Any advice on how to get in as a credit analyst/derivatives specialist without experience in AM?
I'm an incoming analyst for the JPM MMBSI program (2.5 year rotational with underwriting, banking, and treasury rotations) but I'm really trying to get into asset management (fixed income and related derivatives). Currently studying for CFA L1 and have experience where students like myself were managing part of our school's endowment ($3.5M AUM split between $2.5M equity, $750k bond, and $250k blended portfolios) and acted as Fixed income PM for the past academic year.
Now enough patting myself on the back, I'm a big derivatives nerd and really want to get into that part of FI AM but my professors (formed Morgan Stanley PM, Independent PM, and former PIMCO SVP) said that the roles I'm after are sort of a "work in risk management and use those instruments to hedge and then fall into the speculation role".
Any advice would be greatly appreciated.
Hi THYC, check out these links:
More suggestions...
Fingers crossed that one of those helps you.
B
I was in the MMBSI program and am now a junior FICC trader at a different bank (never updated my industry). First things first is that MMBSI is not IB, it is commercial banking. It is definitely possible to get where you want to go and in your case the CFA will probably help open some doors. My advice to you having been in the program is to get out after 1 year. Your experience will not be transferable in almost any way and if FI PM is what you’re after then you are much better off in a different seat.
edit: also I may not have a thorough understanding of AM, but I kind of doubt you would be doing a ton of derivatives analysis on specific names in the FI universe. That sounds a lot more like HF activity to me (not that it doesn’t happen in AM as I’m sure it does). You would probably be looking at a lot more macro derivative type instruments like IRS etc. as a hedge.
Thanks for the insight. I was definitely thinking about the 1-year-out so I don't have to repay the signing bonus. I got some more insight from professors and they said the roles I want are going to be at the big FI AM firms (PIMCO, WAMCO, Payden & Rygel, etc.) because of the sheer size of their funds and needing those hedges/exposure.
Was really hoping that the underwriting side of MMBSI will help build that credit analysis skillset/show some appeal to prospective AM firms when I start applying. I have a couple friends in JPM IB, PWM, and one going into sales & trading so definitely going to keep them close (they're just great friends too) and hope they can give me a holler if they hear anything.
I went down a similar pathway (with a few jumps in b/w) so MMBSI is achievable as long as you can prove that you can do fundamental credit / research and have a sense of relative value. Not sure (I'm European) what segment MMBSI serves but ideally you would have exposure to larger cap deals where you can talk about the public credit side of things.
Not sure about derivatives bit though - are you speaking purely around CDS, etc. or broader than that? My understanding is that derivatives for hedging (i.e. FX, interest rates, etc.) usually take place in a separate team (something like portfolio management (defined differently across firms), while the credit role focusses primarily on coverage and research of the assigned sectors.
Most of the people I know that switched to the buy side from MMBSI went to middle market private debt shops. The experience you’ll receive in MMBSI credit is far more related to that than what you’d be doing at an AM. The other issue is that if you get into a rotation that is not credit (i.e. banking or treasury) you will have 0 transferable experience. I am in agreement with the below poster in terms of how things are likely structured at an AM, but they are unfortunately incorrect as to what you’ll be doing in MMBSI. Unless you work in syndications/ABL/FSG, your exposure to public companies will be minimal. Try to get into one of those groups, and if you cannot then make sure to push solely for underwriting. Find the best underwriter on the team and sit with them as much as possible to learn the process. That’s the only way you’ll really learn anything of value in MMBSI that would translate to what you want to do.
My first rotation is in credit and I'll be starting CBAT in June and CRT in July. I heard that I am technically supposed to rotate into Treas/Banking afterwards but heard I can manufacture a workaround to do the same rotation twice by switching coverage teams. Any truth in that?
It is pretty true. I would try to do middle market credit underwriting first rotation and then switch into one of the specialized verticals doing underwriting as well (ABL, GHHN, TDC, FSG, SFG, etc.). In your 3rd rotation you’ll be obligated to do something else but by that time you’ll have around a year under your belt and can start applying. I would take the banking rotation after that because it can be very chill like 35 hrs a week and just dedicate yourself to recruiting for new positions.
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