The Oberlin Stories Project

On interning at a hedge fund

Juliette Lu ’12

“I had preconceived ideas of finance as a lofty, entirely mathematical, robotically exact, and overall boring kind of field. In no way, shape, or form would I have predicted that I would end up where I was now, exploring the finance world.”

Juliette stands atop a high cliff, with mountains and sky behind her

Like many other freshmen, when I first arrived on Oberlin’s campus a few years ago, I had no clear idea what I wanted to study or do with my life. As a result, I felt a bit lost, and my diverse interests certainly didn’t help me decide on any particular major. I had a deeply ingrained passion for piano, but I also immensely enjoyed languages, history, and psychology and craved academic challenge. I loved performing, but at the same time I did not want to sacrifice the experience of learning other academic subjects.

I was infinitely jealous of people who knew exactly what they wanted to do from the outset — people who had specific goals and what seemed like a grand mission in life. Luckily, I discovered that the varied outlets I had been seeking were all available on campus, and I could indulge in them all. Treating these opportunities like a savory buffet, I sampled a bit of everything and took classes in every imaginable field. At the end of the year I wound up even more confused than I was in the beginning.

I decided to apply to the Conservatory of Music as a piano performance major, because at least that was one aspect of my life I was certain that I wanted to pursue. While I loved performing, I didn’t know if I wanted to just practice 10 hours a day, every day, without doing anything else, without losing my mind, or both. Also, even though I wish it weren’t an issue for me, I wanted certainty. I wanted security. So I enrolled in the Con but decided to stay in the College of Arts and Sciences and scope out the academic opportunities there as well. Welcome to the crazy, activity-juggling world of the double-degree student, or in my case, the wishy-washy, incredibly indecisive Obie.

After about a year, I felt growing pressure to commit to an arts and sciences major. A bucket of ice-cold reality--the requirement to declare a major in one’s junior year--was about to be poured over my head, compelling me to act. I finally zoned in on an economics major in the college.

During my first year, I had signed up for an introductory economics class because I thought it was practical. I ended the semester having truly enjoyed the class. By the end of my second year, I was developing a keen interest in financial crises and economic policy. Curious about the origins of the most recent financial crisis, I decided to poke around with economic policy and finance, joined the Oberlin Student Finance and Investment Club, and took a course on the history of the financial crisis, in addition to my regular economics classes.

Embarrassingly, at the time, I hadn’t the slightest idea what a hedge fund was, much less the ability to predict that one day I would be working at one. Come winter term, though, I applied for and was offered an internship with a hedge fund in Greenwich, Connecticut. I had preconceived ideas of finance as a lofty, entirely mathematical, robotically exact, and overall boring kind of field. I had no idea what to expect.

The fund’s manager played an enormous role in developing and nurturing my interest in finance. He and his staff from the outset were warm, welcoming, and genuinely interested in introducing me to the world of securities, finance markets, and hedge funds. They were all very energetic and intelligent people who seemed all-knowing not only about finance but also about technology, politics, and everyday news. The manager was an Oberlin graduate, and would take me aside to talk about Oberlin, as well as explain the firm’s strategies and how the crisis affected the fund and teach me the financial concepts that were used everyday at the fund. It was like no other internship.

Working at the fund was intimidating at first, much like learning a new language just from being around native speakers. I spent weeks simply developing my financial vocabulary, just to have a very general understanding of what exactly was going on. Once I caught on to some topics, I found myself inquisitive and genuinely interested. I learned that a hedge fund is an investment company that manages a portfolio of bonds and other securities through methods of taking on and reducing risk, in order to generate returns for its clients (usually limited to professional-type investors and wealthy individuals/families), but I didn’t truly understand it until I had the chance to play around with formulas and listen to my manager’s lectures. Some of my previous ideas were correct: the hedge fund did rely on many bond formulas and algorithms, but as important as these devices were, they were more like tools that led to broader conclusions instead of just numbers.

I also had the opportunity to visit other firms to gain a broader perspective of how this particular fund interacts with other banks and firms. As part of the Oberlin Business Scholars program, I attended a hedge fund seminar in New York led by several Oberlin alumni now involved in the hedge fund business; I listened to several managers from a hodgepodge of experiences and backgrounds — among them were a sociology major and biology major. While in New York, I visited the Goldman Sachs trading floor and toured the company headquarters. I learned about the construction and use of securities called collateralized mortgage obligations on my visit to another firm in Stamford, Connecticut.

By the last week of my winter term internship, my accumulated knowledge of securities and current economic conditions served me well enough to compose a portfolio of investments, with the help of my manager. My interest in learning about macro-related issues, namely President Obama’s economic plans, evolved through keeping daily track of the news regarding business and the economy. Banks and hedge funds require an in-depth knowledge of economics and politics — inseparable much of the time — because bank legislation (especially now) affects banks/firms’ daily operations so much. Overall, it was a great learning experience and I am back for more this summer.

Oberlin provides these great opportunities that help you consider, rule out, or zoom in on what you really want to do, and this internship option was just one out of thousands available. I may choose not to work at or manage a hedge fund in the future, but what I’m learning will be just as useful in dealing with economic policy and other finance-related fields as it will be in dealing with my own personal finances. I now realize that there was absolutely nothing wrong with not knowing what I wanted to do, and instead of viewing the uncertain future as a Pandora’s box to be avoided at all costs, I learned to appreciate this unknown as an exciting possibility and opportunity. One day I will choose a career, but rather than forcing myself to pick one now, I will continue learning and exploring. For the time being, I’m not ruling anything out.