Equity LO vs BB Research vs Leveraged Finance
I am at the final year of my studies and I am lucky to hold three offers for September in London. One in equity research at a BB bank, one in equity research at a LO (c.$1tn size, think Allianz GI, AXA IM, HSBC Asset Management, Schroders, Alliance Bernstein etc.) and one in High Yield/Leveraged Loan research at another of the listed firms. Do you have any recommendations on what I should choose?
Based on the most helpful WSO content, here are some considerations to help you decide between Equity LO, BB Research, and Leveraged Finance:
Equity Research at a BB Bank:
Equity Research at a Large Asset Manager (LO):
High Yield/Leveraged Loan Research:
Recommendations:
Ultimately, your decision should align with your long-term career goals and the type of work you enjoy most.
Sources: https://www.wallstreetoasis.com/forum/equity-research/career-ladder-equity-research-vs-investment-banking-a-definitive-guide-part-3?customgpt=1, Allianz Global Investors Graduate Programme vs IB?, LBS vs UCL vs Imperial for IB, Career Ladder: Equity Research vs. Investment Banking - (A Definitive Guide, Part 3), Q&A: Bulge Bracket IB Analyst -> MM in Lev Finance -> Private Equity
bump
Need more info on what your goals are?
BB is sell-side ER, one of the main exits is going to be investment analysts and/or research analysts on buy-side which is what your LO is doing (research)
Really more of if you want to work in buy-side or sell-side for ER. Also, if you do want to work in HF/AM buy-side as an investment analysts - easier to switch from buy-side ER.
LevFin Research is completed different - Don't really think you'll be able to realise the exit opportunities present to LevFin from IB side - not 100% sure about it so I'll leave to others to chime in.
There is such a massive range in the proposed AMs you've listed (HSBC vs AB lol???) that it's a bit hard to say.
If the LO is actually a quality firm, I'd probably do HY/LL (as someone on BB SS ER). More future proof than equities, still interesting cos HY.
If the above is not a quality firm or you significantly prefer equities, then the toss up between LO ER and SS ER depends substantially on the quality of the firms here. If this is like JP/MS/GS/BofA ER (I know GS isn't typically considered good for ER, but for some reason, headhunters still love them) then your exit opps from somewhere like that are probably significantly better than most of the AMs you listed (which are largely mid-tier). On the other hand, if it's like Barclays or Deutsche, you might be better off starting on buyside (unless you have aspirations for MM HF).
Of course your actual experience in SS ER depends on your analyst but I'm well aware most grads aren't given the privilege of knowing that information beforehand.
The BB ER seat gives you the best chance of exiting to a hedge fund seat further down the road if that's what you desire longer term. The advantage of starting on the sell side is that you will interact with lots of buy-side firms which gives you an idea of the different strategies out there and the different personalities. generally, after a few years on the sell side, you get a good idea of the shops you would love to work for and the ones you want to avoid.
The LO ER seat is great if you want a stable (albeit slower) career path. The one caution is that the LO industry is a melting ice cube with fees under constant pressure and comp going forward will almost certainly not be what it was in the past. The culture at these kinds of shops can be quite bureaucratic and slow which might suit some people but might feel stifling for others.
I'm not sure why you went for the HY/LL seat if you want to work in equities? Personally, I would avoid public market credit in Europe. This is a shrinking asset class with private credit taking market share. If you want to be in credit, see if you can get a seat in private credit/direct lending but it's not that easy to land those seats from a public credit role.
In any event, nice spot to be in given how tough the UK graduate market is today.....I'm sure many will be envious of you! Best of luck!
Curious on your comments on public credit in Europe. What's so bad about it here? I'd think in an economy where most of the largest industries are legacy industries that use a lot of debt financing that it'd be pretty active? But that might be an ignorant take.
While HY research traditionally leans toward public credit, it is far from limited to it. Plus, the transferable skills and expertise in credit risk assessment make HY research roles highly relevant to both public and private credit domains.
Interesting conversation
Even though I’m in equity now, I’d recommend the HY/Lev Loan research role. Private credit is becoming more important due to structural changes in the financial landscape, like tighter bank lending and rising demand for alternative financing options. For those starting out, it’s a great way to gain exposure to dynamic and complex markets, while also building transferable skills in credit analysis and understanding capital structures. With institutional investors putting more focus on private credit, this area is likely to stay very active in the years ahead, making it a strong choice for long-term career growth.
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