"The Pulse" -- #113 / Active vs. Passive Management

Recruiting Timeline:

Banking:

Where We’re At:

• SA 2027: No new updates here—won’t see anything here until September

• SA 2026: None. 107 firms are recruiting for SA 2026

• FT 2026: Citi, PWP, Guggenheim, and PJT opened their apps. 21 firms are actively recruiting for FT 2026  

• If you need some interview support or just need a place to vent, check out our Coaching Program: Coaching for banking, consulting, and buyside recruiting | The Pulse. 95%+ of those coached for the summer 2025 recruiting season received offers!

New SA 2026 Applications:

• None

New FT 2026 Applications:

• Citi: BB (FT 2026)

• PWP: Strong elite boutique, sweaty culture (FT 2026)

• Guggenheim: Strong M&A and Rx teams (FT 2026)

• PJT Partners: Best Rx team (FT 2026)

See below to gain access to our premium database, updated weekly, which houses the application processes for over 300+ banks/consulting/buyside firms! Gain an edge over everyone else by not having to spend countless hours tracking applications and deadlines.

Consulting:

Where We’re At:

• Three firms released applications this week. Expect more volume as we approach the fall.

SA 2026 released apps:

• Berkeley Research Group - Summer Associate (SA 2026)

• FTI Consulting - Consulting Analyst Intern (SA 2026)

FT 2026 released apps:

• Simon-Kuchar - Entry Level Consultant (FT 2026)

• Berkeley Research Group - Associate (FT 2025)

Buyside:

Where We’re At:

• SA 2026: None. Currently, 114 buyside firms are recruiting for SA 2026 seats 

New SA 2026 released apps:

• None

The database is updated weekly and contains 300+ Investment Banking and Consulting internships/full-time positions along with:

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Market Update: 

Active vs. Passive Management

Ever since the pandemic, the retail trader has become a prominent force in markets. These are your average Joes investing their savings in the stock market. Some take an intelligent approach and passively invest in ETFs (S&P, Nasdaq, Dow Jones), while others yolo their life savings into individual stocks.

That hasn’t changed since the pandemic; however, over the past few weeks, there has been a resurgence in the popularity of meme stocks. 

One market event that really stood out was American Eagle announcing a partnership with Sydney Sweeney, prompting the stock to shoot up over 10% after hours. That’s a $500mm increase in the market cap of a company I haven’t heard of since 2017!

I spent a lot of time in econ classes reading about markets and whether they are efficient or not. The generally studied/accepted versions of market efficiencies are:

Weak Form Efficiency

• Definition: All past trading information (such as stock prices and volume) is already reflected in current stock prices.

• Implication: Technical analysis (using charts and past price data to predict future prices) cannot consistently yield excess returns.

Semi-Strong Form Efficiency

• Definition: All publicly available information (including financial statements, news, and economic reports) is already incorporated into stock prices.

• Implication: Neither technical analysis nor fundamental analysis can consistently achieve above-average returns.

Strong Form Efficiency

• Definition: All information — public and private (insider information) — is fully reflected in stock prices.

• Implication: No one, not even insiders, can consistently achieve abnormal returns.

Most economists think we are somewhere between weak and semi-strong efficiency. But you have to wonder about the efficiency of markets when having Sydney Sweeney walk around in your jeans adds $500mm to the value of your company. Pair the meme stock mania with the TACO trade/tariff volatility, and it certainly calls efficient markets into question.

Passive management has grown dramatically over the past decade due to its low cost and efficiency. But I think active management can be very attractive when markets are inefficient, reactive, or distorted — like during frenzies or periods of increased geopolitical risk.

Some benefits of active management I see are:

• Ability to React to Volatility

  • Tariff shocks (e.g., between the U.S. and China or EU) can suddenly affect entire sectors (e.g., semiconductors, agriculture)

  • Active managers can quickly reallocate capital away from affected industries or countries

  • Passive funds, which track indices, are stuck with exposure to those stocks (in some cases, this can have benefits)

• Exploiting Mispricing During Manias

  • Stocks can detach from fundamentals, creating opportunities for shorting overvalued stocks or buying undervalued ones left behind

  • Active managers can capitalize on irrational exuberance or panic selling, whereas passive funds must hold the stock based on index weight, regardless of valuation

• Risk Management

  • Active funds can hedge against downside risk during volatile periods using derivatives or defensive allocations

  • This is particularly useful during macro events, like tariff announcements or geopolitical risk, which cause sudden drawdowns

• Avoiding Bubble Exposure

  • Active managers can sidestep overhyped stocks that passive funds are forced to buy as they rise in market cap

  • This avoids buying at unsustainable valuations driven by retail frenzy

This is not to say that we all should be picking individual stocks, but skilled active managers certainly still do have a place for institutional investors. What’s challenging is finding skilled managers who can consistently generate alpha over time. They are few and far between.

For us retail investors seeking very long-term performance at a low cost— ETFs do the trick just fine.

Disclosure: Nothing written here is financial advice or should be used for investment decisions.

Deal Dynamics

Deals get done because people have different incentives. These different incentives also lead to excess value creation (alpha).

Let’s look at the recent noise around Google and Windsurf.

It’s been all over the news.

What happened is that Google bought Windsurf’s management team…leaving the employees high and dry until Cognition swooped them up.

This deal works for both sides:

-Google buys the originators. The revenue generators of the firm. The head of the body.

-Cognition buys the infrastructure. The arms and legs of the body.

Google is a more mature business that is benchmarked by its ability to a). increase profitability and b). exceed expected growth rates. Buying the originators of a business will hopefully yield greater revenue generation and stronger free cash flow.

Cognition is a younger business that is more so benchmarked by potential rather than immediate results (ie commands a revenue multiple or a price on its ability to do new & different things). Buying the infrastructure of a business will allow Cognition to live up to its potential.

In this case, both parties win.

Different deal incentives led to different value creation plays, which led to a good deal on paper.

Time will tell for the two firms whether the transactions are truly accretive or dilutive, but the genesis of the initial bet seems promising.

The viability of a deal goes beyond the spreadsheet, remember that.

Going Forward:

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“The Pulse” #113

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