In my team, we spend a tremendous amount of time marketing to clients and very little time doing actualy modelling stuff.
Generally hours are pretty brutal, around 80+ hours, so I hardly have time to practice my own modelling skills etc. I wanted some kind of advice as to how to leverage my current gig to become a more educated investor, and go into a long-short fund after 1-2 years in ER?
| +81 | Q&A - Buyside Equity Research Analyst/PM | 29 | 5d | |
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| +28 | Getting Frustrated | 10 | 4w | |
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Pitching in from my experience in ER in Asia.
My shop was pretty open regarding gaining more coverage, which involved essentially sucking it up and working harder, initiating on a company on your own, giving your boss credit, then eventually taking "real" primary coverage.
This is the opportunity to gain a bit of recognition internally, as well as the opportunity to do your own modelling; sure, it sucks that you have to do more work, but this is just part of life. 80 hours isn't that brutal - I did 120 hour weeks literally every week for 3 months (to be fair I almost did resign in frustration at this point).
The way I was taught out of college on the buy side regarding modelling was try to keep it simple - the more assumptions you make, the more room there is to get things wrong which will cascade through the model. On the sell-side, models tend to be unnecessarily complicated so relax a bit there. I'm sure you'll have picked up basic modelling, structure, etc. from even just updating your analyst's models - just work a bit off of this and you should be fine for a junior level role in a L/S.
My experience moving back into the buy-side was not that complicated. First round was fit based, some technicals (mostly around valuation), a bit of idea generation, and macro. Second round was a pitch where I re-worked a sell-side model and had to do a 20 minute pitch.
If you're keen on moving, I'd say really make sure you're in touch with global markets, current events, and have your fundamentals down pat.
Smaller L/S firms (which I find more interesting to work for) will be very fit based, but make sure you don't come off as an idiot that didn't do his work properly.
Let me know if I can help with anything else, keeping in mind my experience is purely Asia-centric.
These are really two separate questions, but I think the advice below is good:
I would pick a subsector, or perhaps initially just a company or two, which is neglected and focus on knowing everything about that area. Because the analysts above you will already have staked out all the popular names, you'll have to pick something which is small cap, unloved, complex, whatever. These companies could already be on your analysts' coverage list, or companies which are uncovered for whatever reason.
Do this for just a few companies at first. Within reason, the more complex and unrecognized the name the better. If the analysts you work with are cool they'll initiate on the company, with their name listed as lead analyst of course, but will defer almost all client questions to you since they won't know jack about the company. Alternatively, the analyst may already cover the name but spends little time on it since it is unloved.
Ideally you can rinse and repeat this a few times and gain credibility at your shop. In any event, it will give you something to talk about on your resume and in interviews.
Yes agreed - should have added do it for even just 1 company first. Having that client interaction will always be beneficial whether it be just pure exposure or being able to even further your own knowledge.
ER -> L/S Equity HF? (Originally Posted: 12/31/2013)
Hi guys, recent college grad weighing offers between MM Banking job and ER associate (think Jeff/Evercore/SunTrust).
All else equal, I think I would enjoy the ER job much more.
But, eventually, I think I would like to switch to the buyside at a L/S HF rather than a long only. My understanding is it seems like many of the buyide exits for ER associates are to the long only AMs. And many of the bigger HF's seem to run recruiting through headhunters, which generally do not look at ER associates.
Also does the industry you cover matter in trying to move over? I heard getting tech experience helps, any
If anyone else has experience, what else is relevant? Reputation of senior analyst? Amount of client contact? Firm name? Pedigree?
SS ER to L/S HF is very realistic, although as you may have heard some funds prefer M&A guys, other funds love ER guys due to the direct overlap in skill set.
Industry matters to an extent, usually you'd want to be covering a bigger industry that doesn't have unique valuation (e.g. financials), so that your modelling/valuation skills would be more transferable. Covering a 'hot/high in demand from the BS' sector is always useful, especially if it's still hot at the time of the move from SS to BS.
Reputation triumphs a lot as a higher ranked analyst means you getting more 'airtime' in front of clients, you getting to know more clients (and in turn more PMs/Analysts at HFs), you being more respected (i.e. thanks to the reputation of your Analyst) etc. etc. Thus, a lot of people will say pick the best Analyst from firm X and never look back regardless of the sector you'd be covering, which is partly is the way to go.
You can't really change your pedigree (educational) at the current stage, firm name is not as important as your Analyst 's reputation, but going to a reputable firm is definitely a plus and the amount of contact is correlated with how well-respected your Analyst is. L/S Equities has the most overlap out of all HF strategies, so SS ER should place you well.
How well vs. traditional banking is up for debate, but I'd say - go for what you believe you'll like doing for 2-3 years.
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