We’ll be optimistic here and assume that you’ve actually managed to raise enough capital, get all the legal and infrastructure stuff taken care of, and that your trading strategy still produces solid returns.

So what will your average day look like now?

Like everything with hedge funds, it depends: it depends on your strategy, the size of your organization, and your stage in the fundraising cycle, among other things.

Here’s a realistic day in the life for my research-driven value fund:

6:00 AM

Wake up. Check smartphone before rolling out of bed to scan headlines coming out of Asia and Europe. Glance at inbox to size up what chunk of my day will be consumed by correspondence.

Eat breakfast with the Wall Street Journal. Actually read it.

Listen to the BBC’s Wake Up to Money podcast at the gym and on my commute to round out my information on European markets. It’s more interesting than anything on CNBC 90% of the time.

7:00 AM

Arrive at the office. Read news related to positions I currently hold and am following. As I read all this news, I take notes on what’s interesting, what to follow-up on, and what could affect my portfolio.

A colleague brings by the daily holdings and performance report from our prime broker. There was a big move in the GBP overnight that leaves us more exposed than we’d like to be.

I ask him to call our prime broker to sell the excess currency and get the allocation back on target.

We don’t trade currency as a primary strategy, so we don’t have the capacity to handle this in-house.

There are a lot of securities I’d like us to trade ourselves, but the required infrastructure is too expensive for our current size, so we rely heavily on outside traders.

7:30 AM

Meet with the team to finalize the day’s game plan. This is possibly the most important part of the day, as it determines our research and trading priorities.

A lot of our positions have upcoming corporate actions (bankruptcy hearings, spinouts, etc.), so I need to stay on top of events as they unfold.

We go around pitching new ideas and decide what to pursue. Unlike a traditional asset management firm, we don’t divide people up by industry coverage.

We’re looking for asymmetric opportunities across industries/market caps/geographies/asset classes, so we have to be generalists.

An analyst who watches our screens for ideas presents some companies with massively underfunded pensions and declining earnings as potential shorts. I pick out the most promising names and divvy up the research. We’re off to our desks with plans in hand.

Of course, this plan can be blown to smithereens if the market opens down 300 points.

8:30 AM – 9:30 AM

Work on current holdings. One of them just announced a rights offering, so I build that into my model to see what the capital structure will look like and whether we want to participate.

9:30 AM

US markets open. If things are generally stable, I’ll just keep working through my game plan for the rest of the morning.

There’s an interesting merger underway with the potential to shake a bunch of weird securities, so I spend a few hours reading through the filings to understand the merger terms and the two companies being merged.

10:00 AM

A trader stops in to tell me that one of our positions has been hit with a regulatory action by the EPA. I stop researching the merger to figure out what’s going on with the EPA.

We determine it’s not of real concern since the company has ten times the amount of cash it needs to pay the highest possible fine.

11:00 AM

An equity salesperson calls to pitch a secondary offering in a company I was looking at months ago. No way – it’s a total disaster.

11:30 AM

Eat lunch while reading the merger agreement. They’re paying for part of it in warrants – put those on game plan for tomorrow. Time to fundraise!

1:00 PM

Have call with potential investor. He’s very well-connected and could catapult the fund to the top institutions.

He drills me with questions about our strategy, our risk management, our infrastructure and back office, and whether we have the capacity to take a lot of new money.

If that last issue seems odd to you, scalability is a common problem. A fund focused on microcap stocks can’t take meaningful positions with more than a few hundred million under management because they’d move the market.

On the other hand, it’s hard to succeed as an activist fund without a few billion in the bank.

Large investors are frightened that their contribution will decrease your ability to execute your strategy and they won’t reap the performance that attracted them in the first place.

2:00 PM

That company with the possible EPA fine? It just got worse. The stock is down 15% and the Justice Department has issued its own inquiry into the matter.

It’s going to get ugly – I pull everyone from their desks to figure out who knows what and how we can find out more. It’s a huge position for us and we’re losing money every second, but it could also be a great buying opportunity if the market is overreacting.

I want a decision by 3:30 PM so we can act.

3:00 PM

I’m looking through old EPA court cases to get a sense of how these things progress. History is telling me that the actual fines wind up being far less than expected and our company will have no problem paying.

Nonetheless, the stock’s down another 7%. We go ahead and buy more.

