Should I take AM over IB if I want to be on the buy-side?

I guess the question here is whether you want to be in AM or PE long term. Despite being buyside, AM and PE are pretty different in terms of your role and career. This is equivalent to asking if you should do IB or S&T.

VC/HF are fairly rare/difficult exits from IB except for a few top groups, so will put that and MF PE aside for a moment and focus on your most likely exits. Does MM/UMM PE sound interesting to you, or do you want to be a stock picker? I wouldn't do IB just trying to get a VC seat, for example, unless you have prior internships or founder experience.

IB sucks, but if you prefer M&A to picking stocks, I wouldn't let 2 difficult years stand in the way of your long-term interests. You seem excited about the AM offer, I just wouldn't accept it thinking it's buyside and you're good to go, because buyside is such a wide range. AM -> PE is not a well-traveled path, even post MBA, so be sure this is your actual interest instead of just wanting to avoid 2 years in IB.

So UBS then

Had a convo like this with my mentor, and it really hinges on how much you want to do PE. That’s it. FWIW, I decided to stick with LO AM in the end because, as my mentor told me, there’s no guarantee of re-entry later on. Public investing seats tend to be so scarce that if you’re really passionate about it, then you should hang on to whatever you manage to find.  I was also never enamored with PE, so that may change the calculus for you.

You will work 2 years IB to basically try to get the same role you have the opportunity to have now. I would take the long-only offer and see how you like it. If you don't like it and feel pigeonholed go get your MBA in 3-4 years and go the IB/PE route. It will be easier to go the latter route and switch gears after MBA etc. than it is to get a buyside job in the first place. 

Knowing how hard it was for me to get into my seat, I really dislike the popular indirect route to buyside through IB/ER because you will have more prestige and optionality etc. It is great in theory and maybe it opens an top tier opportunity that you can't get otherwise, but it is all a probability game and too cute in my view. That route is great if you don't have the opportunity to go straight to the buyside. You have 100% probability to get a pretty decent job buyside job NOW vs. let's say 60-75% probability of getting a similar role in two years out of IB because who knows, the market could take a shit and hiring freeze across the street and then you are screwed. Maybe you have a 10-15% probability of getting a top tier Fidelity role or something that you won't have going straight to a LO boutique but that is what you give up for 100% chance to break in.    

I faced a very similar dilemma when I was coming out of university, so I know what kind of position you're in. 

To be frank, it depends on what type of buyside role you want. As others have already said, if you have an inkling suspicion that you might want to do something in PE/VC, then IB is definitely better.

Something that isn't often mentioned in these discussions that I only found out later in my buyside career, is that the difference between various types of investment firms on the public equities side is like night and day (LO AM vs. L/S HF vs. event-driven/special sits; multi-manager vs. single manager, etc.).

To summarize a few of the major public equities buyside roles:

• Long-only - tend to adhere to a fundamentals-driven value/growth philosophy, focus heavily business prospects, and have holding periods of 3-5 years. This is likely the type of place you got an offer at.
• Long/short - Some L/S funds run market neutral or close to it tend to be more short-term oriented (call it 6m - 2yrs) and more "tactical" than long-only funds (for lack of better terminology). Some are long-biased that operate more similar to a LO AM or HF.
• Event-driven/special situations - similar to L/S, but with a twist. Oftentimes L/S funds will have an event-driven or special sits focus, but not always. These types of funds might also be more likely to make a play across the capital structure (i.e. short equity long mezzanine debt of the same company) vs. just investing in equity, so understanding how credit works would be important. It's relatively easy to understand equity as credit guy, but the opposite is not always true.
• Multi-manager vs. single manager - not necessarily always a difference in strategy, but multi-manager funds tend to be short-term focused just by the nature of the organization, the fact that you're running a leveraged book, have tight drawdown limits (5-10% max), and have to manage factor exposures.  You're basically "trading" as opposed to "investing. As such, MMs tend to be significantly more catalyst driven and revolve around calling earnings beats/misses or other types of short-term catalysts. Single managers tend to be lower stress, have a longer investment horizon, and greater job security, but at the cost of potentially slower career advancement. A good MM HF analyst will be able to advance to running a small pod of capital at a relatively young age, while many SM HFs have analysts who are well into their 30s and 40s.

I'd suggest you research all of these to find out what fits your personality the best.

Coming from a LO AM, I would say it would be more difficult to get a spot at a more "tactical" fund because the investment style is totally different. However, you'd probably position yourself just fine, maybe even better than an IB candidate, for one of the long-biased single manager L/S or LO funds.

Don't denigrate the experience you'd get working in banking, especially understanding how the capital structure of a business ties together and understanding markets from a more "human" POV, as opposed to a philosophical point of view that value/growth investors often eschew. After all, markets are nothing but the sum of buy and sell orders.