New user here and very impressed by how helpful the comments here are so I'll give it a go as I'm looking for advice...
What exit opportunities are there from AM (either from analyst or buyside research roles) if you don't turn out to be a great investor?
I did the typical two years sell side equity research at a BB (I left mainly because that job seemed intellectually dishonest) then transitioned into a large asset manager/mutual fund as a research associate 2 yrs ago. This job is interesting, I enjoy learning about new things, good people to work with, and decent (though not excellent) hours and pay.
My progression, if I stay, is to become an analyst (in about ~2 years), from where pay and responsibilities start stepping up more substantially.
But I am having some doubts as to whether to stay or pivot careers for two reasons:
(1) Returns in active management are highly skewed to the very top performers, and at the same time decreasing due to the shift to passive, so even though senior analysts/PMs make good money I am not sure their comp is representative of my earnings potential in 5+ years.
(2) if in ~2-3 years time when I will have had some sort of a track record it turns out that either I am not that brilliant investor or they choose not to promote me if the industry keeps shrinking then I might be stuck on a lower-pay career path than I could have been on.
Would it be feasible to transition into infrastructure funds/PE/IB with no deal or private market background? Am I just imagining that the grass is greener on that side? Where do people go from AM (and ideally still make decent money)? Or can I pivot within AM to be on a career path that has growth prospects (I imagine easier to get paid if the industry is growing)?
Thanks for any thoughts.
waffle maker, bummer your thread hasn't had a response yet. Sometimes bots are smarter than humans anyways:
I hope those threads give you a bit more insight.
Bump
In a similar boat as you and I have been trying to figure out the same thing.
What I have come up with so far is that investor relations would be the most logical exit op and you could leverage that into hybrid treasury/fp&a type role as well. Other ones that might be a little tougher are corp dev/strategy. There is a thread on the ER page about somebody making the jump to VC/PE so that is possible.
While I agree with you that this may not be the best industry for long term career prospects, my thought is try to stick around as long as possible and hope some real money will come at some point. In the meantime I was considering part-time top 15 MBA so that when/if I have to make a career switch my resume has a little more legitimacy to somebody looking at it that is from outside the AM industry.
Hopefully somebody that has made this switch or is familiar with the options will comment.
Most investors LO and HF are far from brilliant investors. Many are lucky, stumbled into it, survived etc. The often lackluster long term returns and high turnover of people and funds will attest to that.
In short, OP, I can’t really answer your question but am hoping that my response will ease some of your self doubt and build your self confidence.
Hopefully others can chime in.
Good Luck
I don't lose any sleep over the long-term outlook for the industry and recognize that shorter-term everything in life is cyclical.
That said, if I were to make a change I would personally probably try and get into corporate strategy as that is what interests me and seems like a logical extension given that I spend a large proportion of my time trying to evaluate corporate strategy from an outsider's perspective.
Anecdotally, I have seen IR as a common landing spot for former analysts. Corporate development and Big 4 other moves that I have seen. PE I've seen only at very small funds and it often comes with a paycut upfront. Can't comment on IB.
I'll add that if you are worried about the outlook for active management though, where is the logic in moving to IR lol
I’d say that is a somewhat fair point. But whether active management continues to shrink or not, there is still value in having a strong IR function. It amazes how poor some companies are at IR or some that hire consultants that do nothing. I don’t have any empirical evidence, but anecdotally I have noticed companies that have strong IR have tended to perform over time.
Do you want to stay on the buy-side at all? Take the time to think about what you want to do. A lot of the advice above is good, maybe go into corporate strategy, a HF is doable, reach out to a recruiter to assess the opportunities for you.
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