Hi Everyone,
Wanted to get insight on which one was a better move for an ER associate, especially in a post-MIFID world?
1) working under a II-ranked analyst at a MM whose an MD
2) working under a lesser known and probably worse analyst at a BB whose an ED
The sector-attractiveness is roughly the same. My thought process is that working at the BB would be better given the current landscape, as there is less chance of comp decline and higher job security. Plus there is always the possibility of working with another analyst if this one gets canned. Any thoughts?
Tough one to answer... when you say MM you don't mean the boutiques? If it was a boutique like Exane/Bernstein/Evercore then 100% take that over BB, but I understand your predicament. Also, could you elaborate on "II ranked"? There's a difference between being a Runner Up (e.g. 6th) and top 3.
Curious as well. Have an offer for large MM bank (not boutique) under a new, unranked analyst. Is mifid going to be rough? Does it look bad to spend 1 yr, get the exp, and move on?
if that's your only option then take it. Usually you want to stay for 2 years at least before moving on (to buy side or lateral)
This is a tough decision and will actually depend a lot on what specific MM and BB you're referring to and their associated strategy with cash equities.
Some BB are pulling out a lot in the markets business in general due to low ROIC and not even being junior can save you from a layoff. II votes are going to matter A LOT in the next 2-3 years because it's the only universal measure for how valuable analysts are. Remember, we're only 1 quarter through MIFID II and this quarter is a grace period. None of the asset managers have yet to swallow the bill behind the cost of research but once they do, it'll be bad and likely worsen if industry performance doesn't pick up (asset managers are currently in a cost cutting period to lower fees amid underperformance and flight to passive).
This is obviously based on very limited information but I would personally choose the II ranked guy in the middle market firm. In my view, especially in ER, it's safer in today's environment to bet on the analyst than the firm. Your analyst is still marketable and you have good odds of being brought along with him if he gets poached by a shop with a bigger budget. Moreover, you'll get experience from someone who knows what he's doing.
It's easier to present yourself as having solid experience if you stick with an analyst in an industry even though you may have to jump firms vs being at a BB and having to switch teams/industry because your analyst got cut.
What makes this decision so tough is that the sell-side really has no clue what the landscape will look like in a Mifid II world even though we're starting to live it already, and that's because the buy-side has no clue how much they'll cut until they have some time to swallow the fact they spent $500/hr talking to an analyst.
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