Can someone make a LO AM tier list?

Seems like on the IB forum people are making prestige rankings every day. I know those get shit on, but they've actually been very helpful to me as an undergrad in terms of understanding where each firm falls in the ecosystem. It would be helpful to get a better picture of the reputations of different firms in AM, and I haven't been able to find anything comprehensive on this forum.

As I understand it, firms like Fidelity, Wellington, D&C, and RCG fall in the top tier. But which firms are a notch below? How would places like Weiss / Putnam / Brandes / Third Avenue rank? Who's in the middle tiers? Where do BB AM groups land? I'm approaching this from the perspective of an undergrad looking for summer internship experience.

Comments (93)

Jul 12, 2021 - 7:14pm
Anonymous244729, what's your opinion? Comment below:

Same with Dodge and Cox. Top tier shop but very few spots even compared to the others I believe 

Jul 12, 2021 - 8:04pm
jackwestjr, what's your opinion? Comment below:

Can't comment on a lot of the firms you've mentioned, but in my mind, "Tier 1" includes Fidelity, Wellington & BlackRock.

Haven't dealt with them much, but Wellington strikes me as an extremely well run operation. BlackRock have unparalleled scale, although I've heard mixed things about the culture.

Honestly, when it comes to interning I don't think it matters *that* much. Although very superficial, one way you can kind of judge an AM is by the performance of its own stock price. There are a handful of AM's whose stock has eaten shit and in many respects, this reflects the state of the company. 

  • Prospect in IB - Gen
Jul 13, 2021 - 11:53am

Forgive my ignorance but what kind of active stuff does blackrock do? I know them by ishares

Jul 15, 2021 - 7:06am
princepieman, what's your opinion? Comment below:

Like.. everything. equities, FI, RE, PE, quant etc

Array
  • 1
  • Intern in HF - EquityHedge
Jul 13, 2021 - 6:51am

Can anyone shed some light on RCG? They sent out a recruitment flyer to clubs at my school and seems like everyone got dinged. 

  • Intern in HF - EquityHedge
Jul 13, 2021 - 9:18am

They have very few spots in a given year (sometimes none) and pretty much only give offers at a handful of top schools, so that would make sense

Jul 14, 2021 - 9:41am
Anonymous244729, what's your opinion? Comment below:

Kinda. Maybe you are referencing the valeant investment? Fund I think has been around for something like 100 years maybe. Probably has made some big mistakes in the past like vrx and may make mistakes like that again in future but overall is still probably regarded as a respected, good, quality fund imho

Jul 13, 2021 - 7:01am
alltid.rakbladsvalsen, what's your opinion? Comment below:

If any veterans / anyone has any insights, i'm curious to hear about the positioning of $1-2 Trillion AMs such as T Rowe Price, Invesco, Amundi, etc in the tiering structure. These $1-2 Trillion AMs don't seem to be talked about as much as the typical BlackRock, PIMCO, etc around here.

In addition, the differences between Bank, Pure-play & Insurer AMs will be great information to this forum as well!

  • Associate 1 in AM - Equities
Jul 13, 2021 - 9:53am

T Rowe is likely considered in that top tier. Invesco is too passive, so likely closer to the middle of the pack. I don't know enough about Amundi.

In terms of BB AM, JPM AM is highly regarded. They probably belong in that second tier. However, the others are not as great as independent AM shops IMO.

Jul 13, 2021 - 10:04am
Anonymous244729, what's your opinion? Comment below:

This overall good. Trowe prob on par with fidelity. Jpam can be there but Might be hit or miss. Prob overall is on par but sometimes can be a bit lower maybe idk

Jul 13, 2021 - 10:42am
alltid.rakbladsvalsen, what's your opinion? Comment below:

That's interesting. Going by what I read online, Invesco has 70%+ AUM in Active (>$1T) and their funds has been returning well. Their 1Y stock performance has been pretty good as well. Just wanted to hear your thoughts on why they belong to mid-tier status given that you work in AM. Perhaps there's something I'm missing out?