4:00 PM

Markets close. Other than our environmentally unaware company, our positions remained relatively flat, which is a relief.

I call our prime broker to make sure we’re set up to act on those merger warrants if we decide to pull the trigger. Luckily, no new paperwork is required.

I round up the team for a meeting to see how everyone’s progressed on their research projects. Most ideas end up as duds and there’s only one idea left from today’s list that I want to keep an eye on.

We go over our end-of-day screeners and pull a few names for tomorrow’s agenda.

5:00 PM

Back at my desk, I have time to do uninterrupted research for two hours. What does all this research entail?

For us, we look at everything: SEC filings, court documents, industry publications, sell side research, and our own meetings with management.

It’s easy to read the first page of a bankruptcy with a critical and energized mind, but by the time page 57 rolls around? That’s where most people drop off.

Our strategy requires knowing the nooks and crannies of everything we hold and that means a high level of engagement with all of these documents.

7:00 PM

Dinner party organized by a hedge fund service provider for new managers. Sad, but not surprising: I’m the only woman in the group of 30.

We talk shop and it seems like everyone’s had a rough quarter except for us. It’s nice to catch up with some peers and network with new folks – odds are that most of our funds won’t be around in three years.

9:00 PM

Head home and straight for my desk to do some paperwork. Running a fund isn’t just portfolio management: it’s a small business. I have to make sure that our bills are getting paid on time and our operating accounts are up to date.

10:00 PM

Outline ideas for the quarterly investor letter. I like to draw back the curtain a bit and talk about a few of our positions.

The challenge now is talking about this EPA fine without inducing panic in our investors – if we get a lot of redemptions at once, it would severely cripple us.

I respond to non-urgent emails from that morning. My friends want to organize a weeklong ski vacation, but at this point I can’t take that much time away from the fund.

11:00 PM

Go to sleep excited about the weekend, not because I have awesome plans, but because I can focus on research in the five-hour stretches I like without any market distractions.

Hetty MacIntyre grew up in Western Europe and the Deep South before attending a liberal arts college in the Northeast. She worked at a large pension and endowment fund manager before starting her own value-oriented private investment fund.

Oh yeah, just how different it is working in finance in Canada and how it can be much harder to break into the industry.

If you haven’t already read Part 1 of this interview and learned how our interviewee broke in against all odds – coming from a culinary background – you should get over there and read his story right now.

We’re going to pick up with Part 2 today and you’re going to learn all about what it’s like on the job - from the industries you cover to the most common deal types to the hours and yes, even the pay (with exact numbers).

And then we’ll move into the exit opportunities - a strange world where traditional private equity, venture capital, and hedge funds are less prominent and where pension funds are a more common destination.

NOTE: THIS INTERVIEW APPLIES MORE TO QUEBEC THAN CANADA AS A WHOLE.

So please keep that in mind as you read through it. Yes, things are different in other places. Some of the points here do apply elsewhere, while others are Quebec-specific (i.e. comments on French, some of the figures below, and so on).

Industry Landscape: Got Gold? And Oil?

Q: Switching gears now, how is the finance industry different in Canada overall? Can you go through what the key industry sectors are and how deals are different?

A: Sure. The main industries here are energy, metals & mining, transportation , timber/resources, and a bit of technology.

The Big 5 banks do deals across all of these.

Capital markets activity here is limited to the 5 – 6 biggest banks, and smaller boutiques don’t do debt or equity at all; the Big 5 banks also work with the federal government and provincial governments that issue debt or otherwise need to raise funds.

You do see some boutiques doing private placements and PIPEs, but anything else capital markets-related is rare to nonexistent.

US banks have less of a presence in Canada, though they are still involved in some deals.

A Day in the Life

Q: So the industry is smaller and much more focused – makes sense given the lower and more spread-out population.

What’s an average day in your life like? Are we talking standard investment banking associate days, or is it better / worse?

A: For me it’s pretty much the same as what you see elsewhere – long, grueling days and plenty of weekend work, with a fair number of crazy people in the mix as well.

You do tend to get more responsibility at the junior levels here since the whole industry is smaller.

So as an associate, sometimes I’ll actually go out and find M&A opportunities, bring them back and pitch them to Partners, and so on – or I’ll help with going out and soliciting investors myself. You wouldn’t normally see that at large banks in the US.

