Recently, I had an nice opportunity to attend company presentations of Sankaty Advisors (which is part of famous Bain Capital) and DE Shaw. These two companies are considered to be best Hedge Funds in their classes. Sankaty Advisors has very fundamental oriented investment strategy, whereas DE Shaw is considered to be purely quantitatively driven. Both companies generated superior returns in recent years.
I am writing about these hedge funds just to show how different opportunities Hedge Fund industry offers. Comparison of the profiles of these two companies shows that there is place in HF industry for both business major students with MBAs or CFAs (Sankaty Advisors) and also for those who have scientific background like PhD (DEShaw).
Sankaty Advisors invests in leveraged loans, high-yield bonds, distressed/stressed debt, mezzanine debt, structured products and selected equities. Sankaty Advisors puts great emphasis on fundamental analysis. They claim they always need to understand the business of any company they are investing in. If you would like to work in this firm, MBA or CFA would be highly beneficial.
DEShaw is mainly statistical arbitrage fund, so great deal of transactions is automated. Computers using sophisticated trading models are speculating on various markets and are exploiting subtle mispricings. Your mathematical background may be very useful in the process of preparing this models.
As the example of these companies show, hedge fund industry is not a solid entity. There is a number of different opportunities you may pursue if you want to work there and each of these opportunities may be prestigious and rewarding.
If I were to decide between these companies I would have a great problem. Both seem to be really nice. The presentations were on comparable level. However, I believe what I would learn in Sankaty Advisors would be more transferable. I could learn a lot about the business and "fundamental oriented investing" and then apply this knowledge somewhere else later. The same with DEShaw would not be that easy. There are not so many places in which you can use cutting edge quantitative skills. Maybe some statistical arbitrage desks of Investment Banks, but still the market is not that big for that. So, I claim that in fact Sankaty Advisors is a safer option for those willing to go for Hedge Fund industry.
If you know something more about various hedge fund please write about this in comments to this post.
I am writing about these hedge funds just to show how different opportunities Hedge Fund industry offers. Comparison of the profiles of these two companies shows that there is place in HF industry for both business major students with MBAs or CFAs (Sankaty Advisors) and also for those who have scientific background like PhD (DEShaw).
Sankaty Advisors invests in leveraged loans, high-yield bonds, distressed/stressed debt, mezzanine debt, structured products and selected equities. Sankaty Advisors puts great emphasis on fundamental analysis. They claim they always need to understand the business of any company they are investing in. If you would like to work in this firm, MBA or CFA would be highly beneficial.
DEShaw is mainly statistical arbitrage fund, so great deal of transactions is automated. Computers using sophisticated trading models are speculating on various markets and are exploiting subtle mispricings. Your mathematical background may be very useful in the process of preparing this models.
As the example of these companies show, hedge fund industry is not a solid entity. There is a number of different opportunities you may pursue if you want to work there and each of these opportunities may be prestigious and rewarding.
If I were to decide between these companies I would have a great problem. Both seem to be really nice. The presentations were on comparable level. However, I believe what I would learn in Sankaty Advisors would be more transferable. I could learn a lot about the business and "fundamental oriented investing" and then apply this knowledge somewhere else later. The same with DEShaw would not be that easy. There are not so many places in which you can use cutting edge quantitative skills. Maybe some statistical arbitrage desks of Investment Banks, but still the market is not that big for that. So, I claim that in fact Sankaty Advisors is a safer option for those willing to go for Hedge Fund industry.
If you know something more about various hedge fund please write about this in comments to this post.
