Hedge Fund Case Studies are the most important part of your interview process, dominate this and you are in. Take-home case studies are probably the most popular among hedge funds as they allow you time to gather your thoughts and really dig into the company, much like HF analysts do everyday. I can guarantee you that at some point during your hedge fund interview you will be assigned to either a take-home case study or an in-house case study.
I can’t stress this enough: the case study is the most important part to your interview. This is the make-it or break-it for you. If you are at this stage it means they think you are a good “fit” and now need to see how well you can put together an idea. Bottom Line: hedge funds are hiring you to make money so don’t underestimate the case study process.
Take-home case studies will match the investment criteria where the fund you are interviewing, i.e. if you are interviewing an equity long/short hedge fund then the case study will be pitching an equity long/shot investment. If you are interviewing at a distressed credit fund you will be asked to put together a case study on long/short credit. Whichever case you have you should follow the detailed idea framework outlined in the hedge fund interview packet.
Time Frame: This varies across the board; usually the rule of thumb is 7 days. Some funds will give you the weekend (3 days) and some like SAC will give you 10 days. Either way plan to devote 100% of your free time to this.
How to prepare: The best way to prepare is to first have a good sense of what a “good” case study looks like. Street of Walls has put together top-of-the-line hedge fund case studies. As for building a thesis we walk you through everything you need to know plus example case studies in the Hedge Fund Interview Guide.
Assuming you have 7 days to complete the Case Study here is how I would budget my time:
- Day 1: Read everything you can on the industry (Growth, Competition, End Market, etc.)
- Day 2: Read everything you can on the company (10-K, 10-Q, Transcripts, Presentations, Equity Research, etc.)
- Day 3: Read everything you can on their competitors
- Day 4: Build the Model & develop a long or short idea
- Day 5: Re-read Transcripts and Equity Research and tweak model to your assumptions
- Day 6: Write the Case Study
- Day 7: Re-read your case study and challenge your assumptions
What most candidates want to do is write the case study the first day; instead you should be focusing on what the company does and developing a variant view on them.
Get Prepared: The Street-of-Walls Hedge Fund team has built out an in-depth interview guide focusing on everything you need to know to get a hedge fund job.