Don't lose hope, from BO/MO to Equity Research

Seems like there has been a lot of negative posts lately (mainly from a few trolls or most likely the same troll) so I wanted give a positive story for those looking to transition.

Quick Background: Went to a non-target state school and didn't know anything about banking for the most part aside from the few kids who mentioned they wanted to do it. I took the first job offer I got as an FA, which I hated. I worked there for roughly 2 years and started looking for something else.

Next job I took was in the data field working with institutional investors and hedge funds. I enjoyed the job at first, but things slowly become more and more boring and I knew this was a long-tern career for me. I started researching for the type of job I wanted and decided this time I was not going to settle just for better pay. I passed level 1 of the CFA and started applying to research jobs.

After I passed level 1 I spent my free time learning as much modeling and technical data as I could. I started to get a few interviews and they started out rough, but as I learned more what types of things they wanted I was able to get to later rounds. Throughout this process I applied to probably 100 jobs maybe more and reached out to a number of other people through email.

Finally I received an offer at a MM bank as an associate for an awesome analyst that I get along really well with. It isn't the BB end all that most people aspire to here, but I am very happy with the role and firm especially from coming from pretty unrelated roles.

The message I would pass on to people who are looking to transition or are having trouble with interviews is that it is all a game of numbers. You only need one person to be willing to give you a chance and just have to catch them at the right time. Make sure you try to better position yourself for the position you want the best you can, for me that was sitting for the CFA and learning modeling on my own (at least enough to talk about in an interview). Final thought is what I think gave me an edge over the other experienced candidates was work ethic. I had 5 rounds of interviews for the position and each round made sure I put in the work beforehand and showed an interest in both the sector and the analysts past work.

Don't give up on your dreams, but don't expect any handouts you need to put yourself in the position to succeed.

 

I tried to stay on the major topics in the space, basically just current events and any regulations. I also did some modeling/valuation on a few companies on my own time to better understand how everything in the financial statements works together and I made sure to bring this up in the interviews to show a passion for the markets outside of the job I was at.

What helped a lot was getting old reports from the analyst to understand what the revenue drivers in the industry are and what kinds of things he was looking at. I referenced some of his growth projections in a writing test and he appreciated that I went outside the box in a sense to find his research.

The thing I would've changed looking back would be to understand a report in depth and try to create one on my own. I think being able to show that you put the time in to understand a company and gave an attempt at writing a report would put you above other candidates. Personally I wouldn't expect everything to be perfect or accurate (the stock I pitched is down 30% since my interview), but putting in the effort would demonstrate the willingness to work hard.

I live my life by the motto that I make up for any lack of skill with effort.

 

It really depended on the firm and the sector. Some of the more niche sectors like oil/gas wanted to see if you had an understanding of the industry while other interviewers wanted to get a gauge on my work ethic. The biggest thing I would say is being prepared and knowing what you are talking about. If you try to bs an analyst about something he has done for years he will see right through that and discount anything else you say. If you don't know an answer just say so, but in a way that doesn't make you look incompetent. "You know I haven't had a chance to take a look at that, but I will be sure to look into it and get back to you". Something along those lines is how I handle things I don't know, but don't use this for every question for obvious reasons.

 

Congratulations mate. I like the post and agree with a lot of what you said, especially the part "you only need one person to be willing to give you a chance and just have to catch the right time". This is so true. There's an element of luck obviously, but you're much more likely to be the right person, in the right place, at the right time if you're constantly improving yourself and applying to every position when they're available.

Love the hustle mate, great work.

 

I used a combination of everything I could get my hands on - Macabus, old BIWS files I found online, this forum, seeking alpha, etc. I tried to do as much hands on as I could because I could read and understand concepts, but when the time came to implement them I wasn't as confident. I found some write-ups on valuations people put on seeking alpha and tried to recreate their work to make sure I understood modeling on at least a basic level.

 

@ERhelp I'm in a similar situation as yourself and haven't had any luck with applications. Submitted well over 100 applications over the last 12 months and haven't received a single call back. Is there some insight you can shed onto increasing hit rate on applications; be it resume structure, cover letters, contacting recruiters?

Thx

 
Best Response

I submitted a lot of applications as well with not a great response. One thing I did was constantly tweak my resume, nothing major just changing a word here and there. The reason I did this was so I could re-upload my resume to the job sites (ie Indeed) and show up as a new resume. I have no idea if that does anything, but I remember seeing that somewhere so I did it. I also tried to take my previous responsibilities and skills and write them in a way geared toward the positions I wanted. For example if my day included research, data analytics, and cold calling I would put the research point at the top and expand on that as much as I could and maybe leave the cold calling out.

