Interview with FoF Firm

Hi all, I have an interview coming up that requires me to take an excel test and a written test (reading a case study and coming up with a recommendation as to whether or not the firm should invest in the co.). Is anyone familiar with these tests? What kind of functions/abilities would I be tested on for excel? Also, does anyone know of a website or have any sample case studies they would be kind enough to share with me? Thanks in advance!

Do you mind sharing if this is a FoF or a consulting firm?

Do you mind sharing if this is a FoF or a consulting firm?

its a FoF firm

For the case study, I would try to find as many articles and examples online detailing why a *particular* hedge fund is a good investment idea. You don’t want something that discusses hedge funds in general but rather something that dives into the attributes of a very good manager. I don’t know of anything offhand but I’m sure you can find something with some googling. Excel test could be anything from simple stuff like “change this text to italics without using the mouse” to things like building a chart or writing a vlookup.

Steely Dan Wrote: ------------------------------------------------------- >or > writing a vlookup. WTF is Vlookup!? I’m kidding.

Thanks Dan!

ASSet_MANagement Wrote: ------------------------------------------------------- > Steely Dan Wrote: > -------------------------------------------------- > ----- > >or > > writing a vlookup. > > WTF is Vlookup!? > > > I’m kidding. It’s Russian.

Sounds like you will have to look at the qualitative and quantitative aspects to make an argument. Quantitatively, make your case based on: Sharpe Ratio Drawdown Correlation (if you are using it in conjunction with other managers within the portfolio) Beta to market Skew Measures of dispersion And so on - there will be enough ‘evidence’ in there to make a case Watch out that they don’t give you Madoff’s track record… Qualitatively, make your case based on: Strategy Edge Key man risk Infrastructure of organisation Capacity Pedigree of key players Outstanding litigation Asset retention And so on Again, there will be enough ‘evidence’ to make a case Sum it up using these two factors and make a recommendation to invest or not Good luck.

Sure, and you should also be able to defend the value add of FoF’s in general. That’s the most important thing to the lifestyle of your potential employers.

thanks a lot mudda, seems like you have a lot of exp. with these. One more question for you though, ive looked around and seen sample case study recommendations and they all have their different formats. How would you start the recommendation? i.e. I would invest in Co. ABC because… and then just go on in essay format?

No problems and yes, I have had direct experience. Not of the interview but working in that environment. I would actually structure it along my suggestion as it is not too far off the way it is presented. Keep it simple: Quantitative Factors: ABC Qualitative Factors: XYZ Conclusion: Based on ABC and XYZ I would not recommend making an investment into this fund/manager. Quantitatively, the Sharpe Ratio is negative, the largest drawdown was 99.99% and the manager has lost money over each of the last 3 years. On a qualitative basis, the manager has invested outside of his style remit, exceeded his VaR limits repeatedly, has 32 drink driving convictions plus an outstanding action against him for peddling heroin. I therefore do not have conviction that this manager has the ability to generate outperformance based on the evidence provided… You get the idea.

Wow… Thanks mudda. This’ll def help during the interview process. Have any suggestions as to the excel portion of the interview? (functions/formulas I would need to be familiar with?) Also, Ive read that certain firms have had interviewees build LBO Models. Would that be a stretch?

Unfortunately, could be anything. Presume it is analysing data rather than anything else. Would not expect you to build a model as you would be looking at past performance if you are analysing funds/managers. If you run into problems with generic excel, hit the F1 button. If you have access to a network computer, google what you are looking for or drop a note to AF…

once again thank you so much mudda.