Breaking into asset management after MBA

I am looking to break into Asset Management after my mba. I am not if this is realistic, since I don't have previous industry experience. I was probably thinking about getting a job as an equity research analyst on the sell side to get the necessary training. What is the recommended path to become a portfolio manager on the buy side?

Thanks,

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Comments (49)

Aug 4, 2016

From my exp at an AM shop, starting in sell-side ER is a good idea. It seems much harder to move directly into the buy side. That being said, I know that CFA is more common (specifically within equity research) than an MBA.

I'd check out some of the larger AMs (Fidelity, PIMCO, BlackRock, JPM) on LinkedIn and just search "Portfolio Manager," "Associate Portfolio," "Managing Director," etc at those companies. Look at what their careers paths are and see if it's applicable to what you're doing. Haven't had my afternoon coffee so excuse any misconstrued sentences.

Aug 4, 2016

Thanks for your response bateman. My first job after undergad was in fixed income research, but then moved to another industry. I have completed my CFA level I, and I am hoping to take CFA Level II next June. My biggest doubt is wether I should consider getting into a BB as an equity analyst or would it be better to get involve directly in the buy-side. I would like to be a portfolio manager someday.

Aug 4, 2016

If you want the formal training, then sell-side ER is the way to go. Then you transition into buy side research and if you prove yourself, then you make PM.

Aug 4, 2016

I am looking to break into Asset Management after my mba. I am not if this is realistic, since I don't have previous industry experience. I was probably thinking about getting a job as an equity research analyst on the sell side to get the necessary training.

That's a pretty good plan.

What is the recommended path to become a portfolio manager on the buy side?

You're so far from that goal that you should focus on the interim steps for now, i.e. positioning yourself to land a job on the sell side. As others have mentioned, the long term route is to eventually go Sell side --> buy side and then work your way up there. Keep in mind it generally takes buy siders >10 years to make PM at larger shops, so you're talking about a 10-20 year journey from the time you graduate.

Aug 4, 2016

the fastest route to buyside PM is sellside trader --> buyside PM.

if you are a rockstar...it only takes 2-3 years to create a reputation to get poached by a buyside fund. Citadel, BlueCrest, Brevan, Tudor, ect...this is essentially their main hiring model.

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Aug 4, 2016

the fastest route to buyside PM is sellside trader --> buyside PM.

if you are a rockstar...it only takes 2-3 years to create a reputation to get poached by a buyside fund. Citadel, BlueCrest, Brevan, Tudor, ect...this is essentially their main hiring model.

I was referring specifically to long-only Asset Management, which seems to be what the OP is interested in.

Aug 4, 2016

could you elaborate more on this idea?

Aug 4, 2016

My current AM shop has $200bb + AUM and investment strategies across a variety of products (FI, Eq, Alt, etc). From what I have seen, the average PM has 20+ years exp in the field as a minimum.

Aug 4, 2016

The obvious question will be "why did you leave investment management if you liked the career so much?" You need to have a really good answer to this question to have a shot to reenter the industry. I got asked this question frequently even though I "left" only to get my MBA.

Aug 5, 2016

I left my first job because of geography (Boston guy- job was in Chicago)
During my second job I was let go because the path on the role was to become a quantitative developer (half the team was let go). Then, obviously I needed a job so I took a financial software sales job, even though I really wanted to go back to fundamental research (tooks lots of interviews) did not land anything.

Would the CFA help with buyside recruiting at the top 10? What about sellside opportunities (except ibanking) sales/trading?

If I cannot find a job here perhaps consulting would be something I would consider.

Aug 4, 2016

Would the CFA help with buyside recruiting at the top 10? What about sellside opportunities (except ibanking) sales/trading?

It would help with both opportunities, but it is by no means a golden ticket to a research job.

Here is the bigger problem:

I am figuring I could get my MBA and try for investment management and then try a plan B if that fails

If I cannot find a job here perhaps consulting would be something I would consider

You are obviously not committed to research as a career. This probably comes through quickly in job interviews. Figure out you what you want to do for a career and go from there.

    • 1
Aug 5, 2016

Good point- Thanks for your input.

