Hedge Fund Internships: How to Land a Hedge Fund Internship

Hedge fund internships are not easy to come by. If you want to land a great hedge fund internship you will need to set yourself apart from the crowd, because the best hedge funds receive hundreds of applications per week for a few coveted internship positions. Landing an internship at one of these top hedge funds can make your whole investing career and set you on the path to running your own hedge fund and making millions or even billions of dollars per year. So don’t take the process of landing a hedge fund internship lightly. Put all your effort into landing a great hedge fund internship and your efforts will be well rewarded in the future.

With all of that said, what are the secrets to securing a great hedge fund internship?

Determine if you really want to work for a hedge fund

The first thing you need to do is determine if you really want to work for a hedge fund or run a hedge fund in the future. Landing a hedge fund internship is very difficult. It makes no sense to expend the massive effort required to get an internship if you have no desire to work in the hedge fund industry or run a hedge fund in the future. Running a hedge fund is a competitive, cutthroat business and it isn’t for someone who is in it purely for the money. You have to have a burning desire to succeed in this industry and you have to really want it. If you don’t have this level of desire, it makes little sense to pursue a hedge fund internship because it would end up being a Pyrrhic victory if you do indeed land an internship without having this burning passion for the industry.

Determine if you have what it takes to succeed

Aside from passion, which is a given, there are a number of other important qualities you will need to succeed in the hedge fund industry. If you lack these qualities, it is unlikely that you will land a hedge fund internship.

You need to have exceptional quantitative and qualitative skills. You must have a strong understanding of business and economics and you need to have the quantitative skills required to back up your understanding of economics. If you are pursuing a position in a statistical arbitrage fund or a high frequency trading firm you must have a strong grasp on high level mathematics. Often a master’s is not enough. Many firms will only consider PhDs or post-docs for internships.

But aside from the quantitative skills you will also need exceptional soft skills to work with fellow members of your team and to eventually work with clients if you end up running your own fund. To manage vast sums of money, you obviously have to be technically proficient, but also, you must carry yourself well in front of investors. Even if you are the most skilled traders in the world you still need to have the people skills to convince investors to entrust you will millions or even billions of dollars.

Find a mentor

There is little chance that you will be able to spot all of your weaknesses and blind spots. It is important to find a mentor in the hedge fund industry to help you obtain a hedge fund internship. You mentor can help you determine what skills you need to enhance and he can also help direct you to firms that may have internships available. Your mentor can review your resume and point out ways to improve it and they may even be able to help you by asking you mock interview questions.

Provide more value than you take

Whether you are interacting with your mentor or a firm that may potentially offer you an internship, you need to provide more value than you are asking for in return. Really think hard about what you can offer to your mentor or to the prospective fund. Hedge fund managers are exceptionally busy people and don’t have time to answer a lot of questions. So when you ask questions make sure they count. And in return provide your best ideas to the people that you are interacting with. A hedge fund manager is always looking for the next great idea and the more great investment ideas you provide the higher your value to them.

Send your best ideas to hedge fund managers

When you are interning at a hedge fund, your sole purpose is to generate great investment ideas. So if you want a hedge fund internship you will improve your chances if you can demonstrate that you are capable of producing great ideas. Network with hedge fund managers at campus job fairs and also reach out to alumni that are working at hedge funds. Try to come up with one great idea per month and email this idea to your network of contacts. If your ideas are exceptional, you will dramatically improve your chances of getting a hedge fund internship as you are providing valuable ideas for free and once the quality of your ideas are recognized, one of the hedge fund managers will want to grab your ideas exclusively for himself and his firm by granting you an internship at his hedge fund.

A Hedge Fund Internship: Running with the Big Boys

If you want to run with the big boys, you’ll have to pay your dues. You will need to start at the ground floor by landing a hedge fund internship and work your way all the way up to becoming a hedge fund manager. Then you’ll be on your way to making a massive hedge fund salary like George Soros, John Paulson or Jim Simmons.

Landing a hedge fund internship can get you started on your journey to becoming a hedge fund manager. But getting an internship isn’t easy. Lots of other people have similar aspirations and hedge funds get so many inquiries about internships that they ignore a huge percentage of them. Here are a few things you can do to improve your odds of landing an internship.

Come Up With Great Investment Ideas
If you want to intern at a hedge fund, you will end up doing a lot of investment analysis, but the key is coming up with great ideas to invest in. Every hedge fund manager is constantly looking for the very best investments possible. Their sole aim is to generate the highest risk adjusted returns possible for their investors. If you come up with great ideas that help them to reach this goal, you will be the one that is sought after.

So how do you come up with great ideas? Do a lot of work. Warren Buffett is said to spend ten hours a day reading company reports and SEC filings. In his younger days he read the entire set of company reports published by moodys. He started with the letter A and kept on reading until he reached Z.

How do your efforts stack up to Buffett? Are you putting in the time and effort required to generate good ideas?

Use Your Network
There is supposedly six degrees of separation between you and every one on the entire planet. Reach out to your network and see if anyone knows a fund manager. Remember hedge funds get hundreds of inquiries from people like you every day. Without a personal connection it is very unlikely that they will respond to you.

Once you have made a connection with a fund, learn everything you can about them and what they are looking for in an intern. Make sure that you are well prepared for an interview with them and understand the needs and culture of their firm thoroughly. And be extremely well versed on your investment idea. Chances are that they will have at least a passing familiarity with it if they are a good firm. Your goal is to know far more about it than they do and to be able to defend your views about it with air tight facts.