  • Intern in AM - FI
Jul 13, 2021 - 12:01pm

This has been well covered before (See: https://www.wallstreetoasis.com/forums/top-asset-management-firms). It's very hard to rank large AMs as their forte varies by asset class and strategies. However, have recruited intensely for large AM undergrad seats for a while and the general consensus across the street (including culture, comp, and difficulty to land a seat) is:

Equities: 

1. Capital Group, Wellington, Fidelity, BlackRock, Dodge & Cox, T. Rowe, GMO (top value shop)

2. Putnam, Amundi, Franklin Templeton

Fixed-Income: 

1. PIMCO (in a league of their own)

2. TCW/DoubleLine/Nuveen/BlackRock/PGIM

  • Analyst 1 in AM - FI
Jul 13, 2021 - 12:36pm

In fundamental buy-side equity research roles directly out of undergrad at one of the Tier 1 shops above, this was my comp progression: 

Year 1: $85 + 20K bonus

Year 2: $90 + 45K bonus

Year 3: $115 + $75K bonus

Analyst (expected): $275K + 100-150% bonus

My PM this past year: $10M 

Partner: The moon

  • Analyst 1 in Research - FI
Jul 28, 2021 - 10:57am

I think the other poster might be in a bit of an exceptional position. I am in fixed income so my numbers might be slightly lower, but I think much more realistic comp progression is:

85-95k first 3 years, 25-50% bonus

100-150k 3-6 years, 25-50% bonus

Around this time you might get promoted to analyst

150-200k, 50-100%+ bonus

  • Analyst 1 in IB-M&A
Jul 14, 2021 - 12:46pm

Would add MFS to the above lists on either tier 1 or 2- flies under the radar a bit but I believe AUM is same ballpark as Wellington. Know some senior people there that absolutely rake in comp.  

Jul 16, 2021 - 11:35pm
brianfatcow, what's your opinion? Comment below:

Yes, specifically insurance in house investment arm that are investing premiums from insurance products in LO fixed income, not mutual fund investment team. Thanks.

  • Prospect in IB-M&A
Aug 5, 2021 - 4:21pm

Yeah I'd also be interested how these rank. Relative to each other, are they all in a similar tier? Are any particularly strong / weak? How do they stack up to a Franklin Templeton / TCW type shop?

Jul 18, 2021 - 12:51pm
Distressed to Impress, what's your opinion? Comment below:

This will obviously depend on what company you are at as some insurers are more reputable than others. I think this is not a bad place to start but have anecdotally heard it can be more ALM driven and not as much actual investing and analysis as a actual AM team would be.

Jul 21, 2021 - 6:25pm
westcoastbum, what's your opinion? Comment below:

>.75bn/investment professional imo. not sure how this would size up to others opinions though so curious to hear from more people.

Feb 14, 2022 - 3:50am
whatsgucci, what's your opinion? Comment below:

Firm I work at is in that ballpark, just over $1b per IP (analysts, traders, PMs)

  • Intern in ER
Feb 7, 2022 - 3:40pm

PIMCO has 2.2 trillion with ~600 IPs is $3.6bn per head including research analysts. FI fees are less but damn the comp must be crazy at the partner level.

  • Research Associate in AM - Equities
Jul 21, 2021 - 8:30pm

.

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  • Associate 1 in AM - Equities
Jul 22, 2021 - 12:51am

Good effort, but there's a few I would change. Wellington and T Rowe Price are in tier 1 without question. They both make arguments for the best period.

I would move Ark invest down to low end of two, maybe tier 3.

Switch MFS and Brandes. I think Brandes is a good shop, but from what I've seen their performance has been subpar over longer periods of time. Strong brand though.

  • Associate 1 in AM - Equities
Jul 22, 2021 - 9:17pm

Way off bro…if you're not familiar with the landscape why make a list? Putting Wellington in tier 2 and Ark in tier 1 seems pretty laughable. I would also add that this whole "closet indexer" jab as a sales pitch for smaller firms is misguided and exhibits a lack of understanding of what these firms actually do IMO.

