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. 009Pitch me a stock.Stock pitchIntermediateevery roundMan GroupEquity Hedge · London · 2016Apollo Global ManagementInvestments · Remote · 2021

   Say this

   Trade first, then the business, then the variant view, then the catalyst, then the risk and what would make you wrong. Ninety seconds. At a hedge fund the variant view and the catalyst are the only parts that get you hired; everything else is table stakes.

   Then walk it

   1. Open with the position, not the company. 'Long X at 62, target 85, roughly 35 percent upside over twelve to eighteen months, and I would size it at 4 percent of the book.' Sizing in the opening line is what separates a fund pitch from a research note.
   2. Two sentences on the business. What it sells, to whom, and the one operating metric that drives the P&L.
   3. The variant view, quantified. 'Consensus has 9 percent revenue growth next year. I think it is 14, because the two contracts announced in April are not in the sell-side models yet and they are worth 5 points of growth.' Name the number consensus has and the number you have.
   4. The catalyst and the clock. What makes the market agree, and when. A quarterly print, a capacity ramp, a contract renewal, an index event, a capital markets day. Without a dated catalyst it is an opinion, not a position.
   5. The bear case with a price on it. 'If the contracts slip a year I lose about 15 percent.' Then the asymmetry: 35 up against 15 down justifies the position even at even odds.
   6. Close with the falsifier and the hedge. The one disclosure you would watch, and how you would express it, whether outright long or paired against a competitor to strip out the sector move.

   Where candidates lose it

   Pitching a mega-cap with a thesis from the financial press. If the reason is in the newspaper it is in the price. Also, never pitch without a number for the bear case and a sizing view. A hedge fund interviewer is testing whether you think in positions, not in recommendations.

   Expect next

   • How would you hedge it?
   • What is the bear case, and what does the stock do in it?
   • Who is on the other side of this trade and why are they wrong?

   Reported by candidates at Man Group (Equity Hedge, London, 2016); Apollo Global Management (Investments, Remote, 2021). Source: Wall Street Oasis.

2. 010What is your variant view on that name, and why is the market wrong?Stock pitchIntermediatesuperdayLong-short equityMulti-manager platforms

   Say this

   A variant view is a specific, numerical disagreement with consensus plus a reason the disagreement exists. Two parts, and people forget the second one. If you cannot say why the market has not already worked it out, you probably do not have an edge, you have a summary.

   Then walk it

   1. State it as two numbers. Consensus 2027 EBITDA is 940 million; my number is 1.15 billion. That gap is the position.
   2. Then the source of the gap. There are only a few legitimate ones: you have better information, you have done work others have not, you have a longer horizon than the marginal holder, or you read the same facts differently.
   3. The structural reasons a gap persists are the most defensible: the stock is under-covered, the disclosure is buried in a segment note, the shareholder base is index and cannot act, or the payoff sits beyond the two-year window most sell-side models run to.
   4. Test it against the price. Run a reverse DCF or an implied-multiple check: what does the current price have to assume? If the market is discounting 6 percent growth in perpetuity and the installed base alone gets you 8, you have located the disagreement rather than asserted it.
   5. Then the falsifier. What observable would tell you consensus is right and you are wrong, and when do you see it? If nothing can, it is a belief, not a thesis.
   6. Be honest about the weakest variant view: 'the market is short-termist' is not an edge, it is a hope. The strongest is a measurable fact you found that is not yet in the numbers.

   Where candidates lose it

   Restating the bull case louder. A variant view has to differ from consensus in a quantified way, which means you must actually know what consensus is. Look up the sell-side number before the interview. Candidates who cannot say what the street has next year lose this question in one sentence.

   Expect next

   • What is consensus for next year?
   • Why has the market not figured this out?
   • What is the one data point that would prove you wrong?
3. 011Are you sure your thesis can be backed up? What if their costs do not fall?Stock pitchHardsuperdayApollo Global ManagementInvestments · Remote · 2021

   Say this

   Answer the substance, do not defend the position. Give the evidence behind the cost assumption, quantify what the stock is worth if you are wrong, and say where you would cut. Under pressure, the willingness to concede the weak leg is worth more than conviction.

   Then walk it

   1. Evidence first, and be specific. 'Management guided to it' is weak. 'The input contract repriced in Q2, gross margin already moved 180 basis points, and two quarters of run-rate are visible in the reported numbers' is strong.
   2. Then price the downside. 'If costs stay flat, EBITDA is 12 percent below my number, the multiple compresses to peers, and the stock is worth 48 rather than 85. From 62 that is about 22 percent down.'
   3. Then the asymmetry, which is the real defence. 35 up against 22 down still works at even probability, and I would size it accordingly rather than at a full weight.
   4. Then the monitoring plan. Which disclosure tells you early, and by when. If the cost curve is visible in a monthly input price or a quarterly gross margin line, the thesis is testable in real time and that is what makes it a hedge fund position.
   5. Then concede properly where you should. 'You are right that the cost assumption is the weakest leg, so I would start at half size and add on the first print that confirms it' is a better answer than digging in.
   6. And name the structural hedge. If the cost concern is industry-wide rather than company-specific, you can pair the long against a competitor with the same input exposure and isolate the part you actually have a view on.

