Asset Management vs Investment Banking 101

Asset Management vs Investment Banking - What are They?

Before examining whether you'd like to work at an asset manager or investment bank, it's important to first understand what exactly they do. To help understand the differences, understand that an investment bank is on the sell-side while an asset manager is on the buy-side.

  • Sell-side: Create, promote, and sell various types of securities
  • Buy-side: Buy various types of securities

On investment banks, here's @Marcus_Halberstram with a concise summary.

It's a financial institution that essentially creates markets by connecting buyers and sellers, and risk and capital. At a very high level, there is a sales and trading business and an investment banking business. And from what I understand, the investment banking division is structured into products (e.g. M&A, Leveraged Finance, ECM, DCM) and industries (e.g natural resources, consumer products, financial institutions).

Right, so what's an asset manager? Asset manager's status as a buy-side firm means that they are concerned with the purchasing of securities. Here are three things that separate asset managers from other buy-side firms.

  • Invest in a plethora of financial instruments and are typically long-only.
  • Three different types of investors are attracted to three different categorizations of asset managers: retail clients via mutual funds, high-net worth individuals via separately-managed accounts, and institutional investors via large dedicated products.
  • Significantly less aggressive investing strategy compared to hedge funds. This is because while hedge funds promise absolute returns (and are deeply incentivized by performance fees), asset managers benchmark themselves against a market-related standard.

Asset Management vs Investment Banking - Compensation

Compensation in investment banking is, on average, higher than compensation in asset management. Out of undergrad, research analysts/associates in AM make slightly less than their banking peers, with investment banking analysts making around $130k. Post-MBA associates in investment banking make $200-300k, and the same goes for post-MBA analysts in AM.

After 5-15 years, an analyst can get promoted to portfolio manager in AM. This is in direct contrast to IB where the post-MBA title is associate, who gets promoted to VP, then managing director/partner. On average, investment bankers make more than their peers in asset management at every level. There is one large exception to the rule: top performers in AM make far, far more than any banker. A portfolio manager at PIMCO will make something like $25m, more than any Wall Street CEO.

AM vs IB - Lifestyle and Culture

Lifestyle is the most significant difference between investment banking and asset management. In investment banking, there's mostly a lack of lifestyle as you put in an average of 80 hours a week. The work week in asset management is more along the lines of 40-60 weeks, and the weekends are completely your own.

The intense work week in investment banking is conducive to burnout, which is why turnover is so high in investment banking. There's a reason everyone talks about the exit opps in investment banking, few people stay in the industry. Jobs in asset management pay nearly as well as banking (more in cases of top performers), and you work fewer hours. Because of two reasons, asset management is incredibly appealing, which means turnover is far lower than in IB.

Private Wealth Management

Private wealth management is perhaps the most notable form of asset management. It is, as the name suggests, the management of wealth of high-net worth individuals. When we mentioned working with a view of the beach, private wealth management was the most likely candidate; where there's money, there's private wealth management.

First, what exactly separates private wealth management from the other two functions of asset management? Broadly, PWM deals with individuals and individual money, the other forms deal with institutions and institutional money.

As a summer internship, PWM is a good option, particularly for those from non-targets or for those without anything on their resume that indicates a propensity for finance. Having a private wealth management internship the summer following freshman or sophomore year is standard procedure, a lot of people do it. It's nothing that will set you apart, but it will certainly demonstrate an interest in finance, which is all you can ask for in an internship as a lowerclassmen.

As a career, PWM is all about bringing in that sweet flow, or assets under management. This involves a lot of cold calling (a lot of rejection) and a lot of schmoozing clients to maintain relationships. It's very much so a relationship-oriented business, but don't let that fool you into thinking it's an easy gig. It's far from it, in fact. Here's @Vancouver Canucks 2011 on why PWM is a difficult career to succeed in.

Honestly, PWM is an extremely tough business, a changing business, a ruthless business - but it is still an exceptional business. 95% of the people whom enter fail simple because they can't "make it" but the 5% who do make a very good living. The average PWM guys at wirehouses (upper echelon firms such as ML, MSSB & UBS) have $80mm in client assets and make about $300,000 per year on a 40 hour work week, doing mostly what they love (interacting with good friends / long-term clients on the phone or at wining & dining events).