Aug 5, 2016

CFA is definitely a good option because it teaches you a lot of what you'll need in an ER role. with the right connections and story i don't think jumping straight to buy side is out of the question (esp if you did an internship on that side during MBA, not sure if you did). Otherwise, ER, S&T are both good initial options.

Aug 5, 2016

I don't think it would be unreasonable to land a buy-side gig out of your b-school, assuming you have either interned or worked in investments/research before. I would recommend looking to intern at a buy-side shop in your first summer, and if not, definitely a sell-side shop in ER or S&T.

While I have not been through the MBA process, I believe your best shot at getting to the buy-side, if not starting there immediately, would be starting in equity research. However, ER interviewers looking at people coming out of MBA programs can tell their true underlying intentions. Generally, at that level of hire, they want to pick someone that wants to stay in the industry and is someone that they can imagine becoming a senior analyst in five or so years. At the entry-level, they are mostly understanding that you want to work as an ER analyst for 3-5 years before jumping ship over to the buy-side, but at the post-MBA level, they want you to stay. So you either need to learn to love sell-side equity research or be really good at faking it. People get picked off by buy-side shops all the time or simply start applying to buy-side shops within a few years, so it isn't that hard to move over, while you're relatively young, anyway.

In regards to the CFA exams, having the designation is almost a prerequisite to landing a PM job on the buy-side or working as a senior analyst on the sell-side. Yes, there are numerous people in those roles that don't have the designation, but they likely have a decade or more of experience and/or landed their first big role when the CFA program wasn't as prominent. Now with more competition, taking the exams is essentially needed for consideration for those types of roles. Getting your MBA with one or two levels of the CFA exams passed may give you a leg-up on your competition.

Aug 5, 2016

The studying never ends does it. Once the GMAT and MBA apps are over I'll focus on the CFA/buyside internships/ and investing/ equity research book. Thanks for the advice guys.

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Aug 5, 2016

I am in the same boat as you actually interviewed around a little in January. I took another tour but am looking to transition in the next 18 months- I hope it works out for you and please keep me posted on your progress.

Aug 5, 2016

Many funds and other groups are friendly to non-finance people. If you were granted an MBA from a top school, you likely have what it takes to grasp the concepts they are going to teach you. Very few positions require you to know everything you need to know to succeed at their firm when you come in straight from business school.

Aug 5, 2016

I'm a 3rd guy in the same boat. posting so I can follow along

Aug 5, 2016

For the benefit of those who recently posted, I'd like to give my perspective on this. This post is much longer than I had initially intended, but I am hopeful that at least one vet will find it helpful.

I am currently in an MBA program at a top program and am recruiting for investment management. I have served in the military for over five years and have absolutely no applicable finance experience other than the first few classes of my MBA program (at the time interviews started) and personally investing my own money in stocks since 2008. I have interviewed with about 20 investment firms this year for a Summer internship (buy-side firms and sell-side equity research, but no hedge funds, which would be much more of a long-shot).

My experience has been that all of these firms will tell you they welcome career switchers, and I believe that is absolutely the truth. However, they will ALWAYS choose the strongest candidate, and usually the strongest candidate has more relevant experience than you and I. These firms have received thousands of applications, are interviewing hundreds of MBA students among the best programs, and they MIGHT choose one intern from your school to join a handful of interns from other schools, all competing for one full-time position after the internship (yes, even the largest firms only hire a handful of interns, and hedge funds hire fewer). So, if you don't have a great resume and cover letter, and a great interview with great stock pitches, you will not be invited for a second round. Going to a target with an impressive resume and cover letter is only enough to get you an interview. My experience time after time this Spring has been that firms expect you to know your shit. They DO NOT hold back on the challenging questions because they think you have less experience. It doesn't matter. You need to have at least three stock pitches. You need to be able to answer random questions about companies in industries that you've never looked at.

For example, one firm asked me to give a projection of revenue growth for a company I had never looked at or thought about, then walk them through what I thought each line of the income statement looked like (justifying everything along the way) down to net income, project what earnings growth would be, translate it to what I thought their P/E multiple would be, then decide whether I would buy it. Other firms asked me what stocks I'd bought over the years, then picked a random one from my list saying, "oh that sounds interesting, pitch me that one." Needless to say, that stock was not one of the three that I had spent months researching for interviews.

