Optimal starting job
My apologies for the somewhat silly title, was just reading some threads and couldn't really come to a conclusion on this.
So in AM we can divide the types of employers into 2: we have the BB IBs who have their divisions (i.e. GS CIMD) and then we have actual AM firms (i.e. BX, PIMCO).
What's the better starting point? And additionally, are these long-term positions? Clearly AM doesn't have the type of turnover that IB does (with people going into PE and HF), but do people actually stay at one place for a long-time and build up value?
Thanks.
All great firm mentioned. Just my opinion...but if I were starting out in AM, I would want to work for an AM, not a AM division of a bank.More to due with culture and resources than anything. Nice knowing the primary fee generator is AM vs. a contributor. Tend to be more resources dedicated to the core mission. Now that said, you can do quite well with any of these top firms.
bump. How does promotion/internal opps look at both
Does anyone know what 1st yr analyst bonus numbers look like at both BB asset management arms and regular AM shops?
A word of caution for folks who are asking about 'AM analyst numbers' - don't compare these positions to IB analysts. Depending on what you end up taking, and the firm you are at, it's going to look markedly different. You are not, in the vast majority of cases, going to bake IB analyst numbers in year 1 or 2. Roles, in my view, vary pretty widely. You can have an 'analyst' come in that's effectively a marketing specialist - i.e. sales/marketing person or an analyst come in that's part of the research team, say an equity research generalist on their small cap strategy. Often that will be a junior analyst or something - and you aren't getting paid IB numbers. There's exceptions - I'm sure folks that work at places can chime in with other good examples or corrections - I've only worked at a non-bank affiliated AM firm.
The one thing to consider in AM is the long term viability of the firm you are at - in most cases, just starting out, it doesn't matter. Get in - get a few years of experience under your belt and then see what happens. Bank backed AM firms have both the blessing, and the curse, of relying purely on their fees. If you are at a niche, high performer and/or overall well structured/run firm - it's a really good opportunity and, I'd argue, in some ways a positive as you could have a less structured role than at a bigger bank backed manager. They inherit the culture of the parent often times.
Turnover - varies by firm. It takes a while to build a career - especially if you are trying for a PM, research analyst, etc. type position. If you end up in a firm with a good culture, on the investment side of the house and one with relatively stable performance/assets - generally vacancies are few and far between. You don't have first year analysts joining those - they hire people with a few years of experience, etc. Plus - you don't generally want high turnover on strategies, especially when clients/consultants value team continuity as part of the due diligence process - and, largely, it's just better for performance long term. Breaking in is the hard part in most cases.
Last thing I'll mention is to think about the different products the AM firm has - as an example, if I go work for a vanguard the vast majority of roles are sales/marketing/hybrid (product manager/strategist) - vs. some of the others you mentioned. There's a billion small, couple billion dollar managers that kill it as well. The larger firms, bank backed and otherwise, tend to have more opportunities to move around or more of the 'corporate' track with more roles across the organization.
Not sure how helpful that was - can clarify or expand on whatever. Haven't had much coffee yet.
SB'd. I'm personally not one of those people who is desperate to start printing money straight out of my masters because clearly that career path is in IB and I am not even moderately interested. I understand that $ comes with experience and results.
As for where to work, I've written down more than a dozen names, some more known (BX, Wellington, T. Rowe) and others less (Third Avenue, Yacktman), and I am still searching as well. Your comment leads me to believe that if I go to one of these less known names and the company is performing absurdly well then there's no point in exiting, however for a bigger name I'm struggling a bit as to how I'd determine whether I should be exiting.
There's also a lot in your post about something that I suspect most people who want to end up at PM don't want. Obviously I'm not experienced enough to say, but I suspect there should still be a way to go from ER or portfolio analyst up the ladder to PM without ever touching anything sales or marketing. I'd even much rather just start doing all those weird Series exams that the people in S&T do and try to build my way up that way rather than do any marketing (somewhat of a traumatizing experience from my bachelors).
I think even among big firms it depends.
Wellington doesn't have shareholders/a corporate parent; just partners. You'll be closer to the end destination of the money there then you would be at lots of other super respected AMs, like PIMCO, that have corporate parents. Hell, even T Rowe and BlackRock are beholden to shareholders via their stocks.
I'm going to expand a bit on what Addinator said, although I don't disagree with any of it. (Other than "...going to bake IB numbers..." in line 3--I think that should be an 'm')
I agree with him that the amount of time the average person stays at a firm varies widely. At my last firm the average tenure was 17 years when I was hired. The firm before that didn't even exist that long.
As a counter, have you considered starting at a boutique? I'm not "exactly" in investments, but I am pretty close in quant R&D. I started at a 12 person firm, where half of the staff was in sales. I learned every part of the business pretty well, because there was nobody else to do it, or when crunch time came the one person who did something would love the help. My PM access there was standing up at my cube and yelling into the PM's office eight feet away whenever I had a question.
My experience moving to bigger firms is that people become a lot more siloed. People know their job very well, but have no idea how it fits into the big picture. This has suited me well, as I get thrown into projects purely for my expertise in seeing how everything fits together. I also get most of the unusual assignments, which is a lot more fun than doing the same thing every day.
It kind-of depends on your definition of what a boutique is. In my reply to Addinator, I noted smaller AM firms like Third Avenue and Yacktman (I googled their AUM when I wrote that comment and if I remember correctly, they were 6 bil and 2 bil) - is this something you would consider boutique?
I would say I'm still leaning more towards big names in the field as a safety play, but obviously I'm open to alternatives if those alternatives can somehow offer me anything better (not in wages, but in terms of work experience and learning). Based on what you said, maybe I should instead be prioritizing a boutique. Not quite sure how this would impact me long-term though as long stints at a company don't usually bring with them exponential wage increases. At some point the chickens gotta come home to roost. It's going to be even worse if this boutique experience isn't as valuable in the open market as we think.
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