Equity vs Credit/Commodity/Other Research
Of course, this forum is dedicated to equity research, but how would joining a credit research team or a commodity/fx/interest rate research team change the 1) group culture 2) day-to-day responsibilities, 3) respect/legitimacy (e.g. sell-side equity research often is considered to be founded on ulterior motives), 4) pay, and 5) exit opportunities?
Off the top of my head, and based purely on speculation, I would say that the difference is primarily in 2 and 5. 2 would differ because instead of focusing on particular companies and specific sectors, you would do broader research for fx or commodities, for example, and obviously would not need to look at earnings releases, balance sheets, and the like (does not apply to credit research). Exit opportunity-wise, I would imagine a transition to trading or buyside research/HFs is possible for all, but the number of equity-based opportunities will differ from the number of credit/commodity/other field-based opportunities. To be honest, I don't know which offers the widest set of opportunities, but I would assume that to be equities.
Again, I am talking out of my ass and would be interested to hear a more informed perspective. For those who would advise that I think more about what I am interested in rather than focusing on my 4 criteria, I am genuinely interested in many of the research fields, but understand the obvious need to "choose" one upfront if I am fortunate enough to break into research.
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Equity and FI research
From my brief experience, I know the FI team was a lot smaller, less-respected, and more under-the-radar. In fact, I doubt they even had much interaction with clients. Also, in day-to-day responsibilities, the FI team did mostly excel modeling while for equity research, the tasks were more diverse. That being said, if you want to work for a macro fund or fixed income fund, by all means, FI research would give you better exit ops. It all depends on your preferences.
I agree with the above. I
I agree with the above. I worked in equity research this past summer, and I just had an interview in FI research yesterday. ER is much more client focused and your coverage is more specific. Whereas an equity research analyst might cover 10 - 30 stocks, a FI researcher may cover 10x or even 20x the number of companies. Also, FI researchers (at least at the firm I interviewed with) sit next to the traders on the floor - definitely not a typical ER setup.
This is just a guess, but FI research probably has better exit ops into trading because of this relationship. ER kind of limits you to continuing in ER or moving onto the buy-side with a hedge fund, etc.
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quaker.. i just PM'd you..
in my experiences, equity
in my experiences, equity research covers less stocks and exit opps are mostly to L/S HFs. FI covers a few more companies but credit analysts understand CDS bonds loans lcds as well as equities. FI sits on the trading floor and interacts with traders more often. exit ops include trading as well as credit hedge funds (distressed, hy, cap structure arbitrage, etc)
anyone have ideas on how to
anyone have ideas on how to prepare for a FI/credit research interview?
Thanks all for the replies.
Thanks all for the replies. Two quick follow ups:
1) Salary+bonus potential for each. Sounds like sometimes, the salary of an FI researcher is dependent on the quality of advice and subsequent pnl of the traders who trade on the advice?
2) When we talk about research in FX, commodities, interest rates, etc., these would be completely different animals? No longer company specific and with a substantially different set of tasks and exit opportunities?
In terms of the intellectual rigor and how interesting the job is on an objective basis (as much as that is possible here), is there a difference between the many different areas of research? Or is it purely how motivated one is and how much interest a person has in the particular sector/area?