I've just started out in Long Only Asset Management after graduating from college.
To be more specific on my individual role, my role deals with quantitative investment analysis. Most people graduate to being a research analyst after about two years, after which the promotion timetable slows immensely.
The work life balance is nice and appreciated but progressing in this business (i.e. rising to the top from bottom) seems if not difficult, at least slower than other areas of finance. This is not necessarily a bad thing: it gives me a great opportunity to learn more in a few very specific areas. However, I find this a bit less appealing since I hoping in a few years time to move to a different city (I'm currently in Baltimore).
In addition, I understand that getting roles in this industry is very difficult. These roles are very much sought after and have many major benefits that other industries do not. I want to get a nuanced approach to how I should think about my own career path, even if a very cursory one, since there are fairly few examples of people who started in Long Only or for whom Long Only was not their final area of employment.
I'm curious to hear where people who started in or worked in Long Only have gone. What did your career path look like and what brought you to Long Only?
Hi marketMergerMaddie, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:
More suggestions...
You're welcome.
I realize this is old.
A few thoughts on this.
At this stage of your career you can still pivot with a strong networking hustle and a focus on learning or self teaching the relevant technical skills for where you want to land. You should prepare for any such move via extensive informational interviews, which you can do at your leisure given you have a role. That said, these are sought after roles, as you note. The fact that other people want them doesn't mean they are a fit for you but I would keep an open mind.
In terms of where you can go, other public asset management roles (e.g. hedge funds), company IR or corporate finance, LP roles like endowments and foundations, and with more work to pivot, IB, PE, and corporate finance roles are all options. You're right that the skillset is viewed as more narrow, but you will learn how to model and should be able to compete fine for these with proper prep.
In terms of LO careers would focus less on having a structured career path, when you get promoted, your title, and more on becoming the best investor you can be and seeing if this is a career you enjoy. I know people who are still "analysts" at successful funds but make seven or eight figure comp and enjoy significant autonomy and respect - many are even co-founders of successful funds, and this probably provides more happiness than a title bump.
Public markets investing is fiercely competitive. Performance, rightly or wrongly can be closely tied to an individual, and so that drives big differences in outcome, positive or negative.The delta in performance between the top people and others is very stark in public markets - a huge number of people who get these jobs won't last 5-10 years, while some will have real outlier earnings, satisfaction, and impact. I would focus as much as you an on being the latter, and I would say the best way to do that is to work with the best people you can find, regardless of the shop (or even to move shop to work with good people). It's an apprenticeship business.
I believe the ways to improve early in your career are to read voraciously, keep an investing diary to collect more data on your thoughts, process, and decisions so you can improve over time, and strive to work with the best people you possibly can. I subscribe to the "so good they can't ignore you" (Cal Newport) school of thought and would suggest his books. You might also enjoy Damsel in Distressed about a woman who had a successful HF career to understand what that path might look like - it does a good job of explaining how the role changes and a lot of it is applicable in LO (she was primarily LO in distressed credit), and she's funny.
Of course, you should aim to think hard about what you enjoy and don't and try to align on that long term. There's a lot of good stuff about that here. Good luck.
I appreciate your extensive commentary despite the age of this post. Since making that post, I've had around a year of work in LO and am enjoying the company I work for quite a lot, while still not being particularly charmed by the city I inhabit. Even having lived here throughout my youth, I find the city degraded past any semblance of recognizability from that time unfortunately. That latter point was my true impetus for making this post, and although I don't think location should significantly impact my career, I still don't love where I live. I won't address that issue here, but I figured some context would be helpful there.
Since making this post, I think that I'll want to stay in LO for at least the near term and possibly into the long term. I've considered leaving for corporate finance roles in the tech space as many have done from junior LO positions (this is surprisingly common), but want to work in this space a bit longer before even fully considering a pivot into an area so different.
