Hedge Funds interview preparation

Questions

100

Traced to a firm

39

Firms

16

Updated

September 2026

Asked at

All firmsMan Group10Balyasny Asset Management7Bridgewater Associates3DED.E. Shaw3Apollo Global Management2KKR2Oaktree Capital Management2Point722SCSquarepoint Capital2ACAQR Capital Management1BGBaupost Group1Coatue Management1HPS Investment Partners1Northern Trust1Viking Global Investors1Wolverine Trading1

Topic

All topicsStrategy taxonomy8Stock pitch10Short selling6Portfolio construction8Risk and drawdown8Performance and alpha7Event-driven and merger arb8Distressed and credit5Fund structure and economics7Financing, NAV and operations6Compliance and research process5Quant and systematic6India and Category III AIFs5Career and fit11

Level

AnyCoreIntermediateHard

Type

AnyTechnicalMarket viewBrainteaserCaseFit

1. 013What is your favourite telecom stock?Stock pitchIntermediatetechnicalBalyasny Asset ManagementGeneralist · New York · 2020

   Say this

   Pick one, commit to it, and make the answer about the sector's economics rather than the company's story. Telecom is a capital intensity and pricing-power question: the winner is whoever earns a return above cost of capital on the network they have already built.

   Then walk it

   1. Frame the sector first, in one line. Telecom is a high fixed cost, low marginal cost, heavily regulated oligopoly where the swing variables are subscriber pricing, capex intensity and spectrum cost.
   2. Then the metrics that matter, which are not the ones from other sectors. ARPU, churn, subscriber net adds, capex as a percent of sales, EBITDA less capex, and net debt to EBITDA. Leverage is structurally high, so the equity is a levered bet on ARPU.
   3. Then the actual pick with a number. For instance, a market where three players have replaced four and tariffs are rising: the operator with the lowest cost per gigabyte and the most spectrum gets disproportionate incremental margin because every new subscriber drops through at near-zero marginal cost.
   4. The India angle is genuinely the best telecom case study going, and worth using if you know it. Tariff repair after consolidation moved ARPU up materially, and the equity story became entirely about whether that pricing held while capex rolled off.
   5. Say the bear case in the same breath. Spectrum auctions are a recurring, unavoidable capital call; a price war resets the whole thesis in a quarter; and regulated markets can hand a windfall to the consumer at any point.
   6. Then the hedge, since this is a hedge fund question. Long the share gainer, short the subscale operator with the same spectrum costs and worse coverage. Same regulatory risk, opposite unit economics, and the trade isolates the operating gap.

   Where candidates lose it

   Answering with a household name and a vague 5G story. The interviewer is testing whether you know the sector's unit economics. If you cannot say ARPU, churn and capex intensity for the name you picked, pick a different sector. Also do not say 'I do not follow telecom' and stop; name what you do follow and offer that instead.

   Expect next

   • What is ARPU doing in that market and why?
   • How would you short telecom?
   • How do you value spectrum?

   Reported by candidates at Balyasny Asset Management (Generalist, New York, 2020). Source: Wall Street Oasis.

2. 035Write a function that returns the n largest drawdowns in a return series.Risk and drawdownHardtechnicalBalyasny Asset ManagementQuantitative Trading · London · 2025

   Say this

   Build the cumulative NAV, walk it once tracking the running peak, and record a drawdown episode whenever the series falls below a peak and then makes a new high. Each episode gets a depth, a start, a trough and a recovery date. Then sort the episodes by depth and return the top n. It is a single linear pass.

   Then walk it

   1. Step one: turn returns into a wealth index, cumulative product of one plus r. Do this before anything else, because drawdowns are multiplicative and summing returns gives the wrong depth.
   2. Step two: running maximum of the wealth index. The drawdown series is wealth divided by running max, minus one, which is zero or negative at every point.
   3. Step three, the part interviewers actually test: segment into episodes. An episode opens when the drawdown series goes below zero and closes when it returns to zero, meaning a new high water mark. Within each episode the trough is the minimum.
   4. Step four: sort episodes by depth, take the first n. Say the complexity: O(T) for the pass plus O(k log k) for the sort, where k is the number of episodes, so linear in practice.
   5. State the edge cases before being asked, because this is where candidates get cut: the series ends while still in a drawdown, so the last episode is unrecovered and you should report it with no recovery date. Also decide whether overlapping nested dips count as one episode or several, and say which convention you are using.
   6. The naive alternative is to take the n most negative points of the drawdown series, and it is wrong: they will all sit inside the same crash. Volunteering why that fails is what shows you understood the question rather than pattern-matched it.

   Where candidates lose it

   Returning the n most negative values of the drawdown series. They cluster in one episode, so you report the same crash n times. The question is really about episode segmentation. Also, sum returns instead of compounding them and every number is wrong. State your episode convention out loud.

   Expect next

   • How would you handle a series that ends mid-drawdown?
   • How would you report time to recovery?
   • How would you do this for a portfolio of a thousand instruments efficiently?

   Reported by candidates at Balyasny Asset Management (Quantitative Trading, London, 2025). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.