Buyside AM offers vs a second IB summer?
BB IB Summer Analyst going into my junior year facing a hard decision. While I like the work & people in my group so far, I find work-life balance/pursuing my true interest in public markets/thinking more qualitatively/doing work that's actually used to be high career priorities. I'm blessed to have two quality options on the table for next summer. Please see specs below on each role and for privacy reasons, you can request a PDF w/in-depth pros/cons of the firm that formally extended the offer.
Role 1/"Firm ABC": Endowment-style investment firm, ~$25B AUM, Bay Area. Strong connections to a top West Coast University as the founders came from their Endowment, intern training hosted at their b-school, execs regularly write recs to M7 B-Schools/facilitate exits. They invest across multiple asset classes; internship is generalist but you're placed on a team full-time. Clients include large sovereign wealth funds, top family offices, endowments. ~75 employees across the whole firm, so very flat structure. Internship housing is covered near firm HQ. Interns are involved in asset allocation, portfolio analysis and manager selection; while it's a FoF, they are heavily pivoting towards direct investing as a core future growth strategy and integrating that into intern assignments, though certain teams seem to do more of it than others. It's always been my dream to explore the Bay, and this firm has led to VC/tech startups and long/short fundamental equity hedge funds in the past due to its location and constantly meeting managers/investors. These two paths, plus an MBA, are my long-term goals.
Role 2/"Firm XYZ": Long-only fund in Northeast (not NYC) focused on buyside, fundamental equity research. Hallowed reputation, >$100B AUM. Associates have autonomy in their work with lots of access to senior PMs, taking positions in IPOs, working across different teams (especially the chance to do sustainable investing), genuine focus on improving diversity/inclusivity in front-office, etc. I don't have an offer in hand so it'd seem silly to compare, but this firm is hosting a diversity program in a week where we meet professionals & work on a stock pitch over 2.5 days. It's so extensive that Summer 2022 offers are given out after the pitch presentations -- no further interviews. When I emailed them regarding my offer, they put me in contact with the program's senior sponsor, who I interviewed with earlier in the year. Nothing's guaranteed and I'll work hard but the conversation was quite refreshing and positive. This firm seems safer for L/S because of its formal multi-month training program after you join full-time; headhunters would respect the name even if sell-side ER/IB to PE are more proven for that route. In that situation, I'd be going from buyside to buyside and all I need to do is prove I can short -- can be done through a client and the city has more HFs than the regular person may think. I could also go to firm ABC after 2 years here based on relationships I've built. Though this firm can technically do the trick for VC, firm ABC would probably be better.
My questions are: firm ABC's offer is due mid-week, but I want to think through this more, so is requesting an extension bad? Does anyone have a template for that (if I end up declining firm ABC, I want to do so tactfully to preserve the relationships I've created after recruiting for more than 1.5 months)? Which offer keeps me on the direct investing paths? Could I go from the Bay Area firm to the non-NYC one and vice versa full-time? Anything else to consider?
Lmk how you end up requesting an extension - I'm in a similar boat. My $.02 is that ABC is a better fit, simply because you sound more excited about it. Location is important, and something that's playing a major role in my choice as well. It also sounds like ABC would have better VC exits and comparable HF exits, assuming you go to bschool prior to HF and ABC's MBA placement is as good as it sounds.
thanks so much! I'm excited about both as they're great fits for my personality, but from a lifestyle outside of work/networking perspective, ABC is really good regardless of the city price and the long commute (even with a hybrid policy). I love ABC city way more than XYZ (although the latter is cool, I'm tired of frigid winters).
ABC would def have better VC exits, however, XYZ seems great for the career advancement/learning front as it relates to HFs. Even though people have exited to HFs from ABC, XYZ is pure research which would make me even more prepared/marketable for L/S HF processes vs ABC being a FoF with direct investing where you have to angle for a certain team to maximize that transferrable learning. I also want to take a risk for once and be a little less "corporate", and ABC lends itself more towards that, so since being in that mentality is what I've always wanted, I don't know why I'm so scared to take the leap.
I see your point about the MBA, but I'd personally want to exit into VC/HFs for my second role out of school then go M7. In fact, I'm applying to a couple of programs for both roles full-time, so this decision may not even end up mattering in the long run, who knows? I can always start at XYZ, keep my relationships with ABC, and move over their after 2 years or to an HF in the Bay Area. Total coin flip for either so I'll let ABC's decision on the extension guide my decision making and let the market shape out the way it will. PM me so I can send you the full list of considerations plus how I'm extending the offer!
Your points make sense. It seems like you're in a position where you can't go too wrong either way, which is a great spot to be in. That being said, I know it doesn't make the decision any easier. I can't pm you, but could you pm me? I'd like to hear how you're getting an extension!
I'm in a very similar boat, and think we'll be attending the same diversity program. PM me
just PM'd
I would personally remove firm ABC. I don’t think endowment style investing is a great place to begin a career if you are looking for optionality IMO. Endowment style investing is essentially another word for a fund of funds (only difference is an endowment invests across asset classes whereas a FoF usually focuses on one asset class). Direct investing might just be coinvesting alongside PE investing, but it probably doesn’t entail building out a PE arm. Whole point of endowment investing is to focus on asset allocation and then manager selection, not actual stock picking. There is a reason the Harvard’s endowment essentially shut down it’s HF, real estate group, and all of its direct investing teams.