If you're an undergrad student, you may feel discouraged, and that feeling isn't misplaced. You reap what you sow in PWM, it's a reality that doesn't appeal to people facing tens of thousands in student loans who've never worked a full-time job for over three months. @thebrofessor recommends against becoming a financial advisor until you're at least 25, and he shared some words of wisdom for those looking to pursue a career in PWM.

Confidence is key. if you think you'll be perceived as immature, you will come off that way. not going to lie, my first few months of calling I was petrified. over time that wanes, and you just get used to it. this gradual hardening gives you confidence and kinda reinforces itself. you act confident, you win business, leading to more confidence and selling better, which leads to more business, etc etc etc

AM vs IB - Which Should You Choose?

In reality, the two are completely different fields and you should choose which career to pursue based on that. Asset management is a career in investing, investment banking as a career is most notably a grind. The lifestyle are completely different, the compensation is comparable, and the career outlooks vary a good deal. In asset management, you choose investing as a career unless you choose to rebrand yourself, hedge funds and other asset managers are your most typical exit opportunities. In investment banking, leaving is the most typical exit opp, as people tend to feel symptoms of burnout within a few years. Private equity, hedge funds, venture capital, and business school are the your common exit opps out of investment banking.

Ultimately, they're two completely different careers that bring a lot to the table in their own respects. If any one factor makes the decision for you, let it be the work itself.

Stepping stones to Asset Management

First, an important distinction: breaking into asset management out of undergrad and breaking in beyond that point are two different beasts. They should be treated as such, and we will discuss how to break in from each level.

Out of undergrad
You need to clearly demonstrate your passion in investing to get consideration for asset management jobs out of undergrad. Despite investment banking positions receiving all the buzz, these jobs are still highly competitive and the firm needs to know that you're willing to pursue investing as a career. Here are four books to help cultivate your investing savvy. If you find it difficult to read through these books, that's perhaps a moment to question whether this is the career for you.

  1. Intelligent Investor by Ben Graham (recommended by @thebrofessor) - "Skip Jason Zweig's commentary - same as above, if I were a high school principal, I would make this required reading before graduation. It's that important."
  2. Margin of Safety by Seth Klarman (recommended by @thebrofessor) - "I know, I know, it costs several grand on Amazon. If you do some sleuthing, you might be able to find a PDF." This and Intelligent Investor will develop your understanding of value investing and form the basis of your investing knowledge. Now we move on to some ancillary pieces.
  3. The Most Important Thing by Howard Marks (recommended by @thebrofessor) - "Newer book, but an instant classic. Compiled memos from Oaktree's Howard Marks, one of the smartest men to manage money that I've read."
  4. Competition Demystified by Bruce Greenwald and Judd Kahn (recommended by @Extelleron) - "I think, if you've read Graham, then you know the basic concepts of value investing, as ^ suggested reading Margin of Safety by Klarman would be great to bring a more modern perspective and some specific examples. But I'd suggest branching out beyond basic value philosophy into understanding how to evaluate a business. You've probably heard of the concept of a moat/competitive advantage if you've been exposed to Buffett, but Competition Demystified by Greenwald is a great book which helps you understand how to identify a moat in reality."

If you haven't already, start investing with a personal account. If you don't want to use real money, paper trading is a perfectly acceptable alternative. You should keep track of your portfolio and back up all of your investing ideas with sound due diligence. Not only will this provide a great opportunity to show off/discuss your investing chops on your resume and in interviews, it'll better you as an investor, which is ultimately what asset management is all about. Here's @N164 on the "model portfolio" and why it's incredibly helpful to have one.

A "model portfolio" - kind of like fantasy football for analysts. Pick a few companies, pretend to "buy" them as of a certain date that you think the stocks look cheap and keep an Excel spreadsheet. Update the prices every so often and see how you're doing. Are your names doing well? Why? Are they not? What did you miss? Then, when you interview, if you've never owned stocks before, you can say you've been running your own model portfolio, here are the names I have, here's why I bought them, here's how they've done. It also means you can answer the dreaded "what was your biggest mistake" question with: "I bought X at $10 and it fell, or I didn't buy Y at $20 and it went up, and here's what I missed"

In addition to investing, following the markets is critical to the job and your knowledge base in asset management. Get a subscription to Wall Street Journal, and read Bloomberg to develop a framework for the markets.

