Hedge Fund

BCG Case Study Prompt

Your client is a $28B hedge fund. Previously they selected investments based on a complex mathematical model. However, about 2 years ago they started seeing lower returns. To address this problem they added a research team to help evaluate investments.

If the model recommends an investment, money is invested. If the analysts agree on an investment, a larger percentage is invested than if only the model recommends the investment.

The research team consists of 4 Senior Analysts and 3 Junior Analysts supported by Research Assistants. The CEO is extremely pleased with the new research team and the uplift in returns they have seen as a result of the new investment methodology.

However, he does not feel that the team is properly structured and has asked you to advise him on structuring the team. What issues would you consider and how would you structure the team?

Case Study Overview

The client in this BCG case study is a massive hedge fund. The CEO has hired you to advise the company on how to structure the team that evaluates potential investments that the company makes. In that way, this case is a hybrid human capital / profitability case.

Incorporate the Profitability Framework into your structure for the case, but you will have to work outside the basic frameworks in order to create a structure that really fits the unique business problem you are being tasked to solve.

You could expect to see a case like this in a BCG first round. However, the qualitative aspect of the case is fairly advanced, with a difficulty score of 3/4.

This BCG case study has 1 exhibit to interpret.

Interview Tips: BCG

What does BCG value in its case interview candidates? Candidates that are structured and are able to clearly communicate that structure.

When going through the case, make sure that your structure is crystal-clear, and that you verbalize every part of your process. Don’t focus as much on the actual answer, but on how you got to the answer.

In this BCG case study, focus on a couple of things:

• Remaining structured the entire way through the case
• Maintaining clarity in your communication throughout the case

Quality practice > quantity practice. Book a session with a specialist coach today to take your case interview prep to the next level.