Buy Side Sovereign Debt - Realistic End Goal?

lustrum's picture
Rank: Chimp | 12

Been finding it hard to find information about funds that buy sovereign debt - especially the emerging market, non-investment grade type.

What are some of the big names that do this?

I'm asking because an opportunity has come up for me in the sovereign team of one of the credit ratings agencies. Assuming I got experience with emerging markets/riskier products (and let's say had a few levels of CFA for good measure), would this be a natural path into a buy side sovereign debt role?

Until now I've kinda been stuck in an IB or bust mentality, and have come painstakingly close multiple times now. I hadn't thought much about sovereign debt research before, but I think it is an area I could genuinely be interested in and good at. At the same time, I want to make money and I know that I'm not going to do that at a CRA - hence the desire to move over to the buy side in 3 or so years.

Comments (6)

Jun 1, 2018

Yes, realistic.

But, it would be very beneficial if you learned the language(s) of the sovereign(s) that you cover. If you're covering China, for ex, learning business Chinese would help a lot and help you to stand out / stand in.

Jun 1, 2018

OK, that's good to know. When I'm done with the CFA hopefully I can retain the habits and direct all that free energy towards learning a couple of languages.

Do you know the names of any funds/banks that do this? I'd like to get a head start networking wise, even though I'm aiming to make the move in a few years time.

Jun 1, 2018

Sovereign debt is tied a lot to interest rates. I'd imagine that your skills would be desirable at any investment bank (all the bbs to my knowledge do rate stuff). Pretty much every large asset manager does emerging market stuff and have macro teams. I could give you a list, but it's not hard to find. Open positions will be challenging though. Generally don't need 5 people to cover 1 country. And how many countries are there to really invest in? If I were you, I'd try to learn the macro and jump quickly to company focused research in that emerging market.

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Jun 1, 2018

Still new to this - by macro do you mean developing an understanding of emerging market macroeconomics, the factors that affect their ability to repay sovereign debt, what influences the market perception of that debt etc?

And what do you mean by company focused research in that emerging market? As in moving over to a corporates coverage type role but focused on a specific emerging market?

Jun 1, 2018

Yes to both.

Jun 2, 2018