Posts Tagged ‘hedge fund’

Three Good Ways to Answer the “What’s Your Weakness?” Question

Monday, July 21st, 2008

It’s the most dreaded question in any job interview. “What’s your greatest weakness?”

Everyone fears it, and no one knows how to answer it. Plenty of us have tried to pass off canned answers like “I’m too much of a perfectionist” or the always popular “I’m a bit of a workaholic.” If you haven’t found out already, these just don’t work.

Chances are your interviewer has heard them before. So she’ll probably turn around and say, “Well, that sounds like a strength to me. Can you give me another weakness?” And then you’re back where you started from.

So, what is the best way to respond to this question? The key is to understand why hiring managers ask it in the first place. More than anything, they want to see how you’ll respond how well you maintain your composure under pressure.

With that in mind, here are a few ways to tackle the dreaded “what’s your weakness?” question.

Tip #1: Only admit to a minor weakness 

Cop to a small weakness — but one that could also suggest an upside. Instead of trying to pass off a blatant strength as a weakness (e.g., the perfectionist line), go ahead and confess a small weakness that more subtly hints at a positive flipside.

Admit, for example, that you are impatient. That’s a weakness, yes, but it also indicates that you’re high-performing (i.e., not lazy).

An even better way to present that weakness: “I work at a fast rate and find that I need to be more patient with those who don’t.”

Tip #2: Admit a weakness that can be fixed

With this tip, we take that advice a step further. After acknowledging a weakness, explain to the hiring manager what you’re doing to address it.

Let’s use the “impatient” example again here. If you admit that as a weakness, follow up by adding that you’re working on communicating expectations with your associates to help make sure everyone is on the same page. Under the right circumstances, this  strategy can really pay off. Because it not only shows the employer that you’re actively trying to improve, it also shows that you take initiative and have leadership skills.  

Tip #3: If you do confess a real weakness, make sure it’s not a red flag

You don’t want to be that candidate who blurts out potentially damaging information by revealing a real, serious weakness. We all have our flaws, but we don’t need to shout them from the rooftops (especially in a job interview)!

The key is not to disclose anything that can make you seem like a problem worker. Saying things like, “I’m not a team player” or “I’m typically late” will set off serious alarms in the mind of the interviewer. Maybe those are obvious. But what if you say essentially the same thing in less direct words?

If you’re frequently late, for example, or you procrastinate, you might dress it up by saying, “I need to work on my time management.” Sure, that sounds a little better than words like “lazy” and “procrastinator”, but your interviewer’s going to reach the same conclusion regardless.

So if you do decide to disclose a real weakness, choose one that is irrelevant to the position you’re up for (e.g., if you’re working with numbers all day, you could say that you’re not a fantastic writer).

Coming up with one answer is hard enough, but I recommend jotting down four. Why? Because I’ve often heard the “what’s your greatest weakness” question come in the form of “tell me your top three greatest weaknesses.” Scary, but true!

Prepare for the worst-case scenario, and hope for the best. And do not forget: practice, practice, practice. Rehearse your answers out loud so you can breeze right through the trickiest question without breaking a sweat.

Expert advice brought to you by The Résumé Girl

 

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A New Hedge Fund Strategy Emerges – With Amazing Perks

Wednesday, June 18th, 2008

As has been discussed and hypothesized in this Blog for the last few weeks with the success of Big Brown (and yes I know he did finish last at Belmont) there has emerged a new Hedge Fund strategy based on the success of future race horses.  We have mentioned in the past, Big Brown’s owners International Equine Acquisitions Holdings have planned to start marketing a horse based Hedge Fund this coming fall with the hope of raising $100million. 

Just a week ago it was announced that another collection of Horse Racing Legends were in the final stages of creating a Hedge Fund based on the future earnings of race horses.  The team for this new fund includes Nick Zitto, D. Wayne Lucas and Bob Baffert; all successful professionals in the horse racing field.  The fund Thoroughbred Legends Racing Fund is looking to raise around $100 million as well and will focus on identifying high potential horses early in their life span.

