Questions about portfolio/asset management? --fire away

sampsonpoint's picture
Rank: Monkey | 60

Feeling festive, and honestly, life is too short after what happened in CT this past week.

I work at a large Asset Management firm on a portfolio mgmt team as a junior PM, where I started out of undergrad.

If you have questions about asset management/breaking in, I'll answer them to the best I can.

Here's a hint: the CFA is super important, I'd estimate that 95% of my firm's associates/analysts/PMs have the designation. MBA is less important for breaking in.

Comments (96)

Dec 16, 2012

Is it feasible to break in as a PM after doing a 2-3 years as an analyst at a top BB PWM (GS/JPM)

Dec 16, 2012

When you say AM/PM is this synonymous with Hedge Fund? Anyways, what are your thoughts on breaking into HF by starting out in ER, but no other finance background. (Pre-med B.S. Biology)

Funny you should mention the thing about CFA vs. MBA as I was just looking into that. I have heard mixed reviews of each for HF.

Dec 16, 2012

It's hard to answer your question about breaking in after PWM, as I never came from the background, and really have no experience with PWM. My very limited knowledge about PWM is that it is based on asset allocation/client service.

That said, after working for 2 years you are still regarded as entry level, so you have a shot. The pedigree of your resume (undergrad and first job) is all fine, but to be honest, breaking in is all about effort. You really have to network tremendously hard and think differently than other job seekers and be willing to do different things than other job seekers.

Dec 16, 2012

When you say AM/PM is this synonymous with Hedge Fund? Anyways, what are your thoughts on breaking into HF by starting out in ER, but no other finance background. (Pre-med B.S. Biology)

Funny you should mention the thing about CFA vs. MBA as I was just looking into that. I have heard mixed reviews of each for HF.

-- To be quite honest, I myself was a bit infatuated with hedge funds, and did have interviews with admittedly small, start-up hedge funds after graduating, but I really think you have to be very selective. I'm not so sure hedge funds are the place to be, at least for the first part of your career. I am actually thrilled that I didn't get the job at the 2 hedge funds I interviewed for.

Working in asset management may not seem as sexy as working at a hedge fund, but that's just the surface reaction. There are analysts at my firm who started out in hedge funds, and then moved to asset mgmt; some who started out on the sell side, to hedge funds, to my current company; others started in mgmt consulting, went to b school, then to a hedge fund, then back to asset management.

Bottom line, regardless of whether it's a hedge fund or asset mgmt, starting out it's all about getting a job where you can learn to think. I've been told that in order to be a great investor, you have to get a job where you can invest in yourself. If you're at a job where you're not learning enough, it's time to find a new one. At this point in my career I'd much rather work at an institutional asset management firm (in pretty much any capacity) than a hedge fund with only a couple hundred million.

I guess I'm guilty of thinking that a hedge fund isn't really as cool as it seems, at least at this point in my career. Would I take a shot at working for one down the road? Yes, as long as its a great learning experience, and I'd probably be very selective.

Oct 25, 2013

great point on "regardless of whether it's a hedge fund or asset mgmt, starting out it's all about getting a job where you can learn to think."

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Dec 16, 2012

Can I ask what geographical location you came out of from undergrad? I'm in Los Angeles at a target (UCLA/USC), and the recruiting for AM/PWM is nonexistent compared to IB and consulting. Essentially cold-emailing is the only contact I'll have with the AM departments of the banks

Dec 17, 2012

To answer your question in a different way, I work for an asset management firm, which in no way is affiliated with a bank. BB really means nothing to me. My company fulfills a different function than a BB. My company/fund invests in BBs, so we are their shareholders. I've actually been able to meet with mgmt of GS, JPM, Citi in the most recent fiscal quarter (they came into our office).

Top buyside firms on the west coast include Capital Group, Dodge&Cox, TCW, Oaktree, among many others. Take a shot at those, I'm sure there are alumni of USC/UCLA at those firms.

It really comes down to how bad you want it, how much effort you put into it, and timing/luck.

Nov 4, 2013

I have two years IB (PF) experience with a local bank in Pakistan and have quit and relocated to Dubai. Looking to make a break into Investment Management, currently have an offer with an Africa-based Family Office (AUM > USD 300M) in Dubai. Any thoughts on what the exit opps in such a role would be considering I would be looking to get into Asset Management eventually?

There would be alot of room to grow in this role as it is currently a 3-man team tending to Family Office matters, no one specifically to manage the investments. Mandate would be to build a fixed income portfolio, explore opps in Equities and Real Estate and arranging financing for new and existing Projects for the FO.

Also, any suggestions on what kind of salary to accept considering the breadth of the role?

Dec 16, 2012

What's your background/how did you break in?

Dec 16, 2012

Thanks for the suggestions, I'll look into networking with those firms as well

Dec 16, 2012

Thanks for the suggestions, I'll look into networking with those firms as well

Dec 16, 2012

.

Dec 16, 2012

background:

non-finance major from a "semi-target," a label which I think is totally self-defeating.

Was fortunate enough to intern at an investment firm my senior yr of college. I had a few interviews at investment banks, but it wasn't for me (and as a non-finance student never did well on technical questions). I studied abroad second semester junior year a few years ago, so never got a summer internship, as I wasn't back home until July.

Dec 16, 2012

also check out tradewinds global in LA. san fran has a lot of buyside shops

Dec 16, 2012
sampsonpoint:

also check out tradewinds global in LA. san fran has a lot of buyside shops

Thanks again, I appreciate it

Dec 16, 2012

thanks for doing this

- equity or fixed income AM?
- what are some of your day-to-day responsibilities? are you a client-facing type of PM or an investment-focused one?
- ever see anyone move from your firm to start their own hf or work for one of the big ones?

Dec 16, 2012

I'm an investment-focused junior PM (the junior person on our portfolio mgmt team). As such, there is no way I would ever go to see our client (representatives of the pensions, retail, and sub-advised accounts we manage money for). It just wouldn't be good to have some punk kid (aged 23-26, not specifying) talking about how the portfolio did over the fiscal year.

