When to Jump Ship?
Currently a research analyst at a very small shop running one equity strategy in a LCOL city in the US. I have been here for 5 years (first job out of UG) and am feeling like it may be time to go. The firm has been around for over a decade with decent performance.
Firm: CIO and myself are the only investment people. ~$600m in AUM. He has a very controlling personality and I was the first analyst he has ever hired.
Comp: Have consistently been ~1/2 of market base comp with jokingly small bonuses. Took the job initially because it was buyside. I have stayed because I thought there was upside potential as the firm grew/succession planning and my non-target background.
Situation: Comp has not scaled as I was led to believe and there has been no mention of profit share, a performance-based comp scheme or potential succession planning. I didn't even have a comp discussion in 2021.
The CIO has also refused to provide me with any research software (FactSet, Bloomberg, etc.) while having a FactSet subscription that he rarely uses (He is pretty old school). I have generated ideas (some got in the book and some didn't) that have outperformed the rest of the portfolio on average with basically no support. It is very difficult to get feedback on why an idea doesn't enter the book.
Question: My question is whether it is time to start recruiting and jump ship or if I am just whining as a younger analyst?
There have been whispers of succession planning in the future but the CIO always changes the subject when I bring it up. This along with the refusal to invest in support for me as an analyst or provide feedback has sent up red flags that he is only interested in maximizing his personal gain in the short-term.
Any advice is welcomed.
Very well paid or learning a lot.
Ideally both, one will do, but none means time to leave.
OP here. How do you determine when you have learned as much as possible with limited support? Obviously I am still learning every day due to extreme autonomy to work on different names but lack of resources has made this more difficult. No access to sell-side work, no expert transcripts, etc.
I know there is no good answer here but it is something I am struggling with currently.
The only real way to know is to interview for a different role to see what you in fact don't know or have been missing out on. Would also give you a shot at impressing by showing how you've found workarounds to reach the same analysis too.
Always remember dear boys and girls, that no matter how well they pay you, you are always underpaid OR worse you're working for a fool that is soon going under. Likewise, don't hire unless your employee will make you more money than they burn.
You have to get out ASAP. Good news is you have 5 years of experience so are reasonably marketable (know enough to come in and be fairly autonomous/ know the basics, but are not so senior you are expensive/ are not trainable/ adaptable to another firm/ process).
I would suggest networking as widely as possible (reach out to any friends, alumni from your college, anyone else you may know) and to recruiters.
I'm sorry, but how is this even a question? At the end of the day, half of the market comp is not enough to offset against any experience you will gain. While you certainly have the pedigree, I suspect the weakness of your employer's name-brand can add limitations to your future recruiting prospects.
In all honesty, and I don't mean this in a 20-20 hindsight type of way, you should've been out after 2, max 3 years. While it is great that you are at least open to discussing it now, to me it is a fact that your employer basically brought zero value to you. The pay, the lack of team, the lack of career progression, subpar personalities, even the lack of resources provided to you so that you could do a better job. There were so many red lights.
And just to highlight, I think you excessively underrate what you bring to the table, e.g. when you refer to yourself as a "younger analyst".
Definitely the case it seems especially seeing yourself as the younger analyst. Also I appreciate the post because it’s made me realize 6 months in at my new role I may be in the same position. Learning but they don’t provide any tools and are cheap with things like software (apparently we had it, but don’t use it anymore things like Property Shark/Reonomy).
Curious how much one on one time does your CIO give you? Since you’ve been there 5 years do you know him well and have you learned from him? Does he sit you down and explain things or did more in the beginning?
OP here. I know the CIO very well. We have a friendly relationship and have dinner/drinks every couple of months. I know his family, have been invited to his home, etc. Office face time is pretty limited as he prefers to work from home. We get lunch once a week or so to discuss any new or existing ideas.
He is not keen on answering a million emails or jumping on a call so I find myself sending notes on a new idea and receiving no response. This is my biggest current issue outside of comp. When I bring these ideas up in person, he has rarely read the report or given the idea any thought. This leads to ideas taking months longer than necessary to fully develop because I get to a point where I am ready to pull the trigger but he hasn't done any work or provided any additional questions. My ideas take months for him to get to but I will get an email to work up an idea he discovered very quickly (within a day) because he is ready to buy it. This confirms to me that he doesn't take my work seriously.
