Perhaps the most important decision before interviewing at a hedge fund is to determine whether the firm’s structure, investing philosophy and culture aligns with yours. Many candidates spend a lot of time preparing for their interviews and developing investment ideas, but not enough time studying the firm and the person they will be interviewing with. As a result, they end up wasting both their time and interviewer’s. As Robert A. Jaeger puts it, if you are pitching a momentum-driven technical short-term trade to a long-term investor focused on fundamental drivers of equity value, your idea is going nowhere, no matter how brilliant it may be.
Today it’s much easier to gather information about hedge funds. Many have websites that provide some information, including history, product range, and sometimes investment philosophy. Other sources beyond simply Googling the firm include Hoover’s and Dow Jones Factiva business information services. Do your homework and figure out ways of uncovering this information for your interview. Digging for little-known information is, after all, a key venture capitalist skill.
You can expect three or four rounds of interviews with hedge funds. By the second or third round, you may be asked to do an on-the-spot investment or trading case study. You will also meet more members of the firm, to help them determine whether you are a good fit. If you make it to third round, you may be asked to pitch an investment idea to the fund principals, either in person or as part of a take-home assignment.
In general, portfolio managers are looking for those who are passionate about investing or those who are interested in investing but also have a specific skill set that the hedge fund firm is interested in exploiting. Someone with either of those two angles stands the best chance of making it to the next round of interviews, and possible even a hedge fund job offer.
Columbia University Graduate School of Business www.columbia.edu
Schwab, Claude. Hedge Me: The Insider’s Guide: U.S. Hedge Fund Careers. Lynx Media.