Path to Top LO
Where do most LO analysts at Cap Group / Wellington / TRowe / Fidelity come from nowadays? Are they all still top MBA's or are more analysts hired from HF/PE?
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Yeah, top MBAs remain the path direct into Analyst roles.
Based on the most helpful WSO content, the path to becoming an LO analyst at top firms like Capital Group, Wellington, T Rowe, and Fidelity can vary. While many analysts do come from top MBA programs, these firms are also known to hire from a diverse range of backgrounds.
For instance, Fidelity is known to prefer blue-chip backgrounds and doesn't require as much networking. They are also trying to change their reputation for a low conversion rate of interns to full-time offers.
T Rowe, on the other hand, places a lot of emphasis on networking. They make a huge effort to get to know candidates before interviews, possibly to gauge if you're willing to relocate to Baltimore. They are also very focused on diversity right now.
So, while having a top MBA can certainly be beneficial, it's not the only path to becoming an LO analyst at these firms. Experience in HF/PE, a strong network, and a willingness to relocate can also be key factors.
Sources: Post-MBA Recruiting At Top Asset Managers / LOs, Big LOs, Top L/S in London and Hong Kong (e.g., Lone Pine, Viking, Coatue, Maverick, Darsana, etc.), Top HY Managers?
I think more firms are taking from their associate programs out of undergrad. It seems like this used to not really be a thing in the past, and it still isn't at some shops (D&C), but I have noticed at other shops that they are developing talent internally more. I have also spoken to some individuals who did not come from MBA but rather from HFs/ other top LO associate programs. I only saw this at one of the shops mentioned above so it may not popular at other firms.
I am going to an associate positions at one of the shops you mentioned though so I am definitely biased lol.
Here's what I noticed as an experienced research associate at a Tier 1 long only (e.g., Wellington, Fidelity, Capital, T Rowe, D&C):
I am not sure how things are for fixed income or at non-T1 LOs in terms of associate progression, so it may be more likely that there are more associate to analyst promotions.
All of that is to say that a HSWCC MBA is still the most traditional path, but of course, that doesn’t mean it’s guaranteed. Spots are limited and also depend on the market cycle. Then even in good times, some associates that leave their LOs for a top MBA program aren’t able to return. My personal plan is to recruit for a non-T1 LO or HF analyst role once the recruiting environment picks back up, then try to return to a T1 after accumulating some experience.
Great insights. Thank you so much for sharing.
I echo the Fidelity's culture piece - in your opinion if you are comfortable elaborating, is the culture projected from the Johnson family or just the firm tends to attract PMs who are of the pompous / arrogant personalities?
I have trouble believing it's a school thing because Wellington and Putnam probably are hiring from the same set of Boston schools.
Between the two, I’d lean towards it being the result of the PMs. I say that because 1) usually it’s a benefit if a LO is private, even if it’s family owned, since there is less pressure to appease shareholders and 2) there are anecdotes that Fidelity grinds the hardest (a lot of the analysts at the T1s know each other from industry events or as b school classmates).
Specifically, if an analyst has coverage that no one’s interested in or if they’re perceived to not fit in, it seems like they’re quickly pushed out. That can start with either PMs rarely interacting with the analyst or the analyst’s coverage gradually getting cut (or both), which leads to negative feedback that will force analysts to look elsewhere.
Why exactly are MBAs valued so highly? I thought an MBA is just 1-2 years of case studies and networking with almost zero enhancement of one’s academic abilities (assuming as in the case we are discussing most people already worked in finance before joining the program). Wouldn’t an associate with 1-2 additional years of work experience be a much better fit for the analyst role?
It's probably more about the marketing and client service aspect of the job, which the MBA does help with
Branding. Same as why CFA is valued so highly in LO.
Because a top MBA self selects for the skills that LO need since they can’t train as well like modeling. They predominantly look for people that have done banking and PE. It’s like asking why do MF recruit MBA students, it’s the same reason, they like students who did their two years at Goldman and PE.
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