Breaking into long only Asset Management
Hey guys, so I was curious at to the various paths to breaking into long only Asset Management (think Wellington, T. Rowe, etc.). So I am thinking about doing investment banking out of college (not necessarily only to break into the buy side, but because I'd really like to try it out), and I know most people use IB experience to get into the buy side for PE/HF.
Can IB experience also be successfully leveraged to get into AM, specifically at great shops like Wellington, T. Rowe, etc.? Or does IB experience count against you since you are so detached from capital markets in a meaningful way by dealing with so much private info and not really working on idea generation?
How does this work also if you are doing this? 2 years in IB, 2 years in PE, 2 MBA and then finally AM? Or 2 years IB and then can directly move into AM?
I know the sell side Equity Research path to AM is also available, but really wondering right now if a lot of people take the IB path to traditional long only AM (not HF). Also, are there are any other traditional paths to getting into AM as well?
If you're really interested in getting into AM in the long run, consider applying straight from undergrad. Almost all of the major asset managers now have junior internship programs, including Fidelity, Wellington, T. Rowe, etc; this is probably your best shot at directly entering the space. You can also enter as a rising senior in some places.
You could theoretically do investment banking first and then enter as an MBA, and the banking experience probably wouldn't hurt you, but it wouldn't necessarily help, either. Before moving to equity research, I interned in banking the prior summer. I interviewed for a few AM firms, and I didn't get a single question asking about my deal experience, or even my banking work in general! Obviously your mileage may vary, but investing is a pretty different game from banking. Also, I doubt there would be an obvious way for you to transition directly from 2-3 years in banking to a big asset manager without business school first. Most of these firms like to grow their talent from within, so that means they mainly recruit straight out of school, rather than making lateral hires.
At the end of the day, it's really about playing the odds, and being realistic. These AM firms don't have a lot of spots-- regarding undergraduates, these big firms now hire most of their full-times from their intern class. This year, I don't think Wellington even took applications from rising seniors, because too many of their interns accepted full-time offers. Fidelity, aka the largest traditional asset manager around, probably hires 10-20 junior interns. I interviewed for T. Rowe's fixed income associate program, and they told me upfront that they were hiring 3 seniors in the country this year (admittedly, T. Rowe's fixed income associate program is a relatively new compared to others - they only hired MBAs previously). Yet despite these relatively crappy odds (compare to the 200+ class sizes of bulge-bracket investment banks), recruiting from undergraduate might still be your best chance. I've heard that the MBA classes at the largest asset managers are around the same size, if not smaller (i.e. 5-10 people).
Yes you can move from IB into investment management. I wouldn't say it counts against you as much as somebody who works on sell side ER would have a leg up.
Going IB-->PE-->AM would be very rare, as would IB-->AM-->PE. You need to pick either PE or AM. The two skillsets diverge quite rapidly so you rarely see people switch from PE to AM or vice versa. PE to AM would be more common but still infrequent.
IB is a good path to either a long only fund or hedge fund. Sell side ER is a better path but IB is still a good one.
As mentioned above, some of the larger firms hire directly from undergrad. There are very, very few spots though.
There are 2 normal paths: (1) SS ER out of school, and move after 1-3 years, (2) IB out of school, MBA, then move. So IB experience certainly does not count against you but it is standard to follow it with an MBA beforehand.
As an aside start CFA as soon as possible (can do L1 in at college) - good signal to them you are serious and I would personally say the CFA is pretty much non-optional in AM these days.