BB IB vs Top LO AM
Hi all, I am a US student deciding between BB IB (Citi, BofA) in an average group and a new grad research program at a top LO (Wellington, Capital Group, Fidelity). I realize this question has been asked a few times, but given the changing outlook in certain industries, is LO AM still a good place to start a career? While I am passionate about public investing, I’m also hesitant to enter this field if there is no longer a long term runway, realizing that IB potentially offers a more versatile skillset (M&A and deal experience) if an exit is needed.
Appreciate any insight & happy holidays!
Happy holidays! Ah, the classic debate between BB IB and top LO AM. Based on the most helpful WSO content, here's a breakdown to consider:
BB IB Pros: - Versatile Skill Set: You'll gain a broad range of skills in financial modeling, deal structuring, and transaction execution. - Exit Opportunities: IB is known for opening doors to various roles in finance, such as private equity, hedge funds, and corporate development. - Brand Recognition: Working at a well-known bank can be a resume booster.
BB IB Cons: - Work-Life Balance: Expect long hours and a demanding work environment. - Stress: High-pressure situations are common, especially around deal closings.
Top LO AM Pros: - Work-Life Balance: Generally better than IB, with more reasonable hours. - Intellectual Stimulation: You'll spend time analyzing companies and markets, which can be very rewarding if you're passionate about investing. - Compensation: While it may start lower than IB, successful investment professionals in LO AM can do very well financially.
Top LO AM Cons: - Industry Headwinds: Fee pressures and the rise of passive investing are challenges in the asset management industry. - Less Structured Exit Opportunities: While there are exits, they may not be as clearly defined or as numerous as in IB.
Given the current industry trends, LO AM is still considered a solid career path, especially if you're passionate about public markets. The skills you learn in research and investment analysis are valuable and can also be transferable to other areas of finance. However, it's important to consider the long-term implications of industry shifts, such as the growth of passive investing and the use of AI in asset management.
Ultimately, the decision should align with your career goals, interests, and the work-life balance you desire. Both paths offer great opportunities, and it's about finding the right fit for you. If you're truly passionate about public investing and you have an offer from a top LO, that could be a compelling reason to go in that direction.
Sources: Would you rather hire a junior out of IB or LO AM?, PM / Sr Analyst at MM HF to LO PM -- doable?, Good LO headhunters?, Work at top AM -- AI will virtually kill of entry-level roles in AM over the next 5yrs, Difficulty to make a career out of AM
*I have just recently entered this space, so definitely take the below with a grain of salt, and prioritize responses from those with more experience*
I would say this depends on a few things. First, is the new grad research program a 2–5-year Research Associate program, or a program that is known to have a high conversation to Analyst (CAP Associate, Wellington Early Career, etc.)? If the former, you could start in an IB group and exit to a research associate program after two years if you want. The opportunity to join a group where promotion to Analyst is likely (although certainly not guaranteed) is rare, and for those who are interested in the public markets, more interesting than an IB seat. Point being, take IB if this is an RA program, and take LO AM if there is a path to investment analyst.
As for the broader question about the future of LO AM, my personal view is that there will always be a role for active managers. The trends of consolidation and fee compression mean that there will be fewer seats, but there is no reason to think that the job will not still present a compelling risk-adjusted (time, energy, balance, intellectual stimulation, etc.) career option 10-20 years down the line. Returns in PE have gone down, this does not mean one should not go into alternatives. Also, one of the largest generational wealth transfers is occurring, so that seems like a compelling tailwind for the industry. If you decide to go into LO AM, be selective about the seat you take. Go to a large platform or specialized boutique, and don't get squeezed in the middle. Favor private and employee-owned structures over public subsidiaries. You will be fine.
Not OP, but joining a large privately-owned AM. What is your view on what a high conversion rate is?
Ad rerum dolore corrupti enim voluptatibus ullam suscipit. Voluptas voluptas enim voluptatibus facilis. Atque ut aliquid rerum omnis unde.
Est ut aspernatur corporis doloremque eos enim iusto. In dolor sit enim fuga tempora quaerat ipsam. Deleniti eaque dolorum placeat voluptates nulla est autem non.
Et fugit delectus qui unde incidunt est quia modi. Rerum autem voluptatem magnam aspernatur velit iusto. Id et excepturi iure. Impedit voluptas sequi non qui dolorem rerum ut accusamus. Architecto quia dolores cum qui voluptates. Molestias dolorem ad est et unde magni.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...