Your dream has always been to work as a hedge fund analyst.
You got all the right grades in high school, you attended an Ivy League college, and graduated top of your class. Apart from that, you’ve also attended one or several internships, and you gathered a few years of experience in investing and the finance world in general. And now you want to work as a hedge fund analyst. Still, you’re wondering what does a day in the life of a hedge fund analyst look like?
We’re here to answer that question for you. In fact, we’re here to give you an exact taste of what you will be going through every single day as long as you have this job. So, make sure you put your seatbelts on because we’re going to embark on a fantastic ride.
A Day in the Life of a Hedge Fund Analyst. What Do You Have to Do?
The first thing you need to understand when it comes to working as a hedge fund analyst is the following.
You will never experience a typical day as a hedge fund analyst.
Even if you do get to perform roughly the same tasks in the morning and the evening, you won’t have two days that are alike. Building on this idea, you will notice that, in the course of the same week or month, you will undergo a specific number of tasks given to you to perform on any particular day.
Taking this into account, here is how a day in the life of a hedge fund analyst looks like and what you will have to do activity-wise.
Wake up as early as you can.
Evidently, it will depend on the coast on which you are located. It also depends on the hour when the market in which your hedge fund operates opens. For example, if you are an associate working for a hedge fund in NYC, the typical commencement hour will be between 5:30 and 6:00 AM. Or, if you are operating in less liquid markets, you may be able to wake up somewhat later than that.
The West Coast, however, tends to wake up a lot earlier.
Still, independently of all these factors, you will have to wake up very early in the morning. Therefore, if you are not a morning person or if you know you don’t perform well if you get such an early start, you might want to reconsider a job as a hedge fund analyst.
Workout at least half an hour.
Most hedge fund analysts like to work out even a little bit early in the morning. Seeing as you will have to get such an early start, some exercises and a shower will wake you up and make you feel a lot more energized.
Try not to drive. Commute instead.
Here is a great tip coming from the world’s top-notch hedge fund analysts. Even though it seems alluring to drive, don’t do it. Instead, try to commute to work. This idea will give you precious time to catch up on the overnight news and to answer any emails you might have gotten since you last checked. Do you know what the best thing is? You get to do it all before you even step foot in your office.
Do not skip over breakfast and coffee.
They say breakfast is the most important meal of the day for a reason. If you skip it, you will feel weakened, and won’t have enough energy to face the long day you have ahead. As far as coffee goes, this is a general term for whatever it is that gets you boosted. You can also have some green tea or a protein shake. The important thing is for you to feel wide-awake and energized.
Plan your day right now.
A day in the life of a hedge fund analyst cannot start if he or she does not plan their day. Create an outline based on your files, accounts, emails, and phone calls you received for the day. Plan a time slot for each activity and try to stick to it as much as possible. Once this step is complete, you can finally truly start your day.
Speaking of activities which you will have to perform throughout a typical day in the life of a hedge fund analyst, here are some examples.
You must work on new investments or investment memos.
This activity is number one on the list because your primary focus as a hedge fund analyst will be to research and evaluate investments. Therefore, the best part of a day in the life of a hedge fund analyst will consist of finding information which he or she can use to that end.
The moment you have finished doing diligence for a new holding, you will have to put together a thesis. Take it and pitch it to your Project Manager. This can happen straight away or in a weekly or biweekly meeting.
The pitch can consist of either a short email toward your PM or a full-blown investment memo. The latter typically has anywhere between five and 30 pages. You will have to construct it in the same way you used to do your practice case studies when you first got the job, only in more depth.
Source and structure the deals which come your way.
Here is another type of activity you will be doing during a day in the life of a hedge fund analyst. It requires you to structure the terms of the funds which focus on less liquid assets or private and semi-private deals. Apart from that, great personal investments where either the fund you work for or a group which includes your fund is in negotiations with a company could turn into a problem for you as well.
Just like in typical banking situation, you have to model potential scenarios for the deal. You will also have to make presentations, coordinate with the lawyers as well as with other funds so that you can negotiate all the terms.
Work on the investment updates.
