S&T Trading vs. Entry-Level AM

Hello! I am a final-year UK student (top UK uni, STEM degree) and I have two job offers, both in London, both entry-level analyst: one in S&T (likely FX, Gov't bonds, or rates trading) at a lower-tier bank (think RBC/Nomura/SocGen), and the other at a relatively small asset management firm (10-15bn AUM, mainly credit, 100-200 staff), as part of a small team. Both offer the same salary (standard London IB starting salary) and I would enjoy the work at both (perhaps the AM one a bit more, although it is less quantitative). My question is which one should I choose in terms of: a) future career openings, particularly if I want to move to a hedge fund (macro or L/S equity) and b) better long-term growth if I choose to stick to it. Which one is more likely to be a dead-end? I would really appreciate some advice or anecdotes, as I have to decide relatively soon. Thank you!

Comments (14)

Nov 26, 2021 - 7:41pm

Lol at this post. I understand you're trying to keep it vague for anonymity but fuck me the vagueness here makes it pretty much impossible to even provide any type of help or guidance. We'll need to know the asset class you'll be in, the exact role/function also the firm for AM is important too as small in terms of AUM doesn't necessarily mean bad as amalgamation can sometimes be bad but its hard to say if you don't want to mention it. Honestly you'll get extremely ill-advised responses from people with vague posts like this. 

  • Intern in AM - Other
Nov 26, 2021 - 8:14pm

You're right, indeed I tried to keep it vague for anonymity. I will edit it – the AUM for the investment firm is 10-15bn, mainly credit. The firm has 100-200 staff and growing.

Nov 26, 2021 - 9:08pm

15 billion is small in the context of real money asset management, it really depends on whether theyre running  a few concentrated strategies (which is fine) or trying to be a jack of all trades by competing against your large institutional asset managers (which is a terrible strategy)

200 people? That's way too many people for a 15bio sized asset manager

Learning and development is going to quite difficult at an asset manager of that size, you wont get the same level of training and market exposure 

What roles will you be doing in each? That's important as the above poster mentioned.

In the AM if its a sales role then your chances of moving into an investment (pm or equity/credit analyst) role wont be high. 

I am always a firm believer in getting sellside trading experience at the start of ones career. In the absence of more information I would suggest considering that option very seriously

Finally you need to ask yourself what you want to do . Do you want to be an investor? Do you want to become a fund salesperson? The roles are all well paid with large upside but you have to know yourself

  • Intern in AM - Other
Nov 26, 2021 - 9:31pm

Thank you for your answer! The fund is real money, no leveraged positions like in HFs. The strategies are quite concentrated, but their plan seems to be to diversify. 200 people, but most are BO/admin, only about 15-20 analysts and PMs. I agree with the point on learning and development – that is my main concern as well. Both roles would be front-office, risk-taking – as a junior trader at the bank or as an analyst at the AM (I believe mainly doing research on prospective holdings, some portfolio trading, and a bit of fund marketing). Finally, my dream is to run an equity or macro (but more likely equity) fund at some point, but I could see myself going the trader route as well, as I have the temperament for it and enjoy coming up with more short-term ideas as well (however, the trading function at the bank does not provide an opening in equities trading, but rather FX, Gov't bonds or rates).

Nov 26, 2021 - 10:13pm

 at the AM (I believe mainly doing research on prospective holdings, some portfolio trading, and a bit of fund marketing).  

Only 1 out of the 3 functions are relevant to your goal to be an investor. PMs in most real money asset managers dont do their own trading, it's outsourced (or in-sourced) to a specialist execution trading team. That wont help you develop your own investment views at all. 

Fund marketing? As a junior you shouldnt be too involved in this as there are product specialists whose job is to do that. Again,doesnt exactly help you in your risk taking goals.

Finally , 15bio is really extremely small in this space. Scale and costs are the name of the game. Not a like for like comparison (since active strategies will always charge more than passive) but A simple metric would be to look at the aum per employee

Pimco manages 2 trillion globally with about 3,000 employees.  legal and general manages abt 2 trillion with 10,000 employees. 15bio/200 might not be sustainable 

Nov 27, 2021 - 3:44am

Not op but thank you so much for posting this reply. I'm curious to why you think sellside trading experience is valuable in early career? 

Most Helpful
Nov 27, 2021 - 4:23am

Purely from a s&t standpoint (cant speak about the ibd to pe pipeline, but there are parallels)

Typically more resources dedicated to training up junior staff in sellside banks 

 There is also a (relatively) formal and time-tested pathway for junior folks on desks. You start off as a glorified coffeeboy/coffeegirl, first one in every day before 6am, using spare moments to watch and learn from your seniors, all while asking intelligent questions, before you know it you'll be sending runs and quoting prices for smaller clients, then progressively larger clients

​​​​​​The largest HFs , asset managers, central banks, insurance companies, endowments etc all trade with the banks you mentioned above ,if you're decent enough after a while you'll get a to meet risk takers from those places and a chance to build a relationship 

that's also how many sellside traders make the move to the buyside

Nov 28, 2021 - 5:27pm

If you're after macro HF then tbh S&T makes way more sense here. E L/S is not so clearcut from FICC S&T, you'd really need to transfer to banking or ER. E L/S from a credit AM isn't so clear cut either. I could see credit AM to equity LO AM but intuitively I feel like to HF would be harder (don't ask me why).

What type of credit strategy would you be on at the AM though, HY or IG? What market?

  • Intern in AM - Other
Nov 28, 2021 - 5:40pm

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