Although the PE industry itself is small here, we do a lot of work with pension funds and big banks here and show them projects that require capital – often we raise that capital in the form of special-purpose vehicles (SPVs) with standard-fund economics.

Q: So how would one of those deals work? Can you walk us through the process?

A: Sure. Typically a company that’s lacking capital (usually equity) or needs to grow more quickly would come to us and ask what we can do to help.

So we would complete some due diligence, understand more about their business and market, and assess how much the company could grow over the next 5 – 10 years based on the usual financial statement analysis and projections that you use in banking.

Then we would wrap all of that in a pitch book, and go out and present it to pension funds. Unlike PE or VC firms, pension funds here barely do any soliciting and pretty much wait for inbound leads to show up on their desks before investing in anything.

The Caisse, for example, the largest pension fund in Quebec and 5th largest pension fund in the world, allocates 80% of its portfolio to Fixed Income and Equities and 20% to real-estate & PE / VC.

Pension funds are huge here; 3 of the top 10 biggest funds in the world are based in Canada, even though the country has a smaller population than other developed countries.

So we might pitch one of these private companies that’s looking for growth capital to pension funds and get them interested in investing.

Other banks here might focus on the distressed or debt or convertible markets and find small-cap or mid-cap firms looking to raise money via those vehicles instead.

Q: What about differences on the technical side of deals? Is anything about financial modeling different?

A: There aren’t too many differences.

One point is that the Net Asset Value (NAV) model is more important for intrinsic valuation purposes when you’re looking at oil, gas & mining companies.

And at VC firms here, most of the “analysis” consists of a gut feeling check rather than rigorous technical work in Excel – but you see that in other markets as well.

Hours, Pay, and Paths

Q: OK, so not too many differences on the technical side, although the deal types tend to be a bit different and you deal with pension funds a lot more than traditional PE firms.

What about the hours and compensation? I’ve heard all sorts of mixed views on how they compare at Big 5 banks vs. smaller firms vs. the buy-side in Canada.

A: Sure. The main difference is that salaries and bonuses are much more standardized here, at least at the Big 5 banks. Here’s what you can expect based on recent numbers:

• First Year Associate in Toronto: $105K CAD base salary, with $50K CAD bonus. That ramps up to a $125K CAD base salary over time, with a bonus of $65 – $75K CAD, which stays flat until you reach the VP level.
• Analysts in Toronto: $65 – $75K CAD base salary (Note: May be $80K as the standard at some banks, and sometimes a bit more or less), with $30 – $35K CAD bonus.

However, these numbers are factored by the cost of living in each region, so you would earn 5% less in Vancouver and 10% less in Alberta. Montreal is about 20% less than Toronto.

Unlike the US, each bank here has a set salary and bonus paid to associates – so it doesn’t change much depending on group performance, number of closed deals, or fees.

Q: Right. Those numbers would look a lot better if the US Dollar falls a lot more, but I guess you have to settle for less sometimes.

What about the progression on compensation as you move up the ladder? How much would a VP earn?

A: I don’t have exact numbers for you there, but I’ve heard that VPs might make around $175K CAD base salary with highly variable bonuses based on deals closed, fee structure, and so on.

In a bad year as a VP, you could theoretically earn less than an associate would earn; it’s not common, but it is possible because VP pay is tied much more closely to deals and fees.

Q: What about compensation at boutiques and on the buy-side?

A: For boutiques, pay differs so radically from firm to firm that it’s almost impossible to generalize. Sometimes you could actually end up making more at a boutique than at a Big 5 bank because the fee percentage can be higher.

One deal I heard about here had a 5% fee (which is unusual – it’s normally more like 1-2%) attached to it, and since the boutique bank advising them has lower overhead and fewer people, they were extremely profitable on that deal.

In private equity, some firms here start you at much lower base salaries – maybe $40K CAD – and then give you significantly higher bonuses of around, say, $160K CAD.

Pension funds pay less, but give you more job security – their returns are pathetic, so there’s less money to go around. Plus, they’re highly scrutinized since so many unions rely on the fund and carefully monitor what they pay people.

As an analyst, you might get $60K base salary and a $10 – $15K bonus there; associates might get a base salary of $80K and a bonus of around $20K.

