9/11/17

Hey Monkeys,

WSO was a huge resource for me navigating through and eventually breaking into the AM industry. Thought I'd throw an AMA for all the grinders interested at AM who aren't at target schools.

Went to a small non-target school in Boston. When I say non-target...think smaller and less known than BC. Scored a 2.5 freshman year, but ended up with a 3.8 major and minor GPA by graduation. Started the internship path with the brutal insurance sales job, after-which I cold called and presented my way into an industry research role at a PE search-fund in the Greater Boston Area, worked 30+ hours a week unpaid and worked as a bouncer at various bars throughout the Boston area to pay the bills. Junior summer I worked for an MM but well regarded fixed income mutual fund. This MM did not have a formal internship feeder program and the fixed income related interns left with no offers.

Graduated with no job. Turned down a few jobs with MM players in both the Boston and San Fran area. Wanted a BB so bad I sat at home for hours every day for three months making cold calls and sending emails to funds. Interviewed two times and got shut down twice..all by the same fund. Kept throwing rocks and knocking on doors and at the end of the summer that same BB fund offered a third interview... and job on the Fixed Income side of their business. This job is NOT credit research, but it is considered to be part of the investment staff (not operations) - as I know most of you hungry monkeys want Credit Research (I do not) felt this disclosure was needed.

Moral of the story here...do not be traditional, do not follow the horde, and whatever you do...do not stop grinding. If you work hard enough and are genuinely passionate someone will take notice. At the end of the day an undergraduate degree is an undergraduate degree, doesn't matter where you got it from. What matters is figuring out who you are, illustrating why you're a better candidate, and most importantly clearly explaining how you plan on using that degree to make an impact for the fund who brings you on. If you're not an income producer, you better make sure you make your added values known.

Work hard monkeys - because in a few years our bullshit undergraduate degrees won't matter anymore, your skills, experiences, and accomplishments will be all firms look for anyway.

I will not disclose the school or fund. Anything outside of that, feel free to ask away.

Keep Grinding.

Comments (24)

9/8/17

Sounds like you're a portfolio analyst. Is your long term goal PM? Also, what's your next step?

Disclaimer: Not trying to throw shade. I know how important portfolio analysts are in a fixed income portfolio.

If my office were any closer to the front, I'd be a doorman instead of a receptionist

Financial Modeling

9/9/17

No worries - not everyone is looking for the CR/ER roles. PA or IA roles, in my opinion, are undervalued. Think about it.. if you're looking for a PM role long term, working closely with the PM and different portfolio strategies can be extremely valuable. Keep in mind that the skills gained greatly differ to those gained in research. Again, my opinion.

Next step is CFA - sitting for level 1 soon. The AM industry greatly favors those with the Charter.

9/9/17

I'm also sitting for cfa 1 in December. Do you know if PA comp is the same as RA for the beginning years? I'd imagine that later on it's much more dependent on your contributions.

If my office were any closer to the front, I'd be a doorman instead of a receptionist

9/9/17

RA will make more early on. Do not focus on comp, focus on what you like will be good at. Focusing on comp is a waste of your time, breaking in is what's important.

9/10/17

Currently an RA, was just wondering about the flip side. I've heard that PA is more quantitative and technical and that suits my current skillset. But I love the research aspect.

If my office were any closer to the front, I'd be a doorman instead of a receptionist

9/11/17

If you have not read the short PM section of level 1 yet you should- fairly quick read. This will only give you a shallow view/idea... however, MIT and other Universities will post lectures on the topic- I'd say they are worth the view if you're having trouble coming to a decision.

9/11/17
SomePleb:

Currently an RA, was just wondering about the flip side. I've heard that PA is more quantitative and technical and that suits my current skillset. But I love the research aspect.

PA roles are very much firm specific. They can be great if the firm treats the role as a "junior/assistant" PM. But they can be bad if the role is focused on more operational/mechanical stuff (running portfolio level analytics, etc). You certainly do get good exposure to the PM will be taught to identify macro market trends (where are spreads, what's bonds are rich, etc) but you will not learn/do the research on why credits are rich/cheap. So yeah it's more quant-like in nature

Financial Modeling

9/11/17

Thanks for doing this. Just to be clear, when you say BB AM, you don't mean like BB Banks like GSAM or JPMAM, you're referring to the big AM only shops like BR,Fido, and Wellington?