I do, however, get to meet management of companies that travel into the office. So that's basically any company in the S&P500 that travels to investor meetings.

The job is different than research. In research it's understanding how companies/industries function and identifying the good/bad investments (which is different than good/bad companies). As the stock market is a discounting mechanism (i.e. current share prices reflect actions investors anticipate will happen in the future, ~6 months), the better investments are one where you can interpret management and industry dynamics and anticipate which companies will have the greatest delta in performance.

Portfolio management is different - throwing together the best research ideas won't lead to the best portfolio performance. It's all about interpreting the market, when to change position sizes/active bets, what competitors own, etc.

My role is a mixture of research, trading/operations and product management. A lot of little things happen that no research analyst would know how to react to. For example, what happens when a client redeems money - how to adjust for this so that the whole portfolio doesn't get thrown out of whack? What to do when a company we own pre-announces? or even when they botch this (see GOOG), etc, etc..

There are a ton of different intricacies in this job, and I'm definitely still learning. But I'm fortunate enough to have developed somewhat of a reputation as someone who can be trusted, which has led to added responsibilities and more learning opportunities.

Dec 16, 2012
sampsonpoint:

My role is a mixture of research, trading/operations and product management.

What does product management entail exactly? Same thing as portfolio management?

Piecing together the info from your posts, would this be an accurate picture of the career paths you're describing?

1) Junior PM --> research analyst --> PM
2) Junior research --> research analyst --> PM

and the argument you're making is that starting out from #1 is better because you get the portfolio management skills and the research skills, whereas #2 will have to pick up the portfolio management skills once they actually become PM?

from what you said, i take it everyone has to go through the research analyst phase to get to PM i.e. there is no going straight from junior PM to PM?

thanks again

Dec 16, 2012

Thank you for doing this!

1. How would you compare the exit ops of research analysts vs junior PMs?
2. How would you compare the transferable skills acquired as entry-level analysts in both positions?
3. EDIT: Could you also give us some (rough) pointers regarding year-end performance bonus (for both positions if possible)?

Dec 16, 2012

exit opps:
junior research (known as research associates on the buy side) get promoted to research analysts. the best research anaylsts get promoted to PMs. Being named as a PM is usually the end goal of most people in asset management, although some choose more executive positions as well (director of research, director of product management, CIO, etc).

My boss, the lead PM for our team, started out as a junior PM, then became a research analyst, then luckily became a PM.

So if you start in research, there's a good chance you could be in research for life, unless you are a top performer (and benefit from good luck/timing) and will then get a bigger title.

I'm thinking that starting in portfolio management will give me a leg up in getting hired as a PM, but that is years down the road. I'm just worried about what I have to do on Monday.

For those analysts that underperform/get canned, it means moving to a different company (which is tough, based on a poor track record), or moving to the sell side for a fresh start

    • 1
Dec 16, 2012

I have no idea what bonus is like for research associates/analysts (I'll never ask co-workers either). But bonus is variable, and I'm guessing each firm has a unique method of quantifying performance.

Bonus for PM teams is based on performance against the benchmark over different time periods (1, 3, 5 yrs). Having a bad year will have a much longer impact than you would think.

Dec 16, 2012

Thanks for the helpful answers. I see... But I'm still wondering, how would a PM who has never been a research analyst know which securities/stocks to invest in? I mean, I understand that PMs determine the asset allocations, and then choose the securities based on the presentations of the research people, but how do they do that if they don't have strong fundamental understanding of the securities?

Dec 16, 2012

stock selection is done by the lead PMs, on a cooperative basis for each team. Most PMs have been research analysts and/or junior PMs. The lead PM will usually have 15 yrs of experience. PMs usually have been star analysts, and have the best understanding of the markets.

The role of a junior PM is essentially an apprenticeship in how to run a portfolio. When the junior PM is able to understand the most essential parts of his/her job, then he/she can be assigned research projects.

I'm at the point where I'm doing stock pitches now. Before, it was doing stuff like monitoring cash positions, creating different quantitative screens to generate ideas, communicating the trades to the traders, looking at sector allocations, etc. You have to learn to crawl before you can run.

Dec 16, 2012

career progression is different for each firm, but it seems that research (buy-side) is a prerequisite for being named PM. You're only going to get good at picking out stocks if you do that full time.

I'm not so sure that starting out as a junior PM is better for being named PM. It's certainly a different skill-set, and one that I think is unique. But you still have to perform. It all depends on the current needs of the PM team you would be hiring for once you get to that point. They could just be looking for a stock-picker. Or they could be looking for something else.

Product management involves keeping track of the nuts and bolts of the operation. It's anything from compiling performance #s to keeping track of inflows/outflows to producing material for asset gathering. Most large asset management firms have designated product teams.

Dec 16, 2012

What information do you consider to be essential when giving a great stock pitch during an interview? (Summer internship position)

Dec 16, 2012

Thanks for the help, and classy move mentioning the CT tragedy.

I'm a 2012 graduate of a top 50 school (non target nonetheless) with a poor GPA in Liberal Arts. I have solid work experience in retail financial sales (insurance and variable annuities mainly) and I have put up some impressive numbers in that field. I am looking to get into Private Wealth Management or Asset Management because my old job was more centered around constant sales and pushing product rather than advanced allocation models. I am dead set on taking the CFA level 1 in June. Assuming I pass this, what would be the next steps for me?

Thanks

Dec 16, 2012

for a stock pitch, find something where you can tell a great story. For example, how did you learn about the company? Why is it a good investment? and for that matter, is it a good company, or a good investment? Identify catalysts that will drive the stock higher. Presentation is key: start with the conclusion, identify key points, and have a price target.

Be able to tell why you are different from consensus. Here's an example: a lot of people were excited about the gold rush in 1849. But, very few people made money from physical gold. The people who made $ during that time were the people who sold the shovels, the picks, the mining equipment. Just because a company is boring doesn't mean you can't make $ off of it.

Final hint: do not pick AAPL. The people who you are pitching it to will know much more than you know about it.

