How does research work in AM?
Hi,
I have a year of investment banking experience, but have decided equity research is a better fit for me, and is what I am pursuing.
I arranged an interview with the asset management division of a BB. My question is this - how does research work on the asset management side?
Lets say I am a portfolio manager; am I using my banks sell-side research and focusing on allocation? Do I have my own team that does its own equity research?
I am trying to prepare for this interview, but I am focusing on research principles without really understanding the process. Any input would be great.
Thanks.
Both. In some cases there are firewalls between AM and ER in the same bank tho, but plenty of PMs use sell-side research from other banks as well
Why would that be the case? Typically the firewall is between corporate and investment banking and the bank AM and sell side research arm. But why would the bank AM and sell side research have a firewall? Neither have access to MNPI, wouldn’t it make sense for let’s say an equity portfolio manager/researcher to use the banks sellside macro/economic researchers as resource for top down analysis? Or industry coverage equity researchers for fine tuned bottoms up analysis?
From what I know, there are sellside researchers who produce research and speak with clients and then there are buyside researchers in the bank AM arm who work with PMs to generate ideas.
Well, sell side research is marketed to and sold to buyside clients, including the firm itself sometimes. Take Goldman’s ER and AM arms- AM can have access to ER research, but they pay for it like any other buyside client. Kind of weird since it’s the firm selling research to itself, but they can’t allow their own AM arm to have access to info for free that other AM firms have to pay for. Hope that makes sense.
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