As with a traditional fund the fee structure is believed to be 2% and 20%.  Although this fund will look to make investments in horses as early as possible, hoping to avoid high cost bidding wars at the auctions, their entrance into the space will still cause the prices paid for these horses to increase.  As these prices increase so will everything else about the horse racing business.

Since both funds hope to own numerous horses and hence spread their risk out over as many as a hundred horses, even less pedigreed horses will have to be added to their stables.  These long shots will be where the real alpha could be produced even if the horses do not make it to the Breeder’s cup. And more importantly, to assure the funds return positive numbers these horses will compete in races throughout the country and a more operational/business management component I believe will become a greater part of the horse racing industry.

As I discussed in earlier Blogs I believe these funds will probably be able to raise the AUM they desire for a few main reasons:

1. The strategy has no correlation to the more traditional investment benchmarks. 

2. The assets behind the strategy can be traded and sold off at any point of the investment.

3. Although the goal is for your horse to win, this is not necessary to make a return on your investment.

4. A winning horse can offer a profitable revenue stream for many years; hence enabling the fund to show a consistent non-correlated alpha producing return for many years.

5. What other investment allows you at the next Kentucky Derby to raise a Mint Julep in the owner’s box to your horse. And if your horse wins, allows you to celebrate down in The Winner’s Circle - no other hedge fund investment has those perks!

Interview Tips Part 2

Thursday, June 12th, 2008

Here is the second half of our Interview Tips:

1.  When you arrive at the office make sure that you treat everyone you meet with respect and consideration. You need to make a positive impression on everyone for you never know who has a say in your candidacy.  I actually know one firm which will question everyone who meets the candidate from the receptionist up, and all of their input has value.

2.  When you meet your interviewer make sure to look them in the eyes and greet them with a firm hand shake.  Remember your manners. In today’s world they can set you apart from your competition.

3.  When you meet your interviewer make sure to look them in the eyes and greet them with a firm hand shake.  Remember your manners. In today’s world they can set you apart from your competition.

4.  Show your passion for the investing.  People want to hire people who have the passion for the same things.

      5.  Always remember to write a Thank You note and yes they can be emailed, emailing the note does get it to the recipient much quicker then any other method which can show passion and keep you fresh in their mind. A hand written note goes very far in today’s world if it is received within 24 hours and is readable. Try to write a thank you note to everyone you meet with for at least 10 minutes, so make sure to get business cards.

Interview Tips Part One

Thursday, June 5th, 2008

For today’s recruiting focused Blog I wanted to offer some Interview Tips which in today’s market seem to be even more important because you need to set yourself apart from the competition in order to get that exciting new job.

  1. Always be prepared for your interview.  Prior to your interview visit the firm’s website and carefully review the entire website. This also includes reading the papers the morning of your interview or searching the web to see if any articles have come up regarding the firm where you will be interviewing.  If you have access to a Bloomberg machine I would suggest looking up the firm right before your interview.  In the case of most Hedge Funds this will require you receiving a password from the firm prior to the interview.  Most firms are very open to providing you the password if you ask, so ask!

  2. Plan to arrive 5 to 10 minutes early to any interview.  This provides you some extra time if something should go wrong.  As well if the firm requires you to fill out an application this will enable you to start the process earlier and not be rushed.  If an application needs to be filled out complete it to the best of your ability at that time, if need be send a follow up email with additional information.

  3. When reviewing the firm’s website make sure to read the bio of the individual who is interviewing you if available.  Your goal is to find a commonality between the two of you which you can offer during the interview. This shows that not only have you reviewed their website, i.e. done your home work, but also when you leave he will have something meaningful to remember you by.

  4. Try your best to be properly dressed for the interview; this has become much harder in today’s more casual marketplace.  Some firms still wear suits while other have gone business casual.  If you can identify the environment of the firm feel free to wear what ever is the firms environment but otherwise I would always suggested wearing a suit.  If you are worried a suit may be too formal, put a fun tie into the outfit, this will show your personality, and most likely one of your passions.

  5. Ask well thought out questions, questions which show you have prepared yourself for the interview.

Tip’s 6-10 next week!

Hedge Fund Blog

Wednesday, June 4th, 2008

In response to a recent email I received I decided to list a few of the Hedge Fund Blogs that I know of out on the web.  For the most part these are blogs that I visit on a regular basis to receive different perspectives regarding events occurring within the Hedge Fund space.

