Deciding between BB IB and T1 LO
Am a Sydney student (UNSW) with an offer to graduate at a BB IB (think GS/JPM/MS) but also an offer to graduate at a top LO (Cap Group/Fidelity/Wellington/T Rowe Price) in Sydney.Was leaning towards IB initially, but over the last year have nurtured a strong interest in public equities.
Started writing pitches on a blog page and doing stock pitch competitions, talking to many investors, and after talking to others I've mostly gotten the feedback that accepting the LO gig is the way to go if I'm interested in equities in the LT.
The graduate pay is surprisingly pretty even (the LO pays significantly better on a per-hour basis than the IB offer).
In the LT (after 2-5 yrs at whichever role I accept) I'd want to try L/S or move to a SM/MM but that being said having the time to see family is a priority to me, so maybe LO is a good choice.Would much appreciate any guidance on the decision.
IB was always the overarching goal for prestige & branding to set up my career - do the top LOs carry similar prestige? And is now a good time to join given AI may compress grad headcounts soon?
For context: Other public equities options in Sydney I could consider include SM HFs with a good track record (MMs don't hire grads in Syd), for context.
Yes Cap group/TRP/Wel/Fid RAs carry more weight and higher prestige on buyside recruiting than BB IB as you'll be doing real stock pitch/investment memos/learning from investors. Moving to SM/MM HF is more common after RA stint than IB analyst.
Based on the most helpful WSO content, here's what you need to consider:
Interest Alignment: If your long-term goal is to work in public equities, particularly in L/S or at a SM/MM hedge fund, starting at a top-tier LO (like Capital Group, Fidelity, Wellington, or T. Rowe Price) aligns more directly with your interests. LO roles provide immediate exposure to equity investing, stock picking, and portfolio management, which are highly relevant for transitioning to hedge funds later.
Prestige and Branding: While BB IB (e.g., GS/JPM/MS) carries significant prestige and branding, top-tier LOs are also highly respected in the investment world, especially among those familiar with public markets. For someone focused on equities, the LO brand can carry similar weight, particularly if you're targeting roles in L/S or SM/MM funds.
Work-Life Balance: LO roles typically offer better work-life balance compared to IB. If spending time with family is a priority, the LO path is likely a better fit. The per-hour pay at the LO is also more favorable, which could enhance your quality of life.
Exit Opportunities: While IB provides a broader skill set and opens doors to various roles (e.g., PE, HF, corporate development), the LO route is more specialized and directly relevant to public equities. If you're certain about your interest in equities, the LO experience will likely make you a stronger candidate for L/S or SM/MM roles. Additionally, as noted in WSO threads, IB candidates often struggle with articulating investment theses, a skill that LO roles emphasize from day one.
AI and Industry Trends: Concerns about AI compressing headcounts are valid, but this applies across the finance industry. Top-tier LOs are likely to remain resilient due to their focus on active management and fundamental research. Starting at a leading LO could position you well in a competitive and evolving landscape.
Sydney-Specific Context: Given that MMs don't hire grads in Sydney and your other options include SM HFs, the LO role stands out as a strong choice. It offers a structured entry into public equities with the backing of a globally recognized brand.
Recommendation:
If you're confident about your passion for public equities and your long-term goal is to transition to L/S or SM/MM, the LO offer seems like the better fit. It aligns with your interests, provides relevant experience, and offers a better work-life balance. The prestige of top-tier LOs is significant within the equities space, and the skills you'll develop there are directly applicable to your desired career path.
Sources: Regrets Due to Finance, Would you rather hire a junior out of IB or LO AM?, Citi, Lazard, Jefferies, Fidelity, Morgan Stanley, Q&A: HF out of undergrad, ~5 years later, As my username suggests, not sure what to do...
bump
bump - curious to know
Top long only is one of the best seats in finance. No brainer.
Wait sorry would you be able to elaborate? I have fears about it being structurally declining as an industry.
I’m in a corporate IRO role and interact with HF AM and LO, and top long only is one of the most desirable seats because of that structural decline. You will not lose very much if any AUM over time and your skillset is very durable within the industry.
You also get paid well at the top, especially on a per hour basis. Assuming this is all front office investing.
I work at one of the places on the list and have interacted with our rotational program participants
If you are ok with the uncertainty of being placed on a team at the end of 3 years, or ok with ending up on a team that you might not be interested in, go to the T1 LO. The training won’t be as good as IB, but you will meet a ton of smart people and work on interesting stuff at very well regarded buyside seats. People who didn’t get placed left for HSW, other buyside seats, or other cool non buyside jobs. If you are lucky and end up on a team you like post rotations, you might arguably have tge best job in all of finance.
If you want to maintain optionality between PE/corp dev/HF, and it’s truly a top IB seat in a group you are interested in, consider IB.
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