Dreams of L/S role. For now, UBS ER vs no-name AM LO?
Fresh grad here. I have two offers that I am torn between. One from UBS for equity research and the other from a boutique LO AM (20B aum). Obviously joining the boutique would mean that I will be joining the buyside directly which is exciting. I’m just worried about their size and their name which is not widely known on the streets. Joining UBS on the other hand, means that I will be working at a BB (not that this impo to me but maybe to HF recruiters) which is relatively respected within the ER space and a big name generally, but with a sell-side mentality which sometimes gets eyerolls from HF peeps. I graduated from top target and believe in my potential to move to a L/S equity role in the future. Which of these do you think would offer me the best chances to do so?
Is $20bl AUM really no name?
If you're dead set on L/S, then the UBS ER likely preps you better for the role (assuming you are trading the qtr or 6 month time horizon) but personally I don't know anyone would take a SS ER candidate over a buy-side candidate for a buy-side role
In AM I believe so, if compared with the likes of Fidelity (4.9trillion aum)?
From what I heard SS ER is not looked at favourably by buyside, especially given the motives of the job which is to direct sales to the trading floor. If you’re saying that not many would prefer SS ER over buyside candidate, why do you think I should take the UBS role over AM which is buyside/investing-oriented? Although, to add, the AM invests based on 3-5 time horizon.
Lol do not compare on an AUM basis. Let me put it this way, among BB's you have top tier firms like Morgan Stanley and Goldman. In flip side, you have top EBs like Evercore / PJT / Lazard. Is one objectively better than the other? No, they're just different and both can have great comp and lead to great exit opps
Similar story in AM. Top large managers include T Rowe Price, Capital Group, Wellington, etc. But you also have top tier small managers ($10bl-200bl AUM) as well -- I don't know what your shop is so not sure if it really is no name, or if it's a well respected EB. Ruane Cunniff for example is a smaller manager ($30bl AUM) but very well respected, as is Harrris Associates (I think $70bl AUM), etc
At every major MMHF, there must be 10 sell side ER hires for every 1 hire from LO.
Sure, sell siders aren't perfect. But there are several common traits in many LOs that are much worse: 1) not having shorting experience and 2) hiding their underperformance behind a "long-term horizon" and 3) lower intensity/work ethic.
I generally agree with this but, as someone who has worked both at a MMHF and now at a very much not rigorous / intense, "long term oriented", long only, it's also because I would never go back to the MMHF world, even though I'm probably making $0.60 on the dollar, for now. SS ER at the associate level (never worked there but interned there in UG) is just a miserable, low quality job so ofc people are trying to jump from there.
UBS ER if Europe. Pretty sure you’ve made multiple posts about this. ER is fine for L/S, a quick LinkedIn search would yield this
You want to be a known quantity to a fund looking to hire a junior. ER is one of the most common places to hire from particularly at the pods - it is the correct choice. You don’t get brownie points for taking the uncommon path, just more skepticism if their training is subpar.
Do your 1-2 years at UBS and swap to the buyside, it’s very straightforward
ER very common yes (mostly if under good analyst which you don't get to choose), IB even more desired. You're right about the training, at UBS it will definitely be better.
Very surprised by the comments so far. If you want to be in the buyside, take the role in the buyside. There is no point in doing SS ER, you’re not learning how to be a better investor. Buyside firms will value buyside experience more than sell side experience 9 out of 10 times, plus it’s no guarantee you will even make the jump from sellside (people think it is guaranteed - it is not). Actually doing the work on the buyside will be better training than anything you would be doing at UBS. L/S encompasses a broad range of investment styles/strategies, so I’m sure that you could find something that works if you want to leave the LO, although you may find that it’s a quality role.
I was sort of surprised as well. I'm not sure why but your answer makes the most sense. I am leaning strongly towards the AM even if it is small, after all I would be breaking into the very industry (broadly-speaking) that I want to work in rather than just joining the other side of the divide and then making a leap to the buyside. As I mentioned previously, the underlying intentions for research at the sell-side which is to gain commission on trades is very different from the philosophy of an investor whose entire vision revolves around whether they should pick a stock/for how long/using what strategy... which is why, from my perspective, it provides better exposure to more aspects of l/s investing. Some of the counterpoints were regarding, I think, the calibre or rigour of training at a BB and I can see their point here, after all a BB has more resources to teach you excel/modelling and you will be surrounded by many other enthusiastic learners who are on your level -- which might be one of the advantages in a pro/con list but by no means enough to dismiss the AM offer or training prospects even if my direct team is very small (it's almost structured like a HF pod with 3 people on the investing team and a portfolio manager).
Ignore my title, I made the jump from ER to LO. Most commonly on this forum is advice given by people who haven't worked in ER about ER, so as someone who has worked in ER, I would advise you to take the ER gig over the LO gig if it's not an RCG, Harris Associates, Select Equity type role.
