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03/22/2011

Hedge Fund Hiring, Apprentice-Style


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With all the Wall Street types who are looking for jobs, and those eager to jump ship, Aram Fuchs, a partner at Fertilemind Capital, figured it’d be no problem filling a senior and junior analyst position at his hedge fund. But when his networking, interviews and other efforts didn’t yield the kind of candidates he was looking for, he decided to take another tack: hold a contest à la Donald Trump’s the Apprentice and award the gigs to the winners.

“I would get these people who were skilled in the mechanics of investing, financial modeling and number crunching, but who didn’t have the multi-faceted approach of guys like Charlie Munger and Warren Buffett,” he relates. “Those two are always thinking about how investing and markets relates to history, psychology and other fields as well as economics and financing.”

It’s obviously not a new concept, but one that may be new to Wall Street. Fuchs has put a twist on the approach Trump uses to better suit the hedge fund hiring process: he’s asking anyone interested in either job to join a specially designed website, propose their best investment idea and be prepared to defend it online. That site is the Capitalist Collective. You can either register with a new user name and password or use your Facebook or LinkedIn sign-ins to access the site.

“I saw all these great things happening in the cloud and with crowdsourcing, so I thought there had to be a better way,” he says. “I like the reality show approach too, so I sort of combined them.”

Not only is Fuchs offering two jobs as the ultimate prize, but he’s also offering a reward for a successful referral to the candidates who are ultimately hired: if your blog, site or individual referral wins the contest, you’ll get a $5,000 check.

He’s seeking to build an online community where participants who are interested in the job openings will debate the various long and short positions proposed, while defending their own ideas. Participants will be judged not only on the ideas they submit and how well they present and defend them, but also on their critiques and comments on the ideas submitted by others.

Fuchs is seeking candidates who are not only solid defenders of their own ideas, but are comfortable with the give and take of a committee-focused investment approach. He’s also looking for people who can think outside the box. “If you look at all the models that were responsible for spawning the financial crisis, all of those models and the people who modeled them assumed that the past 30, 40 or 50 years of history would repeat itself. But, as Mark Twain said, ‘History doesn’t repeat itself—at best it sometimes rhymes.’ These modelers just thought things would repeat themselves and I think that people who have studied in other areas understand that history doesn’t ever repeat itself exactly.”

If you’re interested, the contest is open until the end of July; the top four participants will be selected then and will be flown to New York to compete against each other for the two jobs at a conference.

At the finale, which Fuchs is calling “The Capitalist Collective Talent Search,” each of the “apprentices” will have 15 minutes to present a new stock picking idea in front of an audience.

Those presentations will be part of an investment conference with featured fund managers and investment analyst speakers. Fuchs notes that there will be plenty of time for the finalists to network with conference participants and speakers, so even if you aren’t selected for one of the jobs, it will be a prime networking opportunity.

Following their presentations, Fuchs will select the winners of the contest. He’s already announced that the Senior Analyst position pays $125,000 and the Junior Analyst position pays $75,000. So, if you’re looking for a job and are tired of the usual traditional hiring process, sign up for the website. To register, you’ve got to be prepared with your best investment idea; from there, check out what everyone else has offered and give it your best shot.

While Fuchs didn’t intend to create an alternative form of recruiting, the signs are that he’s onto something. So far 300 people have signed up at the site and he thinks it could become a springboard to a better way to connected the brightest, most well-rounded college and MBA students with investment managers looking for a different type of candidate.

–Amy E. Buttell is a journalist working in Erie, Pennsylvania and is a graduate of Mercyhurst College with a certificate in accounting.

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Comments

The billions adding up in hedge fund investments are approaching pre-crisis levels. A reputation for unscrupulous dealings isn't deterring investors as they flock back to hedge funds. But there are more losers than winners overall in the hedge fund industry and several funds will most likely tip over before the year is out. The proof is here: Reading between the lines of a hedge fund industry comeback.

It is the first time i come here.I have been reading your hedge funds articles during my lunch break, and I have to admit the whole article has been very valuable and very well written. It will be helped everybody.

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