Comments (17)

Sep 24, 2012

nonexistent

Sep 24, 2012

I have seen way more IB -> HF than traditional AM. For HFs, it is usually through a headhunter. Or you might just know somebody.

I think you would need to network into traditional AM, or reach out to an analyst in the sector you want to cover. I have also seen a couple people do 1 year in IB, then recruit for entry level positions. Not to say it would be harder than getting into a HF, but the path isn't as clear. Traditional asset managers meet most of their hiring needs from undergrad and MBA programs, and at the senior level.

Sep 24, 2012

How about IBD ---> B School ---> AM? Will it work?

Sep 25, 2012
HedgeKing:

How about IBD ---> B School ---> AM? Will it work?

This happens, but bschool recruiting for long-only AM is brutal; e.g. PIMCO takes just a couple Associate PMs nationally each year, and only from top targets.

Sep 24, 2012

apologize for grammar, it's been a REALLY long day--

IBD>AM is very dependent on asset class even though I don't think it makes a lot of sense. credit analysis is always valued (but there's almost no such thing as a non-HF distressed shop) so something maybe like IG/HY is possible. Equity wise, for some reason or another IBD always places better into event-driven or catalyst-driven l/s shops rather than strict equity AM. Much of it is because those aforementioned shops have people from an ex-IBD background and they like their own is my guess. Goes without saying that macro/quant/arbitrage style groups are mostly out of the question based strictly on a skillset attained in IBD; if you can break into that it's luck/connections/outside knowledge. If BB has a respectable AM arm, networking/lateraling becomes more possible.

Here's my take on why:

IBD is great for valuation from a cash flow/control perspective and comparables attractive and teaches you how to put up with massive amounts of bullshit and demonstrates that you can have an inhuman work ethic for a year+.

I have a lot of respect for my friends who go the IBD route. It's just that the skillset doesn't overlap with AM as much as initially pitched. Even the stuff you model is just different--reverse engineering your DCF to match some number in the back of your MD's head is a bit different than being held accountable for if your pitch makes money or not for your PM.

If you want to become something other than a valuation slave though (guess who makes more money, PM or research analyst), demonstrating a passion for markets, how portfolios REALLY work, having a deep understanding of how risk really works in either a fundamental or quantitative sense, or how to size positions relative to each other, etc. etc. is what will make the transition more probable. It's the classic difference between advisory and a side of the business that takes risk (even if it's OPM or more benchmark-aware you still are taking risk), Convincing the other side that you are a good cultural fit is a lot harder than it seems. As with every career switch, the earlier, the more possible.

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Sep 25, 2012

i have no idea what im talking about

Sep 25, 2012

Default, any idea what you're talking about?

To the OP -- depends what group in AM. Lots of group use extensive modeling on par with IBD, specifically the REPE and infrastructure PE groups. Those might be great starting points for you.

Sep 25, 2012

1) The IB skillset doesn't apply all that well to long-only equity investing (not to say there isn't common ground, but it would be like going IB to accounting; the mindsets are just different).

2) There aren't many openings at all. Like each might take a handful of undergrads, a few MBAs, and then just hire to fill unexpected vacancies. They don't recruit like PE firms and HF headhunters.

3) The pay isn't going to be much higher than IB (likely a paycut for a 2nd year analyst).

4) Long only AM competes with HF/PE, which theoretically offer faster promotion and higher pay.

Sep 25, 2012

I think WC Rainmaker is correct in all of those points. Pay in your 20s won't be huge at a Long only AM (but can still be very good), but if you are at a place on par with Dodge & Cox, etc. you could end up doing very well if you move up the chain. The quality of life is also unbelievable relative to IB and even most PE/HF people that I have spoken with.

Sep 25, 2012

I thought AM recruits more people. Just compare the # of employees at BlackRock vs BlackStone.

Sep 25, 2012
funzone36:

I thought AM recruits more people. Just compare the # of employees at BlackRock vs BlackStone.

Nope. Massive, massive back and middle offices. Think of Goldman Sachs. They have ~30,000 employees. Maybe 1000 - 1500 are in banking and S&T?

The difference at long only AM is exaggerated further. They have large sales forces, execution traders, fund accountants, risk managaers, etc. Fidelity is gigantic, but the research / investment team is probably a few hundred people, if that.

Sep 25, 2012

If IB isn't a good path to AM, what is? Directly out of UGRAD/MBA?

Sep 25, 2012
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