Overall I have plenty of exposure to the CIO but really struggle to get him to provide feedback on ideas.
OP here. I really have only stayed due to firm AUM growth (doubled over last 3 years) and the expectation that comp would follow this. Also there was the possibility for succession planning turning into having some equity in my mind but that hasn't materialized.
The lack of comp growth and discussion around equity has led me to looking elsewhere as reality has not met expectations.
With the weak brand name it will likely be more difficult to recruit but I am confident in my ability to develop and pitch ideas. The good part of a small firm is that I have 5 years of experience of actually researching and pitching names and feel quite comfortable talking the book.
Do you think that 5 years of experience will ding me compared to if I left after 2 or 3 years? Also any suggestions as to if it is possible to recruit into an analyst position rather than an associate position?
If you really want to stay an analyst: I would say the 5 years of XP will not ding you, but you can run into problems if the on-paper education is there to support it. As you can witness throughout this forum, there is a very linear career ladder along which people tread. Once the work experience is there, you can get pigeonholed at some point if the other aspects don't support it. So in your case - do you have anything to support a step up, i.e. certificates (CFA, CAIA, FRM) or masters/MBA? If you do then to me, associate is the only thing on the table cause you'd be overqualified for almost every analyst gigs.
Landing another analyst gig, purely logically, does not really make sense for either side. You're capable of taking more responsibility, they'll probably want you to do more as well - you'll want more pay, they'll want better added value. The only ways, in my head at least, that you retain an analyst position is if you (1) go into another small boutique that is not that serious about the titles; or (2) you get into a position where there is some small % chance of you being underqualified/unfamiliar and they need you to go through an extended onboarding process.
Boy, this is very similar to how I started out of UG. Time to go. I wish I had more advice/wisdom to give but just do it...
OP here. How large of a firm did you end up at? Any regrets after leaving?
My case may not apply well to you...but after a some networking I stumbled upon a corporate development opp and decided to pursue that route (1) broaden my skillset and life experience (2) be able to trade freely without compliance. FWIW, I'm looking to make moves yet again but don't regret it
Thru my equity research stint I bet I felt similar to you, very frustrated. It was a 10/10 opportunity on paper that never fully panned out. I hit a growth ceiling and it was time to go. Looking back, it's whatever. It's not my firm! I felt this weird mix of anger and loyalty/guilt toward the owners, and it was only once I moved on that I realized how dumb all that was.
Who you work for/with is important, and people don't change. If it doesn't feel right, prepare to make moves. Take your skills and leverage the hell out of them for the next gig
You should have left 2 or 3 years ago which means you should get out asap before you lose more time at this firm.
Do you see the additional 2-3 years time spent here as a headwind to recruiting or simply opportunity cost of not making market comp?
Trying to guage what level (Ideally at the analyst level) I could recruit into with my current experience.
No, I think it will still help. In my opinion, there are two things to consider in this situation.
1. In 2 to 3 years, you've learned most of what you need to know to do the job. You will keep learning but knowledge gains will be marginal.
2. In 2 to 3 years, you've had enough time to prove yourself to your team. Also, your team has had enough time to fulfill some of the initial promises made at your hiring. If you've done the former and they have not done the latter, it's time to go.
why is this a question? you're getting your pants pulled down - LEAVE. Jesus
Prob have something to do with being in LCOL at a very small shop - opportunity set limited and dunno what's out there.
The biggest red flags I see in situations like these are when the analysts hired out of undergrad don’t ever get equity/carry. Equity/carry is the only way comp scales in this business. Not having any (and in your case, no conversation about it) leads me to believe you’re being screwed over.
OP here. Assuming I stay and do get a conversation about equity (or profit share at least) started, I have found it impossible to find any data points on how much to ask for or how the equity grant progression should go.
Do you or anyone else here have some ballpark ranges as to what a fair equity grant or profit split looks like? For clarification this is a LO shop with AUM based fees, not a hedge fund.
Ooooooh, this completely changes the tone of the conversation if it's a LO. Then at $600mm AUM, this is quite sub-scale.