The point is they never, ever treat you like you are just learning this stuff. They don't take it easy on you even though you are only four months into learning about this stuff, and the limited amount of prior knowledge you've been able to build were the fragments you pieced together between missions in Afghanistan while you were more or less jumping head-first into buying stocks in your personal account as a newfound interest.

Interviewing for IM is very challenging, and I've seen more than a few people give up the path and go the easier route of getting an internship that is aligned with their previous career. That path isn't an option for us, but my advice is still relevant. Be clear about what you want and stay focused. Due to the type of preparation it takes for someone in a non-finance career to transition to IM, I believe that you need to know the path you will take before you start your MBA program. This may seem obvious, but there are many people who manage to get into the best MBA programs in the world and yet somehow are incredibly unsure about what they want to be when they grow up. Don't ever be one of these people; decide what you want, learn everything you can about what it will take to get there, determine whether you can build those skills sufficiently before graduating, and make sure you are passionate enough about it to stay on course when you feel like crap and nothing seems to be working out. Do not waver or doubt yourself. The students who quit recruiting for IM did so shortly after on campus interviewing was over, despite there being many job opportunities through off-campus recruiting (just takes more effort and confidence). Never forget why you gave up everything/put things on hold to go to business school, and don't settle for anything less.

So what should you do to increase your chance of success? Use all of the prep resources at your school to make sure you have a great resume and cover letter that frames all of your experiences well for a job in equity research. For example, emphasize pitching to senior officers, persuading others, negotiating with foreign nationals, operating autonomously on projects/missions with significant responsibility/stress, and leading projects in which you've conducted extensive research and assessments (the greater the responsibility and leadership while doing these things, the better). Join the IM club at your school and get a leadership position in it. Join the student investment fund if they have one. Pitch stocks at IM club meetings. Compete in school sponsored pitch competitions. Take the CFA level 1 exam. If you haven't already been investing in stocks with your personal account, start immediately (even if you don't have much money). If you've been investing in stocks with real money for over a year, and you've outperformed the market, include that on your resume. DO NOT put non IM stuff on your resume. DO NOT put that you also joined the consulting club or investment banking club or some shit like that. And it should go without saying that you should not indicate that you have a leadership position in these other career clubs. You need to communicate clearly that you are focused on IM and that is it. Period. Besides, with all of the prep that you need to do for IM as a career switcher, you shouldn't have any spare time to mess around with that other garbage.

The resume and cover letter are the easiest part of the process. If you are at a target, and your hit rate on first round interview invites isn't 90% or above, you need to revise your resume and cover letter ASAP. I recommend having three solid stock pitches. For some firms, this is sort of a check-the-box thing, and it will be easy in the first interview; for others it will be long and painful. Some ask for more than three--they will just keep asking for another pitch until the time is up. For these situations, just have your three solid ones and then have two or three others that you've looked at, find interesting, and you can talk about at a very high level. Pitches should be the easiest thing about the interview, because you've already done a ton of research on them (and you should have a complete model on all three of them), and ideally the interviewer will not be as familiar as you are with the companies. Keep in mind that if you do receive invites for a second round, all companies will make your stock pitch a painful process, even if it was a check-the-box exercise during the first round. Several of them will actually give you a stock to research and pitch for second rounds.

Know your weaknesses (from an IM perspective) and attack them from every angle; the earlier you start, the better. As I walked through my resume, I always ended by talking about why I came to business school and how my personal investing led me to identify knowledge gaps that I was working very hard to bridge. I made sure to communicate everything I was doing to continue learning. Interviewers always ask why buy-side/sell-side, and why equity research. You need to have a passionate, confident answer for this so that they can take that leap of faith to hire you. Don't sound rehearsed. If you really want this career, you won't have a problem speaking from the heart, which I strongly believe is the best strategy to answering this question.

And finally, I recommend applying for buy-side equity research AND sell-side equity research. I have found that sell-side equity research firms/departments are much more receptive to a non-finance career switcher, and they liked my military background. I have no prior industry experience that would uniquely benefit any sort of sector specific research team, and that didn't hinder my chances whatsoever.

