Getting into Long Only Asset Management?

What type of background do folks who go into LO AM typically have, and are these roles usually found after undergrad or after a few years working in a different sector within finance like IB, S&T?

I don't often hear about these roles being mentioned on campus. What is the recruiting process for this like compared to other fields?

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Based on the most helpful WSO content, here's what you need to know about getting into Long Only Asset Management (LO AM):

Typical Backgrounds for LO AM:

  1. Educational Background:

    • Many individuals in LO AM come from stellar schools such as Harvard, Stanford, Williams, etc.
    • Starting the CFA as soon as possible is highly recommended, as it signals seriousness and is almost non-optional in AM these days.
  2. Career Pathways:

    • Direct from Undergrad: Some larger firms hire directly from undergrad, but these spots are very few.
    • Post-Experience:
      • Sell-Side Equity Research (SS ER): One common path is starting in SS ER out of school and moving to LO AM after 1-3 years.
      • Investment Banking (IB): Another path is starting in IB, followed by an MBA, and then moving to LO AM.
      • Internships: Having internship experience in banking and hedge funds can be beneficial. Some prefer candidates with banking experience full-time but potentially having interned at a hedge fund.

Recruiting Process:

  1. Competition:

    • The competition for LO AM roles is intense, and the seats are few. This makes the recruiting process highly competitive compared to other fields.
  2. Networking:

    • Networking is crucial. It's recommended to grab coffee with second-year students at your school and find mentors who can guide you through the interview process and firm idiosyncrasies.
  3. Interview Process:

    • The most common interview cadence includes one or two first-round interviews followed by a super day with multiple back-to-back 30-minute interviews.
    • Take-home case studies are also common. For L/S interviews, it's recommended to have 2 long positions and 1 short position prepared.
    • About 50% of the interviews will focus on how good your pitches are, so practice is essential.

Additional Insights:

  • Role Availability: The recent wave towards IB is partly due to the availability of roles compared to LO AM, which has very few positions.
  • Skill Development: In LO AM, you are largely exposed to an investing style early on, which can be beneficial for long-term career development.

For more detailed guidance, you might want to check out resources like "dickthesellsider's" guide for interviewing on the buy-side, which is highly recommended for those aiming for a job in this space.

Sources: Breaking into long only Asset Management, Would you rather hire a junior out of IB or LO AM?, Post-MBA Recruiting At Top Asset Managers / LOs, Post-MBA Recruiting At Top Asset Managers / LOs, Does long-only active management add any value??

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Asset management doesn't typically hire from undergrad. Some larger firms may have undergrad programs or you may see it on occasion, but most firms hire someone with experience. Typically that includes sell-side equity research or IB type experience. Some go through a back-office finance role and go through the CFA program etc. Either CFA/MBA are often preferred on top of that experience. The predominant main requirement is a passion for investing. The person with passion likely will do reading and learning about investing on there own prior to the role and will go above and beyond to break in. This is a very competitive field. 

We recently hired someone out of undergrad but they are much greener than I think the people doing the hiring expected. They are adding negative value and probably will be for the first 2-3 yrs. I am guessing we won't do that again. The reason is because there is so much to learn and the stakes are high from a performance standpoint. If you are at a boutique, ideally it is better to have someone who is further up on the learning curve and can bring something to the table when they start. 

 

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