Do all post-MBA offers start as first year associates?

I have been working in investment management since receiving my MBA in 2010, but recently received an offer from another company to move into investment banking. The job listing was for an experienced IB associate, but I was able to leverage my 2+ years of sector experience to land the job. Upon receiving the offer I was surprised to see that they are having me join as a first year associate, so basically joining the 2012 MBA class.

Is it normal for associate hires to always start as first years even with prior experience (non-IB though)? Would it be worth trying to state my case as to why I should start out as a second or third year associate, or is this a waste of time?

 

It depends on the firm. Typically the more elite the firm is the more likely they'll try to start you out as low as possible I.E. MM experienced associates lateraling to a BB are likely to get bumped down a year or two. Since your job isn't banking they're using it as an excuse to hire you as an associate 1. Try to negotiate up a year but don't be unrealistic and fight your battles wisely.

 

To convince them to hire you as experience you should probably talk about all of the modeling experience you've had on your job, how you've helped manage lower level research people in your firm, how you've helped on marketing calls to clients, etc. Relate your experience to the work of an associate as much as possible.

 

Thanks for the replies guys.

BigHedge: this IB role is with a very well-known firm and pays much more than my IM role, both now and in the future. I think IM gets a bit overrated on here, there is a lot boring work just like in IB and big money doesn't come until you are a PM and/or own your own fund.

Raptor: good info, I appreciate it. Makes sense they would try to start me out low. I will try to state my case and see if they will consider bumping me up a year or two.

 
Bowser:
Thanks for the replies guys.

BigHedge: this IB role is with a very well-known firm and pays much more than my IM role, both now and in the future. I think IM gets a bit overrated on here, there is a lot boring work just like in IB and big money doesn't come until you are a PM and/or own your own fund.

Raptor: good info, I appreciate it. Makes sense they would try to start me out low. I will try to state my case and see if they will consider bumping me up a year or two.

Definitely can't hurt to try, but like the posters above have said, don't have your expectations set too high.

 

Yes, just like most things, IM is not the be all and end all and is not for everyone (dedication, intellectual curiosity, ability to withstand loneliness...etc). I just think that in IM, even at levels below the PM, you can still make more than in IB and have more interesting work. If you really come to the conclusion that the place you want to join will give you more upside in the LT, then by all means go for it. It comes down to what you enjoy more and you should do that regardless of how much you make. Having a job in IB/IM would make you the 1% anyway so you should be more concerned about your psychological well being.

Not sure what the "boring" work is in IM...hope you're not referring to reading S-4 and 10-K! :)

 
Best Response
BigHedgeHog:
Yes, just like most things, IM is not the be all and end all and is not for everyone (dedication, intellectual curiosity, ability to withstand loneliness...etc). I just think that in IM, even at levels below the PM, you can still make more than in IB and have more interesting work. If you really come to the conclusion that the place you want to join will give you more upside in the LT, then by all means go for it. It comes down to what you enjoy more and you should do that regardless of how much you make. Having a job in IB/IM would make you the 1% anyway so you should be more concerned about your psychological well being.

Not sure what the "boring" work is in IM...hope you're not referring to reading S-4 and 10-K! :)

I don't want to get off track here but I wanted to respond to this post since so many on WSO believe any buy-side job is the holy grail.

I'm coming from a mid-sized long-only IM firm, and I can tell you with absolute authority that comparable jobs in my field pay quite a bit less than IB. Maybe that is not the case for hedge funds (I presume this is your industry given your username), but it is true for general investment management, and it makes sense when you think about how both industries get paid (IB makes more money when completing more deals, IM earns a % of AUM and makes less when individual stocks and/or the overall market goes down).

In the long-only world (outside of the Fido/T. Rowe Price/Wellington level), pay does not begin to approach IB until the PM level, and even then it is below a solid IB MD because the large fund families know that the majority of their AUM comes from strong marketing and stealthy diversification.

Other aspects of IM I don't like include: - essentially forced to get a CFA now (3 years of mastering worthless topics such as temporal accounting translation) - extreme majority of people in the industry are naive and are not capable of generating alpha on a consistent basis, making individual stock picking almost worthless and putting more focus on institutional marketing - having zero real control over companies because you only make small, 1-2% investments; nowhere near as close to the situation as buying an entire company like in PE - taking my work home with me when an investment tanks due to some irrational reason or the company withheld information (goes back to previous point about how small positions are irrelevant and give you no real control over a company or its strategy/operations) - extremely boring workplace environment. IM office environment is nerdy and feels like a library. I am extroverted and want to get out and talk to people, work on deals, etc. Relationship skills are undervalued on this board, primarily because most users are analysts/wanna-be analysts and have not been exposed to the big picture yet

 
Bowser:
BigHedgeHog:
Yes, just like most things, IM is not the be all and end all and is not for everyone (dedication, intellectual curiosity, ability to withstand loneliness...etc). I just think that in IM, even at levels below the PM, you can still make more than in IB and have more interesting work. If you really come to the conclusion that the place you want to join will give you more upside in the LT, then by all means go for it. It comes down to what you enjoy more and you should do that regardless of how much you make. Having a job in IB/IM would make you the 1% anyway so you should be more concerned about your psychological well being.

Not sure what the "boring" work is in IM...hope you're not referring to reading S-4 and 10-K! :)

I don't want to get off track here but I wanted to respond to this post since so many on WSO believe any buy-side job is the holy grail.

I'm coming from a mid-sized long-only IM firm, and I can tell you with absolute authority that comparable jobs in my field pay quite a bit less than IB. Maybe that is not the case for hedge funds (I presume this is your industry given your username), but it is true for general investment management, and it makes sense when you think about how both industries get paid (IB makes more money when completing more deals, IM earns a % of AUM and makes less when individual stocks and/or the overall market goes down).

In the long-only world (outside of the Fido/T. Rowe Price/Wellington level), pay does not begin to approach IB until the PM level, and even then it is below a solid IB MD because the large fund families know that the majority of their AUM comes from strong marketing and stealthy diversification.

Other aspects of IM I don't like include: - essentially forced to get a CFA now (3 years of mastering worthless topics such as temporal accounting translation) - extreme majority of people in the industry are naive and are not capable of generating alpha on a consistent basis, making individual stock picking almost worthless and putting more focus on institutional marketing - having zero real control over companies because you only make small, 1-2% investments; nowhere near as close to the situation as buying an entire company like in PE - taking my work home with me when an investment tanks due to some irrational reason or the company withheld information (goes back to previous point about how small positions are irrelevant and give you no real control over a company or its strategy/operations) - extremely boring workplace environment. IM office environment is nerdy and feels like a library. I am extroverted and want to get out and talk to people, work on deals, etc. Relationship skills are undervalued on this board, primarily because most users are analysts/wanna-be analysts and have not been exposed to the big picture yet

Ok I understand where you are coming from now. I have one very simple solution for you - if you like IM, move to a HF (if possible). At a HF, you have the opportunity to do all the above (network with people, building a rolodex of experts, no need to get the CFA, not based on marketing, need to generate real alpha or you don't get the 20, could take control position, could be an activist, very fast paced if you're in an event driven/catalyst investing group...etc). Oh, and the pay is above that of IB. Relationships are valued in HF because that's how you source great ideas (whether that is from the SS, BS, industry, CEOs, HNW guys, investors...etc).

 

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