Pension Fund Analyst

I have the opportunity to interview with a state pension fund, was wondering what to expect pay wise and upward mobility wise? Junior investment analyst position in the alts space, mostly PE, structured loans, that type of thing. I think the fund does some of it's own structured lending and uses outside managers for PE and leveraged loan portfolio if that makes any difference. The pension itself is ~$45b.

 

Tough to say based on this info alone - there are some good plans to join and some plans that are not worth joining. State publics in general are starting to become more sophisticated and joining a number of these plans could be a good start to your career.

From what it sounds like you're talking to one of the more sophisticated plans. In general, the life is pretty easy - you'll probably do a lot of administrative stuff like reviewing docs, some portfolio management stuff like commitment pacing, putting together aggregate portfolio exposures for the board, and conducting due diligence with fund managers. It's pretty slow in the sense that the program is likely well established so you'll probably be just looking at re-upping with current funds and maybe do 1-2 new investments per year. My guess is that you'll be doing 40 hours a week and not much more.

Since it's a public fund, a lot of their information is easily searchable so here's what I would recommend: -Read board minutes. That'll give you a sense as to who they hire and what their board is like. Better yet look up videos/recordings. -Ask about governance - does everything have to go to the board for approval? How do you conduct searches? Is it a big RFP process? -Do you use an alternatives consultant or invest in fund of funds? -Google public state salaries - you might be able to find out how much people in the investment department make. That will give you a good sense as to salary progression. Just remember that these tend to be banded pretty tightly so you should not expect to get an offer much higher than what's there.

Here's my two cents:

Career: If you want to work at a pension fund, endowment, foundation, corporate pension, manager research, consultant or fund of fund, not a bad place to start. You will get good exposure and it's a relatively unique/niche role. But if you get to the right plan it could open quite a few doors. For career aspirations in PE/AM I wouldn't advise. Depending on the group these places tend to have some churn so you could move up but I think it's more for the title than the pay. If you can become the head of alts at your place it's a pretty decent opportunity for you to move elsewhere but that could take a while.

Work/Life Balance: Pretty good from a work load side. Although you could say that the work can be difficult in the sense of potentially having to play politics, having to report to the board all the time and not being able to be doing as interesting work. There's a lot of scrutiny over travel and budgets so it could be one of those things that annoy the crap out of you.

PM me for more info. Know some public funds out there so I might be able to give you a better thought.

 

Great response - a lot of this info I was pretty sure on but it's good to confirm some of my thoughts. I'm not 100% what I'd like to do long term but I know I enjoy due diligence and institutional accounts. I figured some of the politics would be there but coming from a big bank it's probably not a ton different to be honest.

The thing I'm curious about salary wise is if the stated salary online for people includes any bonus or not? The guy I spoke with made it seem like he didn't get a large salary (I looked up what his was) but bonus was good sized if he beat his benchmark (and depending by how much).

Some of the folks I've seen leave this fund have gone on to be president of local HF and a few have gone to a local private university endowment (~$5b). Some of the FI guys have started their own institutional shop as well. The town I'm in is a very who you know town so I'm not sure if having a good due diligence background and being well networked could help wedge into some of those very niche PE opportunities as well.

  8.3.4
 
Best Response

I don't know about the bonuses - as you can imagine most public employees don't get paid bonuses so it'll be hard to determine whether those are included or not. It's a good question that you could ask. Sounds like you're part of one of the better funds so it may not be surprising that you could get one. But my guess is that the bonuses don't get good until you're pretty senior. One way to think about it is just to expect that whatever offer you get won't go up by more than 2-3% per year or until you get a promotion (and that can get political too - have to apply, more based on seniority, etc.)

If you like the institutional world and want to stay in these roles, the most logical exits tend to be another allocator (E&F as you mentioned), consulting or IR roles in your asset class. By all means decent positions but again depends on what you want - these experiences alone don't tend to get you into the front office on the PE/HF side unless you can really prove yourself some other way or know someone. Not saying you won't have the skills, drive or desire - that's just the way the game is played. You will start to get in the flow of the 'who you know' group - you're one of the largest pools of capital in town so you can start to build that network out pretty well. My only caution is that if you're just starting out as an allocator, you may need to grind it out for 5-7 years or more before you can make a big move (compounded with the fact that there's few spots to fill), so if this is the only allocator gig in town, you either need to keep your head down and commit or be prepared to move to a different city if you don't like it in the next couple of years. Not saying it's bad, but you should think about how long you may need to commit before anything changes. IMO, if you're in a place where cost of living is doable on your potential salary and you like the experience you're getting, it can be a great career with some decent exit options.

If you're still interviewing, I would push a bit harder on the politics - focus on the culture and the governance - spend a lot of time asking them how they decide to commit to a fund, how their board is, how many investments the board has rejected, how political things have gotten around fees, etc. At the end of the day everything you do is under public scrutiny and elected officials who don't understand the nuances of investing. It could end up being fine and you probably know more since you've read some of their board materials, but I think a lot of people underestimate the dynamics of a public fund.

 

Canadian pension fund? They've got some sick benefits, and the hours are pretty decent. The one I used to work for gave DB pensions to all employees and let them reinvest bonuses in to their PE fund

 

Based upon what I have seen in the US:

Pros: Great work life balance. 9-5 and very low stress especially at the entry level Job security Recognizable name on your resume Access to a lot of resources, i.e. sell-side research, consultants, independent analysts

Cons: Generally unmotivated coworkers particularly at the higher levels May or may not learn that much. Depends upon your team Compensation definitely capped at a low level. Probably not as important at the entry level though. Benefits and perks generally not good. A pension plan doesn't mean jack unless you're staying for most of your career.

In terms of exit opportunities, you would have a lot of options especially early in your career. The most obvious would be to another pension fund, but if you really developed a skill you could go work at a hedge fund or traditional investment manager. I think you would also be set up well for a top 20 MBA program, though not necessarily an elite program.

 

Minima nobis illo necessitatibus quas reprehenderit qui. Qui exercitationem qui illum voluptate facilis.

Consequatur aut error maxime beatae et itaque alias fugit. Qui incidunt illo ad unde vitae. Sed quaerat fuga est consequatur accusamus nulla et. Dolore sit dolorem hic rerum sint ut voluptas sequi.

Quia animi minus ducimus repellat voluptatibus. Tenetur eaque voluptatem qui maxime. Inventore enim ut assumenda voluptatum repellendus et.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (199) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
CompBanker's picture
CompBanker
98.9
5
GameTheory's picture
GameTheory
98.9
6
kanon's picture
kanon
98.9
7
DrApeman's picture
DrApeman
98.9
8
dosk17's picture
dosk17
98.9
9
Secyh62's picture
Secyh62
98.9
10
Linda Abraham's picture
Linda Abraham
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”