Is it wise to join a brand new capital management company ?
Hi folks.
I graduated this month from a humble state university in a totally not finance oriented city in the USA. My finance internships on my CVs aren't with heavy hitters either.
I recently got a call from a company with ~3 people that is in the Asset Management field and has a few million in AUM .
My goal in life is to make a tremendous fortune and I'm not risk averse. I don't need to be CEO or MD of b at some heavy hitting firm. All I know is the bigger your role in the firm and its performance, you're more on that path towards financial success and career elevation. Since this is a small company of course you're burdened with more but I believe your progression is possible faster.
I was told that this company even has its Bloomberg Terminals paid for by the investors that capitalized it and since they have around $6-$10 million AUM, I believe getting into the position that the firm has open gives you more responsibility and client exposure.
I'm not thinking about today (salary, company brand prestige which is 0), but about what may be in 5-6 years.
I have no offers out of college and so it's not like I have anywhere else to look.
I like the position and found it extremely impressive that they have millions in management for a team of 3. And i love working with the Bloomberg Terminal.
The company is based in the city where my parents live and I wouldn't mind living with them to save on rent .
The way I see it:
Small company well capitalized = more responsibility, more growth, more client and operations exposure = excellent progression path
no offers from heavy hitters. So job at a ? vs no job at big named firms , seems to me like job at a ? would be interesting.
I mean, if the main investor gave these guys millions in management there has to be something substantial, and they're even featured in Bloomberg articles so that was my thinking.
Any inputs ?
Sounds to me like this is an easy choice.
Do you have any other job prospects on the horizon? Frankly I don't think this opportunity is as great as you think, but it's better than being unemployed...
Totally your call. Someone giving them millions is obviously a good sign, but I would evaluate whether you can trust them to be honest with you about the company's situation. That's the most important thing. There might be times where they have to defer your pay for a bit or reimburse you later. Are you ok with that risk? What if they have to downsize to stay profitable? Will they help you find a new job? Can you come back? There's obvious upside of bigger pay raises and responsibility and you might make it. With 3-4 people, you're going to be spending a lot of time together. If you work with the team well, and they pay you decent why not go for it?
Eh, I wouldn't be so sure. Most managers with a good rep that go off and do their own things can raise a lot more than that fairly quickly.
Starting off with a few million tells me that its either 1) their personal capital or 2) friends / family money. They don't have a great client base (yet) if they're only managing a few million.
Fair. We all gotta start somewhere though right? I mean, clearly this isn't Carl Icahn starting a new company otherwise it'd be a no brainer.
Getting in on the ground early can have enormous advantages if the business kicks off and you don't seem to have any other viable option. Way I see it, it's a chance for you to work hard and learn, which should pay off over the long time horizon you're looking at.
Some points: * What do you mean when you say "capital management?" If you're talking wealth management (or similar model), their fees should be around 1% of AUM, which at $10 mm doesn't pay much. Or are they more of a 2 & 20 PE/HF model? Either way, they are probably burning cash, so there's a bit of a ticking clock to their life * Does it strike you as a bit odd that they'd say $6-10 mm? That's a 40% delta * Don't forget that small teams may be harder to integrate with. You better love those 3 guys.
Did you get an offer? If you don't have an offer in hand, this whole thread is pointless. If it was a call for an interview, I would recommend you focus on securing an offer and then considering your position.
Best of luck,
Take it.
Make sure to clarify your role. Are you primarily going to be in business development or analysis and trading. If it's the former, make sure they get you properly licensed (you shouldn't be soliciting or advising retail investors without a Series 65/66 and registration in your state, WHATEVER THEY MIGHT TELL YOU).
I joined a little Asset Management firm like that after I graduated from business school and it turned out to be a disaster. I wanted to do analysis and learn how to trade and manage portfolios. All they wanted to do was have me block and tackle; they gave me an office, title and business cards, then flew off to California and spent the next half a year ignoring me.
Don't get burned. If this is retail wealth management and you're really interested in going that direction, I'd at least give the training programs at Merrill Lynch and Morgan Stanley a look, too.
I think you're asking the wrong question. It's not should you work for a start up investment firm, it's should you work for THAT (start-up) investment firm. I would be asking lots of questions about their background, goals for the firm, source of seed capital, your explicit role, etc.
You have virtually nothing to lose and a lot to gain. If it were me, I would totally explore the opportunity once I'm confident the firm will exist in more than three years.
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