Asset Management - Analyst Path Questions
Hey everyone, looking for some quick career guidance from some AM professionals on the street.
Currently (a URM) in undergrad semi/non-target in NYC, and as of now my goal is to end up at an institutional Asset Manager like BlackRock/GSAM/Fidelity. Realizing how few spots and competitive it is to break into these out of UG, would it be better for me to do a sophomore internship at a BB in AM or in IB if I’m looking to do my real SA gig at a big AM firm. I figured if I network hard and use my current network to do BB AM for sophomore summer(while keeping a high gpa and extra curries), I would be a decent candidate for the analyst programs at one of these buy side firms? just not sure if IB would be a better move for that summer.
Side questions:
Would transitioning from 2-3 years at a BB AM arm to a BlackRock/Wellington be a natural move or do most people stay put or move to HFs?
Say if by some shot I worked at say BlackRock PMG/FMA or GSAM investment strategies through their analyst program from undergrad, would I be able to clear 100k base+bonus?
And last, kind of a stupid question but what's the difference between an MD and a PM at an AM, I thought there would only be PMs?
Thanks in advance
Wow thanks for that detailed response, would you say lifestyle in terms of hours vary by group or is it fairly consistent across all groups, say betweeen portfolio management Group and FMA at BlckRck, would 12 hrs a day be an accurate estimate or closer to IB hrs?
You'll be able to switch between BB AM and big funds, it's not like the jobs are any different, and this is probably one of the smallest factors for you to consider right now. Working at JPM AM or GS AM or Fidelity will not be that different (except if you get into the hedge fund part of the AM arm).
PM is a job description, whereas MD is a job level.
Yes, you can make 100k.
Take an investment role over trading, and trading over IB.
Thanks for the response man, quick question on the work at AM, i know it's very dependent by group, but would an analyst on an investment role be doing more modeling, research, power point? Or is it similar to IB work? What kind of work does a first year analyst do day to day? Thanks man
AM is a lot less structured in terms of hiring junior people, so they won't have swathes of first years monkeying around. It's also (as you note) very dependent on the group. If you're an analyst you'll have a bunch of different tasks, but not comparable to IB tasks. You'll most likely need to make presentations for management or your clients, and you'll get to do modelling, research and trading. Tasks are less repetitive than in IB.
Analyst programs in Asset Management, private banking or private wealth management at a top BB (GS/JPM) pay an analyst salary of 80k + 10k sign on plus bonus which between 10-40%. Do not apply for any wealth management internships as the learning curve is less steep and you do not get exposed to complex investments. There are two main careers paths: one is an investments role and the other is the banking role. For what you are looking for I would go down to the investments role and get as much exposure to the different product areas.
Yeah I'm definitely shooting for an Investments role, preferably fixed income. Im shooting for a GSAM/MS/JPMAM and hope to get good modeling and investment experience there. Plan would be to either move my way up or move to a large AM like BlackRock or a HF. Im hoping that being on an investments desk being in the thick of it all would prepare me well for any investment role in the fixed income/debt space.
Im glad that the base salary is competitive with every other FO job at a BB, and someone else previously told me that GSAM and other BB's pay 85k base in NY/SF for FO AM roles. Do you think an avg of 30% bonus would be reasonable? If at 30% then I personally feel that AM is the best combo of hours/comp I mean especially if ur pulling in 120k all in first year (including signing bonus) at 60/65hrs a week.
You want to work for a GSAM/MS/JPMAM and then move to BlackRock? lol
I would say that first year (6 months) bonus will be between 5k - 15k (max). For them onwards it is doable to get 30%. Though you have a lot of spare time while working many use it to study for the CFA exams.
Prob should focus more on networking and less on pay/hrs. A place like Fido will hire 5-15 out of thousands and most of them are coming from Ivy League or BC for their research roles.
Still taking everything into consideration
Echoing what has already been said - stop focusing on an $80k vs. $85k base and a few percentage points on bonus. Your primarily goal should be finding a firm that will groom you and a role that will help build your skill set.