Dec 16, 2012

Thanks for the help, and classy move mentioning the CT tragedy.

I'm a 2012 graduate of a top 50 school (non target nonetheless) with a poor GPA in Liberal Arts. I have solid work experience in retail financial sales (insurance and variable annuities mainly) and I have put up some impressive numbers in that field. I am looking to get into Private Wealth Management or Asset Management because my old job was more centered around constant sales and pushing product rather than advanced allocation models. I am dead set on taking the CFA level 1 in June. Assuming I pass this, what would be the next steps for me?

Thanks

-- pass the CFA first. that's your golden ticket into the field. in the meantime, find out what you really want to do within PWM/asset management, which are actually pretty different. for example, do you want to do sales? operations? investment research? the way to find that out is by contacting alumni for informational interviews. offer to take them out to coffee, and just ask them questions about how they got to where they are now. most alumni are willing to help.

Dec 17, 2012

For someone with S&T (trading analyst) background of 1 year, how can this person break into a junior PM or Portfolio Analyst type role? Is this type of background even attractive to AM recruiters? Which firms would be most receptive to someone trying to break in right now?

Could I forward you a copy of my resume and get your review? It has been tough these past few months so it would help me out a lot.

Thanks

Born in hell, forged from suffering, hardened by pain.

Dec 17, 2012

Hi sampson

May i know why the CFA is a golden ticket towards Asset Management? Were the interviewers impressed that you have passed all 3 levels ?

I always believed networking and working on your technicals should be the #1 priority and the CFA should be studied only when your in the job. Cause at the end of the day, there will be many CFA holders fighting with you for the same position.

Would love some opinions on this. Also is ur role more focused on fixed income or equities ever since you started yr job?

Quotation:
"My role is a mixture of research, trading/operations and product management. A lot of little things happen that no research analyst would know how to react to. For example, what happens when a client redeems money - how to adjust for this so that the whole portfolio doesn't get thrown out of whack? What to do when a company we own pre-announces? or even when they botch this (see GOOG), etc, etc.."

Dec 17, 2012

Any thoughts on how to break into a credit research or investment analyst type role? I am looking specifically at asset management arms of insurance companies due to where I live. I just received the CFA charter and have a background in structured finance (MBS, ABS, etc. on the trustee side). I have been networking and have had a few interviews but keep getting the answer that I don't have the relevant experience that is required. It's hard to get the experience unless someone hires me. I put together a 6 page credit analysis on a company for 2 credit interviews. These are more fundamental in nature like you alluded to in another reply. Feel free to PM me if that is easier. Thanks in advance!

Dec 17, 2012

Thank you so much for this. 2 questions.

1) Where can I go to learn more about portolio management and fixed income? I'm living off of google and e-books I can find. I can't seem to find any kind of "M&I Guide" for AM.
2) Can I PM you with a few questions of my own? I think it'd be more efficient that way because they wouldn't flow on here when everyone's asking general questions

Dec 17, 2012

Thank you so much for this. 2 questions.

1) Where can I go to learn more about portolio management and fixed income? I'm living off of google and e-books I can find. I can't seem to find any kind of "M&I Guide" for AM.
2) Can I PM you with a few questions of my own? I think it'd be more efficient that way because they wouldn't flow on here when everyone's asking general questions

Dec 17, 2012

Thank you for your response, truly appreciate it

Dec 17, 2012

For someone with S&T (trading analyst) background of 1 year, how can this person break into a junior PM or Portfolio Analyst type role? Is this type of background even attractive to AM recruiters? Which firms would be most receptive to someone trying to break in right now?

-- Having never been on the sell-side, I really have no idea what gets done in sales and trading. I always hated doing presentations in school, so sales would not be ideal for me. Not hating on people who do it, but it seems like a lot of posturing to me.

Anyways, having worked in S&T isn't going to make or break your career. It could present doors to be opened, but honestly it's up to you to turn the knob. Being in the industry for 1 year, you're still considered entry level. A lot of the portfolio analyst/junior PM jobs list 1-2 years of experience as preferred. It all comes down to your effort and how much you market yourself.

Just know that portfolio analysts/junior PM jobs are very rare, at least as far as I have seen. It's a numbers game - there are more research analysts than PM teams in asset management firms. There are more vacant research associate jobs than junior PM jobs.

In your search, look at large buyside shops: fidelity, mfs, putnam, wellington, capital group, t rowe price, etc.

Speaking of doors btw, nothing closes a door faster than being arrogant or entitled. It's one thing to be confident, it's totally different to be obnoxious.

Dec 17, 2012

May i know why the CFA is a golden ticket towards Asset Management? Were the interviewers impressed that you have passed all 3 levels ?

I always believed networking and working on your technicals should be the #1 priority and the CFA should be studied only when your in the job. Cause at the end of the day, there will be many CFA holders fighting with you for the same position.

Would love some opinions on this. Also is ur role more focused on fixed income or equities ever since you started yr job?

-- CFA is a sign of dedication and enthusiasm for the field. It's part rite of passage, part hazing ritual. You're right that you should focus on networking first, but technicals are less important than you would think on the buy side. Valuation metrics are important, and should be included in a stock pitch. But you're not going to be asked how to do a LBO model, or about NOLs, or whatever. Your thought process is important, so maybe you'll be asked brain teasers.

When you're going for the CFA, it's ideal to already have a job, so that you can get sponsored (for the application fee and books). Just know that employers take it seriously; I was pretty much told to clean out my desk if I didn't pass level 1.

The CFA is definitely important and is a sign of seriousness. It's better to go for it early in your career; you won't have as much time for it when you get married/start a family.

Dec 17, 2012

Any thoughts on how to break into a credit research or investment analyst type role? I am looking specifically at asset management arms of insurance companies due to where I live. I just received the CFA charter and have a background in structured finance (MBS, ABS, etc. on the trustee side). I have been networking and have had a few interviews but keep getting the answer that I don't have the relevant experience that is required. It's hard to get the experience unless someone hires me. I put together a 6 page credit analysis on a company for 2 credit interviews. These are more fundamental in nature like you alluded to in another reply. Feel free to PM me if that is easier. Thanks in advance!