Depending on the specific blog a wide range of issues may be addressed from recent legal changes affecting the hedge fund landscape, to prime brokerage recommendations, to technical analysis, to editorials on investment ideas, to comments about street rumors and major fund implosions and defections.   

 

As I am sure that I do not know of every blog on the web if you can think of any other Hedge Fund blogs I would be very interested in learning about them.

Here is my list in no particular order:

Richard Wilson - covers a wide range of topics but is focused purely on Hedge Funds

Alphaville – covers a wide range of topics and news worthy issues in the investment space including Hedge Funds

Information Arbitrage – written by a Wall Street alum, includes postings on Hedge Funds 

NYT Deal Book – covers a wide range of topics including Private Equity and Hedge Funds

Equity Private - This blog is not focused on Hedge Funds but rather Private Equity but I include it because it can be very funny!

What Hedge Fund Strategies will be the best in 2008?

Friday, May 30th, 2008

As we get ready to enter the last month of the first half of 2008, I find myself trying to determine which Hedge Fund Strategies will end 2008 not only up but be the top performers. 

Presently there seems to be a few strategies that are positive for the year (at least up until May 1st the most accurate recent numbers I can find); such as Risk arbitrage and Managed Futures.  But the majority of strategies are down for the year. 

As I look over the different strategies there are three which I believe will be up by the end of the year:

  1. Industry focused Long/Short Funds
  2. Event Driven
  3. Credit Arbitrage

 

I will be the first one to admit that most people feel some of these strategies will have a strong second quarter such as a Financial Services focused long/short strategy and a Credit Arbitrage strategy.  But what sets my opinion part is that although I believe that Financial Services focused long/short funds will have a strong year, I believe that some other sectors will be even stronger. 

Event Driven funds may surprise many investors in the second half. I believe these funds will perform very well because as the credit crisis resolves itself all of the money that is on the side lines will be put to work to purchase solid assets at a significant price reduction from only a year or two ago. This money includes Private Equity and Hedge Funds as well as corporations who are looking to grab market share for a fair value.

 

Also, I believe Credit Arbitrage may become the hardest place to make money simply because so much money will be chasing after so few deals.  But if you are invested with a well connected proven player in this strategy I believe you could have a very strong return year, even though the risk is still very high.

We still have a long time 7 months until 2008 is over and who knows what the second half of the year will bring, but I know I am excited to watch. What strategies do you think could be money makers in 2008?  

 

  

The Changes within the Private Equity Revenue Landscape

Tuesday, May 27th, 2008

Over the last few years, Private Equity and more specifically the revenue channel of certain Private Equity Funds has changed drastically.  In the past Private Equity firms have always charged a management fee and a performance fee similar to the fee structure of Hedge Funds. The performance fee was usually collected after a capital transaction occurred, such as a portfolio company being sold.

In the last few years, however, some Private Equity Funds have come to realize that two sources of revenue were not enough, and just as important the ability to pay large bonuses only after a capital transaction occurred made these funds less attractive places to work in the eyes of many professionals. Therefore, a few Private Equity funds created an additional revenue source, usually defined as a Special Dividend. 

This Special Dividend is structured to be paid to the company’s owners (the Private Equity Funds), as defined within the initial transaction paperwork.  For instance, it could be paid on the day that the first transaction closed, i.e. the day that the Private Equity Fund bought the company, which in many cases creates a nice one day return.

Another method allows for payment at a set upon date within the life span of the ownership of the company, or if certain goals/targets are reached.  For instance, the dividend could be paid towards the end of a given year, providing the fund some concrete return numbers to show their investors or potential investors while maintaining ownership in the company.  From the Investors perspective they are seeing a return on their money rather then sitting on hypothetical numbers.

For certain investors this new revenue source is seen as a positive concept allowing their Private Equity Funds to wait longer on creating value within their portfolio company, or to wait for better market conditions to sell their portfolio company then was previously possible.  This additional source of revenue enables the Private Equity fund to have more money which can then go back into the portfolio company if the PE fund feels this is necessary. Instead of the portfolio company having to maintain the cash in their accounts, the Fund may now use to their discretion; the revenue channel to help the portfolio company better perform.

