Long-term goal is AM. Should I start in ER or AM?
I have a full-time ER offer at a lower tier BB. If I take this offer, I plan to stay in ER for about 2 years, and then exit to the buyside, preferably at an AM firm. Long-term, I can definitely see myself as a portfolio manager.
However, I've also been getting plenty of interviews for development/rotational programs at buyside firms, such as AM arms of top insurance companies, as well as decent AM firms (ranging from $50b - $500b in AUM).
Given my long-term goals and desire to exit to AM, am I better of starting off in AM? Or should I get that 2 years of sell-side experience? Are there any advantages of starting off in ER (other than slightly higher pay)?
bump
I can definitely see myself as a portfolio manager.
- I don't know what your background is, but it is strange that you have such high confidence in your LT trajectory even though it appears you don't seem to have a strong understanding of the interplay between sellside / buyside or the broader ecosystem.
- I'd recommend you do more reading and informational interviews. Statements like these can make you come across as naïve or even arrogant.
Given my long-term goals and desire to exit to AM, am I better of starting off in AM?
- You should start in AM.
Or should I get that 2 years of sell-side experience?
- You should not bother with this.
- There's no inherent value in starting on the sell side, especially when you consider how many people try to move from the sell side to the buyside only to fail.
- It's important to keep in mind that the sell side doesn't teach you how to invest. Virtually none of your comp is tied to the accuracy of your picks and the incentive structure is such that it rewards smooth talkers who are good at doing quick mental math in their head.
- Put differently, do you think covering a limited selection of 10-15 stocks in a narrow GICs/mkt cap subsector for 2 years will teach you anything about idea generation, portfolio management, sector rotation, or any of the other hundred things that a buyside PM needs to deal with? If yes, you should seriously reconsider your chosen profession. If no, then you have your answer.
Are there any advantages of starting off in ER (other than slightly higher pay)?
- See Above.
Good luck with your decision.
So ... damn ... spot on
IMO starting off on the buy-side is better (unless you definitely want to work at a hedge fund in which case sell-side ER is *arguably* better than a long-only) if you want to work in asset management (again, assume this means long-only). However, if you have an offer in ER, I would assume that it is going to explode at some point and I am not sure that I would want to let that lapse with the hope of converting one of the AM processes you have going on. You didn't mention timing around the offer but that is definitely worth keeping in mind. I also haven't been through it myself but based on what I have seen on this site, the sell-side ER -> long-only asset manager path can be quite difficult and is definitely not guaranteed. FWIW, having worked at a very large asset manager, it was extremely rare to see anyone come in from the sell-side.
Thanks! Then why do people say that AM is a common exit from ER? I've asked about exit opps in ER multiple times, and AM is probably the top exit people talk about.
And yes, the ER offer if exploding soon, so I will probably have to take it.
Others who have sell-side experience may feel differently but I am just speaking from what I have seen. I imagine other buy-side shops (excluding hedge funds which are a different world) might be more open to those with sell-side backgrounds so your mileage will vary. The reality is that there are not a ton of seats at long-only shops and the industry is generally shrinking so people tend not to leave (at least with hedge funds there are constantly places opening / closing). This thread is a good reference:
https://www.wallstreetoasis.com/forums/breaking-into-buy-side-equity-re…
Assuming you want to do fundamental equity investing which entails financial statement analysis, you should develop that skill now in whatever role you choose to take. But I agree that AM is a better start even if you are not exposed to financial statements.
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Agreed with most of what has already been said but I would also say be careful about 'rotational' programs at buyside firms. I have seen AM rotational roles which involve relationship management, fund marketing and sometimes even performance analysis.
If it happens to be one of those rotational programs, its tough to understand whether you'll actually get any real investing experience and also presumably after the rotations you'll be put on a desk full time. If only 1/4 rotations is with a PM doing fundamental analysis etc, that's quite unattractive because even though its a good experience, there's no saying they'll actually need someone full time on that specific desk.
If I had a choice between ER and a rotational program with only an aspect of fundamental research/pitching etc, then I'd probably choose ER.
It's true that many people in ER want to jump to AM but you do learn a lot of skills on how to value a company which is the crux of AM - finding companies that are undervalued. Ultimately if you want to get to AM from ER, you can, you just need to grind harder than the rest. Of course, if the offer in AM is an opportunity to become an investor (i.e. not client bullshit) then absolutely take that one.
Only in WSO and finance circles do you see people genuinely asking 'I want to do X. Should I start in X or Y? Should I split hairs trying to get a job to get another job?'
I want to be a doctor… do you think I should become a dentist first or go straight into medical school?
can't tell if this is playing along with the joke or taking shots at me ...
Start on sell side than move to buy side
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