Wall Street careers continue to attract students from America’s elite universities. With thousands of graduates jostling to break into the industry, it has become increasingly difficult for young hopefuls to stand out from the crowd. But the crush is a challenge for recruitment teams as well. Identifying top candidates in a deluge of applicants requires time and manpower that most firms simply don’t have.
The problem has been compounded by the fact that employers can publicize postings and candidates can apply for jobs more easily than ever before. Recruiters are screening larger numbers of applications than they ever have in the past using the same data points. Grade point average cut-offs have gone up and the willingness to consider applicants with unusual backgrounds has gone down.
Hedge funds have had a particularly difficult time—they tend to employ far fewer people than banks, and cannot dedicate the same resources to recruiting. Due to the difficulty of screening fresh graduates, most altogether forego hiring analysts straight out of university. Students are typically advised to spend their first two or to three years after graduation picking up essential skills in investment banking.
The reality is that most investment-banking skills relevant to hedge funds can be picked up through independent study. Indeed, the initiative and dedication shown by those who manage to figure out the basics of investing on their own are some of the rarest and most sought-after qualities in the industry.
Two years ago, it occurred to me that as students are learning about markets, they leave behind a trail: trade pitches, records from their personal investing accounts, or even trading algorithms. So in late 2011, I went out to several of the top universities in the US and asked students there who they were sharing such work with. A few firms ran small one-off competitions, but there was no consolidated platform giving students a way to have their work recognized by top firms. Everyone I spoke to—at universities and in the business—knew that a lot of top talent was falling through the cracks as a result.
Undergraduate and MBA students from across 20 universities are currently maintaining virtual portfolios on our proprietary platform, sharing trade ideas, and taking part in a collaborative quantitative research program. Pre-screened work samples are passed on to our partners, and the most promising students are engaged in ongoing dialogue over several months. The benefits go both ways: students receive ongoing mentorship and firms are able to observe prospective hires’ ability to act on input and generate original insight.
Earlier this week we announced that two students were chosen from among 1,300 participants in a cross-university competition to intern at Fortress Investment Group, a leading alternative investment firm managing over $60 billion in assets.
Alexander Mallinson, a junior at the University of Pennsylvania, was chosen due to his ability to continuously generate alpha in his Upgrade Capital portfolio. Arun Narasimhan, from Queen’s University in Canada, distinguished himself in the course of presenting a succession of rigorously researched trade ideas to Fortress portfolio managers over several months.
I believe that there are many more students among the 1,300 Fortress Challenge participants who merit recognition, and am doing everything possible to help them get noticed. Top performers can publicize their personal performance with prospective employers. Upgrade Capital has also posted a list on its website detailing the achievements of top performers to provide interested firms with easy access to a pre-screened pool of candidates.
There is yet more undiscovered talent beyond the 20 universities we currently work with. After two years of fine-tuning our system, I look forward to finding more and more young people with a genuine passion for investing—and helping them succeed.
In their search for talent, leading tech firms have been looking beyond CVs for years. I am pleased to say that financial firms are finally beginning to move in the same direction.