Potentially Stupid Question
Ok, so first let me qualify this by saying that I don't know a ton about finance (so hopefully you won't throw monkey shit at me for this potentially stupid question) and have just begun self-studying the field in the past month or so.
I'm trying to put myself in a position to get a research analyst job on the buy-side. I've mainly been focusing on AM because it sounds like a good gig, is not too restrictive geographically, and seems like one of the major buy-side employers of research analysts, financial analysts, portfolio managers, etc. Recently, someone told me that I should also look for jobs at large corporations, as they have their own investment teams who invest pretty heavily (according to this person, they often invest more than a lot of AM firms). I had never heard of this before, I always assumed the only finance jobs at corporations were in corporate finance. I also assumed that these corporations just outsourced their investment decision making.
So, can someone explain this to me? Do most corporations have teams of in-house investors and financial analysts? Are these pretty good jobs in terms of learning, professional growth, etc? Are they more/less/equally as competitive as AM jobs? What are the exit opportunities?
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Yes, they do, some more than others. Obvious examples would be GE Capital, GMAC, etc. The largest category to look at though would be corporate pension funds.
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Don't have an answer to your
Don't have an answer to your question, but hopefully someone else does. I just wanted to assure you that it definitely doesn't sound stupid, especially given your limited experience.
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Look off the beaten path
Look into insurance companies. It's not something that will immediately jump to mind, but they have TREMENDOUS pools of capital they have to manage. They are a great way to get exposure to fixed income research and derivatives if that is your thing. If not, most insurance companies have annuities which have variable sub-accounts. Variable sub-accounts is just a big word for a mutual fund that just happens to be in an annuity. Those sub account funds have researchers, fund managers, traders, pretty much everything you would find at a mutual fund company or BB bank. Speaking of which, have you thought about Fidelity, Pimco, TRowe Price, etc?
I know a lot of large companies manage their own capital in house, but others just outsource it. At my old firm we handled the cash for a few F100 companies, so I know the jobs exist. On the Exit Opp side, not sure what to tell you there, mainly b/c I would rather say I don’t know than blow smoke at you. My guess would be similar to those in AM. To better your chances at landing your dream job/MBA, it may take one or two lateral moves to bigger, more high profile firms before you hit the jack pot and land your dream job. From there, a good MBA program and before you know it you will be playing golf with Peter Lynch. And this was not a dumb question.
Hope this helps.
Also, check this out:
http://www.investopedia.com/articles/financialcare...
Thanks
Look into insurance companies. It's not something that will immediately jump to mind, but they have TREMENDOUS pools of capital they have to manage. They are a great way to get exposure to fixed income research and derivatives if that is your thing. If not, most insurance companies have annuities which have variable sub-accounts. Variable sub-accounts is just a big word for a mutual fund that just happens to be in an annuity. Those sub account funds have researchers, fund managers, traders, pretty much everything you would find at a mutual fund company or BB bank. Speaking of which, have you thought about Fidelity, Pimco, TRowe Price, etc?
Thanks.
On the Exit Opp side, not sure what to tell you there, mainly b/c I would rather say I don’t know than blow smoke at you.
In regards to exit opps, I'm more talking about similar jobs (so not PE, VC, IB, etc). I guess I was just wondering if there is some sort of hierarchy, where for example, starting in insurance will make it really difficult to break into private wealth management. Or if starting at a corporation on their investment team will make it really difficult to transfer to the mutual fund industry. It seems to me that a lot of these financial analyst type jobs are so similar that one should be able to freely move between AM, PWM, insurance, corporate, mutual funds, etc; but since I'm a newb, maybe I don't know what I'm talking about and should be prioritizing these jobs/industries based on keeping options open long term.
before you know it you will be playing golf with Peter Lynch.
LOL!
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Yes, insurance companies have
Yes, insurance companies have their own investment teams. Way back when, I interviewed with State Farm and All State for internships with their investments research teams. Unfortunately, they tend to be located in shitty towns as opposed to the firms that do analysis, which are in big cities.
Insurance firms
Believe me, there are plenty of stupid questions out there, but yours isn't one of them.
Insurance companies have a lot of money to play around with considering they're investing the premiums they collect from policyholders. They're usually more conservative with their investments, but do utilize a wide variety of investment vehicles (equity, fixed, pe, re, etc). Heres an example....
http://www.allstateinvestments.com/
With regards to exit opps, it all depends on what you make of it. In my opinion, insurance is all sales. You'll be selling it to friends and family. Chances are you won't make it far in this field where you'll see a lot of $$$ (mainly because its a churn and burn game, the products you're selling suck, and its quite boring). If you do get far and progress, you'll be able to BS people quite well and with networking, perhaps an MBA you could transition into PWM (largely a sales role on the retail side).
I cant comment on mutual funds, but do know several people who've made transitions from being an analyst within the investment dept of an insurance company to doing equity research for more "prestigious" firms (all of whom made the transition with an MBA from a top 20 and completing the CFA program).
If I started at an insurance
If I started at an insurance company in their investments division (or whatever it's called) as an analyst, could I make the transition to analyst or portfolio manager at AM firms, mutual funds, and similar jobs?
Furthermore, are the research analyst jobs in insurance any less competitive to get than the insurance jobs in AM, mutual funds, etc?
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bump
bump
econ wrote: If I started at
If I started at an insurance company in their investments division (or whatever it's called) as an analyst, could I make the transition to analyst or portfolio manager at AM firms, mutual funds, and similar jobs?
Furthermore, are the research analyst jobs in insurance any less competitive to get than the insurance jobs in AM, mutual funds, etc?
Sure, but you may decide to just stay at the insurance company too. The Insurance companies that have a dedicated investment staff of analysts and PMs are usually the large players in Life Insurance and Property/Casualty. The general accounts and surplus accounts of these companies (along with variable annuities where applicable) are pretty substantial in size.
It feels like everything is pretty competitive right now with unemployment at 10%, so it is hard to gauge how it compares to traditional AM. Perhaps a job within an insurance company is slightly less competitive since many professionals prefer a pure play AM shop, but I wouldn't say by too much.
Not a dumb question, and yep
Not a dumb question, and yep there's lots of AM in the non-bank world. From public and prive pension funds, to endowments, to a public-finance issuers' investment pools, the list goes on.
I'm a RA in credit. I like the thought process, the analytical thinking, and working with people who know how to THINK, not just fill out excel templates. I like the exposure publishing has given me, and it certainly opens a lot of doors. Also, making a big credit call before the ratings agencies do is a big up for your profile. That said, I'm now trying to move into commodities banking. With the credit experience, I'm hoping it will be a somewhat seamless lateral.
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boscfa wrote: econ wrote: If
If I started at an insurance company in their investments division (or whatever it's called) as an analyst, could I make the transition to analyst or portfolio manager at AM firms, mutual funds, and similar jobs?
Furthermore, are the research analyst jobs in insurance any less competitive to get than the insurance jobs in AM, mutual funds, etc?
Sure, but you may decide to just stay at the insurance company too. The Insurance companies that have a dedicated investment staff of analysts and PMs are usually the large players in Life Insurance and Property/Casualty. The general accounts and surplus accounts of these companies (along with variable annuities where applicable) are pretty substantial in size.
It feels like everything is pretty competitive right now with unemployment at 10%, so it is hard to gauge how it compares to traditional AM. Perhaps a job within an insurance company is slightly less competitive since many professionals prefer a pure play AM shop, but I wouldn't say by too much.
Thanks. I didn't mean to make it sound like I'd be trying to get out of insurance. I just wanted to know if I had exit opps, in case I want to move.
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