10/26/07

I know this board's BB&IB-centric, but I like that they've devoted a whole section to Asset Management.

I spent 2 years at a small (~$2B AUM) firm in LA after graduating from a target school. Being the sole analyst, I did everything from pitchbooks (shockingly), to RFPs, to portofolio analysis and modeling, to making sure the 2 MD's and lone trader were happy 24-7.

If you have any questions about the industry, culture of other AM firms (I've probably talked to people in dozens of other AM firms), and general questions, I'm more than happy to share any wisdom or at least how to make sure you don't F things up.

I will say 2 things: (1) being in front of the Founder/MD at all times was a tremendous learning experience and (2) it is tough to justify a long-term career in the industry (for specific reasons).

Comments (37)

10/26/07

Why is it tough to justify a long-term career in the industry? (you set that one up)

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10/26/07

True. Remember that I'm not talking about HF's or BB's here, just FI/Equities Asset Mgrs (which get 50-200 bps on AUM, rain or shine).

As an analyst for small-to-mid firms, you'll get your base + 10-30% bonus at the end of the year and work 40-60 hours/week (pretty sweet deal so far). Unless you get on track to become a portfolio manager (which may take another 5-10 years), you will not be getting the 6-figure base + fat bonus/equity because it's very easy to fall into Ops ("oh yeah, I'll just help clear some trades for a few weeks" then blam! you've been doing it for 20 years), Originations ("I get a sweet base but I travel 40 weeks a year doing my pitch to CEOs in Wichita"), or Compliance (God forbid).

Ideally, you may want to start off in AM, sample other industries, and if you really like AM, come back a few years later (post MBA) as Asst. Port. Mgr. or Port. Mgr. and get ready to lead a comfortable life (provided you beat the benchmark). Then again, there's a lot more money in IB or some variant of Finance. AM seemed passive (to me) sometimes.

Hope this clarifies things.

10/26/07

I personally like the idea of asset management, but you need to understand what you are getting into. I like not having to work crazy hours, while doing reasonably well.

You just need to be able to bring in some cash.

10/26/07

The hours far exceed what you have outlined when you include research hours and the amount of time stressing out over your returns (although for many people this is a hobby anway). Portfolio management is a 24/7 365 day job, as the market moves on news and news is in constant flux. Thanks for the insight.

10/26/07

What about the larger AMs of the bunch?
How does the pay and experience of firms like PIMCO, Western Asset, TCW, BlackRock compare to similar roles on Wall Street?

10/29/07

True. Remember that I'm not talking about HF's or BB's here, just FI/Equities Asset Mgrs (which get 50-200 bps on AUM, rain or shine).

I hope you meant 500-2000bps because who cant get 200bps in rain or shine?

10/29/07

Think he ment 50-200 bps in management fees, not returns.

10/29/07

That would make sense, and I hope so....whewwwwwwwwwwwww

10/29/07

junkbondswap - "The hours far exceed what you have outlined when you include research hours and the amount of time stressing out over your returns"
True, but as an analyst, you don't get paid to worry about returns, PM's do.

bankrupt_fool - "How does the pay and experience of firms..."
Larger firms like those you mentioned compare well to Wall Street (obviously not IB division, but AM), which means that your money will go a lot further in LA than in NYC. In large firms, you're still making your base + bonus but end up having a very specific role in Ops, Acct. Mgmt., or Presentations. In smaller, firms, you're doing at least 2 of those if not all 3.

tbroker - I did mean Mgmt. Fees. AM folk (to an extent) envy HF's 2/20 structure. Then again, AM PMs are not risking the house with every trade (beating the benchmark vs. absolute returns).

10/29/07

junkbondswap - "The hours far exceed what you have outlined when you include research hours and the amount of time stressing out over your returns"
True, but as an analyst, you don't get paid to worry about returns, PM's do.

bankrupt_fool - "How does the pay and experience of firms..."
Larger firms like those you mentioned compare well to Wall Street (obviously not IB division, but AM), which means that your money will go a lot further in LA than in NYC. In large firms, you're still making your base + bonus but end up having a very specific role in Ops, Acct. Mgmt., or Presentations. In smaller, firms, you're doing at least 2 of those if not all 3.

tbroker - I did mean Mgmt. Fees. AM folk (to an extent) envy HF's 2/20 structure. Then again, AM PMs are not risking the house with every trade (beating the benchmark vs. absolute returns).

