Archive for December, 2009

Investment Analyst, New York, NY
Managing Consultant, San Francisco, CA
Mergers and Acquisitions Manager, Boston, MA
Director of Marketing, New York, NY
Research Analyst, Los Angeles, CA

More jobs we think you’ll like…

As a recent graduate from Stanford University, I often hear friends of mine lament the downfall of the finance world. What was once such a hot industry – one many of us strove to join as bright-eyed underclassman – suffered serious setbacks in the past year, forcing hordes of Economics and Business majors to set their sights elsewhere. One friend of mine, a Finance major with previous internships in investment banking, decided to start a company promoting art museums when his job offer was rescinded. So for some, the shortage of jobs in finance has led them to pursue more unique, if initially less lucrative, opportunities.

Still, there are others who remain hopeful in their quest for capital gains, risk arbitrage, and absolute returns, holding on to the mantra, “Wall Street or bust!” Recently I sat down with James, a friend of mine who works for a hedge fund. I asked him questions about his work and about the sort of skill set required of an individual who is looking to break into the finance realm in such an unstable job market. Here is what he had to say:

What does your job entail?

I am an analyst for a long short equity hedge fund. My main responsibility is to advise my portfolio manager on investment decisions. This involves forecasting earnings and valuing companies based on my primary research.

Do you have any specific areas of focus?

My sector of focus is technology, which is extremely broad. Within technology, I’m currently focused on Internet and telecom companies, as well as alternative energy.

Did anything draw you specifically to Tech as a sector?

Definitely. Tech is a sector in which the United States is still very much a leader, and there’s always exciting stuff going on at the margin – new disruptive technologies turning whole industries upside down. Being a tech analyst requires you to stay on your toes and achieve a very comprehensive understanding of industry players. In some ways it is like being in college again – because you are often learning about these companies’ products and the science behind them, not just their financial statements. However, the workload is much more significant than in college, so I would recommend getting some recreation time in before you graduate if you do choose to work at a hedge fund.

What skills are emphasized in the work that you do?

I think it’s very important to be a good listener and a fast learner when you are ramping up – or learning the ropes. You have to be resilient as well – sometimes you will spend quite some time learning the ins and outs of a sector or the particulars of a company before you can really get an edge. But I think that in any finance role, diligence is probably the most important attribute for any candidate, particularly at the entry level. It’s very easy to lose the trust of your superior by messing up some minor detail, and once you’ve lost that trust, it can be hard to move back into a position where you’ve had the same responsibilities as you had before. That’s something I learned as an intern a couple years ago.

How did you land a job at a hedge fund in this job market?

I wish that I could say that I was just an exceptional candidate who could have gotten a job anywhere, but that’s probably not the case. The truth is, I essentially got to where I am now from my internship two years ago. I made certain to stay in touch with the people I worked with, and one of my coworkers from that summer ended up taking a job as a portfolio manager where I now work.

I would advise any undergraduate who has held internships before to try to stay in casual contact with their coworkers, because it makes things a lot less awkward if the time comes to follow up in search of a job. If you do fall out of touch, then it still won’t hurt to ask. Most people like to help other people out, so just be humble and confident and throw out a line.

How is your fund fairing in this market?

We recently passed our high watermark, which means that we can now start earning fees again on the money we make from this point forward. Last year the fund got hit pretty hard, but fortunately we’ve rebounded very well.

Is this unusual?

I think that many funds have fared well this year, but I would say most funds are still under their watermark. Last year was the worst year in history for hedge funds.

Do you have any thoughts on the recent political controversy surrounding bonuses in finance?

I guess I can understand why some people are bothered by the bonuses being paid out at firms like Goldman Sachs and JP Morgan. These firms benefited a great deal from a government backstop, were really on the cusp of a liquidity crisis and now are in as good shape as ever. At a time when most people are suffering, that kind of prosperity in the sector that is blamed for the recession is going to hit nerves.

What is going on in the industry with hiring?

With hedge funds specifically, there is a glut of experienced talent in the market right now because so many funds shut down or were forced to downsize last year. That makes it very difficult for people without experience in hedge funds to enter the industry. However, many funds have said they will pick up hiring next year, and some funds are even hiring right now. The outlook for next year has gotten much better over the past six months. However, my fund is still not hiring right now.

What is your view on the job market in general?

The number of Americans who are either unemployed or no longer in the workforce has been increasing each month. It’s true that we are no longer seeing an acceleration in the rate of new unemployment claims, but it’s hard to see that as much of a positive. My outlook on the job market is that, while things should begin to improve next year, unemployment will not immediately revert to pre-recession levels, and I am concerned about the overall health of the economy going forward. I’m concerned about the job market as a result.

At this point in time, would you discourage people from entering finance?

I think now is actually a great time to get involved in finance, at least in certain areas. I think that the capital markets have been so depressed recently that, for bankers in leveraged finance, M&A, or any field that’s seen massively reduced activity, there will certainly be a bounce-back. And with head count lower, the compensation per employee might actually be higher down the line. I also think finance is a great place to be for young, driven professionals in search of a challenge, and I believe that there will always be room for the talented to succeed on Wall Street.

What steps could someone take to secure a finance job at the entry level right now in this climate?

Be exhaustive in your approach. Don’t be afraid to make phone calls to people who you barely know, or even don’t know, if you are certain that you want a job on Wall Street. My first internship in finance I got through a cold call to an alum of my school. He agreed to give me an interview and a chance to prove myself. If you are persistent and smart, something will stick. But the advice on being detail oriented applies to the application process as well – you can’t afford to make any mistake that will make it easier for people to shut you out.

In addition, a website like Doostang is a great tool for anyone looking for a job. Because there are such a limited number of available jobs out there at the moment, and because many of these jobs are kept within individual firms, it’s often difficult to find the positions you might want to apply for in the first place. It’s crucial to make use of every available resource you have at your disposal, and a job board that lists exclusive jobs at top firms certainly qualifies as a valuable resource.

So take it from the insider, if you’re considering entering the finance field – now is the time! And if you’re not sure where to begin, Doostang is there to help get you started with exceptional finance openings at all levels.

Happy Monday!
The Doostang Team

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Tags: Advice, Career Insights, Careers, Doostang, Finance, Job Search