Deciding between offers... post-MBA AM (Equities and FI) Comp?

In a very lucky situation where I've landed MBA summer analyst roles on both sides of the spectrum (equity and corporate high yield) at $100bn+ AUM firms, and find both roles interesting but am leaning towards fixed income given I think the team's track record is stronger and think there are less headwinds to active management in the asset class as a whole. Both funds are in tier 2/MCOL cities and have around $1bn AUM per head.

As I think through this, I'm curious what "market" comp is for post-MBA roles in AM on both the equity and FI (HY corporate credit) side? Trying to work out what FT expectations should be for each position, since I like both roles so comp actually is playing a factor.

For equities, I'd think maybe $225-250k all-in? I've heard higher than this but figure there's a discount for non-HCOL locations? My summer offer here works out to $150k base if you annualize the comp, but not sure what bonus looks like or if things are higher FT.

Fixed income, if it's high yield maybe $200k all-in? My summer offer here is equivalent to $130k base, again not sure what bonus looks like or if things increase FT.

Curious to get everyone's thoughts, particularly on the FI side given that there is very little information floating around on it.

Comments (9)

Jan 6, 2022 - 10:23pm

I'd imagine 125-150k would be about right as a base for either, bonuses in equities will have the potential to be larger but also more volatile. The work is vastly different especially as you move towards PM. Obviously depends on the shop and strategy but FI is going to be more math heavy and less focused on business dynamics/strategy. I've found myself managing both fi and equity portfolios and enjoy the equity analysis much more. Imo in equities you get to use your mba skills more.

  • Business School in ER
Jan 6, 2022 - 11:01pm

So I'm lucky in that the FI role has 0 macro focus since they are very low on the credit quality spectrum. Coverage works a lot like equities where you're doing very deep research. They're also growing a long/short credit hedge fund vehicle I'd get to work on. Would that change your answer?

Most Helpful
Jan 6, 2022 - 11:14pm

That's definitely enticing…. But it'll still be focused on how can XYZ business can avoid blowing up vs how can this business change the world… I'm just an equity person at heart… I see the interest in FI for sure though.

And agree that there's less passive pressure on FI but also would argue that passive pressure on fi is under-appreciated while it's also over-blown for equities. In the end you should do what ever you think you'll kill it at because that's what'll get you paid in AM… in FI it's easy to beat the index the fund I run has beat the index by 40 bps since I started running it two years ago but it's in the 80th percentile for Morningstar because the index is ~50% treasuries, the peer group can invest in high yield, and I have to keep an average A-rated credit in the fund. What I'm saying is you don't need to beat the benchmark, you need to beat the peer group.

Anyway my advice boils down to do what you think you'll be best at or the form that will give you the best opportunities that's where you'll make the most.

  • Business School in ER
Jan 7, 2022 - 1:05pm

Got it, thanks. The PM is a top 5% performer over the last decade relative to peer group - reputation of the FI group I have an offer with is better than equities.

Given that my natural inclination has been to push back on the things you've said (even though they're helpful) I think it's leading me to believe that my gut is I want to work on this high yield team haha.

On the comp side, would you expect over $200k ($130k + $70k+ bonus) to be a reasonable expectation? I was clearing $235k in my pre-MBA role, albeit in a HCOL city, so it's kind of hard to stomach a material step down from that. I'm sure it scales over time just curious what you'd expect on a reputable team with $1bn+ (and growing) per investment professional. Avg fee on the products is ~1% not including carry in the hedge fund vehicle so that's ~$10m per IP...

Jan 7, 2022 - 3:18pm

Trust your gut, there are more nerves in your gut than your head! Jokes aside, I'd agree with your assessment. My intention wasn't to sell you on equities but rather on where you think you'll do better. And yea I'd think 200-225k is reasonable if low once you get a full time offer id push for 150 base that's really where the industry is at. In terms of pay I faced a similar pride thing but do a comp there's tons of sites that'll tell you what equivalent salary is for say ny vs Baltimore. Real wages are what matter

Jan 6, 2022 - 10:34pm

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