Critics argue that these special dividends are just a way for the professionals at the PE fund to receive more compensation, and cause the Private Equity Fund’s performance numbers to look better in the short run.  With their being less risk on the part of the PE Fund, since the fund has basically been paid back a portion of their initial investment, the Private Equity fund may not be as vigilant with their investment.

In many cases to pay this Special Dividend the companies must take on additional debt to make the payment, this applies more debt to the new company’s balance sheet, which in most cases is not viewed upon positively except by those individuals who received the Special Dividend.  This is one of the most controversial aspects of this new revenue source, who does it really help?

Although this source of revenue creation is new and is being implemented by a very small portion of funds it will be very interesting to see how it emerges in the Private Equity space.  The real question is; “Is it here to stay?”  It is probably too soon for us to make a fully educated answer to this question but unless the large Institutional Investors start to object I would guess that it is and likely will become a greater portion of deals to come. 

This is especially true in the case of very large deals where being able to take money off/out of the deal on day one helps to lower the risk for the Private Equity Fund while not diluting their ownership in the portfolio company.  Furthermore this revenue allows the Private Equity Fund to return money to their investors making the investor happy with a return of capital and the Private Equity Fund’s employees are happy with an additional transactional bonus being given to certain individuals within the fund.

I would be very interested to hear from Private Equity professionals and Investors; how do you view implementing a Special Dividend revenue channel? Do they out weigh the fiduciary responsibilities of the fund or is this a concept that will be looked back upon in the future as having had a negative impact on the market?

I ask for individuals to post their thoughts in our comment section of the blog or email me directly.

How to Make the Most of Your Summer Internship

Monday, May 19th, 2008

Ever wondered how to make the most of your summer internship but don’t have the time to read book after book on the subject?  Well, I’m The Résumé Girl and I’ve read all the self-help career books so that you don’t have to and compiled an easy-to-use, at-a-glance “top ten list” to help you make the most of your summer internship.  So, here’s tips #1 - #5 and be sure to stay tuned until next week for tips #6 - #10:

Tip #1  Set personal goals before you startKnow what you want to get out of your internship by taking time before you start to clarify why you are doing the internship and articulate what you hope to get out of it.  Then, set personal goals for yourself by considering what ideas you would like to learn more about, skills you hope to build on, and people you would like to meet.

 

 

 

Tip #2  Bring legal documentation with you on your first dayYou’ll either need a passport or both your driver’s license and Social Security Card as proof of your eligibility to work in the United States.  If your getting paid for your internship, you’ll also need to be prepared to complete a federal W-2 form, so learn about what this document is beforehand and come prepared to complete it on the first day of your internship.

 

 

 

Tip #3  Take the initiative and meet regularly with your supervisorSome internships are more structured than others.  So, if your supervisor does not ask you to meet with him/her on a regular basis, take the initiative and ask them if you could do this.  In this meeting, take the time to ask your supervisor for both positive and negative feedback and also update him/her on the progress of your internship projects.

 

 

 

Tip #4  Maintain a great attitude and always be professionalApproach all tasks with enthusiasm and professionalism no matter how menial the task may be.  Remember that your internship is essentially an extended job interview and to always act professionally no matter how other interns or full-time employees might behave!

 

 

 

Tip #5  Keep track of your accomplishments, projects, and responsibilitiesBe sure to keep track of all of your summer accomplishments, projects, and responsibilities or hire The Résumé Girl to do this for you!  You’ll not only need a comprehensive list of your accomplishments, projects, and responsibilities to help you with your exit interview, but you’ll find that you’ll need to update your résumé at the end of your internship and having this list prepared will expedite the résumé writing process and reduce your stress significantly!

 

 

 

About The Résumé GirlLike my tips?  Want to learn more about how I can help you?  Visit my website www.TheResumeGirl.com to schedule your free initial consultation!

