Breaking into Equity Research from Back Office Role
I am currently working as a Fund Accountant at a major hedge fund administration firm - I've been in the role for nearly five months now but ultimately want to do equity research/Asset Management. I aspire to do it on the buy-side (as I assume most people who want to work in this area do) but am perfectly happy to start on sell-side as well.
I have a Master's degree in Economics from a non-target school (came 1st in my class) but hedge fund admin was all I could get a few months back. However, I know this is definitely not something I want to do long-term.
My plan is to study for the CFA Level 1 in June of next year, continue networking in my free time and the plan is to study at University of Toronto's CFA Program in Canada (Continuing Education course). The reason I have this in mind is because, 1) Toronto is a major financial hub so it is good for networking purposes (I live in a small town where nothing remotely front office exists), 2) University of Toronto is a brand-name university so it could give me more credibility in the eyes of recruiters and it gives me a better shot at passing.
I really know that equity research is what I want to do, but I would like to get in opinion as to whether the above is the best way to go about achieving it. From what I've heard, if one stays in Fund Accounting for 1 yr+, the chances of even getting an interview at these buy-side firms diminishes greatly. So, really I'm at the stage where I HAVE to take some sort of action to get where I want to be.
Would appreciate any opinions or advice. Many thanks, guys.
I'm not sure how it is in the great white north, but here in the states it's really hard to get out of fund accounting without hitting the MBA path. At least from my experience it was. CFA 1 will only go so far unless you get lucky. It'll take a lot of networking but it's not impossible.
So if you're dead set on ER, I'd recommend looking at MBA unless a buyside firm picks you out of the admin side and they're large enough to provide decent opportunities. But it'll be tough. Fund accounting has seemingly been the one area where it's impossible to really move into another role.
Hi Calnus, Many thanks for your reply. I was of the opinion that the MBA is to do something more general, like consulting or investment banking. For the likes of portfolio management, the CFA seems to be the thing. I don't see how an MBA would provide any benefits that the CFA wouldn't. And I just recently graduated, so going for an MBA at this point wouldn't really be an option anyway.
Hm yea CFA may be the better route then. I mentioned MBA because you already hit the master route (usually if you couldn't pull something from master route it gets to be difficult) and wasn't sure on where you were career-wise, etc.
So yea, CFA it up or try and get some ER/AM related internships if you can afford to not have the job. Again, not familiar with how it is in Canada, but once a fund accountant, always a fund accountant from most people's perspective.
About a year ago I was in your exact spot. I started out of under grad at a large HF Admin in the back office and was able to land a buy side ER Analyst role at a good firm after 13 months.
The best decision that I made was NOT studying for the CFA level 1 as a way to 'break in'. It takes between 300-350 hours to pass the first level. I decided that the 300-350 hours were much better used networking to get the job that I wanted rather than have one more line to add to my resume.
Not discounting the CFA, I'll be sitting for Level 1 in June, but there are lots of BO guys taking that test thinking it's the golden ticket out of there lackluster ops job. Even with the the CFA L1, you are still at a enormous disadvantage coming out of the BO. Breaking out has to be done ASAP if that is your goal, the longer you stay the harder it is to leave.
The best motivation is that you'll likely be making more than your fund accounting manager if you do land a FO Analyst gig. Good luck and let me know if you have any questions.
Hey TheReturn,
Many thanks for answering, appreciate the comment.
Believe me, I'm as well aware as anyone that nothing is guaranteed when applying for FO roles, and I'm by no means expecting that the CFA will be a passport into FO. I have every intention of networking while out there - the CFA society among others may be a good way to do this. Also, participating in the CFA at least shows in interest in where I want to go - the last thing I want is to be labelled as the "fund accountant". So, really the CFA is something I'm using to add value to my networking efforts.
Your background intrigues me, actually. Please don't feel obliged to answer if you don't want, but can I ask which firm you eventually got the ER analyst role with, and what they liked about your application? This is my first time on the forum actually - I don't know if maybe you can message me privately.
Not sure if your plan of taking the CFA study course at U of T is so good. Doesn't it cost several times more than the actual cost of the exam? Pretty sure if you work hard enough you should be able to pass the test no problem without paying for expensive courses.
Also I don't think continuing education courses will really give you much alumni/university affiliation benefit. I went to U of T and the name doesn't really have that much pull on Bay street anyways.
this has been covered on here 100 times, literally.
Well, I'm gonna go the extra mile and cover it 101 times ;)
Start the CFA, work on generating investment ideas, trade your own account, specialize in a sector, know the markets/current events.
Also look at the way the industry is changing. I did all of the above and realized sell-side ER isn't for me. Not because of the hours but because the future of the industry (unarguably ER isn't going away but divisions will get even leaner and be more competitive then ever). Also, multiple people that are in/were in the industry advised against it.
Equity Research Analyst (Originally Posted: 07/03/2012)
Hi all,
I’m looking to make career transition from back office operations to equity research analyst position. I do not have CFA, but I’m planning on taking first level exam sometimes next year. I have heard that is pretty hard to make transition from back office to front. Can you please be kind to let me know if this is a true fact, what skills are required, and how to approach this transition?
Thank you in advance,
There are probably upwards of 200 threads on this exact topic. Read some of the highest rated content from the ER forums and search around and you will find the advice you are looking for.
Search the forum. I'm willing to bet there are threads on this.
Search the thread. I'm willing to bet there are posts saying this.
Don't trust Flake's advice on this topic. He has no experience.
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