Starting career at boutique asset manager

Hi all, I am a college student who is fortunate enough to have the opportunity to start full time at a boutique long only equity investor after I graduate. The firm's AUM is in the $2-$8bn range with 5-10 investment professionals and a similar number of support staff (trying to keep things vague for anonymity purposes). They run a single fund with a specific factor orientation (although they are somewhat flexible) with a long track record and decent returns. 

The people are great -- extremely kind and willing to spend a lot of time mentoring me. Having worked with them before, I know they will give me an incredible amount of responsibility and autonomy right out the gate. WLB at the firm is very good, I find the work they do incredibly interesting, and pay will likely be decent (although we have not discussed this yet).

With that being said, I am also wary of starting my career at a small firm with no name recognition, at a time when there are sustained asset flows out of active equities. I'm worried that if AUM stagnates or declines, in the next few years I may find myself without a job or stuck in a job with below-market comp that is hard to exit from given the limited name recognition. I think there also is a minor disconnect between the firm's investment philosophy and mine (in terms of time horizon, how theoretical vs. practical their approach to investing is, and the kinds of companies / situations they like to look at), but I don't view this as a huge concern.

With that in mind, does anyone have thoughts on the pros and cons of starting a career at a boutique asset manager? What questions would you ask of the firm to go about evaluating the attractiveness of the opportunity? My other option is to start full time in IB, which I am not eager to do primarily due to the lack of WLB and relatively uninteresting / frustrating nature of the work.

Thank you!

Comments (4)

  • Intern in IB-M&A
Jul 4, 2022 - 2:09pm

Also would be interested in thoughts on the importance of AUM and AUM/head, since I don't want to disclose the exact numbers. If you were considering this opportunity for yourself, how much of a difference would it make if the firm had $2b vs $5b vs $8b? If AUM/IP was $250m vs $500m vs $750m?

Most Helpful
Jul 5, 2022 - 10:35am
Addinator, what's your opinion? Comment below:

Unless I'm missing something - it's already an extremely attractive opportunity for you. You'll get direct investing experience right out of school, a close knit group of professionals willing to mentor you and in theory the opportunity to career path yourself pretty quickly within the strategy itself. If after a few years your wants change, you outgrow your role or something happens to the strategy - odds are that you'll have professionals willing to help you find another job, and plenty of experience/skills to get one on your own. 

Name recognition in LO AM - often you'll think no one knows the firm you are talking about, and then someone does or knows someone who worked there. It's a much smaller world than you'd think. Even if no one knows who the firm is, they will care far more about the quality of your investment ideas and experience you bring to whatever your next role is. 

My recommendation is to focus on what the career path is within the firm, how that progression works and how they think about compensation across years - both good and bad years. 

Jul 5, 2022 - 4:52pm
dinganddong15, what's your opinion? Comment below:

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