  • Research Associate in AM - Equities
Jul 28, 2021 - 1:58pm

What's everyone's beef with ark? I've heard their returns are good but also seen people say they are kind of like bubble/hype investors. Wood seems like a fairly smart person who made a pretty good call on TSLA, but idk enough about her to really pass judgement.

Most Helpful
Aug 11, 2021 - 12:54pm
confused_yuppie, what's your opinion? Comment below:

D&C has had a pretty shitty run for the last decade or more - just check their fund performance. Capital Group with all due respect is a closet indexer (2.3T AUM - you have to) and performance for most funds has been suggestive of that, as is obviously Blackrock and Fidelity (both FMR and FIL, though FMR tends to have a better reputation and less turnover).  Ark, you mean the "disruptive tech" a la Softbank ETF provider? 

MFS, T.Rowe is no worse or better than Fidelity, Wellington or Capital Group in terms of quality or process of research. I know people who work at those shops and let's just say I'm fairly familiar with the way they structure their teams/process. They all think they're super different but when you do a head-to-head comparison it's like comparing different flavors of chocolate ice-cream.

Since you're going to pretty much do the same kind of analysis at all of those shops, I'd just focus on the staying power and economics. Generally, the bigger the fund (and better the flows) the better the staying power, because they clearly know something about distribution, which is the lifeblood in this business. You get paid for AUM, so your job as an analyst is to put in good enough performance to mitigate outflows and help your distribution people sell better. As long as you keep your fees steady and closet index, your total revenue is going to grow at whatever the market is growing, sometimes 10-20% p/a. Not bad, if you ask me!

The economics is very easy to figure out. (AUM * Average Fees)-Fixed Costs = profit formula for a typical asset manager. Suffice to say places like D&C or CapGroup or Brandes with partnership structures are on average better deals for top employees than places where your comp falls strictly under the fixed costs bucket like Fidelity (would love to be Abby Johnson though...). People tend to like dividing profit over investment headcount, which is a good calculation to start with, but I can tell you from firsthand accounts that the distribution of $$$ in a partnership setup is anything but equal - even among partners.

Aug 11, 2021 - 1:11pm
westcoastbum, what's your opinion? Comment below:

This is a great comment with fantastic insight into a fundamental characteristic of this business. Great job breaking it down; out of curiosity, do you personally have an opinion on if it's better (from a career perspective) to work at a mega manager or "boutique?" More specifically pertaining to the economic scaling as a product of AUM you already mentioned. Naturally, huge managers (TRowe, Fido, etc) have more total AUM so people could get the potentially wrong idea that you will inherently get paid more here; beyond the AUM or Profit / investment professional headcount metric, what else would you bring up as identifying characteristics?

  • Intern in IB-M&A
Jul 21, 2021 - 8:38pm

Could someone post a list specific to London? I've looked up Wellington on Google Maps and their building looks very small. Are there any large AM firms that are mainly operating out of London?

  • Prospect in IB-M&A
Aug 11, 2021 - 9:38pm

What does vanguard do on the active management side?

Oct 8, 2021 - 10:04pm
Jaypeaches, what's your opinion? Comment below:

For Equity Mutual Funds: 

Tier 1: Capital Group, Fidelity, T. Rowe, Wellington

Tier 2: MFS, Dodge & Cox, JP Morgan AM, Brown Advisory, Janus, Franklin Templeton, First Eagle, Artisan, Goldman Sachs AM, Morgan Stanley IM

Tier 3: Invesco, Putnam, Bernstein, Columbia, Eaton Vance, Federated, Oppenheimer, Lord Abbett, TIAA, Nuveen, Neuberger Berman

Tier 4: The Boston Company, Calamos, Loomis Sayles, Amundi Pioneer 

Feb 7, 2022 - 4:10pm
boom12345, what's your opinion? Comment below:

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  • Research Associate in AM - Equities
Feb 19, 2022 - 10:59pm

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Oct 9, 2021 - 1:48am
Jaypeaches, what's your opinion? Comment below:

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  • Analyst 2 in HF - EquityHedge
Feb 6, 2022 - 3:56am

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