This is a bit of a new territory for me and would love people's insights, especially for those of similar background or know of people who made a similar career change.
I started my career in investment banking at an established/well-reputable bank, doing an internship in the M&A group in my third year summer and joining the same group again for full-time. This February will mark my one and a half year IB career (ex-summer).
I've considered changing careers for a few months now, but the idea of more traditional exit opportunities (i.e. PE) isn't particularly appealing to me.
An opportunity has recently come-up to join a relatively new money management firm (around for about 5 years) as an analyst. The firm is very small (4 individuals) and manage a couple hundred million dollars. The firm's founder has been in the industry for 30+ years and sold his previous money management firm (which he had also founded) for a lucrative amount. Virtually all clients have a minimum investment of $25M.
My role would constitute researching new investment opportunities, updating presentations for investor meetings, etc.
Discussions are very preliminary and compensation has not come-up yet.
My concerns are two-fold: 1) Optically, on a resume, 1.5 years in IB isn't as appealing as 2 years. 2) I'd be foregoing a ~$100K June bonus.
Any insights on whether such a move makes sense for someone like myself who is looking for better hours, opportunity to learn first hand from someone who has been doing this for sometime, and meetings future contacts (i.e. clients worth in excess of $500M), but giving-up a good career where I have established a good reputation for myself would be greatly appreciated. Is this sort of lateral movement common? If so, why not?
Thanks, A
Well....Why not wait till June? I'm sure if you tell them you're waiting to get your bonus before you split they would understand and probably hold the position.
Yeah, agreed. If it's such a small firm I imagine they'd not have a problem holding your position six months, particularly in light of a six-figure bonus you've earned for yourself.
If they don't buy out your bonus, they have to be the Citadel of IM for you to care (though, ironically, in that case a firm like Citadel WOULD buy out your bonus in the first place).
I don't know your financial situation, but $100K would be a lot of money to me, so I'd stay at your well-reputed bank and look for other opportunities. If it's well-reputed enough, I'm sure there will be PLENTY of opps just as good or better than this one that won't make you forgo a six figure payout.
I really appreciate the insight and input. The firm is looking for someone to fill the role immediately which would result in me having to leave prior to June (should I end-up taking the job). I think ultimately, the input seems to be one of, if they cannot buy my bonus, not worth leaving.
Compensation is something which hasn't been discussed yet, but would be the natural next step.
I appreciate the help.
What kind of money management do they do? Is it asset allocation, active management, etc? What sort of risk profile do their investors have? Do they have a specialty in a certain asset class or trading strategy?
What sort of fees do they charge? $250mm is a good amount of AUUM if you're earning 2&20 like a HF but it's a lot less impressive if you're earning 1 and 0. Also if the minimum allocation is $25mm you've got a decent amount of customer concentration.
These sorts of questions really impact the quality of this opportunity-if you're a M&A analyst at a good bank you'll be able to find jobs in all sorts asset management so don't go jumping off to a startup if you can't articulate why it's the right company to be joining.
I was wondering whether it is possible to go into money management without going through IB? If so, what would you be doing?
It’s definitely possible. Some common paths are starting in equity research or manager due diligence within a bank’s AM arm. Both set you up well to go into buy side asset management.
Is it easier to get into ER or due dilligence than IB? Are the requirements the same for both?
I've read up on ER, it seems more appealing to me than IB actually. I've also read that you can transition into a hedge fund after a while from ER, is the transition likely to occur?
Besides ER or Due Diligence is it possible to easily transition to a IM firm coming from Valuations at a Big 4 or smaller IB firm? I have met on person at the firm I am interning at right now and wanted to know if this is common.
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