For cover letters I found a template on here and rewrote it. Recruiters seemed to be pretty hit or miss. I am not a fan since they really just try to put you in a role as close to your current role as they can so they can fill the position quickly and get paid. I would say I had my best luck applying from listings on the Bloomberg Terminal and emailing companies that don't post listings and have a generic "If interested in a position email resume to...."

You may want to re-evaluate your resume, happy to take a look if you want to pm me.

 

I agree the industry will most likely shrink forcing more thoughtful and meaningful research vs plug and play earnings recaps. We were recently told to cut back on company update pieces unless there is something proprietary in the note. I know on my team we are trying to put out notes that no one else is doing throughout the quarter on different macro factors that affect our coverage.

From what I am hearing the banks that will be hit the hardest are the ones with a bigger European client base. I think there will be consolidation among the mid sized firms. We are seeing our clients cut the list of firms that use pretty significantly in some cases (something like a list of 70 being cut to 30). Analysts that have good relationships and insight will shine more while the earnings churners will probably be forced out.

 

Hey congrats on making the transition and thanks for doing this. I've been a consultant for about a year and would like to break into investment banking, equity research or investment management. I come from a large state school with very few alumni in high finance. I hae a few questions about networking: 1) What worked for you? 2) Did you find people to connect with that were out of your network? How and where? 3) Do you have any advice on how to ask someone that you networked with about employment opportunities? How soon did you ask them about employment opportunities after meeting them? 4) Any advice on maintaining the relationships that you made while networking and staying relevant? 5) Do you have any advice on networking topics to talk about?

Thanks again for doing this. Appreciate the advice.

 

So one thing I would advise for you to do is pick one area you want to focus. On a high level investment banking and equity research appear similar but they aren't. Focusing in one helps you show interest/passion to whoever you're chatting/interviewing with. I can only speak to ER as I did not attempt to get in IB:

  1. Reach out via email to senior analyst in sectors you are most interested. It helps to be able to speak about the industry, having a pitch ready and most importantly seeming personable.

  2. Since I was targeting ER most of the senior analyst info is available online. For example, you can use Bloomberg or you can use the investor relations website of any company to search for emails and phone numbers. You can also use Linkedin to find people but I did not use it to source contacts.

  3. I never asked anyone for a job and I think that was important. People would often remind me when I asked for advice not to ask for a job. I also would be asked "what are you hoping to gain from this call". Anyone who accepts to speak with you knows you are looking for a job. Once I got a person on the phone and if the call went well then I would reach out to them if I saw a job posting at their firm. The question I would ask was "do you think this is an opportunity worth pursuing" - a bit passive aggressive I gave them the option to help or not given my background.

  4. This one is a bit harder to be honest even for me. I keep a sheet with key information and dates on when the last time we spoke. I would keep in touch by emailing them if anything major happens in your life, promotion, mba, CFA, etc. or if something happens in the industry. Sometimes they responded, sometimes they wouldn't. Key thing to keep in mind you're not going to befriend everyone or develop relationships so easily. Out of the 500+ emails I sent to over 100+ contacts I was able to develop three/four solid relationships, we text, grab drinks, eat dinner, etc.

  5. Definitely ask to hear their story as it'll give you an idea of their experience while you pick up on themes. I'd also talk about the industry they cover, ER industry as a whole. Honestly the topics aren't as important since you don't want to a static convo. Rather I'd focus on letting the convo be as dynamic as possible and so if you get stuck talking about their industry for 15 mins consider that a good thing. Remember people are busy

 

What are the most important qualities in a first year associate? Specifically technical skills like modeling and valuation, I know soft skills such as written and verbal communication are important.

I have been interning at boutique in the ER group and will be interning at a BB(MS/GS) in the Finance division this summer. Looking to leverage my boutique expereince/ networking internally to move into ER FT. Any advice on how to do this would be much appreciated.

 
assigneduse40:

What are the most important qualities in a first year associate? Specifically technical skills like modeling and valuation, I know soft skills such as written and verbal communication are important. I have been interning at boutique in the ER group and will be interning at a BB(MS/GS) in the Finance division this summer. Looking to leverage my boutique expereince/ networking internally to move into ER FT. Any advice on how to do this would be much appreciated.

