I am a current sophomore at a non-target school with a 3.6 GPA. I currently am in the interview process for two financial advising/insurance companies for a 2020 summer internship. However, I am not positive I will be offered an internship yet and even more-so if the companies will keep their programs open amid the pandemic. I have been interested in a career in PWM, but recently I don't think I would succeed as a young professional at building a large, successful clientele. Therefore, I've become really interested in Asset Management. What are some of the typical careers in AM? I know it is a broad term. Also, can anyone clarify the difference between Asset Management and Investment Management? Should I be aiming for a high level Asset Management internship for next summer, 2021? Thanks.
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Very often Asset Mgmt and Investment Mgmt are used interchangeably. These are big industries with lots of players and moving parts. To muddy the waters more, the terms mean different things at different firms. However, I like to break it down this wasy:
Asset Mgmt: institutional money management . Could be a career path to Portfolio Manager of a mutual fund / hedge fund. Could be the CIO role at an endowment, pension, etc. The path typically includes equity and credit research, analysts (which are portfolio manager support roles), trading, etc.
Investment Management: HNW (Private Banking type) or retail (regular investors). Here's the tricky part. Asset Managers (mutual funds) have roles and careers paths for folks to help the Investment managers. Wholesaling, product support, etc come to mind where you work for the Asset Mgr but your job is to help the investment manager manage money for their client. Actually very lucrative field without requiring you to build your own book. More like building relationships with advisors and helping them build their book.
Lots of ways to skin a cat in AM / IM.
I think the second category should be labelled "Wealth Management". Investment Management and Asset Management are more or less interchangeable - for example MS calls their AM division "MSIM" and of course there's the infamous "PGIM" (mainly) credit AM firm.
Similarly I think working as a CIO or in a more junior asset allocation role (as opposed to a direct asset management role in an investment team) at an institutional investor (or at an intermediary like an O-CIO firm) is more of an "Asset Owner" or "Asset Allocation Strategy" career.
To answer the OP AM careers are broadly split into:
Product Management/Investment Strategy
Investments (i.e. PMs, Analysts and Research Associates or more broadly new grad/junior analysts usually split into Equities, Index, Fixed Income, Credit, Multi-Asset, Alts, ESG and Systematic)
Execution (i.e. buyside trading)
Sales (both Institutional and Fund Distribution)
Middle Office (i.e. Investment Performance Analysis, Portfolio Analysis etc)
Corporate Functions (HR, IT, Marketing, Strategy, CorpDev, Finance etc)
Back Office (fund accounting, reconciliations etc)
This is a very good breakdown of roles at an AM (fund).
I appreciate you taking the time to list some specific career paths, thanks!
I think this is a good depiction. +1 for OCIO showing up on this forum - rarely seen.
To add to this, when you think of 'asset allocators' they generally fall into three flavors... very generally outlined below. Consider the example of Wellington, an asset manager, who runs a variety of strategies across various asset classes. A consultant, below, will pick them on behalf of an 'asset owner' (i.e. pension or endowment, etc.) and give them the money - their job is to literally evaluate wellington, hire and fire them as needed.
Institutional Investor where there are a variety of strategies, some outsourced to other management firms, others where they are internally managed by the investment team, others which are a little bit of both. Obviously the larger the institution, the more they look like an asset management firm where they have PM's, research analysts, etc. Others, largely smaller ones, will have a CIO (chief investment officer) and then a small team of analysts that do a variety of different things from manager research to direct investment research.
Investment Consultant - which is literally what it sounds like. Institution X hires you to review their investment program, work with the board (or provide cover for them, depends on your cynicism) but overall they simply provide advice, help set the asset allocation, manger due diligence, recommendation, etc. Your careers here generally fall into a 'lead consultant' who is effectively the relationship manager, manager research analysts who cover specific asset classes (or multiple, depends on the size) and then all your other various sales, etc.
OCIO - also known as 'outsourced chief investment officer' which is really an extension of the investment consulting model. Rather than an institution hiring a full on staff, and then a consultant, you bring on the consultant and they manager the portfolio for you. They pick the managers, allocate to them, manage against the asset allocation (say 60/40 equity to fixed income) and off you go. Careers here are generally the same as an investment consultant, except there are a few more... I'd call them 'strategy' roles more similar to an asset manager.
Anyway - as you can see, there are a ton of paths within AM.
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