Joining AM given banking crisis
Would it be stupid to join AM as an analyst right after college given the current banking situation? I wouldn't want to accept a job only to be cut shortly thereafter.
My naive take is that it seems like AM would be relatively well protected given that fees are collected on AUM and there likely won't be clients hastily trying to withdraw those assets. The only loss in fees would result in the shrinkage of the fund as a whole given the market continues to go down / lower bond valuations. Would this somewhat ensure my safety or are there other risks that I'm ignoring?
No - unless you are joining CS's AM division, in which case you might consider other options if you have them. Analysts generally aren't getting laid off at AM's, and I haven't heard much about another round. It's often a really, really bad thing if AM's are laying off incoming analysts - we aren't close to that IMO.
That said - there are sure to be some AM's that are impacted. If you were, say, invested in the AT1's of CS - that's a tough look, and not a position I'd want to be in. Same if you were overweight regional banks in credit or equity strategies, it's not ideal and performance isn't going to have been great.
The flip side is that if you are a cash or short term FI manager - this is prime time right now. Rates are high and money is in motion. SMA's probably pickup some shine as well. A few years ago excess liquidity didn't matter much when rates are at zero, now short term rates are high and 'risk' needs to be reconsidered. Suddenly people care again about the differences between owning a 'share' of an underlying pool of securities vs. actually owning the underlying (i.e. a dollar in an MMF vs. a dollar in an SMA holding Treasuries).
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