There are two different tiers of asset managers that will become apparent to you as you pursue the industry: notable asset managers and boutiques. The notable ones (could also be considered the top asset managers, but that doesn't necessarily correlate to performance) recruit almost entirely out of top target schools. If you are from one of those schools, you're in luck. Utilize on-campus recruiting and resume drops whenever possible. If you have a solid GPA, some finance internships beforehand, and a decent looking resume, then you should be able to get your foot in the door with a couple firms.

Boutiques are a far more ambiguous matter. The culture at the typical boutique is very tight-knit, develop talent from within, etc. Thus, turnover is extremely low, and positions are rarely open. You'll be hard-pressed to find any boutique asset managers recruiting on campus, your best bet is to send your resume in every direction and hope to get some hits.

Beyond undergrad
Breaking into asset management once you already have a few years under your belt is a trickier affair. First, consider an MBA (if you don't already have one) to rebrand yourself. Networking and headhunters are your friends, they're how you get your foot in the door. But before you network at all, you have to have a hook, something that makes you appealing to asset managers. At this stage, the CFA is your best bet to do just that. Be prepared, however, to consider asset management your career at this point, because the CFA takes 200-300 hours for most people to comfortably pass.

Original Thread

Here's my situation:
I got little or no connections to I-Banking except for a few people I met at RBC and BMO information sessions. I connected pretty well with them but that is the only time I've had contact and an occasional e-mail.

For Asset Management, my mom has some connections with Portfolio Managers who handle accounts/portfolios of $750,000 minimum and upwards both at HSBC and RBC. They are both coming over for dinner to meet me and to build a further connection directly with me.

I'm a 4th year BBA Honours (Accounting & Finance) student who has Financial Analyst internship experience.

Do you think I should stick to my original plan and keep trying to "break into" I-Banking or capitalize on my mom's connections and get a job within Asset Management with either HSBC or RBC? I plan to keep applying for I-Banking jobs but hedge myself with the Asset Management connections.

Also, is there any chance (or how often) that one can move from Asset Management to I-Banking after a couple years?

Comments (43)

Nov 9, 2010

I'd say you get the AM offer first and use that to leverage up to IBD

    • 1
Nov 10, 2010

thanks patriotsfan, anyone else?

Nov 10, 2010

disagree.. if you can get into AM first, you should take it. much more interesting than IBD/corp finance.

you actually learn about investing, get much better hours (and better pay relative to hours you work)

exit opps are also diff...in IBD you are stuck in corp finance roles. with AM you learn a lot about investing and can do any investment role..

just depends what you are interested in though...i'm more interested in investing and learning about the markets, where as IBD is more about corporate deals/restructuring...

just depends if you like process-based work (ibd) or performance-based work that is more interesting (am)

Nov 10, 2010
maybachmusic:

disagree.. if you can get into AM first, you should take it. much more interesting than IBD/corp finance.

you actually learn about investing, get much better hours (and better pay relative to hours you work)

exit opps are also diff...in IBD you are stuck in corp finance roles. with AM you learn a lot about investing and can do any investment role..

just depends what you are interested in though...i'm more interested in investing and learning about the markets, where as IBD is more about corporate deals/restructuring...

just depends if you like process-based work (ibd) or performance-based work that is more interesting (am)

In IBD you are not stuck to 'corporate finance' roles. Plenty of people move on to hedge funds, asset management, etc. (not to mention private equity)

"Well, you can do whatever you want to us, but we're not going to sit here and listen to you badmouth the United States of America."

    • 1
Nov 10, 2010

Also using connections as a hedge can be a mistake. In my experience, people don't like being used as a back up plan, and once you approach your connections in AM the first thing they are going to ask is: If we make an offer will you accept it?

If you tell them that you really want to be in banking but they are a good backup, any reputable person is going to tell you to take a hike. However, if you misrepresent your intentions, say you want to be in AM, and then bail on them because you get an IB offer, that's going to reflect poorly on you and you will have a difficult time using those connections later.

My suggestion is to take on honest look at your position right now. It's very late in the recruiting season for IB and I would be surprised if BB and MM offers are still going out in large numbers. Even if they are, if you haven't already attended a super day or have been invited to an upcoming one, you are probably not going to get an offer in IB - first round interviewing for FT is over. Your choice is really to try to get a fluke offer from a boutique with a later recruiting timeline, or go the AM route.