Regarding lifestyle - working at an AM firm you will not see 80+ hr weeks. I'd say that 50hr is reasonable and 60hr is on the higher end of the spectrum.
Regarding PM vs. MD PM = Portfolio Manager - this is a job title that indicates the individual makes investment decisions and assists in managing a pool of assets / product(s). In this industry, a PM usually has 20+ years of experience at the lower end of the spectrum.
MD = Managing Director - this indicates a level on the chain of command. Usually the step above MDs are the C-Level executives (CIO, COO, CEO, etc). For example, your job title could be 'Global Head of Wealth Management,' but on the chain of command, you're a Managing Director.
Thanks for the input, I'm definitely going to start putting more focus onto securing a role now that I'm more familiar with the nature of the industry.
Im considering putting more of my focus on Bulge Bracket and Middle Market AM arms seeing that they have analyst programs where they bring in undergraduates and are more likely to hire then an institutional AM, and probably ER or credit research as a back up.
What would you say are the basic functions of an analyst on an investment strategies desk. Would it be comprised of mostly modeling and research? What kind of responsibilities in the investment process would an analyst have?
Undergrad recruiting isn't for investment roles, similarly, the actual investment analysts at the big active equity shops are coming from MBA programs (majority from CBS, Wharton, HBS, GSB). You need to differentiate the title, as the post-undergrad roles are for Associate programs while the post-MBA roles are for Analyst programs. Since you're an undergrad, the path I've seen most often for folks at the big institutional investors that end up in analyst/investment roles is:
IB/Consulting --> PE/HF --> B School --> IM
Capital Group does promote an associate or 2 each year from their TAP program, but getting an offer at one of the spots is both incredibly difficult, and incredibly random. You'll need to know a stock or credit pitch absolutely cold and be able to reasonable speak to 3-4 other companies that are in your personal account. To put it into context my pitch took me about 70 hours to do (form modeling my assumptions, conducting research and surveys, making the physical 1-pager, etc.) and they'll need to see you've done a solid amount of primary research to have a differentiated view from the rest of the market.
The top tier firms (T Rowe, Fidelity, Capital, Wellington, BlackRock Active Equities [debatable]) are only taking on 2-5 domestic analysts each, so the space is not easy to get into at all. Even coming from a top IB/PE/HF there's not really a direct route to joining one of these as an equity/FI analyst without the MBA step.
For compensation, I wouldn't pay attention to the support role $ that they pay undergrads (like Capital Group's TAP program). The real money comes after spending ~3 years as an actual analyst. That said, 1st year all-in compensation for new analysts ranges from ~$300k-$450k with Fidelity typically being the one to pay the most. For some of the firms, you're allowed to stay a career analyst covering a specific sector. For others, you've got a 7-10 year window as an analyst before you're able to manage a portfolio. Keep in mind that although they're both investors, these are dramatically different jobs. And at some of the firms the career analyst can end up taking home more than the PMs depending on performance.
I didn't structure this in any particular way, just went off what was on my mind at the time. If you've got follow-up questions, let me know and I'll answer as best as I can.
Source: Offer from 2 of the aforementioned shops, heading to 1.
Thanks for the post - not sure if you know, but when you say Wellington/Fido/Capital are taking 2-5 domestic analysts, that's only out of B-School and doesn't include what they take out of undergrad, correct?
Building on that - the $300K-$450K I'm assuming is post-MBA. Any idea how comp looks out of undergrad?
They're taking Associates out of undergrad, not Analysts. The associates aren't doing investments and aren't given any portion of the portfolio to do their own investments with. The roles themselves are usually more support based and they'll be doing some modeling or research to support an analyst or PM. For the 2-5 domestic analysts, these are post-MBA numbers as that is a fundamentally different role than the post-undergrad associate roles.
