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

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AnyTechnicalMarket viewBrainteaserCaseFit

1. 068What makes up a NAV?Financing, NAV and operationsIntermediatetechnicalMan GroupEquity Hedge · Boston · 2019

   Say this

   Total assets at fair value, minus total liabilities, divided by units outstanding. On a hedge fund the interesting parts are all in the details: how positions are priced, and everything that sits in liabilities, which includes the short book, the financing and the accrued fees.

   Then walk it

   1. Assets: long positions at fair value, cash and cash equivalents, margin and collateral posted at the prime broker, receivables from unsettled trades, dividends and interest receivable, and the positive mark-to-market on derivatives.
   2. Liabilities, which is where hedge funds differ from a mutual fund: the market value of short positions, margin loans and repo borrowings, negative derivative marks, payables on unsettled trades, dividends payable on shorts, accrued borrow fees, plus accrued management and performance fees and fund expenses.
   3. So the accruals are a real part of the number. An accrued performance fee is a liability that reduces NAV even though it has not been paid, which is why NAV can be quoted gross and net of fees and the difference matters.
   4. Pricing policy is the substance of the answer. Exchange-traded positions at the official close, over-the-counter instruments from broker quotes or a model, and illiquid positions by a documented valuation policy. The hierarchy is level one, two and three, and the percentage in each tells you how much of the NAV is opinion.
   5. Governance is the other half. An independent administrator strikes the NAV, the prime broker's records are reconciled against it, a pricing committee approves level three marks, and the auditor tests them annually. The manager should not be the sole source of a price.
   6. One practical detail worth having: NAV is usually struck monthly for subscriptions and redemptions but estimated daily for risk, and the two can differ. Investors transact on the official NAV, so the gap between the daily estimate and the final struck number is itself a control worth monitoring.

   Where candidates lose it

   Giving the mutual fund answer, assets minus liabilities, and missing that the short book and the financing sit in liabilities. Also missing the accrued performance fee. The question in a hedge fund interview is really about pricing policy and who strikes the number, so say level one, two and three, and say the administrator's role.

   Expect next

   • Who should strike the NAV and why not the manager?
   • How would you value a level three position?
   • What is the difference between gross and net NAV?

   Reported by candidates at Man Group (Equity Hedge, Boston, 2019). 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.