The great thing about ER is that, if your analyst is good, you get to work with all of the best public markets investors. We would regularly get inbounds from many of the investors that are hallowed on this site. You get to sit in on these conversations and learn and hear the types of questions these investors ask, what they're looking for, how they're thinking, what they like and don't like about businesses, etc. and this knowledge is invaluable and prepped me well for the buyside. From my stint, I know exactly what a Citadel analyst cares about vs. a D&C analyst and this has help me immensely in interviews.
I have found that LOs and MMs prefer ER candidates over IB and PE and the tippy top SMs prefer PE and IB. There are plenty of $3bn+ SM HFs that will give you looks and your career won't be shitty if you don't get a job at a tiger cub.
Remember, some HFs prefer IB and PE because of their skillset, not experience. IB and PE candidates are largely ignorant to the public markets and this makes them great candidates because the HF can mold them into the type of investor they want. So basically their inexperience benefits them. I don't necessarily know how adding and shaping homogeneous thinkers to the team truly adds value, but LPs are okay with it. This group think is what causes Tiger to lose 67% in one year, but I digress.
Tl;Dr I'd take the UBS ER offer
Also, ik that I will receive MS for my above comment, but it's my truth. Also, considering that everyone harps on SS ER analysts not being perfect, I don't know an investor that is. If the SS ER analyst isn't perfect (he isn't), why would you think your buyside analyst/PM would be? Funds blow up every day, PMs at MMs get canned, etc. a buyside model is just as likely to have holes or errors just as a SS model. While some SS ER analyst are dumb, the distribution of dumb analysts are probably the same on both the buyside and sell-side.
You're not somehow holier than thou because you started on the buyside or in IB/PE. A SS ER analyst's mistake are just more public. Remember, you're considered an amazing investor if your hit rate is 50%. Even Buffett and Ackman have huge public fails.
Why does this also make sense!!! This is exactly why i am very torn between both offers and keep mentally fluctuating between them. I think there are arguments for both and it all depends on how the person spins his experience. As someone who was in SS ER, you capitalised on these encounters with investors and asked yourself the right questions while sitting with them in order to draw up their profiles, characters, and a sense of their strategies. Someone else, on the other hand, might have found these types of encounters a bit less interesting or maybe was a bit more focused on valuations, modelling, fundamental research.
With this train of thought, I can say that if I start at UBS, I will make the most out of my experience keeping my eyes on the final prize that I want which is a future in L/S. In that vain, I will try to follow every single thread at work that will get me closer to this goal and will be able to 'spin' my experience in favour of my future. But, this argument also applies to joining the boutique AM where I have direct contact with the PM who will be seated right next to me and probably some out-of-house training. A quick search on LinkedIn shows me that people from this boutique were able to move to MM HFs (Man/Millennium) but so have people from UBS ER.
In short, I just think that both your answer and the other answer are correct. It all boils down to the individual. For now, my question to myself is where I will learn more and what will bring me closer to the goal. (e.g. will the quality of training at the boutique be the same as that at UBS? how often will i get to interact with the buyside in SS ER? is that enough to make me think like an investor?...) There are many variable and I'm still confused which is why I appreciate every reply I'm getting here as it's all making me realise different aspects of how to approach my decision.
If this is Alger, highly recommend against it…
I do think the LO I work for has far smarter people on average and learning from these people is amazing, but I don't feel that I would've been better starting my career at the LO. I feel that I am much more polished than my LO coworkers that started out of undergrad at the firm. Any gap in investment prowess that they had was closed fairly quickly.
This is an understated risk of starting at a LO, but LOs are more sleepy than other investment styles. This causes the culture to be much more laid back than a SM or MM. I personally feel that the reason why I've closed the gap so much faster than the associates that started at the LO is because I'm used to working significantly more hours than they are used to. When I first got to the firm, I spent much more time working than others. This is because the work at a LO is much more self-directed than on the SS. I found myself staying later, reading more, and interacting more with seniors on average because I always felt that there was something that I could be doing. Eventually, these extra hours compounds and you're moving ahead. I am, by no means, a workhouse, but the extra hour or two really does make a difference
I would lean towards UBS because you haven't given much away about the other role and it could be a very hit or miss experience. Some people join those sort of places out of uni and have a couple of years of terrible learning experience, trying to jump ship. I feel like that's much less likely at UBS.
PM me. I'm about to graduate and I signed with a 20B LO AM full time (maybe same fund?)
Doesn’t Millineum’s program out of undergraduate start then out doing SS ER at UBS? If that says anything…
Post MiFID 2, the biggest buyers of sell-side research are the pods and L/S funds. As a result of this, most sell-side research is aimed at these funds. If you join a sell-side shop (UBS is a great sell-side shop in Europe), you will get exactly the kind of training you want (especially modelling) to jump to a L/S pod. If you join a LO, you will get painted as a LO guy and it gets much harder to jump to a fast money seat/pod. Take the UBS role, enjoy your 2 years at 5 Broadgate, and buy me a beer in the circle before you depart to Millennium in 2 years' time.
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