-- Congrats on getting the charter. While it's commendable that you worked on a 6-page credit analysis, to be honest there just isn't enough time on the buy side to read something like that. Think of it in another way; there are only so many hours in the day. The markets are very fast-paced. If you're a research analyst/PM at a large buyside firm, are you going to read a research report made by someone looking for a job? Or would you rather spend the time reading something put together by your star analyst. Not trying to hate on you, but next time make it 2 pages. Then spend the extra effort working on how to present it in a confident and convincing way.

Getting a job as a credit analyst is no different than getting a job as an equity analyst. Do your homework, start with a target list of firms, find alumni/connections to reach out to, prepare for the interviews, and be creative.

Most buy side shops have both equity and fixed income/high yield departments. Good luck.

Dec 17, 2012

1) Where can I go to learn more about portolio management and fixed income? I'm living off of google and e-books I can find. I can't seem to find any kind of "M&I Guide" for AM.
2) Can I PM you with a few questions of my own? I think it'd be more efficient that way because they wouldn't flow on here when everyone's asking general questions

-- 1) I'm a big fan of reading hedge fund shareholder letters and interviews with strong investors. I really haven't found a book about portfolio management; the best way to do this is to a) find a solid job or b) find a mentor.

Some books I will mention include Joel Greenblatt's "How to Think Like a Stock market Genius" and anything Seth Klarman (you can download margin of safety on the interwebz). The weekend edition of Barrons is good too.

I watch msnbc/bloombergtv, but only for the information/entertainment. The talking heads on those shows may be smarter than most, but you have to step back and consider why are they even on tv in the first place? A job as a research analyst/PM is both more lucrative and (more importantly), interesting. They're either using tv as a soap box to get more money (first red flag - if they had good performance they wouldn't need to publicize themselves), or they just love the sound of their own voice.

2) Don't PM me, just fire away. Would rather have everyone else benefit

Dec 17, 2012

Thanks for the input. This is super helpful and I think everyone appreciates it Few more questions sorry:

1) What are the most valuable skills someone needs to have to get into AM straight out of undergrad? I mean specifically, someone at a non-target getting something like Fidelity or Pimco or Blackrock.

2) How big are analyst "classes" at AM firms?

3) Say I'm currently a sophomore at a non-target. I did PWM at a solid BB after freshman year and want to do AM now. Are there any firms you know off the top of your head that would be receptive to sophomores? If not, what should sophomores do in general to be able to work in AM after junior year? They can't necessarily do IB or ER because BB's won't take them. Try ER at a MM?

4) What are the cultures of different firms that you know? (you dont have to specify your company if you dont want to, but maybe some of the better known cultures of other firms)

5) What does the recruitment process for AM look like from the inside? A user put a great example of recruitment for IB on the forms the other day detailing essentially how many resumes they get, how the resumes get weeded down to a select few (#'s and criteria), how many for super day, and how many offers.

I can see this as a lot so if you can't answer them its totally okay. Appreciate all your answers thus far though

Dec 17, 2012

1) What are the most valuable skills someone needs to have to get into AM straight out of undergrad? I mean specifically, someone at a non-target getting something like Fidelity or PIMCO or BlackRock.

2) How big are analyst "classes" at AM firms?

3) Say I'm currently a sophomore at a non-target. I did PWM at a solid BB after freshman year and want to do AM now. Are there any firms you know off the top of your head that would be receptive to sophomores? If not, what should sophomores do in general to be able to work in AM after junior year? They can't necessarily do IB or ER because BB's won't take them. Try ER at a MM?

4) What are the cultures of different firms that you know? (you dont have to specify your company if you dont want to, but maybe some of the better known cultures of other firms)

5) What does the recruitment process for AM look like from the inside? A user put a great example of recruitment for IB on the forms the other day detailing essentially how many resumes they get, how the resumes get weeded down to a select few (#'s and criteria), how many for super day, and how many offers.

-----
1) you pretty much just have to hustle, be creative in reaching out to contacts, and be enthusiastic about the job.

also, it would help if you stopped labeling yourself a "non-target." As soon as you walk into the room and shake the interviewer's hand, it really doesn't matter where you went to school. The interviewer will know your background; he/she is the one that invited you in to the interview. Besides, what are you going to do? Lie about where you went? Retake the SATs and do 4 more years of college? The sooner you come to terms that you didn't get into harvard, the better your future will be. when referring to where you went, always paint it in a positive light, and just remember all the good times you had with your friends.

2) varies by firm. Some companies such as fidelity/putnam hire an incoming class, prob low double digits. Others have half that, other have in between.

3) you could try the sell-side if you want, I guess. I never had summer internships, i interned during the school year. There'd be no shame in starting out at a lesser preferred role at a blue chip shop such as fidelity. For example, compliance/operations/sales. It's a great introduction to the industry. You may like it, you may not. But be positive about it and use it as a stepping stone. if you decide to do this, don't ask about "exit opps" in the interviews. it's just a sign that you're not interested in the current job, and only willing to move on. everyone starts out at the bottom. the best workers with the best attitudes move up the quickest.

4) it varies by firm. could prob give you a better idea by region. san fran is relatively more laid back, but you have to be in the office by 530-6 am for market open on the east coast. also tends to have a tech focus. don't know much about LA. Boston is a lot of old money and there are some long-standing institutions. new york I think tends to get dwarfed by banks but has its fair share of shops. don't know much about chicago. best bets for AM are nyc, boston, san fran

5) really not sure about this, haven't been a part of looking at resumes. some places have set recruiting time periods (fidelity, putnam), others fill positions on an as-needed basis when they open up. the interviews I've been on are mostly based on fit and the quality of your pitch (at this point, presentation/execution is more important than how well you can analyze). have also had to do case studies/projects for some interviews.

Dec 18, 2012

Yo sampson

Thanks for the response. Just a few more questions.