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10/29/07

junkbondswap - "The hours far exceed what you have outlined when you include research hours and the amount of time stressing out over your returns"
True, but as an analyst, you don't get paid to worry about returns, PM's do.

bankrupt_fool - "How does the pay and experience of firms..."
Larger firms like those you mentioned compare well to Wall Street (obviously not IB division, but AM), which means that your money will go a lot further in LA than in NYC. In large firms, you're still making your base + bonus but end up having a very specific role in Ops, Acct. Mgmt., or Presentations. In smaller, firms, you're doing at least 2 of those if not all 3.

tbroker - I did mean Mgmt. Fees. AM folk (to an extent) envy HF's 2/20 structure. Then again, AM PMs are not risking the house with every trade (beating the benchmark vs. absolute returns).

In reply to WestCoastChimp30
10/29/07

How is acct. mgmt? Is it considered front office or back office? Any insight into it (compensation structure/experience of ppl who do it/career path)?

I was approached for a position in it a while back but I decided not to interview since I was worried about getting stuck in a non-investing, non-markets type job. It seems like a lot of the tasks for a jr person involved putting together reports & doing RFPs (mundane tasks that I think would drive a smart person crazy quickly).

10/30/07

Acct. Mgmt. - You'll never see a prospect but you will be doing a lot of analysis and reports on existing accounts based on data that's spit out for you (you probably won't be face-to-face unless you're somewhat senior). You can probably lateral to Business Development (front) or do Ops or research (back).

Putting together RFPs can be mundane, yes, but is the only other way the manager gets new money to invest (the other one is to have existing clients give you more). I personally hated doing them because they were never the same but managed to ask exactly the same questions and varied in length (anywhere from 5 to 150 pages).

Bottom line - if you're looking for a way in (and lateral within a year), do it. Intelligence and ambition usually get you somewhere fast (regardless of industry).

10/31/07

so what's the difference between all the different types of management? from asset, to private wealth, to investment management. I'm still a little confused. What do you do different than say a financial advisor at a Merrill Lynch brokerage?

10/31/07

Asset/Investment Management (what I did) - Company invests institutional money on a portfolio of stocks/bonds/alternatives and all you're doing is trying to beat your benchmark (S&P 500, Lehman Aggregate, some Alt Index).

Private Wealth - You're offering investment services that cater exclusively to high net worth individuals and their families. You're probably also giving them investment advice and some mix of banking products.

Brokerage - Stock jockey. You're on the phone all day cold-calling and pitching the stock du jour. You make money based on what you sell.

Hope this clears this up.

10/31/07

For Asset Managers what is an entry level position that closest resembles a trading position?

It seems at many firms you would have to start in their back office or middle offices before you could even become a trading assistant to a portfolio management.

10/31/07

I'd go with Account Management. This way you get to learn the products and what the firm invests in down cold (you can't trade something you don't know anything about).

Of course, the smaller the firm, the more overlap in your duties right off the bat. After a couple of years (provided you show interest and skill), you can realistically start moving up to the Portfolio Mgmt. side.

For bigger firms, the easiest way to start off in Portfolio Mgmt. is to get your MBA.

10/31/07

I've seen that a lot of the BB have AM analyst programs. Does anyone know how selective these programs are? By that I mean are they geared mainly towards target schools like their IB counterparts. Also what about the PWM programs. I definitely want to work with investments eventually, and I want to know what is the probability of getting into one of those programs and how to best prepare myself. Also I am strongly considering taking the CFA I next year in hopes that this would give me a slight advantage since I go to a non-target school. How is this looked upon by companies? Thanks.

In reply to WestCoastChimp30
11/5/07

So are there generally exit ops for Account Associates in PE and S&T if they were interested after their analyst programs? (obviously the skillsets are different, but if one were so inclined to do so)
In terms of prestige I'm sure being an AA in Asset Management isn't nearly as prestigious as IBD at a BB to give them the exact same exit opps.

In reply to WestCoastChimp30
11/7/07

What are you doing now if I may ask?

11/7/07

In all seriousness, I quit AM a year ago and now I'm an Associate in the LevFin group at a bank in Los Angeles. We do the secured portions in the cap structure for MM companies (we do everything from financing distressed companies to financing PE buyouts).

I left AM because the company was small (as I mentioned above) and that meant very few opps to move up (it was either Ops at the time or wait for a shot at Port. Mgmt. in 2 more years). I did learn a lot about workin on multiple things at once, learning stuff on the spot, and putting up with a lot of BS from the higher-ups. Ironically, I work 50% more hours now but I don't mind it as much because I think this job is a lot more interesting. But if you like a steady (albeit smaller) paycheck + shorter hours, then AM's the way to go.

3/6/08
12/9/07

What's the exit-op like at PIMCO (AM group)? What's their reputation like in the industry?

