It's about time I do another post on here and rather than go into detail on a specific aspect of the industry I'm just going to open it up to a general Q&A. The E&F (and asset allocators in general) industry is sort of a black box. Most people don't know a ton about the industry and it isn't necessarily seen as a prestigious opportunity to those gunning for the traditional IB/PE path. When I first entered the industry I didn't expect it to be a long term career, but my perspective has changed significantly. Read the links below for a general overview of the industry and some thoughts I've had on various aspects. Most of my current work is investing in alternatives (Hedge Funds, Private Equity, Venture Capital, etc.) but I can answer questions related to any asset class we invest in. Ask away. Overview: 1. http://www.wallstreetoasis.com/forums/endowments-… 2. http://www.wallstreetoasis.com/forums/endowments-… Qualities of a Great Investor: http://www.wallstreetoasis.com/forums/qualities-o… Hedge Funds: http://www.wallstreetoasis.com/forums/random-thou…
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Pay is solid. Big difference in public vs private though. Pensions and public systems are typically known for paying much less than private foundations and university endowments. Public schools will typically pay a little less than private schools but not substantially. Base pay for an entry level analyst at a place like Yale or Harvard is 70k and bonuses tend to range from 10% to 25%. CIOs can make anywhere from 750k to 5mil at most of the top E&Fs depending on performance. Most of that is incentive and I'd say base of 500k to 800k is pretty normal. MDs/Directors make 200-350k base depending on the shop you're at.
Most of these orgs aren't doing stock picking. Most of us run the Swenson model where we invest in a diversified portfolio of managers. Coinvestments are becoming more common but you still aren't doing stock picking there. Harvard is the one outlier known for their large in house arm but there are talks of closing that down. I also have heard that the Ford Foundation manages some equities in house but I don't have any experience with them to confirm how sophisticated it is.
The bschool aspect was one of the reasons I chose this job. I felt that this would be a differentiatior compared to an IB analyst. I'll be able to answer better after I apply to bschool, but I have seen a lot of E&F analysts get into top programs.
Are certain asset classes sexier? Kind of. Everyone wants to work in alternatives because of their perceived sexiness. Meeting consistently with PE and HF managers is pretty intellectually stimulating and the returns here are typically better. That being said, if you can consistently find traditional public equity managers who are ripping off >100bps of alpha I'd say that's a lot sexier.
I'd say your chances of getting into the industry is pretty equal from those two backgrounds. Traditional PE is considered more prestigious but FoF work is more relevant to what we do. That being said, if you want to jump into the endowment side I'd do it earlier if possible. Most senior people in the industry have done this for a while and I think that is in part because there is something to be said for working towards a cause, whether a university or philanthropic organization. Most people in the industry know that they could get a job doing the same type of work that pays more at a FoF or large AM, but choose to work for an E&F because of the intrinsic benefits.
Some post them on their website, others use headhunters. We are in the latter group. Networking is your best bet. I got my job by reaching out to someone who I had a mutual connection with just as an opportunity to learn more about the industry and it turned into a job. The industry is big on people skills so I'd recommend reaching out to some people at the endowments you're interested in and try and set up some time to talk to them about the industry. If you're coming from a good PE group you shouldn't have a problem getting their attention.
Secondaries and coinvetment activity varies greatly from place to place. Secondaries are less common, but still happen. We've looked at a few in my time but haven't pulled the trigger. We do a few coinvestments a year and we're probably in the 25th to 50th percentile for activity.