1) Was it a pre-requisite that your employers wanted to see that you passed level 1 before they chose to bring you in?

2) Based on your personal perspective on your previous response to me, what your trying to get to us is that once we are on the job for the first few months, its advisable to enroll for the CFA program immediately?

3) Did you had any prior internships before you gotten this job?

4) Is your current firm just focusing on equities only?

5) How would your priority list be if your hunting for a new asset management job? I was thinking it should be something like this: (Need your personal opinion)

a) Networking
b) Good Cover letter and Resume
c) Behavioural and Technical Interview preparation - why XXX company? Walk through valuation models?
d) Stock Pitch
e) CFA

Quotation:

-- CFA is a sign of dedication and enthusiasm for the field. It's part rite of passage, part hazing ritual. You're right that you should focus on networking first, but technicals are less important than you would think on the buy side. Valuation metrics are important, and should be included in a stock pitch. But you're not going to be asked how to do a lbo model, or about NOLs, or whatever. Your thought process is important, so maybe you'll be asked brain teasers.

When you're going for the CFA, it's ideal to already have a job, so that you can get sponsored (for the application fee and books). Just know that employers take it seriously; I was pretty much told to clean out my desk if I didn't pass level 1.

The CFA is definitely important and is a sign of seriousness. It's better to go for it early in your career; you won't have as much time for it when you get married/start a family.

Dec 18, 2012

Would someone who has passed level 1 of the CFA and has the following background have a shot of getting in?

Non-target undergrad in Finance, Non-target MBA, 5 years work experience (rotational program at F500, two accounting roles, currently in a FP&A role).

If yes, what level would you expect them to come in at and what would you say the average compensation package is at that level?

Dec 18, 2012

Yo sampson

Thanks for the response. Just a few more questions.

1) Was it a pre-requisite that your employers wanted to see that you passed level 1 before they chose to bring you in?

2) Based on your personal perspective on your previous response to me, what your trying to get to us is that once we are on the job for the first few months, its advisable to enroll for the CFA program immediately?

3) Did you had any prior internships before you gotten this job?

4) Is your current firm just focusing on equities only?

5) How would your priority list be if your hunting for a new asset management job? I was thinking it should be something like this: (Need your personal opinion)

a) Networking
b) Good Cover letter and Resume
c) Behavioural and Technical Interview preparation - why XXX company? Walk through valuation models?
d) Stock Pitch
e) CFA

-----

1) No, it wasn't required, but my situation may be somewhat unconventional. I was hired out of undergrad (and not through OCR). It took a couple months to land the job; during this time I was networking and interning at a small investment firm on the side. In the interviews, I did express interest in taking the CFA. Once I got the job, it was expected that I pursue it. But it wasn't the sort of thing where I had to sit out/take courses until passing the CFA. I pretty much hit the ground running.

2) I just think it's easier to get it out of the way. It's a lot more challenging when your job is more rigorous and you have more outside commitments such as a family. Also, why not take it right away? It will potentially help with career advancement and it will show you are serious about the industry. I wouldn't suggest taking it during senior year of college, but that's more of a personal preference. It's prob better to just enjoy being a college student at that time. But that's just me.

3) Yes, interned at two small investment firms (equity only). One was a hedge fund, the other was long only. One was during the school year, as a senior; the other was after graduation while I was looking for a job.

4) in total my company manages several hundred billion ($300-600 bn range). There's equity, fixed, alternatives, and index/ETF products, with over 100 funds. This includes various iterations/combinations of large/mid/small cap; value/growth/blend; specialties such as dividend, emerging, convertibles, sector-based, sector-neutral; asset allocation (fixed+equity+funds+commodities), etc...

5) different priorities during different parts of the job search/process.
Networking is most important to get yourself in the door. I really don't think cover letters are even read, but I'm not in HR. It's solid to have a good resume, but solid networking can overcome a weaker resume and even unearth jobs that aren't well publicized. Behavioral/fit questions are probably more important than technical questions (this depends on the job/firm though). The stock pitch is more important than technicals, and probably on par with fit questions, although you have more to lose with a bad stock pitch. It's harder to answer tough questions related to your stock pitch than it is to answer tough questions about your background/interests/personality. The CFA is probably more important when switching into an investment role (like from operations to research or something).

I should point out that I've only had experience with US buyside firms, so based on your spelling of "behavior," you should take any info with a grain of salt, as the industry may be different abroad.

Dec 18, 2012

Would someone who has passed level 1 of the CFA and has the following background have a shot of getting in?

Non-target undergrad in Finance, Non-target MBA, 5 years work experience (rotational program at F500, two accounting roles, currently in a FP&A role).

If yes, what level would you expect them to come in at and what would you say the average compensation package is at that level?

-------

It's really tough to answer this question. It really depends on what firm you are targeting, what position you are looking at, and your attitude/willing to hustle.

A door may present itself, but ultimately it's up to you to ring the doorbell, turn the knob, and walk through it.

Compensation varies, there are a lot of different job functions. I really don't know anything much about compensation for people within my department/on my team. I'm just trying to do my job right. But the joke's on them; I'd do my current job for less.

Dec 19, 2012

It's really tough to answer this question. It really depends on what firm you are targeting, what position you are looking at, and your attitude/willing to hustle.

A door may present itself, but ultimately it's up to you to ring the doorbell, turn the knob, and walk through it.

Compensation varies, there are a lot of different job functions. I really don't know anything much about compensation for people within my department/on my team. I'm just trying to do my job right. But the joke's on them; I'd do my current job for less.

------------------

My goal is to get in at the same level a MBA would be hired in at (research analyst?) and on the portfolio manager track, ideally at a large respected firm, but open to mid-size as well. Is it worth my time to take level 1 of the CFA next June? I'd hate to invest all the time studying if I have no shot of getting in. Feel free to be brutally honest.

Dec 19, 2012

My goal is to get in at the same level a MBA would be hired in at (research analyst?) and on the portfolio manager track, ideally at a large respected firm, but open to mid-size as well. Is it worth my time to take level 1 of the CFA next June? I'd hate to invest all the time studying if I have no shot of getting in. Feel free to be brutally honest.

