Some IBD analysts go back after 2 years but the more common route is 2 years IBD and then 2 years on buyside and then MBA. It’s not really “necessary” to do this but some of them just want a break and opportunity to advance more.

A banking analyst doesn’t really “need” an MBA unless the firm requires it to advance or something… and they would always stop working and do it full-time to get it.

Basically why/when would a banking analyst need to get an MBA and how would they go about it if necessary?

Also, if you’re already in finance sometimes the MBA isn’t even worth it unless you need it to advance (more the case at some PEs and some banks rather than HFs). It’s generally a much better deal for career changers.

Either equity research or IBD works, some VCs actually prefer equity research because it is more about following the markets etc.

In place of equity research, would being an IBD associate at a BB bank be a better option?

Thanks in advance, again!

Unfortunately it’s very, very difficult to generalize hedge fund jobs as they differ dramatically in scope and what you do on a daily basis. You could be more of a trader; you could do a lot of financial analysis (so basically like banking but without all the BS) or you could basically just follow companies or debt issuances.

I would focus on developing your financial modeling skills… the other more qualitative stuff from banking is kind of useless at a hedge fund.

And given how many funds there are, yes, you’ll be able to get in somewhere.

Good luck!

I am starting to think about what I want to do after next year, and am considering everything (from operational roles, to PE, to hedge funds). The biggest unknown for me is hedge funds. Can you provide any insight into what I would be doing at a hedge fun coming from an analyst position? What parts of my job are relevant and where I should focus time to gain skills in that department? Is there any chance that I could get my foot in the door?

Thanks.

Thanks, glad you enjoyed the post.

Value Investing Fund managers generally have much better lifestyles than investment bankers/private equity partners/hedge fund managers. Expectations are not as high in terms of returns, so quite frankly they don’t get paid as much either.

I’d say the ‘one-zero’ you quote is accurate; 0.50% of the assets under management is probably a good estimate of how much goes to the employees. So much less than the 2% taken by “alternative investment” guys.

Again, lifestyle is indeed good but people often get bored of it and move on because it’s not nearly as competitive as other fields in finance.

I am currently in management consulting but have been reading up on the academic papers defending value investing and indexing respectively.

Could you provide some insight into the lifestyle and compensation level of fund manager using a value approach?

My current estimates are ‘one-zero’; About one percent of AUM and no additional pay for exceeding a certain hurdle rate. Also, I have been told 40-45% of revenues goes to expenses, so the manager-entrepreneur of the fund ends up with about 0,50% of AUM. I could accept these compensation levels even with as little as 100M AUM if the lifestyle provided is great…

Feasibility feedback would be great too.