If I were you, I would forget about IB for now and use the connections to get an AM position. Spend a couple years in AM, do a good job, and then if you want to try to break back into IB at the analyst level, apply with some substantial full time experience under your belt. Honestly, if you've got personal connections with high-level portfolio managers, you'll probably learn a lot more working for them than you would as an IB analyst. Finance is an apprenticeship business, and as a recent grad it's important to build relationships with mentors. If the guys at the top care about your personal development, that goes a long way.

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Nov 10, 2010

Whoa...hold up there. AM? $750,000 minimum portfolio managers? Ok, in recent terminolgy that is not considered AM anymore, that is what they call HNW wealth management guys. Asset Management is more in line with areas like alternative investments and investment management strategies and institutional portfolio managers in hedge funds and mutual funds and such.

AM in HSBC and RBC don't deal personal accounts, the WM do. So before you consider going into it, you really are going into PWM which is more or less a sales job.

    • 1
Nov 10, 2010

Didn't BMO pay its analysts craploads last year? I would go for that.

Nov 10, 2010

of course IBD analysts move to private equity, thats why 90% of the people do IBD in the first place...to move to the buy-side.

you are still doing corp. finance roles though (which is very important for PE firms). IBD teaches you how to be good at processing.

opportunities in AM are low (out of undergrad), so if you get an offer with a respected AM group you should take it.

being on the buy-side right out of undergrad is good because you are learning how to perform well right out of college. obviously you'r enot going to be managing any significant assets alone, but you start doing interesting stuff right out of school.

and pay is good, but even better because you end up working only 2/3 to 1/2 the hours of an IBD

Nov 10, 2010

I'll get some clarification when I personally talk to the 2 managers but for now I'm assuming that the $750K+ accounts/portfolios/funds (not sure which one yet) are not personal accounts. One of them deals with a $10M+ one that I know of so that I'm guessing is some sort of fund.

Judging from the comments so far I get that it would be wise not to waste the opportunity I have with the connections and go for trying to get the AM job. I am just beginning my 4th year so technically I would go for IBD summer internships, not full-time yet. I think I'll continue to apply for these but much more aggressively pursue the AM job. Try to line up a job before I grad.

Oh, by the way how much do AM jobs make vs. IBD jobs (reasonable or average please)? I've already got offered a $50K/yr job as a financial analyst for after I grad but I want morrreeeeee, and the potential for this jobs pay to increase drastically in coming years is limited.

Thanks for the advice!

Nov 11, 2010

definitely smells like wealth management - not a bad gig, but light years from institutional/hedge fund asset management

Nov 11, 2010

Not trying to rain on your parade, but the additional details you are giving to prove it's not WM just make it seem more likely that it is WM

Nov 10, 2010

base is around the same straight out of undergrad...lowest 65k. bonus is where you can make a lot extra.

the hours and work/life balance is a serious consideration - you should never do something for the money.

like two above posts - wealth management is very diff from asset management. there are very few positions in AM...each year there are hundreds of new ibankers throughout the BB's, MM's, etc... each year there are only 20 or so undergrad spots for AM (most BB's don't even recruit undergrads for AM roles)

Mar 17, 2012
maybachmusic:

like two above posts - wealth management is very diff from asset management. there are very few positions in AM...each year there are hundreds of new ibankers throughout the BB's, MM's, etc... each year there are only 20 or so undergrad spots for AM (most BB's don't even recruit undergrads for AM roles)

Is there a good way to get into AM as an undergrad, any related jobs from which one could break into AM from?
It seems like PWM is easier to get into but breaking into AM from PWM is hard.

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Nov 11, 2010

AM, just cuz i hate powerpoint

Best Response
Mar 17, 2012

1. How difficult is Asset Management to break into than IBD? Everyone I know is always gunning for the BB Investment Analyst role and then seeking to go to an HF or PE role after they get their MBA. But good AM positions seem much more lucrative.

I would say much more difficult. I know a ton of people that are in or did IBD that want to move into investment management, can't think of too many that want to do the reverse. Most people view IBD as a route into IM.

2. What is the background of most AM people? Just from linkedin, I notice that there are a lot more non-targets in AM positions. But they're definitely people who know their shit. So do you get to meet a lot more non-traditional people in AM? Like the amateur-turned professional?

At the entry level prestige tends to matter. To the extent they recruit on campus, most firms only recruit at top school or perhaps some top regional schools. At the more senior levels, prestige doesn't matter and the top performers float to the top. I would also say that personal network tends to matter less in IM, so having an "Ivy Pedigree" or whatever doesn't count for jack, whereas it can matter in banking.