One more thing regarding on campus recruiting. I am absolutely positive that "networking" with IM firms who do on campus interviewing is a waste of time. You have the EXACT same chance of interviewing with them on campus as any other student regardless of whether you sent someone at the firm that ridiculous thank you note that you obsessed over for three days after they visited campus in the Fall. This is not true for IB or consulting, but it is most certainly the case for IM. I did not see one student benefit from networking with a firm who was interviewing on campus. I received an offer from a firm without attending any of their corporate events or speaking/networking with any of their employees before the interview. Many other students have had similar experiences. Do not waste your time trying to network with firms who do on campus recruiting. Instead, spend that time preparing your pitches and learning how to build financial models; you're time is much better served that way.

Bottom line: you get the interview due to your resume and cover letter, so make those perfect. You get the second round interview by preparing well and demonstrating great potential.

    • 1
Aug 5, 2016

erswitcher

Awesome post, thanks for taking the time to write that out

Aug 5, 2016
erswitcher:

One more thing regarding on campus recruiting. I am absolutely positive that "networking" with IM firms who do on campus interviewing is a waste of time. You have the EXACT same chance of interviewing with them on campus as any other student regardless of whether you sent someone at the firm that ridiculous thank you note that you obsessed over for three days after they visited campus in the Fall. This is not true for IB or consulting, but it is most certainly the case for IM. I did not see one student benefit from networking with a firm who was interviewing on campus. I received an offer from a firm without attending any of their corporate events or speaking/networking with any of their employees before the interview. Many other students have had similar experiences. Do not waste your time trying to network with firms who do on campus recruiting. Instead, spend that time preparing your pitches and learning how to build financial models; you're time is much better served that way.

Bottom line: you get the interview due to your resume and cover letter, so make those perfect. You get the second round interview by preparing well and demonstrating great potential.

Didn't read the whole thing but disagree with this point. You may have gotten an offer without networking, but you got it DESPITE not doing it, not BECAUSE you didn't do it. There is nothing to lose by trying to network, so really don't understand why everyone wouldn't do it.

I work at a big asset manager and we get hundreds of resumes that look awfully the same. Top GPA, top schools, top work exp, etc. Cover letter can only hurt you if you screw it up, can never help. Resume obviously matters but that is somewhat set in stone already with your work exp/school and you can get that perfect without taking time away from networking.

Networking can have a huge impact and I absolutely would not write it off. You should think of it as free face time with the people who could be making hiring decisions. If you impress them during this part they will likely pick you out of the pile or remember your name when going through the book at the end, and that kid with the "perfect" cover letter and resume potentially gets passed over.

Aug 5, 2016

Yeah, by foregoing networking, you're basically saying that you are going to rely entirely on the name of your school and something "special" about your resume in order to obtain an interview.

A name is just a name and a resume is just a piece of paper (while a cover letter is basically useless). Relying on the name of your school might have some logic if no one else from your school is applying (not likely). Relying solely on a piece of paper then does not sound like a good idea to me (especially after spending a small fortune on an MBA).

Aug 5, 2016

@BeastMode: I agree with your point; networking can have a huge impact, but I still stand by what I said. I want to clarify my post though. First, my advice was specifically meant for MBA students at a target with a military background and zero finance experience. Second, the networking comment I made only applies to the very structured on campus recruiting component geared towards getting an internship; it does not apply to what every student should do when seeking employment outside of the on campus recruiting program.

One of the most difficult things to do as a student is manage your time efficiently. Networking with companies that do on campus recruiting at a target is not a critical component to getting an internship. Could it be a good thing to do? Sure. Could it make the difference between getting an offer or not? Maybe. But these companies are going to come to the school and interview 20 applicants to select the best performing one. It is far more efficient for a military career switcher to focus on learning how to model, researching companies, and preparing pitches than to try to network with these firms (who do on campus recruiting) in the Fall without knowing how to do any of those skills yet.