----

Getting the non-target MBA will put you on the research associate track, at least at my firm. Over time I think you'll be thankful for that, as it will help you to develop better. Jumping right into a research analyst position means you would have to be making calls on buys/sells right away. That's a really tough job. Combine that with going for the CFA, and your life will get miserable fairly quickly. It's better to shadow an analyst and learn from his/her mistakes for a few years. As a research associate, you're getting paid to develop; as a research analyst, you're getting paid to perform.

If you're serious about the industry, you should take level 1 this June. You said you wanted to get on the portfolio manager track. Well, no one at my company who is a PM does not have the CFA. I'll say that differently: all PMs at the company have the CFA. I don't think that's unique to my company.

One of the PM/analysts graduated from one of HBS/GSB a few years ago (with previous buyside research experience). He landed the job as a PM/analyst, and was basically told that despite his degree from HBS/GSB, he should get the CFA. It wasn't an ultimatum, but heavy pressure was applied.

Also, when I refer to PM/Analyst, it means someone who is still on the PM team, but is basically in charge of stock-picking within designated sectors. A PM/analyst is third or fourth in line behind the lead PM and second PM, both of whom direct trades, pick stocks and cover the most important sectors, along with being the face of the PM team.

Dec 19, 2012

I'll post what I have sent to people who have PM'ed me:

buy side vs sell-side:

I don't know much about AM branches of banks, and to be honest they might be more sell-side than buy-side. Buy side firms manage money and get paid by performance vs a benchmark; sell-side firms provide research and investment ideas and get paid by trading commissions and how much votes they generate from the buy side (votes are based on quality of published research notes).

The working hours of buy side firms are much easier (usually 7-6), but you can't leave your work at the office. You're pretty much always thinking of your positions and how to make money. With the sell-side, the hours are more brutal, but you can turn your brain off when you go home as you have no positions to worry about. For that reason, I always see the buy side as playing a sport, while the sell side is being a sports journalist.

Buy side firms: putnam, wellington, fidelity, dodge&cox, capital group, mfs, lord abbet, oppenheimer, etc.
sell side firms: GS, JPM, cS, MS, baird, rajay, wells fargo, etc

bringing in work (financial models, etc) to an interview:

As far as bringing in work with financial models, that's something I considered when I was interviewing. I was told by someone I networked with that unless you're 100% confident with your work and ready for it to be published, I would avoid bringing in work. It's almost like you're just opening yourself up for more criticism - if there is even one mistake, you will immediately be at a disadvantage, even when compared to other candidates who didn't bring in work. Mistakes will have the opposite effect of your intention: they will highlight your inexperience, not overcome it.

Dec 20, 2012

What internships did you do during the school year that helped leverage you into AM?

What are interviews for credit research summer analyst positions like/what should an undergrad know beforehand?

If interviewing for fixed income, what are the basic technicals one should know?
My school does not have any fixed income related courses so what i know from class are just duration/convexity, but i am learning on my own now

Nov 4, 2013

Investopedia provides free coverage of each CFA chapter so start there. You can also find good resources on analystforum.

Dec 20, 2012

What internships did you do during the school year that helped leverage you into AM?

What are interviews for credit research summer analyst positions like/what should an undergrad know beforehand?

If interviewing for fixed income, what are the basic technicals one should know?
My school does not have any fixed income related courses so what i know from class are just duration/convexity, but i am learning on my own now

------

Had an internship at a small/start-up hedge fund focused on small-cap securities, merger arbitrage, liquidations. I learned how to model there, I usually completed a rough 3-financial model statement every day. This was during the school year; I loaded up on classes on tues/thur, so that I could work mon, wed, fri full-day at the hedge fund.

Second internship was after graduation, while I was looking for a full-time job. It was for a larger, though still small long-only asset management firm. The PM challenged me to look for ideas and present to the rest of the team, so that helped me learn how to think and compose myself. Because of this i was able to give an impressive stock pitch while interviewing for my current job, which led to me getting the job.

I interviewed for 1 high yield/distressed position and 1 distressed debt position. I'm sure you will have to do some kind of investment presentation in the interview. The high-yield was more technical (and by technical, focus on knowing the components of valuation metrics --EV/EBITDA calculations, various margins, EPS, etc). It also helped to know different forms of bankruptcy.

The second interview I was given a case study, where I had to download a file of historical mortgage-backed security info, and make a bunch of calculations and answer several questions. Was given a week to do it, worked 80 hours on it, didn't get the job. Oh well.

Instead of focusing on just technicals, I would focus on looking up the outline for CFA Level 1 Fixed income chapter. You won't be able to view the reading material without buying it, but you can view the outline. So just use the outline as a guide, look up each subject and be familiar talking about them. Don't memorize, understand the concepts.

I know for sure Putnam has a credit research dept for undergrads. Also look into Sankaty Advisors, an affiliate of Bain Capital. Not sure of other companies.

Dec 20, 2012

Sampson

Another question

How do you continue to follow up with financial markets/news other than MSNBC/Bloomberg TV? Any blogs/sites you have been following daily before you gotten your internships and this full time job? How do you formulate a strong opinion on a certain economy issue, e.g fiscal cliff?

What Books on financial modelling would you recommend for future Equities/Research Analysts? Or even courses such as BIWS, Wall Street Prep, Training the Street e.g

Quotation

"Some books I will mention include Joel Greenblatt's "How to Think Like a Stock market Genius" and anything Seth Klarman (you can download margin of safety on the interwebz). The weekend edition of Barrons is good too.

I watch msnbc/bloombergtv, but only for the information/entertainment."

Dec 20, 2012

How do you continue to follow up with financial markets/news other than MSNBC/Bloomberg TV? Any blogs/sites you have been following daily before you gotten your internships and this full time job? How do you formulate a strong opinion on a certain economy issue, e.g fiscal cliff?