As for being a better investor, I like your idea of an investing journal, that's something that I had not previously thought about doing. I've build out an additional paper portfolio, built some pitches, and keep a "sector guide" that gives an overarching view of a sector updated monthly. I've also read at least a dozen books on investing (as well as Cal Newport's Deep Work) between making my original post and today.
Having a less structured career path in LO is one of the things that daunts me the most about the space. There really aren't that many people who have done what I've done and that makes for a considerably less comfort working in this area. But I've been keen to sharpen my investment skills and I'd say that I'm a much better investor now than I was even 6 months ago. If anything, I've certainly learned a lot from the turbulent markets and I've seen pretty big swings my portfolio even in just the last few days. I've also studied the CFA and passed Level I and am signed up for Level II.
How do you go about finding the best people to work with? I do a lot of networking at my company and have become more well known to those at my company. I've gotten to learn what I like and what I don't and am going to focus myself there. If you have any insights as to the kind of people that fare specifically best from a background and personality perspective in investing vs. trading, corporate development, etc. I'd appreciate your external viewpoint as well, as most who I've talked to in the space work for my company. You're a Partner at a Hedge Fund according to your flair, so I'd figure you've had a ton of experience in this arena. Thank you for sharing your wealth of knowledge.
Is the Cal Newport book good?
Haven't read So Good They Can't Ignore You, but liked Deep Work. Fan favorite book at my current company.
Thanks bud. I need to read that.
So belatedly I'll take a stab at these questions. It's obvious from skimming some of your recent comments that you are developing thoughtfully.
I think some of what helps in thinking about paths is tempermental and also what fulfills you. Just like there are athletes who are slow twitch and fast twitch, some people (trader/marketmaker end of the spectrum) thrive on a very "caffeinated", market focused routine - the daily P&L, the sitting in a loud open plan trading floor, etc. Other people tend to be on the more slow twitch side. Some long only folks (or some allocator roles or roles) like quieter work, lots of reading, few trades, and don't get itchy about not pulling the trigger or getting feedback as fast or as often. So that's a good area to mine. Likewise, deal oriented roles like being in PE are fun for some, not for others. How calm are you about mark to market vol? How much do you like being in a team sport vs individual sport environment? How much internal vs external stimulus do you want?
In terms of who to work with, developing your sense of who is a good investor and who isn't is an art in itself and a career in itself (pace David Swensen). You should see if the logic of what people do resonates (inputs), if they generate results (output), and if they have a track record of helping people get better (a different output). I found with teaching and mentoring some people love it and others don't.
This is a very behaviorally revealing time, so worth keeping notes on who impresses you and who doesn't, and how that changes overt time. Also worth focusing on whether you are still ok in tougher times. A lot of folks left roles after the financial crisis because they realized they didn't enjoy them during the choppy times. Being good at a career involves surviving the downs and plateaus.
Part of becoming more seasoned is developing a more internal yardstick of what skills you have and need. IM generally pulls the training wheels off on this earlier than say, banking or consulting where there's more of a granular feedback culture.
At a large firm you can see many approaches to investing and to work flow among senior people. You can decompose it into what you think they're world class at (interviewing management, building a model, investing in growth stocks that are about to hit an inflection, seeing macro) and then try to focus your interactions on learning not just from the person, but on the person's most compelling skills.
A key piece is understanding that a different style of investing requires a different set of skills and areas of focus, so the two likely will develop in tandem over the course of a career. A value investor looking at financials will be more focused on asset valuations in alternative use whereas a growth person may focus more on changes in incremental unit economics. Management interviews and even the sequencing of diligence may also be different for different folks. So you can start by trying to learn the best from everyone around you, but then gradually hone to focus on the keystone skills of your own process as you evolve. Paying attention to external peers whose thought processes and porfoltios resonate can also be valuable as the world opens up more and you can go to more conferences, etc. You seem thoughtful so I suspect your career will work out in time, whether you stick with this field or not. Good luck.
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