The problem with networking is that it may or may not pay off; you never know, and that is what makes it inefficient. As a student at a target, you will get interviews with 90% or more of the firms coming to campus, so your time is better spent just preparing for what you'll have to do in those interviews. It is better to be a student who hasn't networked but has given the best interview than it is to be one who has networked but gave a shitty interview. Hence my advice to these career switchers, have a great resume and cover letter so you can get the interview, then kill it in the interview. Prioritize those things first.

Of course, when applying to any other firm on your own, network your ass off.

@buybuybuy: My networking advice ONLY applies to firms that do on campus recruiting, so yes, I did rely on my school to get me the interview, and it got me interviews with over 20 firms. That is how on campus recruiting works at a target.

Aug 5, 2016

Fair enough. I do not have an MBA, so cannot say for sure either way.

Aug 5, 2016

Networking is def less important for IM than banking at MBA level, but I think it still matters a bit. Definitely less important than the quality of your stock pitch though. I work for a large long only on the west coast, and we do consider who came out for the IM trek. At my school and I think Wharton does the same, there were two investment management treks that ran simultaneously (East Coast and West Coast), so you can kind of get a sense for where people's true geographic preference lies. Not that we wouldn't interview a top candidate that went on the East Coast trek, but I think it helps at the margin.

Aug 5, 2016

@jankynoname: Thanks for bringing up the treks. Going on one helps applicants get to know the firms better, and chances are that in interviews it makes applicants sound more genuine. I definitely recommend that students go on one during their first year.

Aug 5, 2016

I received a message from someone that reminded me of an important point that is relevant for this thread: for those of you recruiting for any of the post-MBA positions at PIMCO, my advice about not needing to network does NOT apply. PIMCO is the one exception because they will schedule multiple networking events prior to interview and you should attend all of them if you want to be competitive.

Aug 5, 2016

Stern, Cornell, and Tuck do pretty well for AM within the top 8-15 group so those are good choices. UCLA as well but for west coast.

Aug 5, 2016

Not true. Don't know where you heard that.

Aug 5, 2016
jqbuyside:

Not true. Don't know where you heard that.

from a person who had been working in JP asset mgmt for years, or not hire many...?

Aug 5, 2016

False. I like True/False questions!

Aug 5, 2016

False. Where did you hear that?

Aug 5, 2016
UFOinsider:

False. Where did you hear that?

From a person who had been working in JP morgan asset mgmt (not pwm part) for years....

Aug 5, 2016

They don't have a formal MBA training program or "class", but doesn't mean they don't hire MBA's.

Aug 5, 2016

Short answer: No. There are plenty people without advance degrees higher on the food chain of CRE.

Aug 5, 2016

Are you an MAI at a national firm working on institutional level assets or are you at a mom and pop working on small stuff? How long have you been an appraiser? Do you have any other RE experience?

An MBA isn't strictly necessary to work at a life co or in REPE, but it is helpful.

Aug 5, 2016

I'm a trainee nearing my third year at a national firm. I was just wondering if a non-business degree would hurt my goals without an MBA. Don't really want more debt for something with mediocre employment results (assuming a non top-ten school).

No other experience. Would getting a general certified license hurt or help my chances for a repe or life co?

Aug 5, 2016

My advice is to learn everything needed to put you into the role that you want. Network while you spend your time learning. Learn from those you network with. Network while you eat cereal. Ride your citibike to a networking event...you get the point.

After you feel comfortable going up against others with years of IB, CRE, PE experience start to interview at places through the network you've built.

Aug 5, 2016

Generally speaking, getting your general certification would be positive.

I'm at one of the big life companies and it is a mixture of backgrounds. Some Directors/Senior Directors have MBAs, but some don't. There is an SD that has a BA in sociology and one that has a degree in public policy; a director that has a degree in sports medicine and another with a degree in journalism. At the same time, there are also several ivy MBAs and even a couple PHDs floating around (and they aren't risk/research, they just liked learning so they kept going to school).

I have a BBA in finance from a target state school, but no MBA and I feel like I'm sort of right in the middle of the pack for education in the group.

A non-relevant BA (I'm guessing from a non-target) + a general certification + maybe the level 1 CFA or a brokers license or ARGUS Certification + some good networking would probably net several analyst and maybe even an associate interview or two. And once you get into a company, it would be up to you to earn the promotions that you want.