Q&A - Breaking into the Asset Management Industry
Hi! Welcome to a free-for-all asset management Q&A sessions.
Here is a little bit about myself and my background:
-Current Vice President in quantitative risk at BlackRock, covering equity iShares
-Previously spent 3 years at large asset manager in quantitative risk covering fundamental and systematic active strategies managed by some of the most reputable asset managers, including Goldman Sachs, AQR, BlackRock, Capital Group, JPMorgan, Dodge & Cox, and more.
-Spent 3 years at a buy-side asset management subsidiary as an investment analyst managing strategic and tactical asset allocation strategies with a focus on bottoms up and top down equity valuations.
-Founding member of a hedge fund working as a trader who focused on backtesting and developing volatility trading strategies and hedging techniques.
-Graduated from University of Chicago with a background in Economics and Statistics
Feel free to ask questions or have discussons on anything in regards to resumes/cover letters, interviews, certifications, career paths, and more.
I am also a mentor if anyone is interested. Please reach out!
Topics don't have to be in asset management, but this is the industry I've worked in personally.
Book with this mentor? Check his profile.
Any techniques you can share when networking?
Surround yourself around groups of people that are of similar caliber or better. A motivational speaker has once said, "You are the average of the five people you spend the most time with." If you surround yourself with a good network, it will motivate you to be a better person in all facets of your life.
Show up to all networking events at work and really put yourself out there.
Finding people is not the hard part. The harder part is making the right impression with the right people.
Some of the stuff I will say may seem obvious, but you need to be personable.
Give a glimpse to people of your life outside of work. People like working with others that are fun, exciting, and full of energy.
Be giving with your time to people at work, and others will take notice. Treat those employees below you the same way you would treat those above you, which shows maturity and leadership.
These are all effective ways to network better and to make a good impression on people, so that they are willing to introduce you to others.
In short, if you portray yourself the right way, your network will grow exponentially, because people you meet will share positive traits about you to other people.
Otherwise, you will find yourself introducing yourself to people one at a time, which is not effective use of your time. You want to make your network WORK for YOU.
This is how you build a strong reputation over time.
These are just some thoughts that have helped me grow my career and network.
Hopefully, this was helpful. Feel free to PM me if you're interested in discussing more.
Correct me if I'm wrong but seems like your expertise is spread across 2 of the broadest families of equity strategies that are the most different from each other - fundamental and quant? Why is that the case, how did you find the blend between the 2, and are fundamental people very incompatible/ different from quant people? I'm also gonna wager that the CFA prepped you better on the fundamental side of things?
iShares are ETFs right, so do you just manage and rebalance passive portfolios on your job now?
Big question here now, do you think active managers generate alpha?
The two are not mutually exclusive. There are many "quantamental" strategies nowadays that blends both. I have found that managers manage strategies across this spectrum and it is not as black and white as you think. There are many managers that use fundamental data but develop quantitative overlays on top of them. Citadel does that, as well as AQR. There are many systematic strategies that look to develop their strategies around fundamental factors, which blend both. CFA does teach lots of fundamental concepts in investing, and it is necessary to understand these concepts if you want to be a quantitative researcher in certain roles-such as becoming a equity quantitative coverage strategist at some top hedge funds. These quant roles are some of the highest paying roles that leverage concepts taught in the CFA, while leveraging quantitative modeling skills to look for new alpha signals. These roles require in depth knowledge in markets/fundamental investing, math, stats, and coding.
Also, there is a misconception that passive investing, such as through ETFs, is just rebalancing and tracking benchmarks. For example, my role entails a lot of quantitative research in product development that goes into developing new index methodologies and strategies. For example, my team has spent lots of time developing and backtesting new strategies such as the new BuyWrite ETFs, which are different types of covered call option strategies. We work with index providers to develop new benchmarks, which in itself is alpha research.
most active managers do not generate sufficient alpha over their benchmarks to cover fees. To me, this is why I find quantitative research in the ETF so fascinating. For example, BlackRock creates new products through alpha research and charge exceptionally low fees for these exotic products.
there's a lot more details I can go into but I'll leave it at that for now…
Curious to know what parts of your previous roles play the biggest parts in your day to day. Is this in factors?
I would say general market knowledge and investing know-how is the most important skillset to build for any role in AM later on. This goes a long way in any type of asset management role, whether it is portfolio management, equity research, quant research/trading, risk management, etc. You can read all the textbooks and investing tips from famous investors, but nothing beats real market experience and doing your own research. Learn how to think critically when developing new strategies and how to adapt to changing market regimes to produce sustainable long term outperformance
Aside from questions, if anyone has more detailed questions regarding landing a job in AM, please PM me or book a session through the link in the original post. I'd be happy to go over my experience as a hiring manager and how I can help you prepare better, whether it may be through resume reviews, interview prep, career guidance, and more. Resumes and interviews are critical when landing these roles. I can review and share tips, in general, on what firms are looking for.
How are the exit opps for a institutional sales role in AM? Is there a possibility to transfer to the investment side of the business? If so, how should one achieve this? Thanks!
