I'm currently finishing up my first year on Sell-side ER (after having done a grad-scheme) and have been thinking of a long-term career in either AM (LO or L/S) or IBD (specifically ECM).
Could someone please elaborate on the pro & cons of each if interested in a long term career?
Points a care about; compensation, Stress on the Job and WLB
Hey, I'm trying to get into ER, can you elaborate on your first year? Pros and Cons? Things you would've done different/sectors that you wish you had covered instead?
Went to a target school in Europe, did a SA in m&a at a MM bank thought private markets were borinf and hated the lifestyle and hence decided to do something different albeit public markets related.
Did a grad scheme at another bank in LDN were I rotated through the Bank (ER, Sales, ECM, Sales Trading). I didnt like the ecm lifestyle back then (leading ecm bank in europe hence worked from 9-midnight + multiple hours during the weekend).
Since I still wanted to have exit opps (e.g. corp dev or VC which more eyperienced coworkers of mine have exited to) I joined ER.
I realized know that I either want to be a ECM senior (at a shitty or MM firm with a nice wlb) or buyside.
Push
Bump
My take.
LO AM:
Pros: If at a top mutual fund, will be paid well, wlb balance will be pretty good (between 50-70 hrs/wk, just a guess, depends on many factors)
Cons: outlook is uncertain, market rally the past decade has made LO a relative cakewalk but highly unsure this will persist. Might be looking at some outflows here. Greater uncertainty, more difficult entry at the real top shops and possibly lower comp in the future but expected to be still decent.
L/S AM:These market neutral strats are more typically found in hedge funds but there are some mutual funds that do L/S.
Pros: Might have higher performance based comp than LO at a MF, probably similar at an HF. These shops look for absolute returns so might be a good diversification for when the market is stagnant or experiences drawdowns. Might see more complex strategies compared to LO. Might continue to see good inflows going into the future
Cons: I think generally higher volatility assuming you're at a fundamental L/S fund I'm not actually sure. Wlb probably worse than at an LO.
Additional note: In both fundamental LO and L/S you're going to be pretty focused on a particular sector/strategy. It might take a long time to move up to Analyst level in an LO MF, which is when it typically starts to pay much better, almost feels like getting tenure in academia
IB is a pretty different animal altogether.
Pros: You have good exit options including LO, L/S AM, PE, Credit... Etc. It might be difficult (not impossible) to hop between those once you're in one esp between different asset classes. You also have all the other exit ops in Corp strat/Corp dev blablabla. Pay is great. Maybe even better than LO MF pay in the beginning (not like you will have time to spend it)
Cons: Hours are famously horrendous (80-120???), pay also dependent on performance of bank, you might have heard this year the bonus was shit but that's also true for most LO shops. (Hot take) To me the work of IB analysts sounds like it's uninteresting at best, dehumanizing at worst (end hot take). Definitely more intellectual freedom/ more stimulating work on the buyside. Pay discrepancies between IB and top AM start showing more as you rise through ranks.If you're highly unsure about where you want to land in the future, IB is a great route to keep your options open and not sacrifice much on pay.
Realized I should update this. This weekend i have realized that WLB is my biggest priority (spendibg earnibgsweek in the office isbcrazy). Fuck IB i want tp be LO AM
Well, reality is the market is efficient on this as AM will be much tougher to get into than IB. So what you want is what most others want (though I have seen my followers voluntarily go to IB from ER)
Lets see I have an interview for a junior analyst position at a LO HF next week. Its not LO AM but I guess going LO HF -> LO AM should be easier than SS ER -> LO AM
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