If we’re talking about current holdings, then you will have to come up with updates for all the events which could broadly impact the investment itself. If you have started on this path, then you may even have to refresh the whole thesis to accommodate these updates. You will also need to prepare a brief memo or maybe just an email.
The idea here is that you are in charge of all the changes. Therefore, you will also have to notify everyone if anything fluctuates at all.
Work on the marketing materials.
Taking into account the size and the resources of which your fund disposes, you will have to put together marketing materials. You then need to use them to pitch your ideas to prospective investors. Apart from that, you will also have to send the following to existing clients: annual meetings, quarterly letters, updates on the performance, and everything else in between, as far as analysis and presentations are concerned.
Perform back office support.
Just like with the marketing materials, your involvement in back office support as a hedge fund analyst will depend on your fund. Still, if they will require you to perform these activities, you must take care of accounting and compliance.
A day in the life of a hedge fund analyst also includes a myriad of calls and meetings. Here is what you will have to do.
Participate in strategy meetings.
The best part of all hedge funds hold weekly or even monthly meetings led by a PM. They review the performance, provide updates on all investments, and discuss all the potential new ideas. These projects are regularly the ones which you, the hedge fund analyst, have presented in the memos I detailed above.
Even so, the Project Manager calls most of these meetings for special purposes as well as for issues which are time-sensitive. Given their nature, they cannot wait until the regular monthly meeting. You will also have some more regular meetings, such as the Monday Morning ones.
Conference calls are a must. As are diligence calls.
When it comes to doing diligence, your private network is crucial. However, you will need more accurate insights for all the distinct investments currently under your evaluation. Cue other valuable sources of information, the likes of expert networks. Apart from that, you can also use the internet, LinkedIn, sell-side analysts, or even rating agencies.
Here’s a tip – use absolutely anyone who can get you the smallest bit of information which you can use to your benefit.
If they ask you to participate in management calls, do it.
These particular conference calls are also called one-on-ones. They are an excellent source of information for you on a personal level, which is why you should never shy away from one. You can ask your managers everything you want to know about the hedge’s plans in general or for you. You can also inquire about their strategy and anything they are willing to disclose.
Don’t be afraid to speak your mind and present them your ideas and plans. This attitude will show your immediate and upper management that you are a pro-active employee who genuinely cares about the company and his job.
Apart from all these different things you will have to do as part of a day in the life of a hedge fund analyst, you also get to do an entire plethora of fun stuff. If you have the chance, do not refuse them. Here are some examples.
Read. All the time if you can. It will set you apart from your fellow hedge fund analysts.
The best part of the investment analyzing process will ask you to read as much as you can about it. It will help you a lot, especially if you’re trying to find things which your colleagues may have overlooked, such as the footnotes. Don’t forget about the research reports, articles in the news, reports of the industry, emails, and fillings.
Stay on top of all the data coming from the market and of the relevant economic indicators concerning the fund in its entirety. Every single bit of information that comes your way has the chance of turning into a great opportunity. Take advantage of it.
Handle the fund’s lawyers.
This situation is exactly like it goes in banking. Are you familiar with those moments when you upload a data room? It renders a legal document which can sometimes be 300 pages long. Evidently, since we are talking about a legal document, lawyers will handle much of this work. Still, if particular problems should arise, they will hold you responsible. The conclusion? You must manage the fund’s lawyers.
You must perform modeling, even though it’s not such an interesting part.
This idea is a common saying in the world of investment banking. Modeling is a fascinating part of it all. Even so, it’s not the same if we’re talking about a day in the life of a hedge fund analyst. The concept of modeling becomes a methodical process, provided you have the basics locked down. The reason is that you, as a hedge fund analyst, are a lot more interested in what that model can tell you and how it relates to the thesis you’ve just prepared than in how good you are at working with Excel.
If one part of the investments requires you to read and perform diligence calls, the other part will ask some creative research of you.
If that is the case, then you must do one or several of the following.
- Diligence visits to the company which you are supposed to evaluate.
- Arrange and participate in meetings with the management.
- Call every one of their locations so that you can get all the data you need.
At the end of the day, go home, eat, rest, take a shower and go to sleep. This is how a day in the life of a hedge fund analyst typically ends. And then what? Then you get to do it all over again come morning.