The hedge fund interview process is similar to that of investment banking and private equity, in that there are usually several rounds of interviews with various members of the firm. However, hedge funds tend to focus less on deal experience and more on fit and your knowledge of investment markets and strategies.
To get past the first round, you’ll have to demonstrate your knowledge of hedge fund investing overall. You’ll have read the well-known books on hedge funds, such as Jack Schwager’s Stock Market Wizards: Interviews with America’s Top Stock Traders, or Robert A. Jaeger’s All About Hedge Funds. You’ll have followed the markets on regular basis and developed your own point of view on investing. And you’ll be keeping up on current events that may affect the hedge fund industry, and be ready to talk about how these events may affect the industry, going forward.
Most hedge funds are still relatively small compared to investment banks and PE firms. So very often the initial interviews are done by a senior analyst or senior trader or portfolio manager. In addition to confirming whether you are qualified for the job, they will also be looking for personality and cultural fit. The portfolio manager, in particular will look for a compatible investment or trading philosophy. In some firms, for more junior positions, a candidate is not expected to have a fully developed investment style but rather show an openness to learning.
Other traits that hedge fund firms look for including a passionate interest in investing or trading, an ability to analyze drivers of business value, a relentless drive for uncovering facts and details, a hunger to succeed and excel, and the ability to work hard and work smart. Hedge fund firms also look for people who will stick with the firm for the long term, after taking the risk of hiring and training them.
Next time, we’ll look at the most important decision to make before interviewing for a hedge fund job.
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