What Books on financial modelling would you recommend for future Equities/Research Analysts? Or even courses such as BIWS, Wall Street Prep, Training the Street e.g

-------

For the macro issues, I was turned on to "What I Learned This Week" published by 13D research, but only because I was able to use the hedge fund's subscription. It's intended for institutions, so subscriptions are thousands of dollars. Would be really valuable to find, but also pretty hard too.

Hedge fund letters usually have information/opinions on the economy as well as compelling investment ideas. Those are worth a read.

For daily news flow, I follow www.seekingalpha.com/currents. The seekingalpha site itself is pretty crap, but the currents section is the best for news flow, with tweet-like blurbs updated every minute or so. Really useful during earnings season.

I like WSJ for info, but Barrons for learning. Each Sunday on Barrons online they have a profile of a company and basically a recommendation. Easy to read and it does move the market on Monday.

As far as modeling, I was turned onto www.macabacus.com for 3-statement financial models. It also has M&A/LBO modeling, but I never needed that for the buyside.

Start here: http://macabacus.com/merger-model/target-income-st...
Go to a company's investor section on their website, open the SEC files, download the most recent 10-Qs and 10-Ks. Input the data into Excel, using the link above as a guide. Blue font is hard-coded (entered manually), black font refers to another cell(s). Green is a projection.

The goal of modeling is to be able to change key inputs and see how various metrics change. The only way to do this is by using cell referencing; it allows input changes to flow through the model to the bottom line. Hard-coded values are those which you have absolutely certainty.

Once you're done with that, go to b/s and cfs.

I've never spent money on any BIWS, WSP, TS.

Dec 21, 2012

Great thread, its hard to find good quality information on AM jobs.

I'm a senior who spent two summers on the buyside (1 at a small PE shop, 1 at a small AM shop) and got a FT offer to join the AM arm of an Insurance company (John Hancock, Aviva, etc). Do you have any advice for how I can best prepare myself for the role? I'm already signed up to write the CFA Level I in June, anything else I can do to prepare?

Dec 22, 2012

For someone with no internship experience but the interest in investing is there, what is your suggestion for the best boost to getting an AM job? Sorry if you feel as if you have already answered this through your previous posts.

Dec 26, 2012

sampson, thanks so much for this. I am a CFA charterholder and attend a top 10 mba program. I've found that even most top MBA programs recruit for product and account management positions in addition to research analysts...given how difficult it is to break into the industry , I'm wondering if it makes sense to get into the industry by joining product management for example and then lateraling into a research role.

Oct 25, 2013

i'm confused with PM group titles here... Associate vs. Junior PM vs. PM Assistant vs. Investment Analyst..... Are they the same? or how are they different?

I love my bananas!

Nov 4, 2013

I have two years IB (PF) experience with a local bank in Pakistan and have quit and relocated to Dubai. Looking to make a break into Investment Management, currently have an offer with an Africa-based Family Office (AUM > USD 300M) in Dubai. Any thoughts on what the exit opps in such a role would be considering I would be looking to get into Asset Management eventually?

There would be alot of room to grow in this role as it is currently a 3-man team tending to Family Office matters, no one specifically to manage the investments. Mandate would be to build a fixed income portfolio, explore opps in Equities and Real Estate and arranging financing for new and existing Projects for the FO.

Also, any suggestions on what kind of salary to accept considering the breadth of the role?

Nov 4, 2013

That is incredibly vague as AM/PWM consists of a whole host of jobs and firms.... so the answer is 'no.'

If you have a better idea about what you want to do and who you want to do it for, we can probably offer you a bit more advice

Nov 4, 2013

I want to work for a BB or Elite Boutique. Do these banks hire from target schools like what they usually do for investment banking?

Nov 4, 2013

They do recruit from target schools, but it's possible to break into a BB for both AM/PWM from a non-target as well. As long as you are qualified. Just like in IB

Array

Nov 4, 2013

Hey ssebass, I'm the WSO Monkey Bot and I'm here since nobody responded to your thread! Bummer...could just be time of day or unlucky (or the question/topci is too vague or too specific). Maybe one of these topics will help:

  • Years necessary as sell-side Equity Research Associate for Post-MBA Analyst role at long-only AM? Hi guys, My dream career is in a value-oriented asset manager on the west coast (Brandes, Dodge ... & Cox, Hotckis & Wiley). My question is how many years of sell-side equity research experience ... a well-regarded boutique in my industry coverage 1-year Big 4 valuation experience Academic: 3.8 GPA / Top 50 ...
  • Ask any questions about asset management outside of the hedge fund world answer questions regarding asset management outside of hedge funds and a lot of those questions go ... questions comparing working at a BB vs a large asset manager if needed. questions ... unanswered. I am not extremely knowledgeable, only having been in an investment research role at a large ...
  • Asset Management- Analyst Path Questions institutional Asset Manager like BlackRock / GSAM / Fidelity. Realizing how few spots and competitive it is to ... a better move for that summer. Side questions: Would transitioning from 2-3 years at a BB AM arm to ... Hey everyone, looking for some quick career guidance from some AM professionals on the street. ...
  • Life at a Top Asset Manager I like to consider this class of AM firm as a "top asset manager" or a "boutique asset ... background as it relates to AM, briefly: I spent 2006-2008 working for a top asset manager in an investment ... , but never at traditional asset managers. Another big difference is that the top AMs (probably just ...
  • AM vs HF: The Business of Our Business a long-only asset manager in a lot of regards, yet our fees are exorbitant in comparison. We could run on the ... questions, so apologies in advance. asset management hedge fund ... others relatively wealthy, the Asset Management business has a much wider set of financial outcomes for ...
  • Fixed Income Asset Management Interview question Hi All, I am currently interviewing with a Fixed income Asset Management firm for a credit analyst ... role. During the process I have been asked to prepare a 1 page summary report on a company (With no ... how the analysis would change for that type of role, which ratios you think are the most relevant etc ...
  • Asset Management vs Investment Banking 101 average, higher than compensation in asset management. Out of undergrad, research analysts/associates in AM ... Asset Management vs Investment Banking- What are They? Before examining whether you'd like to ... work at an asset manager or investment bank, it's important to first understand what exactly they ...
  • AMA: Asset Management BO to FO and everything in between /support roles to the Asset Management side and that I wanted to share my story. I figured it would be ... relevant AMAs: AMA: I'm an Equity Analyst/PM at an Asset Manager AMA: Back Office to BB ER I am in ... accounting/finance, had an internship in bank/ asset management compliance. Small company so no opportunity when ...
  • More suggestions...

