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When you hear the term “long-only hedge funds,” your first thought might be: “How can a hedge fund hold only long positions? Doesn’t that contradict the term ‘hedge fund’? Why would investors pay high fees for what is effectively a mutual fund?” These are all good questions.
Discounted Cash Flow (DCF) Analysis: A DCF model is often used to estimate the intrinsic value of the company based on projected future cash flows. Key metrics used include Price/Earnings (P/E) ratios, Price/AUM ratios, and enterprise value ratios (EV/EBITDA). An AMC with a strong compliance track record is often viewed favorably.
Other investments may be more protected from economic impacts and can help with diversification. If you do, you may be able to afford to have less in your emergency fund in case something goes wrong (i.e. So you want to pursue a role in Investment Banking/Lateral Banking?
In other words, if you lend $500 million to fund a new offshore wind development, what are your chances of losing money? Therefore, you’ll probably have to focus on high-profile assets that operate more like normal companies, such as large airports – or research funds or large companies in the sector.
You will very rarely get exposed to the type of financial modeling that bankers complete: 3-statement models , DCF models , M&A models , LBO models , and so on. ” Interviews are broader than IB interviews and require knowledge of asset allocation, economics, and and financial markets, but far less specific technical knowledge.
Q: Why not private equity, growth equity, hedge funds, or entrepreneurship? A: You’re most interested in tech or life science startups, and PE funds and hedge funds do not work with these companies in the same way, as they don’t directly fund their development activities. Q: Which current startup would you invest in?
Note that while Leveraged Finance is technically in “capital markets,” it is closer to groups like M&A because most of the work relates to funding for acquisitions and leveraged buyouts. This deal type distinction matters because your deal experience determines your skills, hours, compensation as you advance, and exit opportunities.
Valuation , such as the different multiples used for mining companies and the NAV model in place of the DCF (see below). To value it, we build a standard DCF based on production volumes, CapEx to drive capacity, and assumed steel prices: The valuation multiples are also standard (TEV / Revenue, TEV / EBITDA, and P / E).
To add a growth equity spin, you can talk about wanting to understand operations and unit economics to evaluate companies. A: You like industries such as tech and healthcare, you like to understand markets, unit economics, and operations, and you want to invest in high-growth companies that need capital. Q: Why growth equity?
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