Q&A: An unconventional route to Emerging Markets Asset Management. Non-target, low GPA student to buy side
Hi All,
About me:
Non Target Undergrad, Masters in Finance (3.2 GPA). No extracurriculars.
I work at a firm with a high AUM per capita (4-500mn/head) that focuses on emerging markets, and are long term investors.
I help with financial modelling, fundamental research and now working on building subjective risk metrics for specific goals.
I can use excel without a mouse, and I have built my own macros and toolbar for easy usage. I strongly recommend mastering excel, makes your life much easier. The best way to do this is to practice, practice, practice.
I worked at the middle office for an year, supporting the equity derivatives desk before moving to the front office working on the credit trading desk for three years.
I then moved to the special situations desk, which was the most fun I had working, providing bespoke financing, restructuring funding, issuing commodity linked fixed income securities and learning about the Asian energy market in general.
My goal, long term, is to be a private equity investor in Asian and other EM infrastructure
Talk to me about general trends in the asset management industry and the PE industry, emerging markets in general, my side hustles (watch flipping and internship coaching), and (almost) anything you think is relevant to the scope of this forum.
EDIT: Added more info about work history and path to Buy Side
Regards,
WSO Mentor
Want to work with me? Check out my profile here
Hahah, I acknowledge that it is almost a necessity to even interview at hedge funds.
that is not even remotely accurate
What does your day-to-day work include? What are the hours like? What are the skills needed for the industry? As someone with experience with private (financial due diligence, valuation, financial modeling, M&A deal cycle knowledge etc.), are there any skills that could carry over intto the AM industry? Thank you.
Hi!
My day to day work typically involves attending interviews with industry participants, for their insights into how that segment works. For example, if we were looking at the Asian alcohol market, I talk to a few major distributors in each region, talk to company management, resellers and occasionally some end consumers. Using these insights, I model our collective analyst teams opinion on the firm and pitch it to the PMs, and incorporate their feedback to adjust our assumptions. This gives us a "target price", and the PMs then decide how they want to allocate in their portfolio. When I mentioned risk, I was talking about seeing how ESG metrics influence our investment mechanism. We're trying to figure out how to categorize our risks in terms of political and geopolitical trends, and looking at how they interconnect with the traditional forms of ESG investment. I'm trying to build a framework of rules based on which we can see if a company meets our idea of "risk".
The hours are really good, my firm places an emphasis on work life balance, and I work from 9-5 M-F, although due to the SIP, the time is a bit more fluid. We do have some calls in odd times, especially with senior Asian company management, which happens in the night times, but these are not too much of an inconvenience.
The skills you mentioned are pretty useful - I do not have any direct M&A deal cycle knowledge, but I use my fin modeling, valuation etc - skills daily. The asset management, atleast my category of funds ( long only HFs), is relatively easy in terms of financial complexity, the key to success is a knack and a nose for undervalued companies, and having a good, steady set of investors backing the fund ( for low variances in the AUMs - as dealing with investors outflows from the fund increases the complexity of managing your investments and tends to lower flexibility of the PM).
Can you delve more into your time on the special situations desk? E.g.
What was a typical day like?
What were some of the financing deals and structures you found more interesting?
Given you described it as the most fun you've had, why move on?
Hi! Thank you for your question. That was a really good, challenging time for me, and it directly helped me in my buy side role, especially during the interview.
To give an overview of what the SSG desk did at my bank ( the definition and scope vary depending on the banks, so I ought to clarify the scope of my particular team) - the SSG desk focused on anything, and I mean anything, that didn't come under the traditional investment banking or structuring team. I was a part of the credit trading and dealt with some structuring deals, which was why I was able to transition to the SSG group. I will delve into more examples of what sort of deals we dealt with, if there's more interest.
My typical day was not so defined. I started work at 7a, and worked until 6:30p or 7p, relatively sane for Asian hours. The work was very unpredictable, and that was the fun part. You never know what to expect, and damn, some of the deal proposals my MD wanted under consideration were pretty crazy! I studied Civil Engineering for my undergrad, and I was really into renewable energy. That background led me to focus on more esoteric energy deals, which were pretty wild sometimes (they can be considered kinda vanilla-ish now). I typically helped writing a draft proposal for a deal the MD wanted to get, doing due diligence, running the numbers and occasionally making a PPT. I don't know if that was they style of our desk, or SSG desks in general, but we never really made a ton of PPTs (thankfully!). If I wasn't working on draft proposals, I was running more detailed analysis on deals that we were granted.
Some brief deals I particularly found interesting were when I helped a commodity company go through restructuring, and provided them with bridge financing. We issued bonds whose coupons were linked to that commodity price, enabling some downside protection. I had lots of frustration while working on this deal, the company statements were in a different language and I struggled with translation, but the deal was relatively innovative for that market and established our team, as an expert in that niche.
Another deal, a first for our team, was structuring the cashflows from a solar power plant to take advantage of the tax benefits offered by a govt. due to a newly announced category for "green bonds". It helped me get a good deal of exposure to tax law and related complications.
I also helped price and structure a new product that paid coupons based on the underlying prices of four different indices, based on a relatively standard structured product called RangeAccrual. This was a really interesting deal too, and I think we were one of the first teams in the world to offer this product. Happy to throw more light into this, if requested. I didn't want to add more to what is already a wall of text.
I had a lot of fun, learnt a ton, but I was in Asia and I wanted to go to California. My team wasn't able to help much, so I moved out on my own.
Hi! Could you maybe list the biggest/most successful EM HFs? I am very interested in EM investing and would love to be able to land a job out of undergrad. What skills/knowledge is most sought after at firms like these?
Thanks for your help!
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