equity research BB

I am a second year student in a london target university studying econ and I was examining the internship possibilities.
I am interested in hedge funds but I know how difficult it is to get a FT out of undergrad. I might have the chance to do an internship in a credit Hedge fund (think 3-6B AUM) though I am not sure if this can lead to a FT position. For this reason I was wondering if trying to get an ER summer internship in a BB is a better move as it will allow me to have a better brand in my cv and maybe enjoy better exit opp.
I am planning to stay in London and I am still unsure about which HF strategy I really would like to specialise in.

 
Most Helpful

The best path is almost always to start in IB as it gives you the broadest range of exit opportunities. For example, if you're coming from sell-side ER then you're pretty much limited to long/short HF's. It would be tough, although not impossible, to break into a merger arb or distressed debt/credit fund or a special situations fund from sell side ER. It's not impossible but just a lot tougher than it is from IB.

Why don't you ask the credit fund if there is any chance for the summer stint to turn into a FT position? If you are not sure you want to work in credit I would take the ER position in a BB as there is the possibility to lateral into an IB job and the brand will look good for FT recruiting.

 

IB does not appeal to me to be honest. I am not interested in PE/VC/banking so I do not see why I would spend 80 hours a week for 2 or 3 years doing something I don't like. I know that IB in a BB can lead to a good value/fundamental HF but I would like to avoid this path. I am not 100% sure about credit investing but I have to say that HY/distressed appeal to me.

Is it really much better to do IB for credit or is ER/Credit research/AM still a viable option if I do not manage to get the FT?

 

To people who happen to work in a credit fund, can you please comment on the amount of macroeconomic and ''big picture'' analyzes ? Are top-down analyzes common ? I know that in general credit funds go deep into companies structure but I want to know to what extent do politics influence the day to day operations in a credit fund and how "easy" (at least compared to other strategies) is it to generate alpha in a bull market.

 

I am very tempted to take the internship, especially to see what is a Hedge fund environment really like. My only hesitation is that I am more tempted by macro discretionary HF than ''corporate focused" HF. I fear that by doing this internship it will limit my prospects to join a global macro fund after graduation as I won't have any training in rates, FX,commodities...
(another reason, perhaps more practical, is that I am an econ not finance major and I am more interested in macroeconomics than corporate finance to be honest, even though I find credit somewhat interesting)

 

im not sure why ER department size would matter, but the big guys (bear, Merrill, Citi, lehman, JPM etc.) are all pretty similar with around 70 analysts covering 1000+ companies in the us. that's about 15 companies per analyst on average but that multiple is going up as banks are trying to do more with the same number of people.

 

That's funny, they should keep these files private, don't you think? I think it's the responsibility of the IT guys.

Anyways, didn't you mention in previous posts that you are attending an ivy league?

 
brisbane:
The best yardstick is accuracy, and I believe Oppenheimer & Co. is tops by that measure.

i don't agree. most buy-siders don't care about EPS estimates as they come up with their own models, or use sell-side models as a basis for their own. if you ask people buy-siders as well as sell-siders as to what buy-siders care about the most, almost none of them will say "EPS estimates" and most of them will talk about access to management, proprietary insights, etc. even so, the quality of analysts can span a wide range from bank to bank, simply because each analyst essentially operates as an independent franchise, and the way he runs his/her team is almost always more of a determinant in your life than whose roof you work under.

that being said, if you're looking to break into research, you're almost invariably better off starting at a big bank just for credibility and resume reasons. but what you do at a bank is 80% or more dictated by who your immediate boss is.

​* http://www.linkedin.com/in/numicareerconsulting
 

According to your other thread 2 weeks ago, you were thinking of applying to universities and now you're suddenly a first year student? That was fast!

Your chances are better if you work on improving yourself and accomplishing things instead of making different variants of the same thread on WSO trying to fish for reassurance or encouragement about what university you go to.

 

two follow up points

1) BS aside, I am assuming that there would be a valuable experience to gained by working in IBD.

2) Please no college kids making comments. Just people already working. Thanks.

 

I'm curious of this as well. Further, given the options, how would you rank ER, ECM, and DCM for PE? For HF? I know DCM and ECM are technically considered IBD, but many consider them not to be.

 

how about you stop looking at how acronyms are ranked in a forum and start to look what the positions actually mean. Combine that with the model of the fund you want to work for and the answer should be quite easy.

