Been a very long time since I posted on here and my perspective has evolved a lot since I had my first analyst gig out of college. Over the years I've received a lot of private messages about E&Fs and tried to respond to them all, but I'm sure I missed some. Happy to explain why working for an E&F is the best job in finance, discuss the day-to-day or career path, or answer questions for those on the GP side who don't get as much exposure to their LPs.
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Hey man, I'm a rising senior who has an interview for an analyst position with a multi-billion dollar university endowment fund coming up soon. Any advice on how to ace the interview/what to study to prepare for it?
Not every place is the same but everyone tends to follow the same themes. You'll have anywhere from 1-4ish interviews focused on fit, why investing, and why endowments in particular. If it's a smaller team you'll meet with everyone. If larger then you may only meet with some during the process. After this you'll move on to a case study that typically involves evaluating a manager or investment opportunity. I've seen everything from here is all the data from XYZ PE firm's funds 1 to 3 put together an analysis and tell us your conclusion to here are a few letters to LPs write a synopsis and your conclusions. For first part biggest things to nail are why you want to be an investor and why E&Fs specifically. For the case study have conviction in your conclusions but don't try to bs.
If you need prep read Swenson's book Pioneering Portfolio Management and then Ted Seides' book Capital Allocators. You can also listen to Ted's podcast if anyone from the endowment has been on. If not go listen to the old ones with top CIOs.
How does one break into an endowment after an MBA? Is investment banking experience nesecary?I joined the US military after undergrad. I have a competitive profile for a top MBA. I plan to return to school in a few years. And I would like to know if a path exists for me to break in. Thank you.
IB is not required. Endowments are a bit of a closed industry and breaking in initially is the hardest part. You can use an MBA to reach out to the investment office at your school about interning and then reach out to any E&Fs in geographies you're interested in to do informational interviews. Show a passion for investing and endowment management in particular and you should be able to go straight from MBA to an endowment.
what does comp progression look like in endowments and what do the hours look like?
I think hours are relatively the same across levels so addressing that first. Most people at endowments work 40-50 hours a week. It's an interesting job that doesn't have a ton of heavy hours. If you're working on private deals you can occasionally have fire drills as you typically have a deadline to make your commitment but even then you should have plenty of notice. The one outlier is at the CIO seat. Everywhere I've been the CIO works the most hours. I think that's the nature of being the person in charge of a multi-billion dollar pool of capital.
So comp really varies based on size of the endowment. One nice thing is that all nonprofit tax returns are public records and they include the salaries of the most compensated employees. At a minimum you can always find out a CIO's comp and typically 3-7 investment team salaries. For example you can see MIT's here https://projects.propublica.org/nonprofits/organizations/42103594 which has 6 team members in 7 figures. You can use this website to look at any E&F you want. Even if you only have CIO comp it's a good anchor. Some CIO's only make $500k all-in. Others make $3 million. General rule of thumb: the bigger the endowment the better the pay. All of that being said I think it groups out to the below for E&Fs with full offices. There are outliers on both ends of these ranges.
CIO: $750k to $3 million all-in.
MDs: $600k to $2 million all-in.
Mid Levels: $200k to $500k all-in.
Associates: $100k to $150k + 20 to 50% bonus.
Analysts: $60-90k base + 10% to 30% bonus.
All of this to say endowment MD is one of the best gigs in finance.
Hey thanks for doing this. HF analyst here thinking about leaving to do something a bit more chill in the next few years. Comp sounds very good given the hours but how interesting is the work? Any color on day to day, your level of enjoyment, etc. would be helpful.
Love my job and think it's the best kept secret in finance. I've done a few other posts on the day-to-day at the junior levels. Happy to answer any specific questions.
Thanks for all the above info. Currently in an E&F analyst role, and I'm curious if you have any insight into exit opportunities to AM or LO HF. Also, to advance in the ranks of E&F, what do you suggest? Put my time in where I'm at or try to go the MBA route and lateral to a better role? Thanks for any insight
Not BlueWing but used to work in the industry. I've seen exits to AM and LO HF via MBA programs (HBS/Wharton/CBS). Haven't seen too many direct exits just because it's a different job unless your E&F was running an equities sleeve or something similar.
Above comment is right. Very rare to go E&F to AM or LO HF directly, does happen though from some of the larger university endowments. MBA route is best bet if that's your goal and it'll have more to do with your stock pitches than your E&F experience.
For moving up at E&Fs MBA is by no means required. Might have some benefit on the margin if you're trying to be a CIO but until that point not necessary. Whether to work your way up at your current shop or move elsewhere is hard to say without knowing where you are. If you're at a blue chip endowment and like the team/philosophy no reason to leave as long as they keep promoting you. Better to wait until you get an MD or CIO offer elsewhere to jump somewhere in my opinion.
Hi there, I got an offer from top university endowment fund. The job is analyst role in private sector, so I am wondering what is typical exist opportunities? Many thanks!
Late question but appreciate any insights. Have an offer from a multibillion dollar foundation after 1 year at a BB in AM. What is the wiggle room on salary negotiation as it appears to be a bit low?
You only have 1 year of experience so unlikely you'll be able to move a ton plus multibillion is a wide range. If it's <$5B probably unlikely to have wiggle room on salary, maybe $5-10k? If it's >$15B there's potentially wiggle room. Use your current salary or another offer to try and negotiate but at your level it's probably not going to make a huge difference.
got it yeah, I am just trying to gauge because I like the work a lot more but it is about 10-15k less than what I currently make. How much have you typically seen a bonus at the earlier levels.
Hello,
Just finished up an internship at a L/S HF but didn’t really enjoy it and have an interview for a multi-billion $ endowment coming up. I was wondering - what makes it such an awesome job in your eyes and what types of people do you think are best fit for this role?
Also one of the things that I hated about my HF was a lack of that collegial spirit. I could spend a full 14 hour day on my computer staring at a model without talking to anyone. What is it like working an endowment? Is the work more teamwork based?
I think its an awesome job because I get to do a lot of the most stimulating parts of investing without a lot of the drawbacks. Lot of people cite meeting with the best investment managers in the world as a perk. If you spend 14 hours straight at your computer you're doing this job wrong. E&F work tends to be much more collaborative.
Hi, this is super helpful. Just out of curiosity, where do most people at the associate level come from? Currently in a debt-focused IB group, would it be possible to make the exit?
There isn't one focused feeder. Working for another endowment is the easiest route, but I have a friend that made the switch from debt capital markets analyst to E&F associate. We recruit from a wide variety of finance jobs at the junior level.
Thank you for doing this, very helpful. Btw, which do you think would be a better experience for E&F work in alternatives: direct PE investing or a PCA IB group? Trying to think strategically early in my career since i see myself doing E&F long term
Direct PE investing is a better pre-E&F job because it's actually investing. PCA IB is a good way to network but is not actually going to prepare you to be an investor. If we're talking at the analyst level I think either is fine. The longer you stay in PCA the harder it'll be to switch whereas with direct PE you could switch at almost any time.
Thank you!!
What kind of quantitative skills do you need? Let's say for someone coming in at the post-MBA level.
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