Advice on preparing for a hedge fund interview as an undergrad with limited direct experience?

Hello 

To prepare for your hedge fund summer analyst interview, focus on a balanced approach that covers both technical skills and market knowledge, as hedge fund interviews often test a mix of the two. Given your background in investment banking and equity research, you likely have a solid foundation in financial modeling, valuation, and accounting, which are critical for technical questions. Expect to be tested on these, particularly on discounted cash flow (DCF) models, comparable company analysis, and understanding financial statements, as these are common in hedge fund interviews. However, since this is a hedge fund, they’ll likely emphasize your ability to generate and articulate investment ideas. Prepare to discuss market trends, macroeconomic factors, and specific sectors or companies you find compelling. Research the fund’s investment strategy (e.g., long/short, event-driven, or macro) and tailor your preparation to their focus. For example, if they’re long/short equity, dive deep into a few stock pitches with clear theses. Practice presenting one or two well-researched investment ideas, ideally with a long and a short position, supported by data like valuation metrics, catalysts, and risks. Keep your pitches concise—aim for a 2-3 minute overview, with the ability to dive deeper if prompted. Brush up on current market events, as questions like “What’s moving the markets today?” or “What’s a recent trade you’d make?” are common. Resources like Wall Street Prep or Breaking Into Wall Street can help refine your technical skills, while reading financial news (e.g., Bloomberg, Financial Times) and investor letters (e.g., from Baupost or Pershing Square) can sharpen your market perspective.

For the interview, confidence and clarity in your thought process are key. What helped others in similar interviews is demonstrating curiosity and a genuine passion for investing—hedge funds value candidates who think like investors, not just analysts. Prepare questions for the interviewer about their strategy or recent trades to show engagement. Common pitfalls include being overly academic (e.g., reciting textbook formulas without context), failing to back up investment ideas with data, or appearing unprepared for behavioral questions. Since you lack direct hedge fund experience, frame your IB and ER internships as relevant preparation, highlighting transferable skills like analyzing companies or working under pressure. Avoid overly complex pitches that you can’t explain thoroughly, as interviewers may drill down to test your depth. Practice articulating your thought process clearly, as they’ll care more about how you think than getting every number perfect. Finally, be ready for brainteasers or quick mental math to test your composure—practicing these can set you apart. Stay calm, show enthusiasm, and let your preparation shine through.