In terms of first-year associates, I think a basic understanding of accounting/modeling/valuation is pretty fundamental. Of course most people won't make it past the interview process without that foundation. Honestly, the things I look for (and this is not exclusive to ER) are humility, a willingness to learn and a positive attitude. These are almost impossible to teach and people definitely notice them.

Are you currently in a front office role at the boutique? I think you should definitely take advantage of any opportunity to land a full-time offer at your current shop. It will likely be easier to lateral into a BB from a boutique than moving internally from a finance role. That said, anything's possible if you put your mind to it. If you want to move internally at a BB, I would recommend figuring out which teams have open positions and then email the analyst directly asking to chat.

 
  1. I'm currently in BB BO studying for CFA right now. How feasible is the internal transfer given I pass levels II and III? Do you think passing all three tests matters or just level I, II, etc?

  2. anything else you think I can do to get myself recognized?

  3. also, I just graduated last year, so do you see any value in pursuing an msf?

  4. if you don't mind me asking, how old are you, and how long did it take you to break in?

thanks a lot

 
theebreadwinner:

1. I'm currently in BB BO studying for CFA right now. How feasible is the internal transfer given I pass levels II and III? Do you think passing all three tests matters or just level I, II, etc? 2. anything else you think I can do to get myself recognized? 3. also, I just graduated last year, so do you see any value in pursuing an msf? 4. if you don't mind me asking, how old are you, and how long did it take you to break in? thanks a lot

  1. It's entirely feasible and I don't think you have to pass L2/3 before you starting trying to make a move. Passing L2 would definitely be a positive given how much hard it is than L1, but the CFA in general is a great way to show you're serious about investing. Like I said to assigneduse40, figure out who has open positions and start networking. The associates are also useful to contact because they might be able to get your resume in front of the analysts.

  2. I would say have a good story (i.e. why ER?, why sell-side not buy-side?, etc.), do a modeling course (Breaking Into Wall Street is good), and write a research report on a company (or companies) that you're interested in. When I was cold emailing, I attached my resume and a mock research report that I wrote. In retrospect, it was terrible, but it showed I was serious.

  3. I think if you know you want to do ER, take the shortest route and network your way in. I had several people tell me that when I asked whether I should go IBD and then move to ER.

  4. I'm in my late-20's and the whole process took about 9-10 months from when I started networking. Set realistic expectations and assume that it could take a thousand contacts before you land something (it took me 600+). Remember, it's a numbers game. The more people you talk to, the more opportunities to land the job.

 

Congratulations Er2014 on breaking into ER! Reading these kinds of threads fuels my motivation.

Could you discuss a little about what avenues of networking you used to break into ER? For example, if you cold emailed 600+ people, where/how were you able to obtain that level of information?

I ask only because over the past year I've compiled a list of about 400 or so equity shops in the NYC and was wondering what my best approach would be to use the data.

Thanks again!

 
Crramos20:

Congratulations Er2014 on breaking into ER! Reading these kinds of threads fuels my motivation. Could you discuss a little about what avenues of networking you used to break into ER? For example, if you cold emailed 600+ people, where/how were you able to obtain that level of information? I ask only because over the past year I've compiled a list of about 400 or so equity shops in the NYC and was wondering what my best approach would be to use the data. Thanks again!

I used LinkedIn as my primary source for contacts, as my personal network and alumni network were of limited use. In retrospect, I should have started with cold contacting ER analysts/associates and saved myself a lot of time. I would just search "equity research" as a keyword and go firm by firm. I started with the bulge brackets and worked my way down into the smaller middle market and boutique firms. I lucked out and landed at a larger shop, and frankly my experience so far leads to me believe you should aim for a bulge over a smaller shop (ISI Evercore might be an exception). The great thing about LinkedIn is that it has that "People Also Viewed" feature on everyone's profile. That should give you plenty of contacts to start with and everyone's fair game.

 
The Real Max:

How common is it for people to exit to HFs? More/less than investment banking? How many people make promotion to analyst and how long does it usually take?

Unfortunately don't have much insight into HF exits in ER vs. IBD, but the clients I work with tend to come from an IBD background more often than not. Whether that's because therer are simply more IBD positions than ER, I can't say.

In terms of promotion to analyst, it completely depends on positions opening up, or if the firm decides to expand coverage to a new sector. When an analyst leaves, the firm may go internally with an experienced associate (say 3-5 years experience) or they may try to poach someone from another shop. It's really situation-dependent. I've seen some associates at my firm poached by other firms to cover a sector on their own.

 

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