Hedge Fund Internship: A Couple Of Tips

Hedge Fund Internship: A Couple Of Tips
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Hedge Fund Internship: A Couple Of Tips  by David Merkel, CFA of Aleph Blog

Here’s a letter from a reader:

Hi David,

Hope all is well.

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unnamed 12Hayden Capital's performance update for the second quarter ended June 30, 2022. Q2 2021 hedge fund letters, conferences and more Dear Partners and Friends, The markets continued to sell-off in the second quarter, especially for internet-based businesses.  This year continues to be the toughest stretch for us, since the Hayden’s inception.  Inflation concerns and the Read More

I will be starting a Hedge fund internship soon and want to contribute;. Any advice?. Are there any skills that I should learn/ brush up on so I  can be productive. 

Thanks a lot.

In one sense, a Hedge Fund Internship is like an internship at any job.

Hedge fund internship – Here’s the easy stuff:

  • Be on time.
  • Dress like those you work with, or just a little better.
  • Listen carefully, and keep a notebook, so that you can remember things, or write down questions to ask later.
  • You are new to the social hierarchy, and sorry, you are at the bottom of it.  You may get garbage jobs that the junior analysts don’t want to do.  Do those garbage jobs with as much flair as you can.
  • Don’t waste time.
  • Do ask questions, particularly intelligent ones.  If you are not sure, ask.  If it is still not clear, ask.
  • Spend extra time if you need to research something for the business outside of business hours.
  • If you can program, and there are projects that could benefit from programming, offer to write some code now to aid processes after you are gone.
  • Don’t look down on anyone.
  • Be willing to speak up in meetings, but only when you have something of high quality to say.  If they ask you your opinion, and you don’t know, say that you don’t know.

  • Try to find some friendly mid-level person who can give you advice.

Now for things that are hedge fund internship specific:

  • Make an effort to understand how the hedge fund intends to make money.  Once you know that, try to read up on their particular strategy.  Ask those with experience where you can learn more.
  • Realize that they are doing you a favor, and not vice-versa.  At the hedge fund I once worked at, we always paid interns, but only one intern out of many was ever worth the cost of paying and training.  So be grateful, and do what they ask, so long as it is not illegal or unethical.
  • Show interest in what others do, and learn from them.  People like to talk about their work, so when you have the opportunity, ask good questions.
  • It’s possible that they may play some practical jokes on you; bear with that in a graceful way.
  • Hedge funds are entrepreneurial, so if you do well, they will throw harder tasks at you.  Don’t be shy; do your best.

Hedge fund internship: So what is the payoff for your hard efforts?

  • References for a real job, so impress those that you intern for.
  • Advisers on how to find a job if you did a good job for them, but there are no openings.
  • Also, they might rather hire privately, rather than expose the firm to risks from advertising a job publicly.  As such, if you showed that you could do great work for them, they very well might hire you.  Stay in touch with them.

That’s what I think you should do.  The comments section is open for more advice to the young man.

Updated on

David J. Merkel, CFA, FSA — 2010-present, I am working on setting up my own equity asset management shop, tentatively called Aleph Investments. It is possible that I might do a joint venture with someone else if we can do more together than separately. From 2008-2010, I was the Chief Economist and Director of Research of Finacorp Securities. I did a many things for Finacorp, mainly research and analysis on a wide variety of fixed income and equity securities, and trading strategies. Until 2007, I was a senior investment analyst at Hovde Capital, responsible for analysis and valuation of investment opportunities for the FIP funds, particularly of companies in the insurance industry. I also managed the internal profit sharing and charitable endowment monies of the firm. From 2003-2007, I was a leading commentator at the investment website RealMoney.com. Back in 2003, after several years of correspondence, James Cramer invited me to write for the site, and I wrote for RealMoney on equity and bond portfolio management, macroeconomics, derivatives, quantitative strategies, insurance issues, corporate governance, etc. My specialty is looking at the interlinkages in the markets in order to understand individual markets better. I no longer contribute to RealMoney; I scaled it back because my work duties have gotten larger, and I began this blog to develop a distinct voice with a wider distribution. After three-plus year of operation, I believe I have achieved that. Prior to joining Hovde in 2003, I managed corporate bonds for Dwight Asset Management. In 1998, I joined the Mount Washington Investment Group as the Mortgage Bond and Asset Liability manager after working with Provident Mutual, AIG and Pacific Standard Life. My background as a life actuary has given me a different perspective on investing. How do you earn money without taking undue risk? How do you convey ideas about investing while showing a proper level of uncertainty on the likelihood of success? How do the various markets fit together, telling us us a broader story than any single piece? These are the themes that I will deal with in this blog. I hold bachelor’s and master’s degrees from Johns Hopkins University. In my spare time, I take care of our eight children with my wonderful wife Ruth.
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