Should You Start Out In Private Equity or at a Hedge Fund Rather Than In Investment Banking?

“I read your articles on the myth of the buy-side job and why finance doesn’t guarantee you $10 million and your own beach in Thailand.

But I still want to do finance – I just don’t want to do investment banking. I’m an Economics major, I have a 3.7 GPA and I have no industry contacts.

Do you think I should start in private equity instead? How can I do it?”

This is a very common “strategy” I get questions about.

But is it a good idea?

Finding The Time To Interview (How Many Trips To The Doctor Can You Have In One Week?)

“The difficulty is in coming up with a credible excuse or rather, a set of excuses, when you need to do follow on interviews in a short period of time. Let’s face it, three doctors’ appointments, two visits to the dentist and a broken boiler, fridge and blocked sink in the course of the two week period for you to meet every single member of the team at Goldman who is looking to hire you, is not an option.”

-Failsafe Interviewing Techniques For Investment Bankers, The All Nighter

Continuing this week’s theme of “assessing strategic alternatives for your career,” or “how to survive and interview for other jobs, even in a bad market,” I wanted to cover one other question I’ve seen lately: how to find time to interview with 2 full-time jobs (welcome to the life of the investment banking analyst).

Even if you’re not in investment banking, but rather another professional field like accounting, consulting, or corporate law, finding time and making up the appropriate excuses will always be an issue.

While it’s easy (easier perhaps) to do phone interviews, you’ll never get an actual offer unless you do at least a few rounds of in-person interviews, and sometimes many more than that.

There are 2 approaches you can take when it comes to being out of the office interviewing for other jobs: deception and honesty.

Investment Banking Exit Opportunities: The Myth Of The Buyside Job

“Before I became so fervent about Private Equity, I thoroughly considered all my other career options: hedge funds and VC.”

-Hicks Musings, The Leveraged Sellout

One common question I’ve been getting lately goes something like this:

“Inquisitor, I just started as a freshman at Harvard. I am majoring in economics and finance and I’m in the stock market club, the investment banking club, and I even borrowed $500,000 of my Dad’s money to invest in my personal accounts. So far I’ve earned a 50% return in 6 months.

How can I make sure that I work at Blackstone by the time I’m 25?“

Another variant of this same question:

“I am only doing investment banking so that I can pay off all my student loans in 2 years, but I have no interest in ever doing it again. What are the exit opportunities like for Associates at boutique banks who want to get into hedge funds?”

For those breaking into investment banking, the exit opportunities are always a big motivation.

It makes sense on paper: you go from working 90-100 hours a week and doing mindless work to working 60 hours a week and doing meaningful work 100% of the time, right? Right?