   Where candidates lose it

   Defending emotionally, or answering a different question than the one asked. This is a test of whether you update on evidence. Candidates who repeat the bull case with more adjectives fail; candidates who quantify the bear case and name a stop pass even if the interviewer keeps pushing.

   Expect next

   • At what price would you stop out?
   • How would you size it given that uncertainty?
   • What would you have to believe for the bear case to be right?

   Reported by candidates at Apollo Global Management (Investments, Remote, 2021). Source: Wall Street Oasis.

4. 012Take me through a structured investment idea the way you would present it to a portfolio manager.Stock pitchHardcase studyPoint72Investment Banking · London · 2026

   Say this

   A PM has five minutes and wants four things: what the trade is, what you know that they do not, what it is worth if you are right and wrong, and what kills it. Structure it in that order and answer the question asked before you show your work.

   Then walk it

   1. Page one is the trade and the sizing. Long, short or paired, entry, target, downside, horizon, and the risk you want to take in the book. Everything else supports this page.
   2. Page two is the variant view with consensus next to your number. A PM reads this page and nothing else if they are busy.
   3. Page three is the mechanism: the two or three drivers that get you from today's numbers to yours, each with the evidence behind it. Volume, price, mix, cost, capital allocation. No page of company history.
   4. Page four is the risk map: the bear case with a price, the two things that break it, the dated falsifiers, and the hedge if the idea has an unwanted factor or sector exposure.
   5. Then the questions you could not answer. Naming them yourself is a credibility move at a platform, because the PM will find them anyway and would rather find them in your appendix than in the P&L.
   6. Business judgement is what is actually being graded in a case like this. That means industry structure, who has pricing power, where the profit pool sits, and whether the company's advantage is durable. A model with no industry view is a spreadsheet, not an idea.

   Where candidates lose it

   Building up to the recommendation. Analysts trained on client decks lead with company overview and market sizing and lose the room. Put the trade in the first sentence, and make sure something in the case shows judgement rather than arithmetic, because that is the explicit test.

   Expect next

   • What is the single best argument against this idea?
   • How would you express it if you could not short the obvious hedge?
   • What would you need to see to double the size?

   Reported by candidates at Point72 (Investment Banking, London, 2026). Source: Wall Street Oasis.

5. 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.

6. 017How did you get the assumptions and calculations in your case study?Stock pitchHardcase studyDED.E. ShawGeneralist · New York · 2025

   Say this

   Go line by line and separate the three kinds of input: facts from disclosure, estimates built bottom-up from a driver, and judgement calls. Say which is which for every important number, and cite the source for the facts.

   Then walk it

   1. Facts first: pull them from primary disclosure and say where. 'Installed base of 1.4 million units is from the 2025 annual report, segment note 4.' Never from a secondary summary if the filing exists.
   2. Then the built estimates. Show the decomposition rather than the result. Revenue is units times price, units are installed base times replacement rate, and the replacement rate comes from the reported life of the asset. Now the number is auditable.
   3. Then the judgement calls, flagged as such. 'I assumed a 60 percent attach rate on the new product. There is no disclosure, so I triangulated from the competitor who does report it and haircut it for their head start.'
   4. Then sensitivity. Say which assumption the answer is actually sensitive to. Most models have one or two inputs that move the value and ten that do not, and knowing which is which is the sign of someone who has built models rather than filled them in.
   5. Then the cross-check. Does the implied market share exceed the whole addressable market in year five? Does the implied margin exceed the best operator in the industry? A bottom-up model with no top-down reality check is where the embarrassing errors live.
   6. Honest close: name the number you are least confident in, and what you would go find if you had another week. Interviewers at quantitative shops are probing whether you know the difference between a number you derived and a number you liked.

   Where candidates lose it

   Saying 'industry reports' or 'I assumed it grows in line with GDP' for a number that drives the whole answer. That reads as reverse-engineering the model to a conclusion. Label facts, estimates and judgement separately, and volunteer the one assumption the valuation is most sensitive to before you are asked.

   Expect next

   • Which assumption is the answer most sensitive to?
   • What is the implied market share in year five?
   • What would you check if you had another week?

   Reported by candidates at D.E. Shaw (Generalist, New York, 2025). Source: Wall Street Oasis.

7. 018How would you perform a whitespace analysis?Stock pitchIntermediatecase studyViking Global InvestorsQuantitative Research · New York · 2024

   Say this

   Whitespace analysis maps where a company could sell but currently does not, and then asks how much of that gap is actually reachable. It is a growth-runway tool: define the full addressable grid, mark what is already penetrated, and size the remainder with an honest win rate.

