Q&A: From BO/MO to FO in Buy Side Credit Strategies

I'd like to give back to the community, which has been extremely helpful along the way. I have recently landed a credit investment offer at a large institutional AM. Thinking some fellows on this forum may have similar backgrounds and are trying to get into FO roles too, I am happy to share a bit of my experience.

Background:

• Finished an advanced degree in applied science and started finance journey by studying CFA, FRM and quant finance

• Spent two years validating derivative pricing and market risk models at a bank

• Moved to an institutional AM (asset owner $50-100B AUM) in portfolio analytics and investment risk focusing on building risk solutions and reporting infrastructure, it's been one year now

• Joining another AM (again asset owner w higher AUM) in structured credit

Pretty happy about the outcome, hard work getting paid off and landing a FO role in just under three years. Happy to answer any questions you may have. Cheers.

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Comments (14)

Most Helpful
  • Associate 1 in AM - Other
May 9, 2021 - 9:37am

JohnGutfreund

Best piece of advice to move from Back -> front? a biggest setback that you overcame?

Thanks for the questions. I do a lot of reading. I read books/materials that are related to (1) my daily work to gain a better solid understanding; and also (2) what I hope to do in the future. That habit really helped me. The biggest setback was failing on questions about investment ideas / current market views. That pointed me to read materials differently: to have the following in mind "so, how I would choose the securities if I were to investment in them". Also I tried to read more news and listen to investment podcasts. Overall, the improvement comes very slowly...

  • Analyst 1 in IB - Gen
May 9, 2021 - 10:18am

What's the networking scene like? Any tips? 

  • Associate 1 in AM - Other
May 9, 2021 - 10:58am

What's the networking scene like? Any tips? 

Even though I networked heavily both internally and externally, networking didn't help me in getting interviews. Looking back, this too appears interesting. E.g. in a few cases I used LinkedIn to connect with MD/Heads (as a long-time follower not just connecting to ask for favors) and requested my resumes be shared with the teams. It didn't work in my favor.

With that said however, I would suggest keeping up the efforts. At least you get to know how potential hiring managers view your skill set and what their teams' challenges can be. That can improve your strategy. Regarding internal networking, PMs can give candid opinions about you and it's just sometimes(or most often) they cannot take you on their teams too soon due to internal politics.

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May 9, 2021 - 4:41pm

Hi, I'm currently a big 4 junior auditor looking to break into credit research. I'm wondering whether you think this move is at all feasible, and if so how would someone go about making the move?

Is it necessary to learn coding/analytics these days to work in fixed income? I have a degree in maths but I suck at problem solving hence why I'm working in vanilla financial services.

Thanks

  • Associate 1 in AM - Other
May 9, 2021 - 7:29pm

A jar

Hi, I'm currently a big 4 junior auditor looking to break into credit research. I'm wondering whether you think this move is at all feasible, and if so how would someone go about making the move?

Is it necessary to learn coding/analytics these days to work in fixed income? I have a degree in maths but I suck at problem solving hence why I'm working in vanilla financial services.

Thanks

Hi I think your first question is hard to answer since I'm not from auditing neither am I looking at credit research. In my case, the new team liked my experience in risk managing structured credit products and validating related pricing/risk models. Therefore to tangibly answer your question, I would suggest your make clear what you want to do; if it overlaps partly with your daily work, try to gain a deeper understanding; if not, grind it out even harder. There is always the chance.

To your second question, coding/analytic skills seem to be a must for almost all the roles that I looked at. Only a matter of levels. Portfolio construction, equity/credit research, investment etc are all heavily about sourcing data, building insights and generate ideas. Current trends of data warehousing, business insights and visualization techniques call for strong analytic skills. I don't think FI is an exception. 

  • Associate 1 in AM - Other
May 10, 2021 - 5:13pm

Any advice in terms of career progression?

The question is huge. To me, the mindset has been "do not settle until you find the area that your skills fit and that promises satisfactory personal development." In the end, it's quite personal I would say. People simply have very different career aspirations. Quoting a saying here: "Do things that you're skilled at in a field that you're passionate about." 

May 23, 2021 - 1:25pm

Any insights/opinion on candidates coming from 1 of the 3 rating agencies in terms of skillset in credit research? A plan would be to stay at a CRA for 1,5 years and potentially pick up CFA level 1 while reading up on relevant stuff, such as HY/distressed debt for me who currently focuses on IG issuers. Thanks for the thread and appreciate any comments.

  • Associate 1 in AM - Other
May 23, 2021 - 2:41pm

Vanpattern

Any insights/opinion on candidates coming from 1 of the 3 rating agencies in terms of skillset in credit research? A plan would be to stay at a CRA for 1,5 years and potentially pick up CFA level 1 while reading up on relevant stuff, such as HY/distressed debt for me who currently focuses on IG issuers. Thanks for the thread and appreciate any comments.

Sure. I think this is more of my opinions than insights b/c I never worked in rating agencies. So I worked on a project of developing our current firm's implied corporate credit rating models (regression, z-score, and ML multiclass classification) and came to realize that quantitative skills of rating quants are solid and useful. Clearly, ratings by agencies have fundamental aspects to it, which is definitely helpful. I don't have much to opine on HY/distress. I worked with one of the big 3 rating agencies on structured finance, looking at the credit enhancement, collateral performance, cash flow simulation and risk capital charges. If you would like to work in HY/distressed debt, definitely helpful to look beyond usual credit research into more esoteric products and brush up your knowledge/skills.

  • Associate 1 in AM - Other
Jun 26, 2021 - 8:48pm

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