Or maybe the following users have something to say: @Tximu @Savage_Quant_22 @GatorWagerX

I hope those threads give you a bit more insight.

    • 1
Nov 4, 2013

Can you talk about your ST internships at BB? S or T? Role? What did you love and what did you hate?

Nov 4, 2013
ivoteforthatguy:

Can you talk about your ST internships at BB? S or T? Role? What did you love and what did you hate?

I interned at CS equity research sophomore year and JPM EQ Deriv structuring junior year. I loved the quantitative aspect (I am a physics major) but I hated the fact that a lot of times you are trying to justify an answer that your boss wants, as opposed to actually finding an answer. For instance, I would be asked to do stress tests/back tests on the structuring desk but half the time you know exactly what your boss wants to hear and you kinda have to manipulate input to get that "answer".

Nov 4, 2013

Could you talk a little bit about the expected career progression for someone in your role?

thanks

Nov 4, 2013

If you come in directly out of undergrad, you will be in an associate investment/research analyst (investment analyst and research analysts are essentially the same thing just different names). You are expected to work towards your CFA during that time if you really want a career in this field.

After 3 years, some people get directly promoted to a full fledge junior research analyst role, while other people get their MBA (it is much easier to skip the MBA if you have significant work towards CFA so I strongly recommend starting early).

Then after a few years you become an analyst at the more senior level. At this point, some people choose to become an associate pm and work on the portfolio manager path, while others work towards being promoted to senior analyst and become career analysts. As you may already know, the former is much harder since there are only so many PM spots available.

Chris_Marlin:

Could you talk a little bit about the expected career progression for someone in your role?

thanks

Nov 4, 2013

what are post-analyst exit opps, esp for quant/investment analysts at a good BB AM arm (GSAM/JPMIM)? thanks for doing this man

Nov 4, 2013

One thing about the BB AM arms is that a lot of their analyst (actually a majority of them) end up doing fund of fund work and not real investment analysis work. It's a crap shot to be placed into a group that gives you transferable skills.
But if they are real quantitative or research analysts, I would imagine the exit ops would be the same as an associate research analyst coming out of a good mutual fund, namely moving up to a PM track or some more research driven hedge funds, moving to sellside research, endowments and pension funds (if you want a more comfy job with less pay) etc

acljnle0:

what are post-analyst exit opps, esp for quant/investment analysts at a good BB AM arm (GSAM/JPMIM)? thanks for doing this man

Nov 4, 2013

thanks for the response twopaths. i actually work at a large AM firm in a relationship management role and don't have much exposure to the PM side and was always curious how your progression looked like.

Nov 4, 2013
Chris_Marlin:

thanks for the response twopaths. i actually work at a large AM firm in a relationship management role and don't have much exposure to the PM side and was always curious how your progression looked like.

Sorry to hijack, but would you be willing to talk about what a relationship management role entails, Chris?

Nov 4, 2013

Do people from hf lateral over for more stable job/comp?

Nov 4, 2013
bearcats:

Do people from hf lateral over for more stable job/comp?

happens, but not as much as you would think. Most PMs are really home grown (from analyst ranks)

Nov 4, 2013

nytrader, i'm sure twopaths will verify this, but fewer people "try" to move back to the sell-side. i know people that have moved to portfolio management roles in PB/PWM divisions at a BB, but most will try to become career analysts/PM at mutual funds, hedge funds, diversified PE funds/sovereign wealth funds, and institutional Asset Management

compensation at legit buy-side firms (T.Rowe, PIMCO, Wellington, MFS, Fidelity) can be above-street pay, but there are very few spots available. compensation can range from 75k-120k for a first-year (ugrad) depending on signing bonus... and we're talking pretty good hours here too

as twopaths said, BB AM groups do a lot of FoF work, and there is a big chance that you get put into a role where you're not doing real investment analysis. be sure to double-check what you will be doing

Nov 4, 2013

What are the typical backgrounds of those coming in through an MBA?

People like Coldplay and voted for the Nazis, you can't trust people Jeremy

Nov 4, 2013

twopaths goes on hibernation mode again..

Nov 4, 2013

.

Nov 4, 2013

I know someone who also worked at blackrock for a year. I believe he's at GS now.

Nov 4, 2013

how is blackrock?

Nov 4, 2013

I would really like a place to read about asset management. With the other new forums it would seem appropriate.

Nov 4, 2013

done...please recruit your friends in Asset Management and have them do the same so the forum is relatively active...or else it's f no use to anyone.

Thanks.

Nov 4, 2013

Interested in this as well.

Nov 4, 2013

From what i understand people like GSAM have some interaction (at least read the research) of the sell-side. So it's likely that they can draw upon their other side's research capabilities (even as capacity as client) better than outsiders can. With specialists you will probably have the advantage of being less biased towards any single brokers' research and your team members may likely be more encouraging of critical thinking of broker research. Sorry that sounds quite one-dimensional, I don't think there's that big a difference though in what they actually do. The AMs that are attached to IBs will probably have greater capabilities to deal with big AUM as well due to superior infrastructure, which generally means they can rake in more money easier.

"All men are caught in an inescapable network of mutuality" -- Martin Luther King, Jr.

Nov 4, 2013

Assuming the average property in the portfolio has around ~250 units, I have seen guys at my firm that are assigned as low as 3 and as high as 17 properties. Obviously this depends on seniority, level of management, etc. Obviously if the assets are too spread out it will be much more difficult to cover than if they are all clustered in a single metro area.

Nov 4, 2013
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