eFinancialCareers

Earlier this week hundreds of students from around the world converged on London for a two day private equity and hedge funds conference organized by the London School of Economics’ Private Equity Society and Financial Markets Group.

2,500 students applied to attend the conference; 350 were given passes.

Recruitment company the Cornell Partnership was in charge of deciding who got in and who didn’t. We asked Cornell director Jim Nairn how they decided who was eligible for a possible future career in hedge funds or pe.

We asked: So, how did you choose the special 350?

Jim answered: We wanted to ensure we had representation from all around the world, so demographics were a consideration. But we also wanted to ensure that the people who attended had the potential to get a job on the buyside.

We asked: And how did you assess that potential?

Jim answered: It was the usual considerations really. We were looking for excellent academics – people from recognized universities in their respective countries. Ideally, we were also looking for people with experience. Having a financial services internship on the CV made it a much easier decision, without a doubt. As did credible outside interests that indicated a candidate had some knowledge of how private equity firms or hedge funds operated.

We asked: So, what are the chances of students going into hedge funds or private equity straight from university?

Jim answered: It does happen in today’s climate, but the reality is that your chances are very slim. Most of these companies just don’t have the infrastructure or the resources to train someone absolutely from scratch. They’d rather an individual gets great training from a large brand name and hire them after that.

We asked: In that case, what’s the ideal career path for hedge funds?

Jim answered: There is no prescribed route into hedge funds, it very much depends on the investment strategy and style of the fund; however most typically candidates will come from an investment bank or a traditional asset management business.

We asked: How long should you wait before moving into a hedge fund?

Jim answered: It’s impossible to say. If I said three years, someone would say they’d done it after four. If I said four years, someone would say they’d done it after five. As a generalisation, you either need to get out to the buyside early in your career, or to wait until your career’s established and you’ve got a brand reputation. If you’re an analyst or an associate you stand much more chance of making the move than if you’re a VP or a director. But then again you might be able to move once you’re an MD and you’ve built a name for yourself.

We asked: How about getting into private equity?

Jim answered: It’s a similar story, except that if you’re trying to get into private equity you could spend your time in a bank in M&A or leveraged finance. Alternatively, you might be able to get in from strategy consultancy and maybe even accountancy.

We said: Thank you Jim.

Separately, an interesting piece of advice came out of the conference itself. One of the private equity panelists (a senior member of an inhouse PE fund whose identify we’re not at liberties to disclose) said he always asks students he interviews what’s hot on campus. If they say PE (or any other area they’re interviewing for), he rejects them because they’re obviously doing it for ‘fashion not passion’.