<p>Basically I graduate in this upcoming year (degree in economics from USC) and I'm starting to look at post-graduate credentials that I could earn (CFA/CPA/CFP/ChFA). I was wondering which, if any, of these credentials would help me pursue a career in either investment banking, hedge fund management, or related fields. I know that if I end up going the wealth management route that the CFP will be the first credential that I go for, but I want to start looking at the options laid out before me If I decide to go into ibanking, etc. </p>
<p>So my main question boils down to if any of these credentials will help with, or are necessary, for a career in the aforementioned fields</p>
<p>In Ibanking, I know CFA helps; it is equivalent to an MBA for them, generally. My cousin has been an analyst in NYC for Morgan Stanley for 2 years or so and has begun work on it.</p>
<p>Another cousin who is a VP for Merrill (or whoever owns them now, I think BofA) has a CFP, and he did wealth management.</p>
<p>From my experience, this is not accurate at all. CFA is useful and serves to be a substitute for an MBA sometimes in equity research or investment management, not investment banking. When I was in IB, I didn’t know one person with a CFA or in the process of working on it. If your cousin is an analyst at Morgan Stanley and is pursuing a CFA, it is most likely in equity research or the asset management division.</p>
<p>Is it at all possible (or even recommended) to start studying for the CFA exam while I’m wrapping up undergrad? I know it can’t be awarded until 3 years work experience are completed but I believe that you can sit for the exams before you meet that requirement.</p>
<p>Would the CFA help at all in private equity/hedge fund management?</p>
<p>back in the days when dinosaurs roamed manhattan, CFA was a 3year exam, given once a year in late May/early June, and you had to take one section per year. If its still the same and you feel like studying for it your last semester of college, why not sit the exam, you dont have anything to lose except your time.</p>
<p>CFA is useless in banking and doesn’t give you any edge in hedge funds/PE. Big waste of time in my opinion, but if you want to do PWM work then you should probably get one. </p>
<p>The general thesis is, if you are smart enough to get into ibanking, HF, or PE, you don’t need a CFA to prove you understand finance</p>
<p>Gellino is correct. IB, PE is very unlike HF. CFA is not going to help in IB, some guys in PE are CFA chartered and you will see more people in HF who are chartered.
However, there are tons of people all over the world who have passed various levels of the CFA exams and still cannot find any work in IM, HF because of a lack of experience. Nowadays, one needs 4 years of related work experience to be chartered.</p>
<p>BPKO43, I assure you that cbreeze, gellino, and I are not mistaken. If you have worked in IBD, you should have realized that what you do has little to do with what is on the CFA. </p>
<p>However, I will concede that you may see more CFA in HFs–not necessarily because you need one, but because those people often come from a different background (asset management, equity research, investment consulting, etc.). I know people at SAC, Renaissance, and other top funds. I can tell you that any skilled traders won’t give two ****s about your CFA, especially not the quants who have Phds in Physics from MIT</p>
<p>To be entirely candid, I am really only considering investment banking because I’ve been told that after 1-2 years in IB the transition to hedge funds or PE becomes very easy. Are there alternate routes that have a comparable time frame that allow a transition into, or lead into a career with a hedge funds/PE firm?</p>
<p>CFA is not very relevant to investment banking. It is VERY relevant to portfolio management.</p>
<p>Solomonm, 2 years in IB is a traditional route into PE/some hedge funds, but it’s definitely not easy. Why are you “only considering” IB for PE/HF? The lifestyle and skillsets required are similar, and at the junior level, the money is not THAT much better.</p>
<p>If you are deadset on PE/HF (gotta choose one), you should look for opportunities to go straight in after school. There are plenty of MM PE firms that hire out of school (a few high quality ones out of those will give you a huge leg up in landing a job at a megafund). If you have a quant background, I think there are hedge funds that hire out of school, but I have no experience with this.</p>
<p>Another way (though this is much less certain) is to land an analyst role at a fund of private equity funds or fund of hedge funds (called investment management/asset management at some BBs). You will gain exposure to funds and hopefully make some contacts. It’s still extremely difficult to make the transition to PE/HF but you wouldn’t have to go through banking.</p>
<p>Since you are graduating next year, what kind of internships have you landed this summer? If you don’t have a gig lined up, your chances of doing IB, PE out of college is very slim.</p>
<p>I still have one more summer after this current one, which is the one that I’m worried about since that internship is so crucial to a career upon graduation. </p>
<p>This summer I’m working as a mergers & acquisitions research assistant for an independent wealth advisory firm. This upcoming fall I’ll be working at UBS as a financial adviser’s assistant (basically making cold-calls but I’ll do my best to embellish that for my resume)</p>
<p>What kind of PE internships/positions/firms would you reccomend looking into? I’m already pretty familiar with the summer analyst internship programs at most investment banks. Although I wonder if it would be worth looking at smaller IB’s and straying away from the major institutions?</p>
<p>Anyways, while I learn more and more about investment banking and the associated lifestyle the more I’m not sure I really want to go into it. I have absolutely NO problem putting in a lot of hours and working hard but for me personally 10am-2am 7 days a week just isn’t worth it for me. So at this point in time I’m trying to find a suitable alternative to IB that has comparable pay (maybe a little lower pay for fewer hours?) and serves as a springboard to an MBA, PE, or a hedge fund.</p>
<p>I’ve worked as an analyst and associate on both a derivatives trading desk and a proprietary desk. I finished the CFA exams last year and am a PhD student now. The CFA material is incredibly useful in buyside long-only portfolio management, equity long-short, distressed, convertible arb and asset allocation work. In exotic rates and FX trading, option greeks and calibrating yield curves are probably the most important areas of academic focus- the CFA curriculum spends some time on these topics but further self-study is needed. I would suggest Alex Lipton’s papers, Vladimir Piterbarg and Stefano Galluccio among others. If you want to work for a quant fund or the derivatives group of a bank, you’ll probably need to supplement your undergrad with a masters in mathematical finance or financial engineering. Stochastic processes underpin the modeling of most financial time series so having a good grasp of stochastic calc and financial econometrics can be very useful.</p>
<p>Oh yeah, another thing is the primacy of good computer skills- VBA on a FI or good equity trading desk is a must-know these days and preferably some exposure to C++ or Java and Perl, not to mention Matlab to implement your strategies/relay ideas to the quant team. </p>
<p>For fundamental desks, funds- a CPA and maybe a masters in accounting would help a lot in terms of valuations, and detailed Financial Statement Analysis. Benninga has a great website, Damodoran at NYU and Holthausen at Wharton do alot of work on this.</p>
<p>But you seem to be suggesting that “if you’re smart enough to get in…” that’s all you need and no further qualification is necessary and you can go on and make your millions. There are superstars, but it’s not like that for most people.</p>