What is a Multi Asset Strategies Group?
Hello,
I’m a sophomore at Cornell/Brown/NYU and I was fortunate to get a ‘22 offer in a Multi Asset Strategies group. I did some research and it looks like constructing portfolios without actual investing. The team is under AM but can anyone give insight into the role? How does it compare to an AM role in a fixed income or equity group? If given both options will a Multi Asset Strategies Team prepare me better long term.
Bump
That's pretty neat, congrats!
Depending on the firm but some it could be in a research like function... so their role is primarily to use global trends, pick sectors and products... write about it and share with PMs or sometimes they have funds and can also invest in their own strategies/ideas
Hi, I’m wondering since they are multi-asset team, how can they invest in their own strategy? Do they for example, invest in multiple asset classes using the weight that they came up with?
Might not be relevant to you anymore, but to others who come across this topic - they can create their own custom strategies, package it into a fund, and use it in the multi-asset portfolios they run.
So, most large AMs have a Multi-Asset group of some description (sometime dubbed "Solutions"). The term is broad and can mean a lot of different things, but generally describes running investment strategies that have a remit to invest across multiple asset classes.
In practice, this can mean standalone multi-asset strategies like Standard Life's GARS / Invesco GTR / Aviva AIMS. It can also be a group that sleeves together underlying strategies from within the business to form a Fund (i.e. dynamically allocate between your own equity/bond/REIT Funds).
Generally, the common thread is that the active return ("alpha") is, at least in part, the result of the Portfolio Manager's ability to allocate between asset classes (clearly, you want to be investing in the stuff that looks attractive on a short/medium term basis and shorting/avoiding the opposite).
It's a pretty cool offer to get out of college. The upside is that you'll get exposure to a lot of different asset classes / investing styles. If you want a career in AM, this gives you a lot of flexibility and optionality further down the line.
The above is a really solid description of Multi-Asset Solutions at most companies. The focus on asset allocation for the generation of alpha is the key here. You help to construct portfolios with portfolio managers that match what clients want and that will best generate alpha.
As mentioned it's a great first job out of college to get since it gives you a lot of career optionality. You'll really enjoy it if that's what you want to do and can easily build a career out of it.
The other replies cover it quite well. To add, I think one of the main differences between Multi-Asset strategies and most other groups is their investment style. Within Multi-Asset you take a very top-down approach, and you will allocate to asset classes/regions/sectors based on macro economic trends, regional trends, central banking announcements, investor sentiment, global news, etc. Besides portfolio managers and analysts, they sometimes have strategists and economists on the team who do not manage an actual portfolio but instead determine the firm’s general investment vision while managing a model portfolio. They usually also have quants who build top-down forecasting models, etc. You mention there would be no actual investing, so the above probably applies except they only have analysts, strategists, etc.
Overall, Multi-Asset is quite different from bottom-up strategies such as FI and equities, and it requires different skill sets and interests IMO (although there is of course a lot of overlap as well). You will not find yourself going through financial statements or running financial models for an individual company. You could however find yourself analyzing/forecasting COVID trends and their effects on regional equity markets. Or how a rate hike announcement by the fed will affect markets (ideally you would see the announcement coming and position yourself favorably in advance). This all of course also depends on the specific position you have within Multi-Asset Solutions.
In most cases, one would probably need slightly less advanced financial (statement) analysis skills at Multi-Asset, and instead should be very strong at foreseeing/interpreting global trends and have a solid understanding of how seemingly unrelated segments of global markets are connected to each other. It can in my experience seem a bit more theoretical than bottom-up strategies, since there is less concrete information to go on (no 5year historical financial statements or management forecast to base your assumptions on) and you will frequently come across unfamiliar/unprecedented scenarios where you have to hypothesize the effects it will have on markets.
Multi-Asset Solutions is a nice place to begin your career. It will expose you to the full breadth of the investment universe, and you can still move to a more specialized team at a later point if this is what you want. One of the downsides is that some of the skills you will acquire may not be very transferable to bottom-up strategies within FI, equities, etc. Depending on the firm/strategy it can also be less exciting than other strategies. If you manage a fund of funds, then it could be that a large part of the risk is taken by the PMs of the underlying funds and not by you. If you only manage a model portfolio, you take no real risk at all (except for maybe reputational risk). You might also face a bit more competition from ETFs than other strategies, depending on the specific solutions your team offers.
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yes, it is highly likely that all equity investments will be done via external managers so allocating to mutual or hedge funds or on an index basis so investing in ETFs. You will with almost 100% certainty not learn much about bottom-up equity research when joining a multi-asset team
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Multi asset is usually essentially a FOF strategy that can select passive or active managers. Your job will basically be doing asset allocation stuff, which can be a good start for more quantitative or macro/economic work. It’s not a terribly exciting business, but it’s also pretty stable and the work is somewhat interesting. I did it for a bit before transitioning to fixed income, I was pretty bored and wasn’t getting paid great but it set me up nicely for the fixed income business
Hey! If you have time to give some advice, could I please PM you?
Congrats on NYU
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