AM // ER — Plz help me choose

First off, congratulations on being in this position. Both of these roles are super competitive and you’re lucky to have the opportunity to choose between them.

With these jobs in mind, you need to understand that both are a result of the “Efficient Career Hypothesis” where employers will only pay enough for a desired percentage of their employees to stay, all else equal.

As a result, ER offers higher pay with more required hours on the job; whereas AM has better WLB for a sizable pay cut. A very close example to this situation is the investment banking vs corporate development dilemma (pay versus WLB). As you’ll find there is no crystal ball that demonstrates one job is a clearly better trade off than the other - rather it comes down to your own values and interests.

As someone who has decided to start a career in ER myself, I’ve always valued optionality above balance (at least to start my career). ER is essentially a hybrid between IB and AM when it comes to the pay/WLB trade off. First year ER analysts clear ~$140/150k in exchange for ~55-70 hour work weeks. ER earns less than the investment banking analysts but also have materially less hours (IB = 80+).

In terms of optionality, ER has roughly a 50% retention rate after 2 years. This is far greater than IB but obviously less than AM (as you mentioned has 90%). Most ER analysts who leave often exit to Corp Dev, Hedge Funds, and Asset Management. Most who exit to Corp Dev/AM are looking to further reduce their hours in exchange for lower comp while those who pursue the HF route value higher comp above everything else (70 hour weeks).

Obviously, there are some stories where AM guys at the senior level are clearing comp similar to IB but this is the exception to the rule and will become even more rare with fee compression in the active management space. Therefore, for all intents and purposes, I’d say AM = Corp Dev in terms of pay/WLB trade offs.

By choosing ER, you’ll earn more money and have more exit opportunities — which will cost you more working hours. By choosing AM, you’ll have materially better WLB at the expense of less pay / direct exit opps. All in all, both fields are much more cerebral than IB or Corp Dev in my opinion. Of course there are some caveats with being on the sell-side versus buy side in terms of investment philosophies and priorities but in the right environment, you can develop essentially the same skill set.

Personally, I would recommend that you self-assess how much you value optionality in your career. The more you do, the more I’d recommend trying out ER first. If you have other personal responsibilities or important lifestyles, I’d say to go for AM.