I have had co workers join the investment side from a sales role. It may take one or two hops to make it happen. There are a few options you could go, including going to grad school and/or getting a CFA. There are other possibilities as well, including going into a back office role first in a support role. Getting a masters in a quantitative field is also an option, which can help you get into an analytics role, in order to transfer into an investment role. Most importantly, aside from a few of these paths you can take, the path and skills you highlight on your CV has to be intentional. Certain skills in your institutional sales experience are critical to highlight in your CV, which can actually transfer over to the investment side. This comes with preparing your CV in the right way. Lastly, AM interviews are very particular with certain questions they ask, as I've conducted many as a hiring manager at BlackRock.
There's a lot to go over. Feel free to PM me if you're interested.
Definitely agree with this view. Currently working for a big ETF issuer, joined through a Sales Role, and looking to make my way across the board by getting my CFA, to get back to the Investment side of the business. It's no secret that sales roles teach a lot of soft skills that are beneficial in any area, it's only a matter of displaying them the right way to get where you want !
What are the courses/degree that you would like to recommend for anyone wants learn more about quantitative investing.
What are specific areas that quantitative investing uses the most?
I used to learn few courses on coding like Python but , to be honest, I am not really into it and don't know how to apply it in finance.
I am CFA Charterholder who has had 10+ years of fundamental investing. but looking for quant skills to develop here.
Thanks for creating this thread. I will definitely PM you for coaching in the future soon as I have been living and working in AM industry outside USA but plan to break into AM in US.
Your questions are quite general, so there are many answers.
What you need to learn really depends on your existing skillset and what you want in your career.
If you want more tailored answers specific to your experience, I'd be happy to help.
This thread is aimed for more general guidance and general questions.
Without getting to know your specific experience and story, my responses will be too long for this thread and I can go on forever...
It's better if we discussed through PM if you want specific guidance on your career growth.
Don't join AM. It's a stale dead industry. Market is shrinking, fees are down. Lack of innovation
I cannot disagree with you more. Assets always shrink during fears of recession, which is where we are now. It is transitory, not permanent. It's all a part of the typical business cycle. Second, there is plenty of innovation. See my comments on new product launches that drive alpha with lowered fees. Decreasing fees in the industry is actually due to innovation as asset management companies have learned to scale their businesses, which in turn has increased quality of products, while lowering costs/fees for investors. The decrease in fees overall is due to innovation in managing at scale and increased efficiency, not the lack thereof. Other examples include innovation in the ESG space as well, and financial industry will be heavily relied upon to drive a sustainable future, because politicians are too shortsighted. What else? Robo investing is also at the forefront of innovation in AM. Plenty of quantitative research is going into this area to develop better strategies within robo advising, further democratizing investing for the masses. I can go on with many more examples. Yes, there are certain areas in AM that are dying just like any industry, such as fundamental stock pickers, but overall, the AM industry is thriving long term.
According to data and sources, organic growth in AM may be slowing but that doesn't mean it is shrinking. Your terminology is misleading. Every industry goes through periods of slower growth.
Do you think fundamental analysis still has a place in fixed income vs equity? Basically trying to find a career path that is less exposed to being taken over by quants.
I am European from a semitarget (3.9 GPA, full merit scholarship). I will do a summer internship in Allianz Global Investors (800B AUM) in their alternatives department as an investment intern in private debt.
How can I leverage this internship to get into AM in London in summer 2024? (BlackRock, Pimco..., Ardian)
Reach out to me through PM.
I can't really provide you the advice you need without getting to know your situation better.
The answer is different for everyone.
This Q&A is more for general questons about asset management.
You mentioned that you conducted several interviews already.
What would be the most common questions one should be expected to answer during an interview for an internship at an asset manager? Thank you
For nearly all AM interviews, you should expect some sort of a market question.
Usually, these are pretty open-ended, the hiring manager wants to hear you think out loud and see your critical thinking abilities.
This could be, for example, questions about inflation and market history, or where you think the market is headed and why.
They may ask you asset class related questions, in relation to factors that influence an asset's price and how they are correlated with other factors.
In quant roles, you should expect stats and coding questions, related to PCA and regressions/factor models, as well as how to use certain packages in python.
Most importantly, they want to see you exhibiting passion for the markets, and they assess this through how you use current events in your answers and thought process. Anyone can explain something technically, but if you can bring up an event in market history that is related to your answer, that will set you apart.
My background lies in strategy consulting, VC & corporate finance. I have just accepted an offer for a summer internship in the ETF Asset management field, and I'm looking for ways to develop my skills before summer. Given my background is not necessarily quantitative, I've been wondering about relevant programming skills. Overall, I want to feel to be able to shine during my summer internship, so I'm very glad to hear any tips! Do you have any advice?
What type of role are you going into in the ETF space? It really depends, although python is going to be pretty important regardless. It can be more or less important depending on the firm and type of role. Is it a PM, quant, or trading role, etc.
I am currently an undergrad sophomore at a non-target school majoring in Finance and minoring in Data Analytics. I recently have been doing a lot of research into the AM industry and find myself deeply interested in pursuing a career in the industry. Are there any specific resources or courses that are directly geared towards AM, to help build the necessary skills to secure a summer 2024 internship? What specific skills (such as modeling, valuation, excel etc.) are required, and what is the best way to go about learning them? Most courses and trainings are IB oriented. Is there any overlap from such courses that would be directly applicable to learn the skills needed for AM? Thank you so much for offering the Q & A.
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