I'm still a bit new to the industry so I'm trying to understand which places are the ones with the most cache, which allow you to have most options when you leave.
Let's take funds with some of the biggest AUMs like Vanguard, Wellington, Fidelity, or sovereign wealth funds like Temasek, GIC, ADIA, BlackRock, etc. Or funds with smaller AUMs like KKR, Blackstone, Bain Capital, et al.
Which are the most prestigious (i.e. most desirable jobs, best reputation, and best exit options) and what are the factors that determine the ranking? Is it IRR? Salary?
I’d probably remove vanguard and add Capital group to the list. Fidelity is behind Capital group IMO for the fact that all of capital is actively managed and analysts manage money there. PMs leave fidelity to become analysts at capital. Most analysts manage 1B+ at capital.
The % active of AUM matters as also as it gives you more leverage for access to management.
When you say % active, do you mean how much being sold and bought in a given time period or do you mean dry powder?
The amount of AUM that is actively managed. Not to say that the index shops aren’t prestigious in their own right, but on the individual basis active management matters. If you’re successful at an active shop it holds more weight.
Another point is It matters to investors when they notice an active manager takes a position therefore company management would be more inclined to give access. Access and connections go a long way.
i think he means active like hedge funds do and active such as mutual funds that mostly track the index.
KKR, Bain Capital and Blackstone are PE funds. They do have special situations/internal hedge fund groups, but those are a minor part of their business. Those are lucrative, difficult to get jobs that you must be headhunted into. Exit opps are generally other buyside jobs, but will vary depending on strategies you covered.
Sovereign wealth funds like Temasek, ADIA and CIC tend to invest across different asset classes (PE, public markets, VC, debt). If you go work for them you'll likely end up with a group that focuses on an industry and/or asset class. Pay is not as steep as PE, but typically neither are the hours. These are good jobs and people tend to stay long. Exit opps - family offices and other buyside jobs (smaller funds).
Long only funds (Fidelity, Wellington, Capital, T Rowe Price) are a different animal. As an analyst your job is to pick stocks. These jobs pay well and offer a better lifestyle, so naturally very hard to get. Exit opps - people just never leave, but if they do they go to another long only or on rare occasions a L/S or activist hedge fund. AUM is not a big consideration in terms of prestige - long term returns and culture are.
If you want to end up in active management stay away from Blackrock (unless fundamental equities group), Vanguard and DFA.
Thank you very much for sharing. That was very insightful.
How would you rank the desirability between Bain Capital/Blackstone vs. Wellington?
Bain Cap / Blackstone are PE funds, so naturally that's what they do best and what they do the bulk of hiring for. The internal hedge fund/special situations groups are a pretty niche opportunity in the broader PE/HF space, which is not something you desire but something you walk into at some point in your career. I'd guess that these opportunities just like multi strat hedge funds expose you to a variety of situations, strategies and structures and this may appeal to a certain type of person who thrives on creativity more than process.
Wellington is [for the most part] a long only fund and they too have an excellent reputation in their own asset class. Asset management is an extremely intellectually stimulating job and allows to really own and improve decision process over years and become a world class expert in your own coverage, which some people will find exciting, but others too repetitive and restrictive.
Both are stressful, well paid, highly sought after jobs. So the question about desirability is mostly - what's your investing style and culture preferences?
I would actually disagree. We may be a bit old-school, but are still pushing the rock-star PM model. (Think Peter Lynch) Rumor has it that the PM of our largest and most lucrative fund makes more than the CEO. (who is a former PM himself) When you are the biggest rainmaker at the company by a large margin, the rules don't apply to you.
All good points. I’d say AUM matters to an extent that it opens doors. There’s not a company out there that wont talk to you at a larger shops which can open doors. I mean when our company moves on a position people notice so companies likes to try and convince you to be a holder. Management at bigger target companies don’t have the time to meet with every shop. Not only do you get exposure and “prestige” that way but it’s pretty helpful when most companies are banging on our doors for meetings. Access is very importsnt to the investment process in these times.
It also depends on how you define prestige. If you are at a smaller shop that has a track record of stellar returns then that will open doors as well.
I can also vouch for Wellington being very respected. I work at a long-only high AUM fund and it seems Wellington, and a select few T Rowe funds (new horizons is one) are pretty regarded by our top investors on the equity side. Janus has a few pretty good investors but it’s hit or miss same with Fidelity. AUM/employee is also a good metric to judge considering the majority of comp will be weighted to the top employees if that’s your thing.
And yes to the points on no one ever leaving. Our analyst positions are coveted and I’ve only seen a handful of new PMS since I’ve been there. They stay until they die. A couple have moved into corporate roles in the industries they cover (analysts mostly) but that is rare.
Depends on geographical location im a way amd what matters to you i worked for rothschild back in europe amd i hated every minute there at least in my department cant speak for all
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