I would be between firm XYZ and IB. Both will give you a broader skillset and more optionality down the road. You can also probably go from IB and XYZ to firm ABC, but not the other way around. If you want to go to L/S HF, VC, or are generally unsure, go with IB for greater optionality. If you want to do far more interesting work, be surrounded by better people (fewer assholes, smarter, etc), and have better WLB, go with XYZ. Getting a seat in LO AM is incredibly difficult and people never leave these places (great people, really interesting work, good WLB, very competitive pay). XYZ is the exit opp and probably a better career path than L/S HF or VC imo. If firm XYZ is a place you could see yourself building a career at, I would jump on the offer—these seats don’t come up often and you might not have the opportunity again.
thanks for your advice, great points! I will say that firm ABC is unique in that the direct investing and FoF stuff is split 50-50, and people have exited to pe/hf in the past. The teams I would want if I accepted the internship and received the full-time offer from the firm are the most direct investing heavy at the firm. Personally not willing to go back to IB since I have these options, so that's why it's XYZ vs ABC.
Just a couple of questions: Firm ABC is in a part of the Bay Area that's a hotbed for VC/direct investing, so do you think that can help from a connections standpoint? Can LO AM lead to L/S or macro HF investing, even though just getting the LO seat is an unparalled exit opp already? Also, this decision is for a junior summer internship (sorry for not clarifying - idk if that helps), so could I pivot into other roles for full time with sophomore BB IB + firm ABC on my resume? Really interested in hearing your thoughts. Happy to PM if needed.
It’s tough to comment without the name of firm, but who knows what group you’ll be placed on and how much “direct” investing you’ll actually do. Even if you end up doing doing “direct” investing, people down the line will assume you’ll at a FoF and you’ll have to get your foot in the door to even explain what you did and change their initial impression. Also, what does “direct” investing even mean? Is this bottoms up public security selection, late stage buyout, growth equity, venture capital? The skillset needed for FoF work and direct investing are fundamentally different. Endowment model is also placed emphasis on asset allocation and long term trends rather than security selection. I know people who work at the major endowments, and exiting to buyside is pretty uncommon. I hated my time in IB with a passion, but I would absolutely take it over any FoF work. Nothing wrong with FoF work—it can be an amazing gig with good pay and hours. Just not a place I would want to begin my career and I think I would be kicking myself if I started my career here. I don’t think the location will matter too much for breaking into VC. Just network virtually. Breaking into VC is hard from IB, and it’ll def be harder from FoF.
XYZ is actual buyside work and requires building an investment skillset. I would take this in a heartbeat over ABC. It will be easier to move to L/S from XYZ than ABC. Same goes for PE. However, most people would take LO AM over HF and PE. Work is extremely interesting, hours are better, and pay is on par.
You do you, but if you view your next career as a stepping stone, I think ABC is a terrible choice. IB is probably the best if you want to move to PE/HF/VC. XYZ is close second but will have far better WLB than IB and is a place you might not want to leave given LO AM is the exit opp.
Ask ABC for an extension. You’re in college so it’s pretty reasonable and you might be able to cite your career center. Tell them it’s an extremely important decision and your final internship, so you need more time to make sure that it’s the right decision for you.
I don’t see why you could try to make the leap again from junior internship at ABC to something else FT, but I think this will probably be easier coming from two IB internships. It’s easier to spin your story, less jumping around (people will also have no doubt you got return offer for junior year), and IB is a very recognizable role on your resume.
Fund of funds is bad. it is bad branding, and causes people to doubt your skillset even if you have it.
that said, enjoy makena cap
it's a different firm, and I just want to evaluate the merits of each of these opportunities instead of brushing something aside solely based on a name/investment strategy. after all, the best things in life do come unexpectedly.
not trying to be rude, but i see you're an mba associate in IB, and huge congrats on that bc securing the seat ain't easy. however, did you quickly delete schools during your process just based on something you saw/heard after narrowing down a huge list initially (it's a different story if it didn't fit into certain criteria)? no, i'm you did extensive due diligence on the opportunity cost, network, reputation, teaching style, etc. i'm just speaking to open-mindedness and how it's important now more than ever in society, especially when it comes to your career when you're on your own. our world would be better if we practiced that more. i'll play it out and whatever happens happens.
dont want to offer too many details on how I know this, but you can probably guess.. will just say that FoF have been offering the same sales pitch about how they have great grad school connections and allow you to see a broad swathe of high finance at an early age for years
that isn't wrong, but it glosses over the fact that while you see high finance, it generally doesn't qualify you to move to these other areas, and in fact often precludes this move as the PE/HF opportunities you are learning about look for prior IB/direct investing experience. As a result those who start in FoF tend to rely on those grad school connections because they require a rebranding to move out of the space
dont rely on the people at the FoF to tell you how they are different and their analysts all get sweet HF/PE/VC jobs after 2-3 years - make sure you reach out to some of the people who made this move and ask them how their search went/how replicable their path was, and if they would recommend it over IB or your other direct investing options
Update: Had the interview with XYZ today, thought it went pretty well. Some slip ups happened of course but I always overanalyze them and feel nervous after interviews. If it means anything, I asked the professional about 12-13 mins of questions out of less than 30 (interviewer came a little late, had intros, so didn't really start until 5-6 mins after the original time). went very quickly.
Hopefully it worked out. These LO AM shops usually have pretty extensive interview processes and get back to you fairly quickly. If you’re interviewing with someone more senior, the interview might be mostly time for questions (typically later stage though).
didn't get it. still a chance at an offer via the diversity program but I officially signed with ABC today as the offer extension was about to expire EOD -- very relieved/excited! will revisit the LO AM for full time.
How did you get a bbib soph sa? Are you from target/diversity?
semi-target, diverse, applied to/did a diversity program at the end of freshman year at the height of the pandemic, program date to offer call to signing took less than 2 weeks.
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