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Hedge Fund Target Schools

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Written By
Dan Buckley
Contributor Image
Written By
Dan Buckley
Dan Buckley is an US-based trader, consultant, and part-time writer with a background in macroeconomics and mathematical finance. He trades and writes about a variety of asset classes, including equities, fixed income, commodities, currencies, and interest rates. As a writer, his goal is to explain trading and finance concepts in levels of detail that could appeal to a range of audiences, from novice traders to those with more experienced backgrounds.
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Updated
Oct 28, 2023

A hedge fund target school refers to a university or college that is specifically sought after by hedge funds during their recruitment process.

These schools have earned a reputation for producing graduates who are well-prepared for careers in the hedge fund industry, both in terms of academic rigor and relevant skill sets.

In a previous article, we looked at investment banking target schools, where the term “target school” is more commonly applied.

While it’s less commonly applied to hedge funds (due to the lack of jobs directly out of school), there are still some opportunities directly out of undergraduate or business school.

Or feed into intermediate employment opportunities that then feed into hedge funds (e.g., investment banking).

Let’s take a look.

 

Ivy League

  • Harvard University
  • Yale University
  • Princeton University
  • Columbia University
  • University of Pennsylvania (Wharton)
  • Brown University
  • Dartmouth College
  • Cornell University

 

Top Colleges & Universities Outside the Ivy League

  • Stanford University
  • Massachusetts Institute of Technology (MIT)
  • University of Chicago
  • California Institute of Technology (Caltech)
  • Duke University
  • Northwestern University
  • University of California, Berkeley

 

Business Schools

  • Harvard Business School
  • Stanford Graduate School of Business
  • Wharton School of the University of Pennsylvania
  • MIT Sloan School of Management
  • Columbia Business School
  • Chicago Booth School of Business
  • Kellogg School of Management at Northwestern University

 

Liberal Arts Colleges

  • Williams College
  • Amherst College
  • Swarthmore College
  • Wellesley College
  • Bowdoin College

 

  • University of Virginia (McIntire School of Commerce)
  • University of North Carolina at Chapel Hill (Kenan-Flagler Business School)
  • Indiana University (Kelley School of Business)
  • University of Texas at Austin (McCombs School of Business)

 

Regional Target Schools

  • New York University (Stern School of Business)
  • Boston College (Carroll School of Management)
  • University of Southern California (Marshall School of Business)

 

International Hedge Fund Target Schools

  • London School of Economics and Political Science (LSE)
  • University of Oxford (Saïd Business School)
  • University of Cambridge (Judge Business School)
  • INSEAD
  • HEC Paris
  • University of St. Gallen (Switzerland)

 

FAQs – Hedge Fund Target Schools

Why do hedge funds recruit from target schools?

Hedge funds recruit from target schools for several reasons:

  • Proven Track Record: These institutions consistently produce high-performing individuals who excel in a competitive hedge fund environment.
  • Focused Recruitment: It’s efficient for hedge funds to concentrate their recruiting efforts where they know there’s a high concentration of top-tier talent. (It reduces recruitment costs.)
  • Strong Curriculum: Target schools often offer courses and experiences tailored to finance and investing. This ensures graduates have relevant knowledge.
  • Historical Relationships: Many hedge funds have long-standing relationships with these institutions. Often because alumni from these schools hold positions within the fund.

How does a school become recognized as a hedge fund target?

Several factors contribute to a school becoming a hedge fund “target school”:

  • Alumni Success: Alumni who excel in the hedge fund industry can raise the profile of their alma mater.
  • Academic Rigor: Institutions that offer robust finance, economics, and quantitative programs tend to gain recognition (e.g., Wharton).
  • Networking Opportunities: Schools that facilitate industry interactions, such as through guest lectures, internships, or partnerships, garner attention.
  • Student Performance: Outstanding performance by students in industry competitions or internships can highlight a school’s caliber.

What roles do hedge funds recruit undergraduates for?

Hedge funds typically recruit recent college graduates for entry-level analyst roles.

They seek individuals with strong analytical, quantitative, and financial skills – often from target schools with reputable finance, economics, or mathematics programs.

What hedge funds recruit out of college?

Bridgewater Associates, Point72 Asset Management, Two Sigma, Citadel, and D.E. Shaw are among the prominent hedge funds known to recruit recent college graduates for various roles.

Are students from non-target schools at a disadvantage for hedge fund roles?

Students from target schools might have more direct recruiting opportunities and a built-in network.

But it doesn’t mean students from non-target schools can’t break into the industry.

