Trying to understand the scope of disruption in asset management
I'm interviewing for an entry level analyst position for an offshore FIC MO (think DB/MS/CS) in an emerging market with a plan to pursue an MFin in the US couple of years down the line, to get into investment analyst positions in hedge funds.
I was honest about my plans with the interviewers, and although they liked me as a candidate and have forwarded me to the final round, they felt like I was a bit delusional or unrealistic in terms of setting such specific goals. One of the interviewers said that he understood my ambitions but argued that once you get into this firm, reality might be different from what you expected, in terms of available options and how the industry is doing.
Am I really being unrealistic in setting such goals? In what way? In terms of industry situation, I wanted to understand if sectors like asset management are really on the verge of disruption, through innovation and technology. For example, do you think firms like these Kristal.AI are about to disrupt traditional AM and that newbies like me should chart out career plans according to skills required for such upcoming and disrupting firms.
Looking forward to a discussion on future prospects of traditional and upcoming AM firms and skills that will become outdated or needed in future.
bump!
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The problem you'll face is it's very difficult to go from an offshored position to an analyst position at a top fund in an developed market (i.e. a fund in London or the U.S.). It's like trying to go from the Bloomberg help desk to working at a fund. As you mentioned, the best route would be for you to get a MFin or MBA at a western school in a few years and then try to make the jump, but this is well worn route by many Indian and Chinese candidates, so it's difficult to stand out in that crowd.
The entire active management industry is being massively disrupted by passive products. Basically, any active product that can be easily replicated - which is most public equity products and some fixed income products - is at serious risk of going passive. There is also a lot of pricing pressure in the industry due to this transition.
Most active managers are seeing constant net outflows and almost nobody in the industry is growing anymore. By most metrics the pace of this change is picking up. You're also starting to see a lot of industry consolidation which is leading to analyst job losses. I think the pace of this change can be debated, but the direction cannot.
First of all thanks a lot for responding. If you were in my situation, do you see any other way/routes to accomplish the goal of landing as an analyst at HFs?
My thought process is this: 1. If I really want to work towards my goal, getting into a relevant academic program in the US seems to be the only way for me to get access to networking and possible job opportunities. I'm confident about being able to get into MIT/Cornell/Berkeley MFin/MFE programs, based on my peers who made it and using them as benchmark to compare myself with. 2. This offshore experience at least gives me exposure to markets. Secondly, joining an academic program with such experience might be better than without. (Is that correct, or do you suggest that this experience might not actually be useful at all?) 3. Your point about a lot of Chinese and Indians using that same route - I guess that's the reality which probably exists in almost all industries, and that its up to me to take efforts to make myself stand out of the crowd?
Would be of great help if you could point out flaws in my thought process.
There will always be demand for strong, consistent performance. I personally welcome the move to passive. Garbage managers shouldn't be allowed to charge high fees for garbage performance. On the other hand, it could promote performance if capital were stickier (3 year horizon rather than 1 year)
How does technology affect traditional AM? (Originally Posted: 05/03/2017)
With the fast development of technology, high frequency trading and algorithmic trading have been very popular. How does this impact the traditional AM industry (fundamental analysis)? Any idea if AM firms and banks are downsizing their traditional AM divisions and shifting more towards technological and quantitative trading?
Google.com
Here's an example -http://www.zerohedge.com/news/2017-03-28/robots-win-blackrock-bets-comp…
Challenges to Asset Management industry? (Originally Posted: 02/03/2011)
I was asked this question in a interview and wasn't sure how to to respond.... I spoke about the uncertainty behind the new financial regulation, but does anyone have a more solid answer?
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