   Then walk it

   1. Build the grid explicitly. Two or three axes that matter: customer segment by geography by product. Cells are combinations, and every cell gets a size and a current penetration.
   2. Get the penetration from disclosure and bottom-up data rather than management's TAM slide. Customer counts, store counts, licence counts, segment revenue, and where possible third-party data like app downloads or job postings.
   3. Then subtract what is not really reachable. Cells owned by an entrenched incumbent with switching costs, cells where the product does not fit without heavy investment, cells where regulation blocks entry. That haircut is the analytical content of the exercise.
   4. Then convert it to a number the model can use. Reachable whitespace times a realistic win rate over a defined period equals incremental revenue, and I would keep the win rate low enough to be defensible, often 10 to 20 percent rather than a third.
   5. Cross-check against history. If the company has been adding 400 customers a year and your whitespace implies 2,000 a year, the whitespace is not the constraint, execution is. Reconcile the two or drop the analysis.
   6. The limitation to say out loud: whitespace tells you the ceiling, not the path. Plenty of companies with enormous whitespace never grow, because the gating factor is sales capacity or the economics of serving the marginal customer, not the size of the opportunity.

   Where candidates lose it

   Producing a large TAM number and calling it a thesis. TAM slides are marketing. A credible whitespace analysis is mostly about what you exclude and the win rate you apply, and it must reconcile with the company's demonstrated rate of expansion.

   Expect next

   • How would you validate the penetration numbers independently?
   • What win rate would you use, and why?
   • Where does this analysis mislead you?

   Reported by candidates at Viking Global Investors (Quantitative Research, New York, 2024). Source: Wall Street Oasis.

8. 019Pitch me a short.Short sellingIntermediatesuperdayLong-short equityShort-biased funds

   Say this

   Same structure as a long, but three extra things have to be in the pitch: why the market is wrong in a way that resolves on a clock, what the borrow costs, and what blows you up. Shorts are timing trades, not valuation trades, so name the catalyst before the valuation.

   Then walk it

   1. Lead with the trade and the constraint. 'Short X at 40, target 25, borrow is 3 percent annualised and there is ample availability, and I would cap it at 2 percent of the book because short interest is already 9 percent of float.'
   2. Then the thesis, and pick a category. The good short buckets are structural decline being extrapolated as cyclical, accounting that overstates earnings quality, a broken unit economic that growth is masking, and a balance sheet that needs to refinance into a worse market.
   3. Then the catalyst with a date, because time works against a short. A refinancing, a covenant test, a lock-up expiry, a competitor's capacity coming online, a guidance reset. Valuation alone does not close a short.
   4. Then the carry. Borrow cost, dividends you owe, and the interest you earn on the proceeds. A 12 percent borrow means you need the thesis to work within months, not years, and saying that shows you have actually shorted something.
   5. Then the blow-up risk, explicitly. Float, short interest as a percent of float and days to cover, retail interest, index events, and whether the company could do something reflexive like a buyback, a raise or getting acquired. A takeout is the classic way a good short thesis loses 40 percent overnight.
   6. Close with sizing and stop. Shorts get smaller as they go against you in risk terms because the position grows, so I would run a hard stop and a smaller starting size than an equivalent-conviction long.

   Where candidates lose it

   Pitching an expensive stock. 'It trades at 60 times earnings' is not a short thesis, it is an observation, and the last decade has been brutal to people who thought otherwise. Also, candidates forget the borrow and the squeeze risk entirely, which tells a PM you have never actually been short anything.

   Expect next

   • What is the borrow on that name?
   • What is short interest as a percentage of float?
   • What would make you cover?
9. 033You are down 4 percent on the month and your risk manager is on the phone. What happens next?Risk and drawdownHardsuperdayMulti-manager platforms

   Say this

   First I would know the answer to their question before they ask it: what lost the money, whether it was the thesis or a factor, and what I am doing about it. Then I would cut risk to the level they need, without arguing, and keep the positions I still believe in at a smaller size.

   Then walk it

   1. Attribution first, and fast. Split the loss into market, sector, style factor and idiosyncratic. A 4 percent loss that is mostly a momentum unwind is a very different conversation from a 4 percent loss on two broken theses.
   2. If it is factor, the fix is mechanical: neutralise the offending exposure and the drawdown stops compounding. That is a risk process failure, and I would own it as such.
   3. If it is idiosyncratic and the theses are intact, I still have to reduce, because a drawdown limit is not an opinion. The question is which positions to keep. I would cut the ones where the falsifier has been triggered or where liquidity is worst, and keep the highest conviction, most liquid, nearest-catalyst names at reduced size.
   4. Say the number out loud, because it is how these seats work. Most platforms run a soft limit around 3 to 5 percent where gross is cut hard, and a hard stop near 7 to 10 percent where the book is closed. Knowing that is what shows you understand the seat.
   5. Then the behavioural discipline: do not double down to get it back, do not switch style, and do not stop communicating. PMs who go quiet in a drawdown get taken down faster than PMs who over-communicate.
   6. And the honest part: I would reserve the right to say that a position is being cut for risk reasons, not because I think it is wrong. That distinction is worth recording, because it is how you learn whether your process or your judgement failed.

   Where candidates lose it

   Saying you would defend the book and ask for more room. On a multi-manager platform the drawdown limit is the contract, not a negotiation, and that answer gets you marked as someone who will not survive the risk framework. Lead with attribution, accept the reduction, and show judgement in what you keep.

   Expect next

   • Which positions would you cut first, and why?
   • At what level does the platform close your book?
   • How would you tell the difference between bad luck and a broken process?
10. 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.