On the other hand, it’s also a very secure job with almost unlimited funds, so you can slack off and barely do anything – it’s almost like working for the government. We’re talking 40-50 hours per week at the most.

The top guys running these places make a lot of money, but the juniors don’t fare nearly as well.

Q: So what’s the typical “path” there in terms of progression and exit opportunities?

A: As I mentioned before, a finance degree from a top Canadian university here is essential. It’s also very helpful if you know French because many of our clients come from Quebec and want to work with other French-speakers.

For some inexplicable reason, they value the CFA very highly here. So that would be an ideal combination to start with: top finance degree + finance internship at Big 5 bank + CFA + French speaker.

After banking, there aren’t too many exit opportunities and most people tend to stick around in the industry; venture capital has been growing lately and some funds are getting larger, but overall the industry is still tiny. And PE is almost nonexistent, relative to the US anyway.

Sometimes people go to big companies’ internal M&A practices – energy companies here, for example, like to solicit oil & gas M&A associates and VPs to come in and run deals so they can avoid paying fees to banks.

And there’s going to be a lot of industry consolidation in coming years because the big companies here want to acquire the smaller players, and they keep on finding new reserves, developing new extraction technologies, and so on.

The Exit Opportunity Landscape in Canada: A Gaping Black Hole?

Q: You’ve mentioned a couple times now that there aren’t many traditional exit opps in Canada – do you have any numbers to back this up or describe the industry?

A: Sure. To give you an idea, in Quebec there are only 3 private equity firms with over $500 million in assets under management; Toronto has a few $1 billion+ AUM funds.

By US standards, $500 million is tiny – the biggest firms out there have tens of billions in capital.

Sometimes, big funds in the US such as KKR actually get aggressive in Canada and will do deals here as well since they consider it part of their “play ground.”

In the VC world, there are also very few firms and in Montreal, for example, only two venture capital firms even have more than $500 million in capital – again, tiny by US standards.

Many PE and VC firms are tiny, which is a bad deal for you if you think about it.

If a firm has $50 million in capital and 6 Partners, you’re looking at $1 million in management fees (2%) each year that gets split between the Partners, leaving very little for the associate; he might make $50 – $60K and be more of an analyst.

Pension funds are an order of magnitude, or maybe even several orders of magnitude, bigger than either of these and a single pension fund might hire 10 associates per year, test them out over several years and see how many a) last b) like the pay c) don’t go on to law school.

(Yes, a significant number of MBA graduates here either have a law degree or follow up with a law degree afterward.)

And since pension funds pay so little, “exit opportunities” for most IB analysts here consist of, “Go to business school and re-join the firm as an associate if you want to get paid more and advance.”

Q: So exit opportunities aren’t too appealing – any differences in recruiting to be aware of, in case someone reading wants to pursue PE, VC, or pension funds in Canada?

A: At pension funds, the process is very similar to what you see in private equity interviews – they give you a case study, a week or so to complete it, and then you have to write up a presentation or thesis on the industry and whether or not you’d make the investment.

And the same goes for PE and VC: the firms are smaller, but they’re still looking for the same qualities – some technical know-how, the ability to recognize and recommend good investments and avoid bad ones, the ability to drive deals to completion independently, and how well you can bring in new business for the firm.

Oh, and since pension funds are heavily regulated by the government, you’re required to be bilingual in French and English if you want to work at a pension fund in Quebec. And there’s tons of M&A activity in Quebec, so you’re pretty much out of luck if you want to work at a pension fund there but don’t know French.

So maybe you should think about doing a Finance degree at McGill with a Minor in French if your heart is set on pension funds…

Q: I’m not convinced by these “exit opportunities” in Canada. It almost sounds like opening your own restaurant might be more lucrative – are you thinking of getting back into that?

A: Hah, good one! For now, I’m happy where I am but who knows what will happen in the future.

I’ve had a passion for food and culinary arts for a long time, and it’s ironic that I originally got into the industry by working at a restaurant.

So I’ve thought about opening my own place before, but I’m not thinking about doing anything like that in the near-term.

Q: I still think you should give it a shot, or at least move to a country where exit opportunities pay more.

But in any case, thanks for the chat – really enjoyed it, and learned a ton about finance in Canada in the process!

A: Thanks! I enjoyed speaking with you as well.

NOTE: THE INTERVIEW ABOVE APPLIES MORE TO QUEBEC THAN CANADA AS A WHOLE.

