Assessing My LO post-MBA Research Offer
Current MBA student and was fortunate enough to receive a buyside equity research FT offer, and am wondering if my offer is within range for a HCOL city. ~205k all in for the first year: 125k base, 80k other comp (signing bonus + year-end bonus + relocation). This is for a boutique firm with ~$2B AUM. From asking around and looking at employment reports, it seems like base for post-MBA varies quite a bit, but should be around $150k, with some firms bumping to 170-175k in HCOL areas and given recent inflation, so I’m thinking my base is on the low side.
Background: 7 years of finance experience but 0 doing buyside research (outside of my internship). Will be graduating from a T25.
Any insight would be great!
Seems low to me (at established firms I think you would expect at least 250-300), but maybe is appropriate since it's a smaller firm. out of curiosity, how many investment professionals are there?
Thanks for the insight. That range seems more in line with what I've heard as well. The firm has 8 investment professionals, would be 9 if I joined.
Yeah the aum / head is a bit low. 9 investors could manage 10x the aum just as easily. it's an interesting business because the economies of scale are really strong, which works for you when you're growing aum and against you when you're losing it.
What is performance and aum growth like? This is probably the biggest question. If they are able to scale the assets this could work out quite well for you despite lower starting comp, but if they are perpetually bleeding assets you could end up with stagnant comp or at risk of losing your job in the long run
When joining a small shop like this, you are partially betting your career on the future success of the shop - so you should try to assess whether you think they are set up to succeed
Also, since it would be your first buyside job it's important that they are both a) eager and b) able to train you as an investor
Congrats on the offer!
Hard to say given small AUM. Is this is a mutual fund shop?
Yup this is for a long-only mutual fund (within the EM space).
Congrats on the offer man! I think it’s fine. It’s a bit low but the AUM is low. Focus on what you love doing and disregard the rest.
Appreciate it! Thank you.
Buddy of mine just started post-MBA at a several hundred billion credit long only out of MBA. He got 130 base and got bonus that would annualized to $255k all in (so I guess about 60k for the half year).
this is for someone with 3 years AM experience pre-MBA in a totally different vertical
was he in credit or equity LO pre-mba?
Fixed income (treasuries)
For a firm of that tiny size it's a fair offer. If you're talking about a firm w/ >$20bl AUM then it's way too low (that number should at least be 300k all-in, if not 350-400k if it's a top tier shop and you're a top tier candidate w/ former buyside exp)
Seems fair for a sub-scale LO. Plus you probably have 0 bargain power in terms of: 1) where we are in the market cycle 2) how hard it is to get a LO job (you can call a hedge fund offer "bargain power" but we all know it's completely different lifestyle / stability despite better comp trajectory)
Unless you have another LO offer or you will pursue a completely different profession, you are likely taking the offer anyways. Hope you will be working with great people who treat you well and teach you their process.
Get a seat at the table, learn the craft and see where it takes you. In a declining industry, staying in the game is the way of life. Not to mention you are lightyears ahead of your peers who will be grinding in IB and MBB in a down cycle too.
Thanks for this insight. Currently interviewing with another LO, but only in the very early stages so I most likely won't have another offer to use as leverage.
Definitely grateful to have a seat in this industry and having my dream job at a place with great people who have been willing to teach me, especially in this market. I guess the HCOL and MBA loans are scaring me a bit, but you're definitely right. It is nice to have some perspective.
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