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hedge fund job interview

Preparing for Your Hedge Fund Job Interview

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.

References:

Columbia University Graduate School of Business  www.columbia.edu

Schwab, Claude. Hedge Me: The Insider’s Guide: U.S. Hedge Fund Careers. Lynx Media.

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Hedge Fund Jobs – Preparing for the Interview

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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