12/20/07

I have an interview for a position as research assistant for a small Canadian asset management firm. Do you know if this is a good position to start for a recent grad? The job description says that the responsibilities will be to assist the portfolio managers with model execution, data gathering, running, editing, and formating reports, assist with ad hoc marketing projects, general administrative duties (filing, booking corporate meetings, etc.).

Do you also know what kind of salary this type of position pays and the exit-ops?

Thanks.

12/24/07

If you want to do AM, then it's a good starting position. The description sounds pretty average for an entry level job. Don't know specifics about salary but you'd probably be looking at $45-55K (not sure about Canadian market but numbers above are average US numbers, particularly smaller AMs). Exit ops are limited to AM but you can always try b-school to branch out to IB/HF/PE.

If you do decide to take it, make sure to do two things: (1) Get to know the PMs you're going to help out pretty well and (2) Based on what you end up working on (bonds/equities/alternatives/etc), learn as much as you can about what your team's investing in.

12/25/07

So working in AM divisions of major banks is a bad career choice. Im shooting to be a fund/portfolio manager, where should I start?

In reply to michaelshawn86
1/20/08

If anyone has questions regarding account management/client service in asset management firms I'd be happy to help.I've been at it for two years at a major.

1/31/08

Is "getting stuck" in Ops/back office really as limiting as the dramatic language that comes up on this board? Are you really "stuck" there... banished to tedium and middling compensation?

2/1/08

People working Ops at the smaller shops are in their late 30s or mid 40s. They lead rather boring lives and probably don't make that much from doing repetitive trade settling and mind-numbing paper-pushing.

I don't know about you but if you're young and ambitious, I figure you'd like to surround yourself with like-minded people. Don't get me wrong, you'll work short hours and get paid OK, but the upside is not that great.

Just my 2 cents.

2/5/08

I took classes year-round to get out of school in three years, but after I finished all I could pick up was an Ops position (no time for an internship). I work for a larger asset manager. The young and ambitious advice above seems to be working against me; I don't think they are going to let me leave. For high-drive, what are my options? I know without the Ibanking background and after attending a non-target, my options outside of asset management are limited. What kind of exit ops can I realistically expect? The top 5% of those in my position are drafted into the Jr. Analyst, PMA, or Junior trader role after 3-4 years(depending on the area). Seems like an awfully big risk considering everyone else never leaves Ops.

I agree with your assessment above; AM seems very passive at times. Putting in your dues seems more important than intelligence or drive. Is it worth sticking around?

------------------------------------------------------------------------

The struggle itself toward the heights is enough to fill a man's heart.
-Camus

The struggle itself toward the heights is enough to fill a man's heart.
-Camus

2/6/08

You're right, AM can be passive and there's a lot of "paying dues." Few things you did wrong and a few things you can do to make your life easier:

1. You should've stayed in school for 4 years. Unless the situation's financial, there's really no reason to graduate early (you'll have the rest of your life to work).
2. Getting hired for Ops is weird because the interviewer will give your resume a hard look while those already in Ops that have been doing it for years never had to sit through a tough interview like yours.
3. You can try and get your CFA or see how much your co. will pay so you can take some classes (modeling, finance, etc.) at the local university. Try to make yourself more marketable.
4. Waiting around to be a Jr. analyst is probably not worthed as you could probably have started there if you interviewed better and/or had a better resume.
5. I think it's worth sticking around only if the company has some program to fast-track ambitious workers. If not (and it seems like the case here), I'd look into #3 and start fresh in a new company.
6. Get in touch with a recruiter.

After putting in 2 years as an AM analyst, I realized that my career path was either Ops or some jr. trading position. Didn't really jive with me so I interviewed for a diff company (and industry) and never looked back.

Don't get discouraged, just realize that there are plenty of jobs out there for smart, ambitious people (who don't drink the IB kool-aid).

Hope this helps.

2/12/08

i will be intern with GS PWM this summer, would you plz shed some light on the career progression and ext opportunities in GS PWM? and what is the average pay i will get as a starter, and several years later if i got promoted.

Thx

2/20/08

I can't comment on GS (they didn't cover us). You may be better off sitting down with HR after a successful internship. Try talking to whoever interviewed you as well. Tough for me to answer 4 super-general questions.

4/12/08

I have been offered a role in CDO compliance at an AM group with about $20bn AUM.

will you consider stil small, mid or large, they only deal in the credit markets

the emall just under 50 people with background from top banks

what are my changes of moving into a move fron t office like leverage loans or PM in 2 yesr

4/14/08

Do I think that's small or large? It's a $20bil fund, so large.

Not sure what your chances are for moving to the front office, but I'd say you may not want to go into lev. loans just yet (see WB and DB losses).

5/8/08

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