I also find that some of the most successful people in IM tend to be real weirdos and not your traditional Ivy material.

3. What's the career trajectory for AM? Do you just stick with one fund until you become a top-ranked portfolio manager? Is there any incentive for you to leave? Are you limited in exit opportunities once you do it for a few years?

Jumping around is much more common. Senior people rarely leave, so to move up you generally have to move to another firm.

4. What's the compensation/lifestyle? From anecdotal evidence and basic research, this is what I've been able to gather:
~12 hours/day (usually less) the first 2-3 years with an odd weekend here or there.
This eventually becomes ~8-10 hours/day with no weekends after like 3 years.

Varies tremendously but you're generally correct about lifestyle. Keep in mind travel can be a big factor at some firms if you're on the international equities side.

0-3 years experience...........$130,000-$180,000 all in
3+ years experience.............$500,000+ all in
8+ years experience.............$1mil+ all in
15+ years experience...........Sky's the limit

If you're talking about years experience out of undergrad you should lower your expectations. 0-3 years is more like $80-120k. 4-7 years is more like $150-500k. After that it's very unpredictable and the sky can be the limit. IM is very different than banking in that your responsibilities (i.e. are you generating ideas, or just supporting an analyst?) and performance have a much bigger role in your comp than your years of experience.

From what I can gather, most people stick with one fund their entire lives.

Not true at all in my experience, unless you get lucky and end up at a firm that is growing and promoting from within.

Very few people either leave or get fired.

Generally true for long-only managers. Not true for hedge funds.

The hours and pay are amazing. Not to mention, there's very little bullshit face-to-face interaction with others. It basically guarantees you'll be a millionaire with little stress or political in-fighting by the time you're 35.

Generally true. This is why people like IM over IBD.

It seems that most investment management funds really nurture you into a leadership role.

Not true at all. How are your leadership skills being developed staring at spreadsheets and 10-Ks? Also, I would say a fair number of firms don't want you to "learn the ropes" too quickly, otherwise you'll want to jump ship for a better gig.

Lastly, the intellectual nature of your work seems infinitely more interesting than entering data into Excel spreadsheets in 80+ hour weeks for 5 years of your life.

Partially true. You're still spending a lot of time doing menial work though.

But with such an amazing career, why the hell do America's best and brightest always go for the NYC BB investment banking analyst position?

Most 21 year olds follow the crowd and find the prestige of a BB attractive. Additionally, there just aren't that many IM roles for people coming straight out of undergrad. Also, working at a BB can be a great route to entering PE, whereas it is very difficult to move from IM to PE.

    • 2
Mar 17, 2012

If you can't get an AM role immediately after college, would you suggest doing ER instead of IB as your first post-college job?

Mar 17, 2012

Thanks for all the info models_and_bottles. Yeah it really seems like this job is just too good to be true. I imagine this is THE definition of a cushy job, assuming you have an aptitude for making good valuations.
But I feel that most traditional Investment Banking guys at the associate level also overlook the Asset Management route. They almost always try to head into PE or HF, right? Why is that exactly? Just BC of prestige or is it just too hard to make it in AM? Or are PE/HF better compensated?

Also, is an MBA more favored in terms of moving up the ranks?

Is it possible to get recruited out of a non ranked, non-target undergrad? Reason I ask is:

Last question, I have a friend recruited for an internship with the Delaware Investments group down in Philly as a "managed accounts trade analyst." The kid is just a junior right now. I'm tempted to copy his moves and try the same thing. But, as you said, AM is performance based. Is there anything I can do to make myself more appealing to these types of funds?

Thank You so much.

Mar 17, 2012

I understand you have to have a real passion for long-term investments and performing valuations. I plan on doing some relevant economics research and ideally getting published before graduation. In addition to that, I can hopefully provide a track record of some personal investments I make over the coming two years.

I know you're not my career counselor or anything. But I'd really like to hear your input. Thanks again.

Mar 17, 2012

I imagine this is THE definition of a cushy job, assuming you have an aptitude for making good valuations.

There's a lot more to it than putting together valuations. Being successful in years 0-2 of IM is about putting together valuations. Success in years 3+, aka when you make real money, requires understanding how to look for good investment opportunities. There are many, many factors that make a good investment opportunity. It takes a tremendous amount of skill.

