Brandes Investment Partners - Reputation and exit opps?

Very solid value team. However recently their funds have hugely underperformed (down 40% + on the year). They're not looking like value anymore. Reputation is solid in the field. Exit opps, depends on the track...research im assuming? 5 year program. More of a laid back culture, awesome office in san diego but can feel a touch on the nerdy side. More of the engineering types.

Pay is lower than "analyst" pay significantly (this was last year) and Im not sure about this year. Given performance and mass redemptions, im assuming same?

Good firm though.

(not that engineering types are nerdy)

Thanks, I appreciate it. The pay is definitely on the lower side, especially given the cost of living there. Salary is street but the signing and performance bonus are quite low.

Could you expand on the exit opps? I'm looking at the 4 year research associate program (equivalent to an analyst position elsewhere). Are they placing people in good hedge funds and P/E shops? What about business school placement?

It seems like the real value they offer to recruits is their name brand and rep, not pay. I definitely liked the people and city.

They reduced it to 4 years? From what I know (which isnt too much) about them, the research people go back to school for grad programs. Mostly non-mba. Msc in financial engineering, other engineering etc... They did say a few went on to mba but given the highly quantitative nature of the firm, they either did msc or went the cfa track and on to other funds. If you go down this path, im assuming you will end up in portfolio management for a mutual fund, investment manager etc...

Dont know about p/e or hedge funds. Im sure you could aim for value hedge funds. Name is defenitely solid in the field.

I have various friends that live in LA and they all consistently say go to San Diego. Guess the grass is always greener on the other side.

What do you think the average pay is at a mid-sized AM firm? I'm still deciding on whether I should take the Brandes offer.

Also, do you think I should worry about their stability? Their funds have definitely taken a hit lately.

45k? around there without sign on bonus + overtime you might close 50+ then you have generous benefits, time off etc...

Stability, im sure theyll be ok, downsize maybe in the short term but I doubt theyve been reckless in the past with over hiring. So you shouldnt worry but dont take my word for it, in this environment, all is possible.

Their funds are performing pretty badly. -65% YTD on the LCV. I doubt the rest of the funds are doing better.

LA > SD -> again personal choice so visit both and see where you prefer to be.

I will say that Brandes' compensation is significantly higher then that. I don't think anybody pays that low for top tier candidates (all the candidates I saw were definitely from top tier schools).

LAWM - do you know how the rest of their funds are doing? I've been trying to dig around and find some info, but I'm not having much luck.

You'd be surprised (about the comp).

If you look at their site, you'll see some of the individual investor funds. Those provided to clients via advisors are slightly different. I don't have a list on me right now but I can pm you some of the stats.

The compensation (salary and bonus) is about 80k for the first year and increases 0-10k per year thereafter depending upon individual and firm performance.

Thanks models_and_bottles. the compensation you mention does not seem low on any measure for a college graduate (I am assuming you are referring to the Research Associate position?) May I ask if you know this 80k figure to be a fact or an estimate?

Consider the 80k figure quite reliable.

hi LAWM, you seem to know quite a bit about the firm. As such, i was wondering if you knew 45k to be a fact or an estimate?

The 45k figure is either seriously outdated, bogus, or for some back office position. No legitimate investment management firm is paying quality research talent that low. Do you think that these firms would really pull from top undergrad business schools at comp that low? Even accounting pays better than that.

Several Things to Clarify Here: 1.) Pay starts at $60k base for research associates. Bonus potential of up to 20% (approximately half will be deferred until the end of your 4th year with the firm) of base for the first year. Profit sharing kicks in after your first year with the firm, and is worth effectively 3% of bonus+base each year. As you can tell, there is relatively little differential in pay between the best performers in the RA program and the weakest performers. 2.) Hours are good. 8-6 at the most. Also 15 days off per year, and it is expected that you will take all of them. 3.) Few if anyone from the firm goes on to do quantitative analysis. Just look at the profiles of the senior people there, all MBA's. It is a highly contrarian shop (I wouldn't call it graham and dodd per se, despite their marketing), but focus is on looking at K's and Q's rather than onsite visits or speaking with industry consultants. 4.) You will build no substantial contacts outside of the firm in the RA position. You will however sit in on company management meetings and sell side meetings to the extent the person you work for likes to participate in these types of events. 5.) Many people who stay on the whole four years here feel burnt out their last 12-24 months, but feel handcuffed to stay due to their deferred compensation after 2 years with the firm.

bump, thoughts as of current time?

bump. also interested

Awesome job, but the firm's AUM has declined a lot so there are stability concerns.

Still a good place to be. Their AUM is currently sitting around $13~14bn. For approach, they are as deep value as you can get, similar to Templeton in style. Focus outside of the US seems to have picked up in LATAM & the Middle East.

Brandes' AUM is $26bn (as of quarter end), not $13bn. The focus hasn't changed at all, the EM product has just performed much better than the other products.

Wow! Is Brandes really down to $26?! I think they were running 80-100b when I was looking at them six or seven years ago. They're a great shop and seemed to have a very good process (although I'm not sold on committee style investing). I'd also recommend people take a look at Causeway Capital in Santa Monica if they're interested in international value.