Question from Student Regarding Top LO Managers
Hello All, below are a few questions that I would appreciate any insight on:
Will I need an MBA to recruit for a top LO seat (Capital, Wellington, D&C, etc)?
Do these LO managers have more AUM in equity or credit?
How would the compensation/progression differ between an equity or credit seat?
Do any have in-house HF strategies?
Best way to network in the industry? Thanks in advance!
Ahoy there! Let's dive into your questions one by one:
MBA for Top LO Managers: While an MBA isn't always a strict requirement for a position at a top long-only (LO) asset manager like Capital, Wellington, or Dodge & Cox, it can certainly be a feather in your cap. These firms often look for candidates with strong educational backgrounds, and an MBA from a top program can provide a significant advantage. It's also a great way to build a network, gain exposure to different investment philosophies, and develop a deeper understanding of the financial markets.
AUM in Equity or Credit: The allocation between equity and credit AUM can vary significantly from one LO manager to another. It often depends on the firm's historical focus, investment philosophy, and the market demand for their funds. Some may have a larger equity portfolio, while others might be more fixed income (credit) focused. You'd want to look at the latest financial reports or fund fact sheets of each firm for the most accurate information.
Compensation/Progression: Compensation and progression can differ between equity and credit roles, often based on the performance of the funds, the size of the AUM, and the individual's contribution to the team. Equity roles might offer higher compensation due to the potential for higher returns, but this is not a hard and fast rule. Credit roles can also be quite lucrative, especially in high-yield or distressed debt markets.
In-House HF Strategies: Some LO managers do have in-house hedge fund strategies. These can range from traditional long/short equity to more complex strategies like global macro or event-driven investing. It's best to research each firm individually to see if they offer such strategies and what their focus might be.
Best Way to Network: The best way to network in the asset management industry is to be proactive and genuine. Attend industry conferences, join investment clubs or societies like the CFA Institute, and reach out to professionals via LinkedIn or alumni networks. Remember to be respectful of people's time, be curious, and always follow up with a thank you note after a conversation.
Remember, networking is about building relationships, not just collecting contacts. Be someone who adds value and shows genuine interest in the other person's work and insights. Keep swinging from vine to vine, and you'll build a strong network in no time! If you need more personalized advice, feel free to reach out. Keep climbing to the top!
Sources: In Search of Wisdom, Switching from 'Industrials' to 'Restructuring'., Some Thoughts on Networking, https://www.wallstreetoasis.com/forum/asset-management/qa-breaking-into-the-asset-management-industry?customgpt=1, The Best Networking, Cold Calling and Cold Emailing Posts on WSO
If you are still in college, you can try to apply to associate programs. Placement out of these programs is iffy so there is a good chance that you'll need to get an MBA after completing the associate program.
Once you're out of college (and trying to break in) the MBA is a much easier route. At my firm for every new person without an MBA there are probably 3-4 with an MBA. It is definitely the more common route.
There are some LO's with HF strategies. I know Wellington has a couple LO products, not sure who else.
In terms of networking, it's difficult. I personally don't really have any influence on hiring at my firm, so I find it annoying when people reach out to me. I understand it, and I've been there, but I don't like the typical "I want to learn about..." LinkedIn message because at the end of the day I know they want a job and I can't really help much anyways. I generally prefer if the person messaging me just straight up says that they want to work for firm x. That being said, if someone was truly differentiated, I'd maybe put them in touch with the right person that can actually help. If you sent me a stock pitch I'd feel obligated to respond just on the basis of you putting in the effort when nobody else does.
Also please for the love of god have a decent resume and don't add things like "political activism."
del
From my observation, MBA helps dramatically as most of the top shops recruit from there regardless of pre MBA experience. I would imagine you have a leg up if you work for the firm out of UG for a few yrs, get the MBA, and recruit back. Assuming you were well thought of at the firm, I would think that would be a big advantage. That said, you still need to get that MBA from a good feeder because that's who you're competing with. I imagine an occasional stud is moved along without but it's rare.
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