 

and there is the problem. PE and HF, broadly. It will depend on what type of fund (esp. on the hf side) Why would you care how the ratio is of people from each category moving to the buyside? When somebody would say DCM sends the most people to the buyside, would you then go into DCM despite the fact that it will be most likely in distressed shops only which might not be what ur interested in?

sorry im just leaving college so I might be the wrong person I just think ur question is stupid as hell

 
and there is the problem. PE and HF, broadly.

I do not mean PE + HF, broadly, I mean PE, broadly, and HF, broadly, as in two different categories -- how the experiences would stack up for each.

It will depend on what type of fund (esp. on the hf side)

I know it would depend on what type of fund, but some funds have got to be more common than others. I'm wondering if one particular experience would be relevant to the most types of funds.

Why would you care how the ratio is of people from each category moving to the buyside?

To stack the probabilities in my favor, if I am indifferent between two different jobs.

When somebody would say DCM sends the most people to the buyside, would you then go into DCM despite the fact that it will be most likely in distressed shops only which might not be what ur interested in?

That's the type of information for which I'm looking, worded: "Well, DCM places the best into distressed shops, if that's something in which you'd be interested." You know, a considerate and helpful response.

sorry im just leaving college so I might be the wrong person

Yea... "I'm looking for is advice from someone who actually has experience."

I just think ur question is stupid as hell

I just think your spelling and grammar are stupid as hell.

 

WOW you guys sure have a boner for those bankers. They must of sold you a pretty nice bill of goods for you to embrace it so wholeheartedly. Do you think that ER is looked down upon? Jesus Christ.

The problem with your original post and, in general, your question is that its stupid. Shows a complete lack of understanding of the industry. Personally, I can't believe you got hired which such limited knowledge.

Moreover, its childish for you to want to "rank" positions. If you want to work in a transaction driven LBO PE fund, I bet IBD has an advantage. But then there are difference on whether or not you're in an industry group or a product group.

If you want to work in a deep value long/short fund, I'm willing to bet ER has an advantage. But what if you were just a excel monkey and never learned how to really research and understand industry dynamics?

My point is think about experience, not job descriptions.

If you just stopped to think about what you're asking you'd save both of us some time and grief.

Follow me on Twitter: https://twitter.com/_KarateBoy_
 

Start focusing on doing a good job and the opportunities will follow. If you show that you're intellectually curious, analytically focused, and can communicate your ideas in an easily digestible manner you'll build a network that will vouch for you no matter what you decide to do. Too many people here are so focused on the exit opps that it becomes tunnel vision. The more you talk to senior guys the more you realize the range of paths that lead to success.

So the answer to your overly dramatic "am I totally screwed?" is: You're only as screwed as you think you are. Concentrate on the opportunities you do have and knock them out of the park to open up more doors in the future.

 

ER prepares you better for a bunch of HF/AM roles, although it depends on what you would want to do. It doesn't sound like you actually have a specific end goal in mind so my advice:

1) Give ER your best shot, maybe you'll actually enjoy the work and want to stay long term

After a while of working in that mindset, you can start to look at the broader picture of how things work:

2) Find out what investors that you speak to are doing and if you would want to eventually switch into their role (AM or HF L/S) 3) Same for upper management in the companies that you cover 3) Consider business school after a few years if you really want to open more doors

Going into anything while focusing/worrying on the exit opps will only limit the amount that you enjoy your job as well as the amount that you actually get out of it.. which ironically, will end up hurting your exit opps

 

It really depends on how esoteric your industry vertical is as well as how silo-ed the team is. For instance, I cover a relatively easy space to pick up vs. something like mining or healthcare equipment. However my team finds it beneficial for everyone to know about all our 28 names so it might take me anywhere between 1-1.5 years to become 100% comfortable speaking on all of them as well as close competitors in depth.

 

Mostly analyzes trends in domestic and global financial system liquidity and credit conditions and assesses domestic and global risks.

I'm wondering if this experience gives me a good foundation for which of the areas in front office BB: equity research, risk management, or trading.

I also have a bachelor degree of finance and math, with a minor in econ from a foreign target school.

 

Long story short, yes. My firm which is a BB has ER on the west coast.

As far as big4, I am ex-big4, but it wasn't the easiest of transitions in my experience. I didn't do TAS, but regardless, you're competing against many people with far better credentials (burnt out bankers, ppl with industry exp, consultants). IMO, I got really lucky and don't think my results are replicable.

Having said that, a job is better than no job, and big4 TAS is not a dead end if you wanna go into finance - just be ready to work really friggin hard.

 

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