Going into Large AM (BlackRock) vs Small Hedge-Fund out of Undergrad
I am set on going into the buy-side after undergrad and am in final rounds with BlackRock, among other large AMs in NYC, and a small fund in a tier 3 city. The position at BlackRock would be in the Portfolio Management Group, in a Fixed Income desk focused on mostly global allocation. The fund is an equity long-bias with a very small team and ~3B AUM that has been performing very well for the past 15 years.
I know I would learn a lot at the small fund, and it seems like a great opportunity to have responsibility starting off, have my work be very much investing-focused and definitely make more money to start. It is in a tier 3 city (although a beautiful one) with a small amount of young people and I dont know if I could pivot in the next 2-5 years if I am not enjoying it. Do you guys see this as an amazing opportunity out of undergrad that I shouldn't miss out on?
BlackRock and other Large AMs are obviously the safer option. It's a sought-after role in a good group, Its in NYC which i favor and It would open a lot of doors. The work seems less intriguing although it is in FI which i do prefer.
I am young and want to take risks but dont want to lose a good opportunity on both sides.
Thoughts?
Asset allocation vs. fundamental research is like apples and oranges. Really depends on what you want do long-term.
I understand that, but people rarely go into research / idea-generating roles from the get-go at these large AMs. In the PMG group it would be farely easy to pivot into something like that in a year or two. Aside from that, I would have the Blackrock PMG name on my resume which could potentially land me better roles later. Even if i started in research focused role (the case with some other firms im interviewing for), I would still be in more of a support/spreadsheet role for the first year or so.
Do you think that carries less weight than going straight into something I want to do long-term?
Yes, PMG carries much less weight (or to me, no weight) if I am hiring for a fundamental analyst. You will have gained minimal relevant skill.
I expect you to come in knowing how to read a financial statement, how to model, how to read a public filing, how to ask right questions with IR or company management which I believe you learn none of that in a PMG role. All the forementioned skills can be gained if you are a performing junior person at any fund after 2-3 years (good ones are secretly or openly generating own ideas as well).
I would definitely take the HF here. $3bn is not a small fund.
I think I know the role you're actually talking about. Interestingly, I chose to work at a different AM that allowed me exposure to the research side of the business and gave me exposure beyond PMG, even though a large number of roles out of undergrad in AM are PMG focused (for the investments piece of the business).
I knew from the get-go that I wanted to do research and decided that I would take an offer there. It's worked out for me and I plan to stay at my current shop. That said, I have a good feeling if things go South at my current shop or if I want to leave, I'll be able to.
The PMG stuff isn't as transferrable between shops, but if are confident you can transfer to a research role from the PMG role at BLK, I would say it's up to you. Just note that the PMG work is not particularly transferrable and won't make landing a research role (especially outside the company) much easier.
Go do the HF job and reassess if you want to live somewhere else in 3 yrs. This is not even close if your goal is to be a fundamental investor. You‘re hugely overestimating how much the BlackRock name would open doors for you. Just believe me these middle/back office type people trying to move out of big asset management shops are dime a dozen. Nobody jeezes their pants at the BlackRock name - it’s synonymous with index investing really, not really associated with superior training ground for analysts/PMs.
Dude, what? BlackRock are effectively the most successful Active Manager in existence right now and their name carries a huge amount of weight in the AM and HF communities. There are significant network effects both from working within a Manager of that scale, and from working in NYC. I cannot possibly see how this is a no brainer, particuarly when there is a lot of risk involved in accepting a role at a smaller Fund in a more obscure city. The reality is that if you wash out or the Fund downsizes, you're effectively fucked.
I'd unequivocally say do your 2/3 three years at BlackRock, get your CFA, network your ass off and then decide if you want to take the risk on moving to a smaller/more obscure HF in a smaller city.
This is such a bad take
Did you read this part? The BLK role is in a mid-office portfolio management function, not in research. Also, $3B hedge fund that has 15 years of track record (presumably a good one) is in no way at risk of "washing out" in any given year. Though I don't know all the details, I'd guess that the client base is fairly sticky and long-term - this doesn't sound like the kind of shop that folds over 1-year underperformance.
I don't know how much experience you have in the industry, but I've been working for 7 years in NYC at large IB, large PE, and small HF. I had your perspective 3-4 years ago when I didn't know any better than "name recognition = good for career". My time with a big shop was in direct investing capacity so I don't necessarily regret it - and I would not have gotten my HF role without that credential. But the learning experience and skill upgrade you get from working with a tight group of high-performing investors is something I'd much rather lean on to build my career than hoping you can fool someone into giving you a great seat later by flashing that you worked at BLK (in an irrelevant function). People see through this stuff, at the end of the day it's about what your actual experience is and what you spent time on. If the small HF team is really solid and have a investing strategy that you could align yourself with, there is no way I'd rather be at some random irrelevant function at BLK. I'm happy to agree to disagree - yours is common advice people give to chase the brand and use it as a launchpad. Having gone through my career up until this point, I wish I had started in a sharp investing seat earlier and spent less time at "name brand" bureaucratic organizations. Caveat, this is assuming OP is passionate about investing and wants to build a career doing it. If your objective is to just get a good corporate job and make friends, BLK is perfectly fine option.
how is portfolio management middle office? don't they decide what to invest in based on the research of the analysts? sounds more like a front office role to me
Yeah wow you would be crazy to take that middle office BlackRock role over the hedge fund ... Trust me this is an obvious one, you'll be kicking yourself in a couple of years if you don't go with the latter
Also, comp progression at BlackRock is pretty bad. If you start as an Analyst, all that you're really guaranteed of is that in two years, you'll be promoted to Associate and get a ~15-20% raise from a base that already pays below Street (because you should feel so lucky to work at BlackRock)... hooray.
Go get some investing experience, build a track record for yourself, get paid, and save some money by living in what I assume is a low cost of living city if you're calling it Tier 3.
What is the typical base salary for an analyst at BLK in the division that you are talking about?
~90k base (might be ~100k now), ~20% bonus I think
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