Can an early 30s generalist get into the investment industry?
Happy holidays!
Long story short, is it too late for me to get into the energy investment industry?
I’m an engineer with a masters in management with a focus on energy, which is my passion. Never found the opportunity to work in the investment field where I live. Worked in oil for a bit and left when I realised that I won’t be able to work investment in the future. Started a company to learn about business (the hard way, rookie mistake) and unfortunately after 3 years the business failed.
Soon afterwards, a company asked me to analyse their business, troubleshoot the issues they were facing, and find solutions for them. I LOVED doing this. I spent hours upon hours investigating, analysing, and developing products for them, and they liked the end result.
Now, in your opinion. What do I need to be able to pursue a career in energy investment. It’s been my passion since college and I’m lost at where to begin.
Should I pursue an MBA? Or learn online and hope that my story is compelling enough to get myself an interview at a fund?
(Sorry about the long post)
There are a few things to unpack here.
1. The way you described solving the problem for that company, maybe you should consider consulting. Not MBB, but some form of specialist consulting. That would be the path of least resistance if you have the right credentials under your belt.
2. When you say investment, what do you exactly mean? If you say private markets - I think you are a little late to the race. If I was in your position and not going to a top-5 target school for my MBA, I would not be really hung on that goal. If you say public markets - you still might have some shot. But then, again, you need some solid background with it. Even in public markets, there are so many strategies, fund structures, asset classes, and even roles to consider. Get a primer on these and find out the path that would be easier to get into. It's easier to navigate within these job markets than it is to break into one.
If I were you, here's what I would do:
1. Get my CFA: Get all the financial theory in one structured format, plus show my employer that I have some basic understanding of what I am doing, and the fact that I can grind through a few hundred hours.
2. Target an MBA: If you are sure you want to manage institutional capital someday, focus on getting that MBA as soon as possible. I would focus more on the location of the program, than on the number of applicants it places into IB/PE/HF. The people who go from B-School to major firms already have conventional profiles for such roles. I would prefer being in Texas and get into one of the several smaller funds/banks, instead of targeting the top of the bracket. Focus on schools that are good for candidates who are switching careers. And, become a networking ninja on LinkedIn.
3. I would also focus on getting into family offices, and even consider wealth management. I know it is more sales and less investment management - but hey, it gets you in the door, when everyone else might be quite sceptical about even considering you.
4. Start investing - at a small scale or with a traceable paper-portfolio. Now, most paper portfolios do not support transaction costs and hence the returns are a little bloated but they still show the credibility of the idea. This is something you can start immediately and keep in your back pocket to pull out in an interview or networking call.
Lastly - if you are focusing on energy investing right now - you have to be very sure about what you are doing. Investing in energy at this point can be a career risk. Just a few weeks ago, BMO shut its energy teams in the Houston or Dallas office, if I am not wrong. So, you can focus on the renewable energy side of things but that is more of infrastructure and less of energy, in my opinion. If you find project finance interesting, explore that as well.
You are actually on track with the idea that you should target the vertical where you have some expertise and tangible experience. Too bad, that vertical has been going through some systemic shifts in recent years. Anyway, may randomness be on your side. Cheers!
THANK YOU! I honestly couldn't begin to describe how grateful I am. You really put things into perspective for me in the most straightforward way possible!
I totally understand why the energy field has gone through these shifts. Luckily, for me, I focused more on renewable in my masters haha!
What I meant by investment were two things:
Investing in energy projects (renewable energy and natural gas mostly, since I don't believe oil prices are going to recover to their pre-2014 levels in the long term) and technologies. whether through the equity market or by investing in the businesses themselves, and
VCs. I thought since I have an experience in building a business and failing I can vet startups and the demand for their products/services and leverage this knowledge into identifying good investment opportunities for my employer.
After what you said I started to narrow down the paths which I could break into. Again, thank you so much.
Quick question, is it normal to pursue an MBA after finishing level 1 of CFA? Or does that come across as being distracted?
To answer the question - nah, clearing CFA L1 would not cause any distractions to your application. In fact, till you clear CFA L2, you would be in a 'common club' of people who want to break into finance. You would be surprised to see people already having the CFA charter under their belt, sitting in your MBA class. CFA is good for some added bling on the CV and an efficient source for learning more about investments & portfolio management. MBA is still the way to go for adding brand equity to your profile, networking, and getting a breathing room for two years since you are not grinding at your job and working on a transition.
VC and growth equity are not that easy to break into either. I think you would have a more fulfilling time at a shop like Kendall Sustainable Infrastructure (read about them at www . kendallsustainableinfrastructure . com, without the spaces ). It's a PE firm that invests in renewable energy and sustainable infra projects. I have nothing to do with the firm; got to know about them on some podcast.
You should also look at finance roles at renewable energy firms - something that is still close to project finance or even FP&A. You can also keep Big4 roles focusing on infrastructure advisory on your radar; these would be reasonably easier to get into and will put you on a trajectory of building expertise. No clue how will that help you get into investing; but it's still something closer to where you want to be.
On an unrelated note - check out the Project Finance Institute. They have started a program on project finance; it's expensive, in my opinion, but seems quite interesting. There's also a Project Finance course on Coursera, offered by Bocconi. But it focuses entirely on the bank's perspective as a mandated lead arranger in a syndicate of banks.
You should also check out the Project Finance & Infrastructure Journal and the Project Finance International websites. They have a ton of deals data and league tables. Start building a database of companies that are deploying capital and investing heavily in projects. If I were you, I would start networking with people primarily working at these companies. Most of them are infra lenders.
Now that I think about it, once you lock-in on where you want to be, there would be several ways for you to explore. On yet another unrelated note - I heard Jim Chanos talk about over-capacity in renewable energy in the USA. Check that out for fun!
Cheers!
Thank you soooo much for the information and the suggestions!
I think the right thing to do right now, as you said, is to start in a financial position that is related to this specific vertical and to simply explore my options as I build my experience along the way. Of course after CFA L1 at least haha!
Thank you for the Kendall Sustainable Infrastructure suggestion!! I just checked them out and I REALLY like what they are doing. You are right about the financial roles at infrastructure advisories. This really expands my options more than I have thought before posting the first question!
You are right about how pricey the PFI’s course is! I have a year-long subscription to Coursera, so I will certainly add the Bocconi Project Finance course to my curriculum, thank you!
About Jim Chanos, THAT is super interesting! Side note, his financial fraud detection class sounds pretty interesting.
Again, thank you so much! Cheers!
Ya. I found the course-outline for Chanos' class. I am just waiting for Yale to someday upload the entire thing on Coursera. But I doubt they ever will.
Cheers, mate!
Same here!
Thanks again 🙌🏼
Cheers!
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