My goal is to work as a credit or fixed income analyst at a big AM/Mutual Fund out of college with the goal of eventually becoming a PM.

Whats the culture like at you're firm? How much do the investment analysts work with the Portfolio analysts and PM's?
Did the Investment Analysts start at the firm out of college or did they do banking/research first? Did the PM's start at the firm and work their way up or did they come from banking/B-school?

Whats the average age of a PM at your fund?

9/11/17

No problem, and yes by BB I was referring to Fido, Wellington, BR, etc. Apologies- I know most automatically assume the AM division to a BB bank.

Culture- A relaxed version of what one could expect at a GS or JP..with a 50-60hr work week.

If you're a rising senior I hope you're applying now- big players already have entry level programs open or closed.
The variation in backgrounds is fairly wide at this firm for junior analyst roles. The most uniform road is to be recruited out from your undergrad/MBA program..however, I've met with some coworkers who worked their way up from the mid office roles such as IRA- however holding the CFA will be an absolute necessity for this battle. Reminder, I'm still new- overall I'd say junior to mid level analysts are recruited, however, that by no means prohibits anyone with the rights skills from making the jump.

PMs are lifelong investors (50+yrs old), few came from banking. Most, not all, did go to a target MBA program, or quant based Masters program (MIT for ex.)

-When you say "Credit or Fixed Income Analyst"... what do you mean? CR or an FI PA?

9/11/17

Thanks for responding. I meant Credit Research analyst. srry for the confusion.

I'm actually a sophomore just thinking a bit a head and trying to learn more about the CR space and best position my self next summer to land an SA role at one of the big AM only shops my junior summer. I'm thinking of either doing AM or CR at a BB(bank) and then moving to an AM only or AM Boutique like 3rd Ave if I don't get into one straight from school seeing how competitive these roles are for so few spots.

Do you think you could describe a bit about what you do? I don't see too much about a PA roles on this site. Thanks!

9/11/17

I'm in week one...compliance and training...exciting stuff. I'll gladly post new feeds on the PA role once I've dug in. My hope with this post was to offer insight on breaking into the industry. Trying to help out the fellow non-target grinders.

9/12/17

What were some of the technical interview questions asked?

9/12/17

Explain duration, and what my target duration would be and why?- If this was answered wrong/insufficiently it was an absolute deal breaker.

9/12/17

Curious on your take for this one. I'm currently leaning towards longer macaulay duration. Hbu?

If my office were any closer to the front, I'd be a doorman instead of a receptionist

9/12/17

In the current rate environment with potential rate hikes coming shortly and the Fed balance sheet run off you would want to be shorter than benchmark duration at the time meaning but be prepared to extend duration once you determine that central banks will stop tightening.

9/12/17

TBH, I was expecting the Fed to hold off on hiking until inflation gets to its 2% target. And that would make hikes less frequent. So it'd be more worthwhile to go further on the curve to bet on expectations being higher than reality. However, if inflation returns strong, you can bet that I'm going to put bonds in my PA.

If my office were any closer to the front, I'd be a doorman instead of a receptionist

9/12/17

With the most recent economic indicators I would agree with you. However with the Balance sheet run off looming and most Fed officials preferring to be closer to the "neutral rate" i think they may hike one more time in Dec and be done unless economic indicators become more favorable in the near/mid term

9/12/17

In terms of PA. I am LONG EM Local debt. attractive risk adjusted returns can be found there especially with the dollar remaining pat and/or depreciating.

9/12/17

Also, Modified Duration is used more frequently- It accommodates the compound frequency of most, but not all, bonds.

9/12/17

I thought mod duration is just Macaulay divided by ytm and describes the sensitivity to interest rates.

If my office were any closer to the front, I'd be a doorman instead of a receptionist

9/12/17

The formula is [MacD/(1+ ytm/n)]

Yes, it describes the sensitivity of a bond and or bond portfolio. The reason a PM would calculate Mod over MacD is that it better illustrates the sensitivity of a bond portfolio to interest rates. ModD will always be lower than MacD.

9/12/17

Actually...

If my office were any closer to the front, I'd be a doorman instead of a receptionist

10/20/17
9/23/17
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