk, and be that hybrid position between a quant and a developer, and then maybe you go back to school, you teach a little bit. You get your PhD in, say, Statistics or again, Financial Engineering, Computer Science — whatever it is — and then you end up opening up your own quant shop and make more money than you ever dreamed of.
The people who normally do have the education and the drive to do it don’t necessarily have the marketing piece that comes along with needing to open up your own shop. So normally that’s when you get the quantitative strategy guy and the trader/broker guy, who comes and brings the money along with him. The two of them build something that lasts.
What makes you want to work with someone?
Personality — somebody who isn’t opposed to understanding how things work — and when we interview someone it shouldn’t just be an interview about their background, but we also like to get to know the people. “Where’d you go on vacation last year? Where are you from? What do your parents do? Who got you interested in the financial world? What other places have you interviewed with?”
People who are not secretive — if I ask a guy where he’s interviewed, a lot of people think we’re doing it for a shady reason. The only reason is we want to see if you’re going to be a good fit. We know people at most firms. We probably already knew about the job. There’s a reason we’re not working it. We’re going to be asking you, if you interviewed at XYZ fund, and we ask if it went well, we know that if it went well at XYZ fund, it’s probably going to go well at ABC fund because they’re very similar people. But DEF fund is not going to be a good place because if you got along with those guys, you’re certainly not going to get along with these guys. There’s a lot of information that we can gather in ways that people wouldn’t realize.
Personality — not necessarily charm — but amenability is key, obviously along with technical and financial skill sets.
What’s the best way to stay in touch with a recruiter?
Ask in the initial interview with the recruiter (or with anybody): “What’s next up? When should I expect to hear from you?” If you don’t hear from them in that timeframe, try giving them a call or an email, but there’s no reason to hound anyone. Now if there’s a recruiter you’ve worked with in the past and it’s time to make a move, that’s a bit more of a personal relationship, and then it depends on the people.
What should a candidate expect in a working relationship with a recruiter?
I think a lot of times people are averse to coming in and meeting with a recruiter because they look at it as a waste of time. There’s a big advantage to coming into a recruiter’s office. One, you can see their operation. If it’s a nice-looking office in a nice building, you know they’ve done something right. If there’s a lot of people, there’s a buzz in the office — you know that everyone’s working and something good is going on there. It’s all relationship-based. If you meet someone face-to-face, that relationship starts off on a much better foot.
How should a candidate research and prepare for the interview?
Match everything on the job description to the things in your resume. And everything on your resume is fair game in an interview, even if it has nothing to do with the actual position. The interview is the ability to sell yourself — show the company that “not only am I selling myself and I’m a commodity for everybody, but I’m really interested in what you guys are doing, because I’ve done all this work for you already. You haven’t even paid me yet.”
What’s the most common flaw among qualified candidates who are unsuccessful in their search?
People who are just looking for more money, people who put down their current employer. Whatever it is, money, negativity, and the lack of helpfulness. A lot of times people expect the recruiter to do everything. They’re under the impression that we work for them, and that’s certainly not the case. We do represent them; we don’t necessarily do all the work for them.
In the interview process, what’s the most common mistake that people make?
It’s amazing how many people don’t know how to shake a hand. A handshake tells someone a lot about people. If someone comes into my office before they go on an interview, and they shake my hand in an odd way, I’ll show them how to shake their hand.
But they go on to the interview and they do it the way they did it before they met me — it’s never going to turn out well. Take the advice. We do this whole job thing for a living. Your job is to be a quant. Your job is to be a developer. Your job is to be a trader. You’re good at that. Let us be good at what we do, and listen to us because we’ve seen it all.
Everyone’s looking for those out-of-the-box thinkers. It’s okay to put on your resume that you can solve the Rubik’s Cube in one minute, or some of the contacts you have in the British Royal Family — whatever it is, something special that you’ve done. I think that gives you a leg up over everyone else who has the same skill set. It also shows that you have the personality and wherewithal to deal with people.
If you’ve done something interesting, fit it on your resume because people will notice it. It’s a conversation piece once you get there, and it’s a good ice-breaker.