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What I learned in my first two years as a buy-side analyst

Traders

Want to join a hedge fund right out of school? You’ll need a sharp mind and an impressive pedigree if you even want to be considered. Buy-side firms are extremely picky, particularly when it comes to hiring undergraduates.

We spoke to one former hedge fund analyst – an Ivy League grad – who was hired right out of school. He recently left the industry to start his own business. Here’s what he said a young analyst can expect if they’re able to earn themselves a seat at an experienced hedge fund. He preferred to keep his identity anonymous.

Were the hours what you thought they would be?

No. I was told that I would be working roughly eight hours per day (8am to 5pm with an hour for lunch) but my hours were generally 10-12 per day and sometimes longer.

How do PM treat analysts, particularly young ones?

I can only speak to my own personal experience here. I was basically treated with respect at all times, but there were instances were I was spoken down to or made to do menial tasks.

How competitive are you with other analysts who entered at a similar time than you? Do you guys get chummy?

There was healthy competition with other employees who started around the time I did. I got to know them rather well, but never did much with them outside of work. Of course, drinking is part of the hedge fund world so we would drink together from time to time. Some of the senior analysts treated the junior ones fairly poorly.

How are you evaluated?

I was evaluated in a timely fashion using a standard performance review form, based mostly on the hedge fund’s performance (which often was out of my control).

How blunt was the culture?

The culture was definitely open, honest, and straightforward to the point of being blunt. For me, it wasn’t as bad as most probably would think, but you had to have thick skin to survive.

How nervous are you when someone takes one of your recommendations? What happens when they go south? And if they prove to be worthy?

Most of my recommendations in the beginning came from some advice from a co-worker, so I wasn’t as nervous as I would be had that not happened. Obviously, it’s no fun when advice is given to a PM and the company performs poorly, but it’s great when they’re directed into worthy investments.

How much and how bluntly do you talk about money?

Money is talked about all day long. Not so much in a blunt fashion, just how to make more of it.

What’s bonus season like? Do people share numbers?

I was surprised at the amount of my first bonus check. It was a lot less than I expected. We shared bonus amounts with other colleagues who had the same status.

Is there the usually trimming of bottom performers every year, like in investment banking?

Yes. Low performers were weeded out.

What was the worst part of working at a hedge fund?

The worst part of working at a hedge fund was probably the long hours and having to complete grunt work tasks in the beginning.

What was the best?

The best part about working at a hedge fund was the money. Even though I thought my first bonus check was less than I expected, overall I did quite well for myself during my career in that industry.

How difficult was the interview process? Can you give us some general examples of what you were asked? Any particularly off-the-wall question you can remember?

The interview process was rather informal – a lot of off-the-cuff, yet very blunt questions. I was asked things like how hard I planned to work for the company if hired and how can I make money for the fund. But I was also asked more industry-centric questions like explaining a balance sheet and the meaning of a yield curve. One odd question I remember is that an interviewer asked me for the headline on the Wall Street Journal on the day of my interview.

If you had any advice for an incoming buy-side analyst who is new to the industry, what would it be?

Thicken up your skin and be prepared to take care of tasks you might not think to be part of your job description. Brush up on financial modeling – you’ll need that knowledge.

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