Point72 Asset Management has acknowledged that there’s a huge shortage of talent in the hedge fund industry right now, but this doesn’t mean it’s easy to get through the door.
The family office managing the assets of hedge fund billionaire Steve Cohen has just opened up its U.S. academy programme in the UK and Asia. So far, in London it’s received over 1,500 applications for the 2017 intake. Just three to five people will be taken in across the full-time and summer internship programme. In case you’re wondering, this gives you a 0.2-0.3% chance of success. The odds are better at Goldman Sachs.
“The availability of talent in the hedge fund industry is constrained,” says Will Tovey, the head of Point72’s London office. “The desire to grow our own talent is also incredibly high – around 80% of our current portfolio managers are home-grown.”
Students who get on to Point72’s internship in the UK can expect to spent a lot of time in New York. The first two weeks are spent in the U.S. at its ‘training camp’ where you’ll learn about financial modelling, team projects and presentations. Then, it’s back to London for three weeks to work as an analyst on a portfolio team. After week five, the second half of the internship is in New York again covering companies in more depth and pitching stocks.
The first eight months of the full-time analyst programme are also spent in New York, where you’ll learn financial modelling, fundamental research, coding and data analysis. Then, back in London, analysts rotate across three investment teams.
Is the shortage of talent at the junior end really that high, though? After all, juniors are being promoted at an ever-faster rate on the trading floor in investment banks, and the sell-side has been scaling back.
“There may be a lot of talent in the banks, but it’s not necessarily the skills we’re looking for,” says Tovey. “We want people who can perform in-depth, fundamental analysis of stocks and companies. Demand for that young analytical talent is very high currently.”
In London, Point72’s junior ranks are comprised of either former investment bankers, or came as part of a team move with a portfolio manager. Jack Ingles, who worked as a FIG banker at Goldman Sachs, joined as a long/short analyst in September, while Teng Beng was a former researcher at Bernstein. Another recent recruit was John Pelly, who transferred across from Point72’s Connecticut office.
But Point72’s latest Academy recruits are not cut from the same mould as those going into investment banking. Alexander Sacks, for example, is a Yeshiva University graduate who interned as a financial analyst at insulin adjustments software firm Insulin Algorithms before spending the summer at Point72. Adam Loewentheil, a Brown graduate, interned at Livingston Securities, but also spent four months running social media at NBA all-star Earl Monroe’s entertainment company.
Some of the class of 2016 did major in accounting, economics and finance, but among the small group were also those who studied environmental science, music and neuroscience.
Tovey says that Point72 values “diversity of thought”, particularly among any academy recruits, and that there’s no secret formula for making the cut. Hedge funds have previously been accused of following a “herd mentality” and part of this, according to research from academics at the University of Konstanz, is down to their tendency to hire the same sorts of people with the right connections.
It will, however, shortly be touring top universities in London as well as some “well-reputed” universities outside across the UK and Europe.
So far, globally, Point72 has received more than 4,600 applications for its academy. The European programme closes to applications on 23 October. It’s also hiring in Asia, which closes to applications on 16 October.