Pursuing AM
For the AM monkeys out there, what drove you to pursue a career in AM versus IB / PE / other finance roles? I am interested in learning more about the pros/cons of pivoting towards AM.
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Nature of the work is intellectually stimulating (investment research and developing a thesis with alpha generation as a goal), usually great hours, and great pay at the senior levels.
Pros: intellectually stimulating, minimal politics (not nonexistent but minimal), better compensation per hour, output oriented (if you are good, you can work 5 hours a week and produce 5 alpha-generating ideas, most don't but just illustrative)
Cons: daily mark-to-market (no matter how long-term oriented your firm is, no PM likes losing paper money); most good lifestyle AM firms have flat or declining asset growth; low geographic mobility (which is true for finance in general but more acute as most AM firms are in handful cities); not where most money is made nowadays (more companies stay private longer given abundance of VC $)
This may be a dumb question and I’m likely missing something—but haven’t IPOs been hitting annual records?
Yes, but sorry what is your question?
Pros: better lifestyle, intellectually stimulating at times, high job security
Cons: fee compression, generally competitive industry / lack of differentiation, management will typically focus resources on LP trends (e.g. quant, private credit), huge pay disparity at most levels, firms typically don't want PMs to be too important to the product, research analysts are a nameless aggregated fixed cost
Sorry could you expand on the pay disparity and Research Analysts being a fixed cost.
Could you also explain the comment on "firms typically don't want PMs to be too important to the product?"
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