 

Hedge Your Bets at the Track

Friday, May 16th, 2008

Tomorrow is the second race in the famous Triple Crown and as the winner of The Kentucky Derby; Big Brown is a favorite to win the Preakness Stakes. Whether Big Brown wins the race and goes on to win the Triple Crown -which would be the first time in 30 years-I am sure some in the racing world are wondering what will happen to the horse racing business after this year.  The reason being-Big Brown is owned by a new type of horse owner-a Hedge Fund.

My guess would be International Equine Acquisitions Holdings, will report a strong return to their investors especially if Big Brown goes on to win the Triple Crown.  Although even with just the Derby win under his belt I guess his stud fee will help this firm’s performance for many years. 

I think a bigger more interesting question should be asked: Will the success of this strategy and its uncorrelated returns to any traditional financial market lead to other copy cat funds being formed?  If I was a betting man I would bet big on the answer being yes.  And if this occurs then is the horse racing business in for an explosion to the upside on cost as we have seen happen in the commodities universe specifically with oil and natural gas?

Will Hedge Funds and their large pools of money start attending these horse auctions with the hope of walking out with the next Big Brown? If Hedge Funds do start to attend these auctions then you can expect the prices at these auctions to break new records and for many more horses to be bought, for the funds will most likely try to spread their risk out over numerous horses. 

These new record breaking prices will most likely trickle down into others cost and revenue producing areas of horse racing such as stud fees, sponsorships and race winnings.  As the race purses, sponsorships and stud fees increase in value more investors will try to get into the strategy and I would presume more people in the general public would be interested in watching the races both in person and on TV.

If the strategies are proven to work and the returns can be spread out over a long time period especially with stud fees and sponsorships then I would expect some institutional investors to invest in this strategy in the next 3 years or so, perhaps thru their emerging manager platforms.  Once this occurs people presently involved in horse racing may be in for a very pleasant surprise.

As you watch the Preakness Stakes tomorrow; I ask you to remember you may not only be watching a historical race in regards to the Triple Crown but you may be watching the horse, Big Brown who is responsible for changing the horse racing business for ever.   

 

Resumes for Private Equity and Hedge Fund Space

Thursday, May 15th, 2008

As we have discussed in previous blogs your reputation is extremely important in the close knit community of Private Equity and Hedge Funds.  But what if you are applying to a position and no one in the firm knows who you are? Then a properly worded and crafted resume becomes extremely important.

A well written and composed resume can be the difference between being asked in for an interview or having your resume put in the do not call pile.  The tough thing about creating your resume is there is no one perfect answer in regards to what a resume should look like. However certain styles seem to work better for particular industries and in some cases the preferred resume style may even vary by the roles within the industry.

The typical resume in the Private Equity and Hedge fund space consists of one page and is written in one continuous font and with very little formatting involved.  Your name and the name of you employers may be bold but otherwise there are very few changes.  The resume should also be written in bullet point format with each bullet point being a concise, action oriented comment about your position. 

Although I am not a resume expert, as an executive recruiter I have seen thousands of resumes during my career and I do have a key few points which I believe are very important:

  • Concise bullet point descriptions, action oriented descriptions of your responsibilities
  • No spelling or grammatical mistakes - mistakes express a non detail oriented person
  • Ideally one page
  • Make the resume easy to read, line up company and title as well as the date on opposite side of page
  • If you are coming from an investment banking program, a deal sheet should accompany any resumes you send out
  • If you have any discretionary Portfolio Management duties make sure to include your most recent returns numbers, I would also suggest you have another sheet with your performance number for at least the last 5 years including how they compare to your benchmark
  • Make sure to include any awards you have received from either your employer or peers

Because a resume is such an essential component as one tries to advance their career, PrivateEquityJobs.com has decided to team up with an experienced and knowledgeable resume writer who has direct experience in the alternative investment field.

“TheResumeGirl” possesses hands on expertise in this field. She worked as an analyst for an investment banking analyst program as an analyst before joining a large Hedge Fund and has has written hundreds of financial resumes for professionals in the field. She therefore knows exactly what these firms look for in a resume, and is ready to help them find that in your resume. She will be a regular contributor to this blog and hopefully she will write some articles for our newsletter.   Her first blog, coming this Monday, we believe will be a tremendous help for those students interested in entering this field.

PrivateEquityJobs.com looks forward to working with The Resume Girl in the future.