Asset Management - Most Common Interview Questions?!?! Need Urgent Help

Hey WSO, long time lurker of the forums and really appreciate all the information that this site has provided. Anyway, I recently received 2 interviews with 2 AM/IM firms in SF and I'm curious on what questions I might be asked? I had originally wanted to go into investment banking but did not secure any offers during recruiting season. However, I was able to network with a couple of alumni that ultimately got me 2 interviews with 2 different AM firms. I don't have any job descriptions besides the fact that it is for an undergrad research analyst role at both firms. I'm super nervous because I have only prepped for ib interviews thus far.

Is a 100B+ AM firm considered mid size?

What questions might be asked during the first round interviews?

 
Best Response

$100bn is mid-sized in the AM world, but massive in the HF world (Bridgewater isn't even 100bn AUM). I worked at a shop that managed $450bn globally and we were considered tier 2 in size, which makes sense considering Vanguard, Fidelity and T Rowe are all $1 trillion+.

As for prep, know what's going on in the market and the major headlines, have a long stock pitch or two ready with some sounds reasons why you like the name(s). Be prepared to defend your position and go above and beyond just looking at financials and building a basic model. Listen to the earnings calls and be able to call out things management said on the call, that would impress an interviewer. I once interviewed a kid who had bought a share of a small-cap company and actually talked to investor relations on the phone. That's some f'ing dedication and he probably got quite a few offers.

One of the first Q's I always as at interviews is where is the S&P500 and what's the 10-year yield...it's a good barometer of the interviewees' interest in the market.

 
I know I am a freshman so would the firms expect a lot of technical proficiency?

Not if they're being realistic.

I also made day trading strategies as an extracurricular activity at my school with a club so I'm familiar with some technicals but not much about value investing.

Unless you're interning for a day trading firm I wouldn't talk about day trading too much. Most investment analysts view day trading as similar to gambling.

As for advice, given that you're a freshman I would say the following:

  • your attitude and genuine interest in the industry are what will win you an internship. If a firm is realistic, they will understand that you don't bring much technical knowledge to the table. You need to be willing to do general office work and other mundane tasks with a good attitude to get your foot in the door.

  • given that your resume is probably very thin, you should have a good story about why you are interested in the industry and what you've tried to do so far to learn the industry (i.e. student clubs, classes, books you've read, etc.)

  • if the firm has a stated strategy i.e. value then you should try reading books and websites on the strategy. The Intelligent Investor is a good place to start for value strategies.

  • at the end of the day, these underpaid internships generally come down to making a personal connection with whoever is hiring you. Hopefully you have some shared interests or ties to them (i.e. alumni, same hometown, sports, whatever).

Good luck.

 

Have a stock pick. There is a good likelihood they will ask you for at least one buy recommendation (and maybe even a sell). That's probably one of the best ways to demonstrate interest in markets and investing. Also, have some knowledge of the levels of various indices, commodities, currencies, and interest rates - don't spend too much time memorizing but definitely have some awareness.

Read up on valuation as well - would probably be particularly good to know a bit about relative valuation (incorporate into a stock pick).

 

I second the need to be ready to pitch a stock. It's a very common question to see if the interviewee has interest in the markets and it is also an opportunity to show your knowledge. Know the major measures(Market cap, P/E, div yield, ROE, D/E, etc.) for your stock pick and also how the ratios compare to the industry/overall market.

 

Okay, good to know. If write some of the ratios for my pitches in into my little interview-portfolio and refer to it, will that hurt me? (I'm wondering if it is necessary / encouraged to memorize all of the pitch data).

Also, while I know what all of those ratios are, I'm not familiar with how to weigh them in an investment decision. Any resources you would suggest?

Thanks for your help!

 

1) If quantitative skills are your strength, make sure you know how they can be applied. Especially, if you think you are selected because of that. 2) KNOW the market. If you follow market regularly, then it won't be a problem at all. When I say know the market is not about ' where is s&p at', 'whats the 10y yield?' 'what is VIX right now?' 'or what is the stock price of GS, JPM or blablabla'. YOU NEED TO DIFFERENTIATE YOURSELF. Pick a current topic, say 'European debt crisis'. You study everything, the cause, the status quo, where do you think it is going, what are the possible solution, what are the opportunities in this sitution, and your plan of execution. 3) Behavioral questions. 4) Pick a stock, kinda lame, but the easiest way is to go to your business school library, download all the research report of that company and minutes for earnings call. (Minutes for earnings call is far more informative and helpful.) Read them and summarize 3 reasons why you would buy the stock. And briefly derive the fundamental value. NOT ALL Ratios are important. Just name the ones that related to your investment thesis.

GL

 

I'm not sure if you've had it already, but you should know how to analyze a given industry and what drives the sector. Be able to showcase why you love investing and bring up examples of how you've acted on that interest. The ones who get the job are the ones who don't necessarily know the most, but can show that they are extremely passionate about the role and would work their ass off if given the chance.

 

Be prepared with some bullshit about where you see the markets going. Doesn't matter which direction you choose, all you have to do is have some solid rationale.

Also, watch Bernanke (2:15 EST?) and have an opinion. Or read WSO really quick and spout whatever shit you hear on here. Probably better than trying to wing it, honestly.

 

Know what is happening in the markets, have 2-3 stock picks and be able to justify them, have a general sense for what sort of asset-classes you're interested in (equities, fixed income, alternatives, etc).

"There are three ways to make a living in this business: be first, be smarter, or cheat."
 
SirTradesaLot:
Sounds like an HR screen. expect to walk through your resume and why position/why firm kind of stuff.
There any partiucularily "good" answers for why AM or why this firm? I know M&I says you should craft it to your story (ie. I worked in boutique AM for the last 3 summers, really liked it, want more experience on a global platform etc.). Anything else?
 

Who are you speaking with?

If HR, they just need to confirm these things before they can pass you over to speak with the team: 1) your salary expectations 2) how soon you can quit your current job to work for them 3) you seem like you can get along with people

If it's someone from the team, it can vary. But it's usually just a brief chat to scale your knowledge on the markets (i.e. "what draws you to the high-yield/distressed/large-cap team"?). Just read whatever is relevant today on the topic of high-yield/distressed/large-cap etc. and be prepared to talk briefly about it.

Good luck

Baby you're the perfect shape, baby you're the perfect weight. Treat me like my birthday, I want it this way and I want it that way. It makes a man feel good baby.
 

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