How hard is it to make the jump from a small-ish AM to a big one?

Landed a job in AM at a small-ish shop ($60bn AUM, ~$5bn in the specific fund I'll be working in). Looks like a really interesting role and a great team but will be taking a fairly substantial pay cut. 

If I take it I definitely want to commit to them for a decent amount of time, say 3-5 years at least. However I'd eventually like to make the kind of money only a bigger shop can offer. 

Will it be easy to make the switch once I have some experience? Would an MBA probably be required? If so I'm already in my late 20s so might be pushing it. 

Will be doing EM fixed income if that helps. 

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Comments (14)

Sep 9, 2021 - 12:40pm

Just my observation, but it seems to me like moving up the food chain in FI AM is easier without an MBA, as compared to LO equities. I work in equities so I can't really comment with a lot of conviction, but I have interviewed with some relatively large FI shops and a lot of the seniors didn't have MBAs (which isn't to say all of them), there were just more when compared to equities, in my experience.

  • Analyst 3+ in Research - FI
Sep 9, 2021 - 12:53pm

That's interesting to note. I'm outside the US so I've always seen an MBA as a way to "break in" to the US market given how difficult it is to get sponsored for an H1B. I also have a no-name undergrad: strong in the country I grew up in, but unheard of in the US/Europe, so in an ideal scenario I'd be able to correct that and also recruit for Blackrock type funds. 

All that aside, if I can get away without one I'd be saving a lot of time and money. An alternative I've considered exploring is an applied economics masters at a decent school, given the technical skills are quite relevant to what I'll be doing on a day to day basis (local currency denominated investments etc). Recruitment out of those programs often isn't as structured as an MBA though, so I'd want to make sure my small-shop AM experience was well regarded before I took the plunge. 

Sep 9, 2021 - 3:59pm

Ah I see. I can't comment on making the jump across the pond unfortunately, but I'd guess you are right on about an MBA being a potential way to make that happen. An econ degree would be applicable, but you definitely sacrifice a lot of the recruiting opportunities. Hope that helps, good luck!

Most Helpful
Sep 14, 2021 - 7:10am

You will be able to move to a large AM - you won't be judged on the size of your current shop, but rather your experience, track record (if you can demonstrate one) and skillset. Small AMs aren't necessarily considered 'below' larger firms - in fact, often the opposite as 'boutiques' sometimes have strong niches, lower headcount/more responsibility per team member, and strong reputations in their own right. 

  • Analyst 3+ in Research - FI
Sep 15, 2021 - 9:09am

That's great to hear. Not planning on jumping anytime soon, but just want to make sure I'll be able to make that big money eventually. I'm doing EM fixed income, and I get the impression that it's a fairly niche area already. 

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  • Analyst 3+ in Research - FI
Sep 16, 2021 - 2:18am

Rough estimates in my head: Small = <$100bn, medium = 100bn </ 500bn, large = 500bn<. Could be way off. 

In any case, the pay and bonus are way, way lower than the numbers I've seen at bigger shops, although that might have something to do with geography (continental Europe). 

Sep 16, 2021 - 1:01pm

My thoughts... 

MBA - I have one and am on LO equity side. If you are already in the industry, it's not worth pursuing / not necessary. If you need to break in, it might help, but it's not as much help as it used to be. 

Small Firm - $60b firm and $5b strategy is very much big enough to have options later, in my opinion. Another poster made the point, and I think they're spot on, that your future job prospects will be determined by how you develop as an analyst... your calls, your experience, your philosophy, your process. MBA and size of firm are irrelevant. I would much rather have rock star performance at a small firm than a top tier MBA and mediocre performance at a large firm. If you're 28 and already in the industry as an analyst, then the #1 thing you want to focus on is evolving as an investor and driving performance. 

Definition of a "small firm" - again, I'm on the equity side... I know AUM can be larger in FI... but $60b for a firm and $5b for a strategy is pretty far off from being small IMO. I would call a small firm a single-strategy firm, maybe <$5b... I'd call large as $250b+. There's only ~75 firms globally >$250m AUM... and the median AUM at the Top 500 AM firms is ~$45b (pic below)... and keep in mind there's a very, very long tail of smaller shops. The slide deck here is worth downloading The world's largest fund managers - 2019 - Thinking Ahead Institute

Median AUM of top 500 AM firms

  • Analyst 3+ in Research - FI
Sep 17, 2021 - 8:13am

Appreciate your insights, and I'm glad you say that about an MBA because I'd obviously rather not drop that kind of cash and take two years out of the workforce. 

That said, do you think it could be worth pursuing a top masters degree in economics or a related discipline? These tend to be ~9 months long. Could help me overcome the fairly weak UG name I have in my resume, plus in EM academic chops seem to be fairly well regarded. 

  • Senior VP in HF - Other
Sep 16, 2021 - 6:13pm

This question likely also plays into your geography. For example, if you're in more of a niche market, say LA, its likely much harder to move up given the limited number of seats relative to competition. Whereas in a larger market such as NY there is more musical chairs and opportunities so it matters less. 

  • Analyst 3+ in Research - FI
Sep 17, 2021 - 8:09am

For sure. This role is in continental Europe but I'm flexible to go anywhere. USA is probably a stretch because of the visa but I'll probably look into London/Zurich/Dubai/HK/Singapore in 3-5 years time. 

  • Analyst 3+ in Research - FI
Sep 17, 2021 - 8:10am

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