Those who are aspiring for an investment team’s Analyst position in this $3 trillion industry should be prepared for the most intensive and demanding rounds of interview. It’s the buy-side dream land that is coveted by most Finance professionals, and the interview is the rough last step to get into the land.
1. Hedge Fund Interview – Overview
Picky Hedge fund recruiters, in order to screen the best investing enthusiasts, typically conduct 3 rounds of interview:
Phone interview is the first screening round where the fund has a quick check on your competency, and if you’re seriously passionate for the job.
You’d be asked mostly resume-based questions about your previous professional experience, your interest in investing, and your understanding of the fund. Time pressure, rather than the difficulty level, is the challenge of this interview round. The need to present your personal story and industry/market knowledge in a very succinct way requires your thorough preparation.
Apart from general fit questions, you’re recommended to have at least 2 90-second Investment ideas, and updated current market understanding under your belt, in case they ask you about any investment pitch.
The real test is here. You’ll be facing a marathon interview super-day, ranging between 4 and 10 interview sections, in order to be thoroughly assessed personally and professionally. Your endurance and work stamina are another factor to be tested.
It could be said that this round of interview is mostly about your stock pitches: be prepared with at least 1 long and 1 short in every single interview. Delivering a sound pitch is 70% the key to succeeding the interview.
A wide range of questions and a stock pitch example would be introduced in the full list below.
At some big funds, you have to make some extra trips to the office to meet everyone, as a way for the fund to determine one last time whether you’re a match with the team.
2. What do Hedge Fund recruiters look for in an Interview?
What qualities do recruiters want to see in a candidate through answering questions after questions? How would you picture yourself as an ideal Hedge Fund analyst? Here we list out some qualities that a potential hedge fund analyst should possess:
3. Hedge Fund Interview Preparation
The preparation for this career advancement started years long before you actually submit your resume, probably ever since you read your first investment book. And so forth the large part of this interview preparation process is about reflecting on your previous experience, your track record (if you’ve invested on your own), and all the things you’ve learned about the financial market.
- Incorporating your personal stories into even common questions like “What are your strengths & weaknesses?”, or “Why do you want to work here?” would leave an impression on the interviewers, and also speak volumes about your long-held passion for investment.
e.g. (Weakness: … -> don’t want to work in IB anymore -> switch to HF to directly take charge of a real amount of capital)
- Specifically dig deep into your past investment decisions / economics trends / any noticeable market movements to start forming your own investment philosophy. Having a unique viewpoint on investment is appreciated at hedge funds. It doesn’t have to go against the widely accepted market fashion, but hedge funds don’t want analysts who just simply follow the trends. The process of forming your idea is more important than whether that idea is right or wrong.
3.2. Latest news catch up
It’s very likely that you’ll bump into questions like “Where do you catch up the news everyday?”, or “What’s on the front page of the Wall Street Journal today?”. As part of daily responsibility, investors have to closely follow today’s market situation, and adjust their prediction on future market climate upon current numbers.
It’s a must that you’re familiar with daily market highlights – they’re the one thing hedge fund analysts stick their eyes to days and nights, with a hope of generating new investment ideas from market inefficiency. Having knowledge upon various industries, especially ones targeted by the fund, would definitely give you an edge.
3.3. Prepare investment ideas
The very first step of preparing your stock pitch is to research the fund. After all, your idea is to be hypothetically enacted in their fund, so it has to align with the fund’s style and strategy. Pitching a stock to a credit focused fund and you’ll turn yourself into an idiot.
Each of your 10 to 15-minute idea has to be backed up with neat and tidy documents:
- A 3 to 5-page write-up, could be alternated with a 10 to 15-slide Powerpoint presentation
- A 3 statement financial model with comps analysis
- A scenario analysis if it’s an event driven idea
Confused on how to form investment ideas and write up pitch deliverables? Get the best self-study materials for Hedge fund Interviews!
4. Hedge Fund Interview Questions
Here comes the main part – questions actually been asked in Hedge fund interviews.