So please keep that in mind as you read through it. Yes, things are different in other places. Some of the points here do apply elsewhere, while others are Quebec-specific (i.e. comments on French, some of the figures, and so on).

Finance in Canada – Series:

• Investment Banking in Canada – Overview
• Break Into Investment Banking in Canada (Part 1 of Interview)
• Investment Banking in Canada: On the Job and Exit Opportunities (Part 2 of Interview)

UPDATE: Comments on this article are now closed.

Yes, pay figures may be different and some of the individual details within may apply more or less depending on where you are and which bank you’re at.

However, I cannot afford to spend all day arguing about these points. Everything that can be raised about the interview already has been raised and discussed below.

If you don’t like it, please skip over this and read whatever else you want on the site. Best of luck.

But too often those promising resolutions suffer a fate similar to that age-old agreement between male and female friends to try and be “friends with benefits.” Sure, it sounds like a great idea, and heck, it even works well for the first couple of months.

But sooner or later, reality sets in: you can’t keep coming into the dealership every weekend to test drive the Maserati. Eventually, that sales representative is going to give you a long look in the eyes and politely ask you: “Are you going to @#$%** buy this car or what?”

So how do you turn your New Year’s resolutions into a 2011 metallic colored Maserati Gran Turismo with red coral interior?

Or better yet, how can you make New Year’s resolutions that you can actually keep – even when you’re working 80+ hours per week in finance?

The First Step to a Better Resolution is Admitting That You Have a Resolution Problem

Studies show that more than 80% of people fall short of their New Year’s resolutions before the end of February, so how do you keep from being a statistic?

The first step: Don’t confuse dreams with resolutions. I would walk a half mile barefoot across hot coals and shards of glass to own a Maserati, but the dream of owning that type of car at this point in my life is just that: a dream.

If I want that dream to materialize, my resolution should be the intermediate steps I need to take to earn the money necessary to buy that type of car. Resolutions are actually declarative statements toward a dream or goal.

“I want to look like a bodybuilder.” That’s a lofty goal.

“I want to get to the gym three times per week.” That’s a measurable resolution.

“I want to enjoy more of my life.” That’s a very vague goal.

“I want to travel once a month to a new destination.” That’s a practical resolution.

Long story short, a resolution must be a viable and actionable plan.

How to Get Your “Four Weeks Committed” Resolution Chip

“Hi. My name is (Your Name Here), and I have a problem keeping my New Year’s resolutions.”

No problem Mr. or Mrs. “Anonymous.” From ambitious weight loss pledges, to unrealistic professional designation goals, we’ll examine a few common resolutions that go awry and how to prevent that from happening.

My goal is to help you maintain that new resolution from now until December 31^st, 2012.

On that day, if you’ve sustained your resolution from start to finish, you deserve to celebrate your achievement before the start of a new year. Note: mild indulgence and gluttony are not synonymous.

Auld Lang Syne – Your “Do-Over”

“I’m going to finally escape banking and move to the buy-side this year!”

Yes, you and every other junior banker, trader, salesperson, and equity research analyst.

This seems like a great plan, but you’ll need to get more specific to actually have a chance of pulling this off.

If you walk into a recruiting firm and tell the headhunter that you “want to move to the buy-side,” he or she will realize that there’s zero chance in placing you anywhere given your ambiguous goals.

Before you re-write your resume and spin your experience appropriately, you need to figure out which area you’re most interested in: Private Equity? Hedge Funds? Asset Management?

Then, figure out what your industry focus is: Value-Oriented investing? Real Estate? Global Macro?

For the cherry on top, you also need to narrow down your geographical location: Do you want to work in New York? London? Hong Kong? Small town in the middle of nowhere? (Not recommended)

A much better resolution: “I’m going to get into a mid-sized private equity firm that invests in tech or healthcare companies on the west coast of the US.”

And as an added bonus, with that kind of resolution headhunters might start returning your calls, too.

 “I’m going to the gym every other day. I’m gonna be jacked by June.”

Here is another resolution that’s too general and completely unrealistic.

Watching vintage Arnold Schwarzenegger weightlifting videos on YouTube can motivate almost anyone to get into the gym and hit the weights.