But I feel that most traditional Investment Banking guys at the associate level also overlook the Asset Management route. They almost always try to head into PE or HF, right? Why is that exactly? Just BC of prestige or is it just too hard to make it in AM? Or are PE/HF better compensated?

First, PE is a very different skill set than either long-only or long/short investment management. Buying and selling private companies requires a much different mentality than buying and selling minority positions in publicly-traded companies. When I was 21 I thought the two skillsets were fungible, but they're completely different.

My impression is that most IBD associates have one of two exit plans:

1) Go into private equity.
2) Work for a client in a corporate development or corporate finance type role.

Both are very legitimate exit opportunities. Keep in mind when you start to get "older" (i.e. close to 30) your desire to work 80+ hour weeks indefinitely once you've already "made it" will begin to decline.

Also, is an MBA more favored in terms of moving up the ranks?

Not necessarily. I did it, but many people in IM do very well without an MBA. It's not mandatory by any means.

Is it possible to get recruited out of a non ranked, non-target undergrad?

Always more difficult. You have to network with people at your target firms and get on their radar. They won't come to you.

Last question, I have a friend recruited for an internship with the Delaware Investments group down in Philly as a "managed accounts trade analyst."

Honestly that sounds like a mid to back office type role. A front office role in IM involves researching and analyzing companies and submitting recommendations based upon your findings. Everybody else is in a support role and their compensation will ultimately reflect accordingly.

Is there anything I can do to make myself more appealing to these types of funds?

Take as many finance and accounting courses as possible. Take and pass the level 1 CFA exam. Read classic investing books such as The Intelligent Investor. If you're still in undergrad you have a lot to learn and nobody is going to care about your 1-2 year performance record. More important to show that you understand the fundamentals and are apt to learn more.

Mar 17, 2012

hey guys, so I also have an opportunity to join a small wealth management firm (as research assistant, not advisor) and basically research mutual funds and etfs. I understand this is very basic compared to a real AM job, but would it bring any value to the table for a career later?

I'm currently in BB BO, and it seems like there is more potential in BB BO than a small 35 man no name boutique (most of the employees are advisors, and they dont invest in any stocks, just MF/ETF)

note: would also be putting some trades in for them like OP mentioned his friend is doing

thanks for the input, you guys are brining some great info

Mar 17, 2012

Would it make a difference between working at a BB's IMD vs. Asset Managers like BlackRock etc.? Do companies like BlackRock even take undergrads?

Mar 17, 2012

I know BlackRock takes coops for Drexel alums consistently. You could try looking if your college has anything set up with them.

Mar 17, 2012

Hi KK... I would say that most of your surmising is wrong. I come from the alternatives investment management side and hire and fire Top HF's. I'm assuming that you're interested in working for a Top HF...that's where you make the "big bucks". Most Top HF's hire Midlevel to Senior Super Star Analysts or Co-PM's from the BB Sell Side or other Top HF's or Very Good HF's. There are very few HF's that have entry level training programs. I was just speaking with one of the sector heads at Maverick and recounted to him that one of my Wharton MBA friends (who pretty much had a 4.0 and was a former I Banker VP at a BB firm and then was a Midlevel PE Analyst) said that Maverick only interviewed 120 candidates from the thousands of applications received and then only hired 1 of the 120 interviewed candidates. The sector head elaborated and said that sometimes they hired 0 of the 120 interviewed candidates. HF analysts are let go all the time if they can't deliver on performance. So, once you're in, you don't just coast. The hours are generally not as bad as I Bankers but they're also not weekends off. I spoke to another senior analyst who reported directly to Carl Icahn and he said that Carl regularly called him on weekend evenings to "talk shop" even on a Saturday night when the analyst was at a dinner party with his wife. Jack Nash of Odyssey Partners fame had a belief that the best investors had exceptional quantitative skills and exceptional sales and people skills and even tested applicants on these attributes by giving them a Math test and having them assessed by a team of psychologists...my friend passed the Math test but failed the personality test...but still did manage to go on to work for Michael Steinhardt and George Soros and retire in his early 30's. When he was in HF land, he was working 60-90 hour weeks so he could deliver returns. I suggest that you read the book about working for Jim Cramer by one of his former junior employees to get a better sense of what working for a HF is like. n.b. Cramer was never considered one of the God-like HF's like Maverick, Cooperman, SAC, etc and he's lucky he had his ex-wife as his Trader who was supposed to have been pretty phenom and was at Steinhardt before going into business with Cramer. Dan Loeb has mellowed out over the years but if you read about his early days and see his team in action, Third Point is not a place for slackers. Also if you look at the pedigrees of most of the I Team at HF's, they're pretty exceptional. Though I'm not from the East Coast, I have the trait of coveting the Ivies and equivalents as do most East Coasters who were fortunate to have come from that path. Have hope, just because you didn't go to one of the prestige schools or I Banks, doesn't mean you can't become a HF Superstar...it's just harder and you have to truly be exceptional to do it.