There also isn't a real direct line from associate to analyst/PM. It's like consulting in the sense where most of the folks are expected to leave and go do something else (HF/B-school) before you get into the industry as an analyst for the long-haul. It's very important to differentiate that the undergrad roles are NOT direct line into an analyst or PM role, whereas the analyst role is direct line to PM. You can be tossed in groups that have nothing to do with direct investments, so the number of associates that they bring on is fairly variable. If you're looking into the industry for the long haul, most of the Analysts and PMs came form MBA programs and didn't do direct FI/Equity investments fresh out of college. That said, if you can get one of the names on your resume out of undergrad, it's better than not having it when you're trying to become an analyst.
For comp from undergrad, the only one I can think of is Capital Group's TAP which was $65k base, and ~$10k for the bonus.
Capital Group TAP Program
Thanks for this super detailed post. Just wondering about BB AM arms, I know GSAM and JPAM definitely take kids out of UG through their SA class, and I know that GSAM is split between Client Solutions and Investing Strategies. Im also sure that BlackRock portfolio management Group and Financial Markets Advisory group both take kids from undergrad through their SA class. So do you mean that all of these are only support roles? If by support roles you mean making models and doing research we're on the same page, but if you mean support roles like dong back office stuff then I may be mistaken, but I'm well aware that no one fresh out of college will be doing any kind of portfolio management. I was under the impression that I could get into one of these firms through the summer analyst class and work my way up. Sorry about the confusion between Analyst and Associate, but Im specifically referring to Pre-MBA fresh out of Ug. Thank you
Yeah I mean typically the associates will be doing a lot of the behind the scenes work. You aren't going to be covering stocks on your own at this stage, but you may be paired with a sector team or an analyst or two who will have you help flesh out models, spread comps, do some digging into sellside/survey work, touch base with IR after a quarter, and help you get prepared for meetings with management teams if the company is not "front of mind" for the analyst. I work with one guy who takes his associate along on most of his trips to conferences, company visits etc, so depending on who you work with there could be some good opportunity to get in front of mgmt teams. A lot of analysts on the buyside will cover 50-100 names, so it always helps to have an associate who can keep you sharp on a sleeve of those (particularly the smaller caps). But yeah, you won't be making 'buy'/'sell' calls at this stage, nor will you really be advising portfolio managers on how they should position aside from providing some data-based "support".
Another thing to keep in mind is the difference between sell-side research roles and buy-side research roles, as it's not really all that easy to jump from sell-side research to a buyside role at all. Of my class during recruiting I don't think anybody that did sell-side research fresh out of undergrad got an offer with one of the top buyside shops. Also, the sell-side analyst roles weren't terribly difficult to get (this is for MBA). Others may disagree with the order here, but I would rank the following as the most expected paths to getting a buyside role:
1) Buyside Associate From UG --> MBA --> Buyside Analyst 2) IBD/PE/HF from UG --> MBA --> Buyside Analyst 3) Non-Traditional from UG (military, consulting, industry) --> MBA --> Buyside Analyst 4) Buyside Associate from UG --> Buyside Analyst 5) Sell-side research --> MBA --> Buyside Analyst 6) Several Years Experience --> Buyside Analyst (Lateral) 7) Anything else --> Buyside Analyst
Also for your second point, a buyside associate could be doing back-office stuff as well depending on the company. Capital's TAP for example (I constantly cite this since it's literally the only established program I can think of with regular class hirings) you can have a rotation(s) supporting client services or ops or several other business units totally unrelated to anything on the investment side. This may be different for Fidelity or T.Rowe undergrad hires, but they're all different.
Hey I’m gonna assume you got into the TAP/CAP from the way you wrote your post. That’s awesome. Any tips on the interview process, what they look for, how to prep etc.?
Many thanks!
Quick clarification point:
In AM, the hierarchy is you start as an Associate and are promoted to Analyst vs. in IB it's Analyst promoted to an Associate.
Small point, but I saw some confusion with this. Also from speaking with someone I know at one of the big AM firms you mentioned I can tell you that they hardly recruit from Undergrad at all. In fact, they barely hire MBAs. Obviously this is specific to the one I'm referring to, but they generally only hire people with industry experience.
Thanks a lot for that clarification
Do any of you know what it is like to work at insurance investment divisions? Prudential Fixed Income? New York Life Investors? MetLife Investments?
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