But remember, Arnold was a professional bodybuilder. Before the hit movie Kindergarten Cop and the public relationship scandal of Shrivergate, Schwarzenegger won multiple Mr. Olympia and Mr. Universe titles!

Your dream can be to work toward eventually looking like the Terminator, but your resolution should be to develop a regular, reasonable schedule for going to the gym.

I would assume that if your resolution starts out by saying, “I want to get to the gym…”, then you’ve probably just learned where the nearest gym is located. You need to take baby steps before you attempt to run at full speed.

A better overall resolution to working out is, “I will go to the gym two times a week for an hour and a half each day.” Making a resolution similar to this one can develop the confidence and consistency needed for you to continue to work out in order to see results.

Remember, your resolutions should be intermediate steps toward a larger goal.

And yes, it’s possible to maintain a regular gym schedule even in investment banking: just focus on intense spurts of exercise, commit to a minimum number of weekly workouts, and take every available opportunity to reach your weekly goal when your work schedule permits.

“I’m going to study for the CFA, CPA, MMA, and the PGA.”

Did I read that correctly?

So in addition to a full-time job, you’re going to study for two major financial designations while simultaneously working on your ground-and-pound fighting style and golf swing? Unless you’ve successfully cloned yourself, get real.

Every year I have friends that seem to think that they’re going to do everything they want to do in their lifetime within the span of one calendar year.

If Rome wasn’t built in a day, how can you expect to fulfill one-fourth of your bucket list in 52 weeks?

Choose one designation to study for and develop a hobby on the side. Studying for one professional designation is tough enough.

Attempting to study for two professional designations in addition to maintaining a fulltime job is just insane. Focus exclusively on one test and once you’ve conquered that task, then you can move on to others.

As far as preparing for the PGA, MMA, or PBA, it’s probably best to choose one of these activities and make it a hobby.

Over the course of the year if you discover that you want to invest more time in your activity, then do so after careful consideration of your time commitment to the other areas of your life.

It’s also a good idea to remember that it may be a bit of a challenge to study for the CFA with a swollen eye or broken forearm.

“I’m going to start day-trading. I’m going to make a fortune so I can quit my day job!”

Or you’re going to lose a fortune if you don’t have a proper trading strategy around your ambition.

If you’re new to the world of day-trading, the first step to success is to familiarize yourself with various strategies (assuming you already know the basics of trading) and pick one: Are you going to focus on a particular sector? What data indicators will you focus on? How will you evaluate performance?

What software will you use? What broker will you select? Do you intend to use margin? All these elements factor into your overall trading strategy.

Trading casually and pledging to make a regular day job out of it are entirely opposite each other. Managing the positions in your IRA does not require the vigilance and active research that is necessary to be a day trader.

In short, day-trading is a full-time job. I have never met a person who has maintained a full-time job and worked successfully as a day trader – and if you’re thinking of starting your own hedge fund, that’s definitely a full-time job.

And for the record, the movie Limitless starring Bradley Cooper was fictional.

“I’m going to break a few bad habits.”

Once again, this resolution is too vague and it probably won’t last more than two months. What exactly are your bad habits? Are they habits or addictions? Are we talking about your addiction to bottle service, or your addiction to psychostimulants?

A popular bad habit that people vow to break over the course of a new year is smoking. Unless you’re a social smoker, smoking is an addiction and very few people can simply just make a New Year’s resolution to quit an addiction.

I know the thought of sitting around in a circle with strangers talking about how many packs you smoke a day, how many shoes you buy on any given weekend, or how many episodes of Jersey Shore you watch a day can make most people uncomfortable, but if it helps to break your addiction, go for it.

New Year’s resolutions are about setting intermediate goals to be a better person in your eyes in the immediate future and over the long haul, so if you need help to get to achieve that goal, get help.

There is a laundry list of unhealthy vices and it’s important to distinguish between what is a habit and what may be an addiction.

Resolutions can reform habits, not addictions. That, is unless you make a resolution to go to “(Your Addiction Here) Anonymous.”

Great Expectations

So raise your wine glasses; here’s to a New Year filled with promise, better resolutions, and great expectations.

Hopefully you didn’t resolve to drink less in 2012. I can’t support that.

Exeter Jones is a philosopher trapped inside the body of a writer, trapped inside the body of an alternative investment analyst. He’s worked in investment banking and alternative investments and his favorite breakfast food is ESPN.