It seems these days that nearly every trader in investment banking has their eye on a hedge fund job. Unfortunately, there are only so many seats available at hedge funds. Networking is key, but you’ll also need the ideal resume to get your foot in the door and earn an interview.
We asked a few recruiters who place candidates at hedge funds what they look for on sell-side resumes. Here are a few of the key elements.
The STAR method (situation, task, analysis and result) is often used as a job interview technique, but the concept is easily transferable to resume writing. Hedge fund recruiters want to see quantifiable personal results, not bullet-pointed responsibilities, said John Breault, president & CEO of Breault & Smith LLC., an alternative investment recruiting and consulting firm.
Break down difficult situations you’ve encountered and detail how you personally overcame them to generate compelling results, whether financially or otherwise.
“The last thing a hedge fund recruiter wants to see is a generic resume that could easily have been written by someone who is either amazing or terrible,” Breault said.
One of the biggest issues facing investment bankers who want to jump to the buy-side is the very nature of their work, particularly at the analyst and associate levels. They have strong analytical skills, but their experience is often rather general.
“People coming out of investment banks have a broad array of skills that aren’t specific to one niche,” said Evan Lerman, principle at IJC Partners, a Wall Street search firm. “That’s a big sticking point for buy-side firms that want specialization. They want people who are the best of the best in covering one sector.”
Avoid being a jack-of-all-trades and a master of none, Lerman said.
Indeed, most hedge funds want rather unorthodox, niche technical skills that fit their particular focus, said Chris Apostolou, a former analyst and economist who’s now the managing director at London-based Arbitrage Search and Selection.
“For example, rather than an analyst just having analyzed the banks to assess their debt or credit rating, it's better to have technical knowledge of different tiers of bank debt such as tier2, illiquid loans or CoCos,” he said. “These products could be trading far from fair value and people who understand how to trade these parts rather than just the equities can pick up the more interesting trades that mainstream funds can't or won't touch.”
While investment banks are built like machines, hedge funds are similar to startups. They demand more ownership and personal accountability. Highlight any examples of entrepreneurialism and breaking outside the box of the traditional trader at an investment bank, said Breault.
Some funds are known to hire chess, bridge and poker players. Other great examples include completing your day job while also starting an Internet firm, Breault said, or growing your language and cultural skills outside of work and applying them to your role.
Discovering and applying alternative investment approaches takes a creative mind. Prove that on your resume wherever possible.
It’s a bit obvious, but worth mentioning. Hedge funds have the luxury of being highly selective, so they’ll look at your GPA and standardized scores as well as your work and personal experience, said Breault.
“Having examples of being the best at both quantitative items and liberal arts items,” like being great at math and also an opera singer, he said.
At the end of the day, hedge funds want just one thing. Someone who eats, breathes and sleeps investments. “They want guys who would work a 14-hour day at a bank and then spend their free time coming up to speed on the market because they love it” Lerman said. “For 99% of the people, it’s just a job. Hedge funds want the other 1%.”
While this is hard to “prove” on a resume, make an effort to explain your passion for the business.