Nonetheless, they might need to be more proactive in their approach, such as seeking internships, networking, and building relevant skills.

How can a student from a non-target school increase their chances of getting into a hedge fund?

Students from non-target schools can adopt several strategies:

  • Networking: Actively reaching out to professionals in the industry for informational interviews or mentorship. Don’t limit yourself to just your own college’s alumni, especially if the pool isn’t deep. Most people will ignore you, but it doesn’t cost you anything to reach out (besides the time taken).
  • Internships: Gaining practical experience in related fields like investment banking, private equity, or asset management.
  • Relevant Courses: Taking courses in finance, economics, or quantitative disciplines to build foundational knowledge.
  • Certifications: Pursuing industry certifications like the CFA can bolster credentials.
  • Competitions: Participating in investment or trading competitions to showcase skills.

Do target schools vary based on the specific strategy or focus of the hedge fund?

Yes, certain hedge funds, especially those with niche strategies or specialized focuses, might prioritize schools known for expertise in those areas.

For instance, a quant-focused hedge fund might target schools with strong math, statistics, or computer science programs.

While Harvard might be a more universal target school, schools like Caltech and Carnegie Mellon might be target schools for quant hedge funds.

What courses or majors are most relevant for students aiming for hedge fund roles?

Relevant courses and majors include:

  • Finance
  • Economics
  • Statistics
  • Mathematics
  • Computer Science (especially for quantitative roles)
  • Business Administration

How does recruitment from business schools differ from undergraduate institutions?

Recruitment from business schools often focuses on candidates with some work experience and a more advanced understanding of finance and investment principles.

While undergraduates might be recruited for analyst roles, MBA graduates from business schools are often considered for associate or higher-level roles, given their added experience and education.

Are there networking events or specific clubs at target schools that facilitate hedge fund recruitment?

Many target schools have finance or investment clubs that host events, bring in guest speakers from the industry, and manage student-run investment portfolios.

These clubs often facilitate networking events, workshops, and partnerships with hedge funds and other financial institutions.

Do international hedge fund target schools have the same prestige as their US counterparts in the hedge fund industry?

US target schools are often well-regarded globally, but many international institutions hold strong prestige in the hedge fund industry, especially in their respective regions.

Institutions like the London School of Economics or the University of Oxford have strong global reputations comparable to top US institutions.

Are there specific skills or experiences that hedge funds look for, irrespective of the school’s status?

Yes, hedge funds prioritize:

  • Strong analytical skills (e.g., quantitative background helps)
  • Proficiency with financial modeling
  • Deep understanding of financial markets and instruments
  • Strong work ethic and ability to work under pressure
  • Excellent communication skills, both written and verbal
  • Relevant experience, such as internships or research roles

How often do hedge fund target school lists change or get updated?

The top target schools have remained fairly consistent over the years due to their established reputation. But the list can evolve.

New schools might emerge as targets due to rising academic standards, alumni success, or other factors.

But significant shifts in the reputation or desirability of a school are infrequent and happen over longer durations.

For example, liberal arts schools like Williams, Amherst, and Swarthmore, and lesser-known “good” schools like the University of Chicago have student bodies whose academic proficiencies rival or exceed those of more universally known schools.

But there’s largely a reputational difference due to various factors (e.g., historical reasons, research capacities, alumni, location, etc.).

Who are some notable hedge fund managers who went to liberal arts schools?

Examples of hedge fund managers who went to liberal arts schools include Chase Coleman of Tiger Global (Williams) and Stanley Druckenmiller of Duquesne (Bowdoin).

Do target schools increase your chances of getting a job at top hedge funds?

Yes, being from a target school can increase one’s chances due to more direct recruiting opportunities, a vast alumni network in the industry, and the perceived rigor and relevance of the education received.

However, individual merit, skills, and experiences remain most important.

How do alumni networks from target schools impact hedge fund recruitment?

Alumni working in hedge funds can advocate for students from their alma mater, provide mentorship, and facilitate introductions.

Also, strong alumni relations can lead to more on-campus recruiting events and partnerships between the school and hedge funds.

What is the significance of regional target schools in hedge fund hiring?

Hedge funds might prioritize “regional target schools” for practical reasons, such as proximity for interviews and events.

Additionally, regional target schools often have a deep understanding of the local financial landscape and specific industries, making their graduates particularly valuable for hedge funds operating in that region.

For instance, Ken Griffin’s Citadel, which has a large presence in Chicago, recruits heavily from the University of Chicago, though Chicago graduates have much less presence in New York-based hedge funds.

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