Mar 17, 2012

To me, entry/associate-level IB is a more accessible career because the primary qualification is endurance, as opposed to judgment and intelligence, which are rarer. The banks are using your youth and energy to perform relatively simple tasks. The analysts with judgement and intelligence move on to bigger and better things. The rest are filtered out after being useful.

Mar 17, 2012

If AM jobs are so much harder to get, why do they pay so much less? I was assuming that it would be at least 85k base like every other FO position. I guess hours are a bit less, but that should reflect in bonus not base?

Mar 17, 2012

If AM jobs are so much harder to get, why do they pay so much less? I was assuming that it would be at least 85k base like every other FO position. I guess hours are a bit less, but that should reflect in bonus not base?

Several factors in my opinion:

1) Hours are way less in IM and the lifestyle is way better. In general, the people you work with are better to be around too.

2) The value of an entry level associate at an asset manager is not that high.

3) Frankly the investment banks probably way overpay. I've never understood why the IBs keep increasing comp for entry level employees when the value of the same is not increasing. Perhaps that's why most investment banks are crap investments. Look at the share prices for Goldman, Greenhill, and Lazard if you want proof.

4) The runway is really, really long in investment management. Like being in medical residency, the short-term low income is more than made up for by the long term income potential.

5) The IBs have to pay to retain employees. If IBs reduced pay then you would see a mass exodus of 2nd and 3rd year analysts exiting to either PE or corporate finance type roles. At some point, its worth it for the banks to pay more rather than deal with all the turnover, which has its own costs.

Nov 11, 2010

why can't you explore both and see what comes out of it...no need to limit yourself

Mar 17, 2012

interested as well

Nov 12, 2010

do not do asset management.. look for boutique or MM IBD instead.

Mar 17, 2012

public finance INVESTMENT BANKING

Nov 10, 2010

anyone who does boutique or "MM IBD" over asset management is retarded

Nov 16, 2010
maybachmusic:

anyone who does boutique or "MM IBD" over asset management is retarded

Fk that. Gotta disagree with you. Solely depends on what you want to do in the future. Plus, depending on the AM firm, the MM IBD (possibly even boutique) would be the better option.

Nov 16, 2010

Maybachmusic,
why? Just wondering whats so great about AM?

Nov 16, 2010

I think I can chime in here. I worked in the buyside for both my internships and a FT job out of school at a decently large asset management/hedge fund, and then moved into IB.

Although the buyside was great, where I had decent hours (about 11 hour days with few weekends), good pay, lots of responsibility and freedom to do a lot of the things I wanted...I felt like I was behind the curve compared to a lot of my peers because they all came from pretty rigorous programs either in S&T or IB. Now unless you join a fairly large firm where they'll give you comprehensive training, I'd say most shops will just "throw you in the fire". If this fits well with your personality, I say go for it...but it wasn't for me. I also found out that I'd like to do more transactional buyside work (i.e. PE).

I left my AM/HF job about 9 months in to go to a brand name IB, where I work a ton more hours, but generally happier with the trajectory of my future career.

Nov 16, 2010

Mezz
How did you leverage your AM to get to IB?

Nov 16, 2010

Wasn't that hard IMO. My experience in AM helped me develop quite a few things that I believe make a good IB analyst: analytical and critical thinking, able to take on large amounts of responsibility, needing little senior supervision, concisely summarizing key data and information regarding companies and industries, etc... not to mention the modeling skills I picked up. At the end of the day, it was Front Office and I had only been in the position for 9 months so it wasn't like I was pigeon-holed.

I just made the case that even though AM/HF was interesting, after giving it a try, I realized that I preferred transactional work.

Nov 16, 2010
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Nov 16, 2010
Nov 19, 2010
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