Business roles in an AM firm

I used to like the investing part but my interests evolved and now I'm much more interested in asset management as a business. What roles at an AM firm would you say give you the ability to grow and manage the business? Again, not interested in the investing function per se, nor the back office operational stuff. Would you say that fundraising or BD roles are lucrative in terms of comp level, trajectory, and scalability?

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Comments (8)

Oct 3, 2021 - 1:36pm

everywhere ive worked the chief operating officer (with a background in ops) manages investor relations/business development/ marketing, operations, IT and sometimes HR.

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Oct 3, 2021 - 8:18pm

I would imagine very large asset managers (in the tens of billions AUM) have dedicated fundraising people, no? At smaller scale I can see how the PM's credentials and track record are sufficient to pull in capital (so the COO probably does mostly the process stuff?), but I can't imagine you can scale to over $10 billion with your COO doing fundraising... I could be wrong. 

Oct 3, 2021 - 8:23pm

IR / Fundraising can be very lucrative, however it's generally eat what you kill and is very dependent on: a) your ability to build and manage relationships and b) your network / relationships with allocators. While it's not as technically challenging as acting as a PM, these kinds of roles require a particular demeanor / skillset that only some people have. There's also a degree of embedded risk in these roles in that periods of poor performance can jeopardize your ability to fundraise which in turn, impacts your bonus. IR personnel are also an obvious target for layoffs when times get tough.

I've met quite a few professionals in roles of this nature that started out working in Banking / S&T and ended up moving into more operational / fundraising roles as they became more senior. I've also seen Analysts/PMs pick-up fundraising responsibilities on the side, which often makes them by far the most useful IR personnel to speak to (because they really understand the Fund's book). With that said, most IR professionals I've dealt with come from a sales, client service and/or IR background.

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Oct 3, 2021 - 8:43pm

Thanks, that's really helpful. I think there are some of us who started out as analysts, but you grow older and your preferences and tolerances change. I no longer enjoy just thinking, analyzing, and modeling all day only to come up with a decision, after which I'll only be considered good if I'm right 55% of the time or more, and I won't find that out for perhaps a couple years. Very long feedback looks and constant self-doubt around whether you're good because of skill or luck. Sales is shorter feedback loops, more rejections too (but at least won't hurt your ego as you won't interpret it as a rejection of your competence or intelligence), and probably a skill that will grow in value as active managers increasingly struggle to raise capital. Just my thoughts, could be totally off. 

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Oct 3, 2021 - 8:53pm

I think you hit the nail on the head in that priorities change as you get older. There's an upside I failed to mention in that if you're able to build relationships and raise funds, IR probably has the best work/life/salary balance in the entire industry.

I would digress on feedback loops though. I've met salespeople that spent years building relationships with a single allocator before they raised anything. I've also seen it take the better part of 12+ months from an allocator meeting with a PM/Fund to actually being invested. It can be a pretty slow, frustrating experience at times. 

The other option you could look at is actually joining an allocator (Pension / Sovereign / FO etc.). While often not quite as well paid, these types of firms tend to offer pretty interesting work with an extremely good WLB. You also get incredible access to Funds / incredibly high caliber personnel (because they want your money). Have sat in on meetings with some pretty incredible investors as a result. 

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Oct 3, 2021 - 9:35pm

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