Pizz, it's very strange that you haven't asked him if he's getting laid. WHat other question really matters?
He's not getting laid if he's not make $$$
Yeah sounds like this guy doesn’t really respect you if he’s pretty much ignoring your ideas and not paying you. Leave ASAP, always know your best bid away because at the very least you can come back to current employer and tell him what someone else is willing to pay you
Your bonus/comp was those lunches/dinners CIO paid for thats when he said “comp scales youngn”. Aka dude when I make another 200k I will buy you a steak.
CIO prolly got abused by a former a CIO themselves and is the type “well kid when I retire your comp scales otherwise enjoy the nice steak lunch and keep those ideas coming.”
This is what I'm afraid of... I think he may be stuck in the old school way of "pay your dues, make no money and take over the firm when I die".
I guess I will just start recruiting if he won't consider giving up equity.
Unclear if he will give you the firm when he dies. He can hire a more senior person if he wants. My experience is that people usually don't inherit these types of businesses unless it's obvious that they could build it themselves as an alternative - that clients will perceive them as seasoned and smooth enough to do it.
Honestly based on the quality of training and lack of peer exposure and other roles, you have to honestly ask would clients see you as a credible replacement? Would the founder see you as someone who could set up his own business or at least find another role if he doesn't pay you?
I'm actually biased towards these kinds of roles (see my dissenting comments on start up hedge funds) - I took jobs with hair on them to break in and believe its an apprenticeship business. But it doesn't sound like you're learning or that you will be earning.
I was in this same position in my first job. Leave. When you see how much you will learn elsewhere it will blow your mind. It’s tough when you know the owner well and are invited over for dinner etc etc. I’ve been there. But it’s your career. If they are actually a mentor they will understand and you can continue that relationship after you leave. This is an industry where people move around all the time :)
Have you followed the firm you left? Any regrets?
I have, and I am still friendly with my mentor! Unfortunately they continued in their same habits and have essentially grown little in terms of AUM, performance is arguably worse, and turnover has gotten pretty bleak. My finance skill set is much better, and I am very glad I left.
Very timely subject for me. In a similar spot, in terms of years of experience, lean team, and a boutique with about 2x the AUM.
I’ve learned a ton and have had pretty consistent positive performance. I’ve thought comp would scale as a track record was established, but it’s stagnated at probably half the market rate as well.
Part of me wants to stick it out for the chance a succession planning conversation comes around and a good year of fund performance will help the PM be a little more generous with comp. However, reading the comments here makes me realize I probably need to get out.
OP here. While I'm sorry you are in a tough spot, it is good to hear that I'm not the only one experiencing this.
Do you mind discussing how you plan to go about broaching the topic of succession/comp increases? It just seems impossible to find data on what to ask for or even opinions on how to approach it.
Happy to PM you too if you don't want to talk about it here.
As others have already stated I would start looking elsewhere ASAP while you are still young. It sounds like you have a good relationship with the PM, but I would have an offer in hand/be applying to other firms before you bring up the topic of a share in AUM fees or bonus/raise (if you even want to stay otherwise just leave). These gives you some power and flexibility. While you two are cordial now you never know if he will take it personally or be volatile when you ask for a true piece of the pie. If you don't have other offers and he blows up on you then you are stuck in a shitty situation with the firm being so small.
OP here. This was my plan. Recruit hard, then hopefully approach him about equity/comp after receiving another offer. Unfortunately, he will definitely take it personally if I bring up another offer.
1) The street only knows the structure not your pay..
2) Capitalize on what you just said, your good shots and proximity to upper management..
3) Turn 1 and 2, into a market paid position, with a top mentor..from what I see you're on the younger side, thus I'd target a place where the boss has a mentor/teacher mentality..I do not want to be boring..but money will come..trust your skills
I worked at a rating agency for 4 years and was in a similar situation, althought I had trouble breaking into a role that was the right fit for me financially and professionally. After moving into my new job, I realized how much there is to learn and that I could have spent it better by working someplace else. Additionally, i realized there are firms that do pay you well and give you a clear path to the top. You just have to find the right firm.
Don’t let your title prevent you from applying to jobs with higher titles/higher salaries. Apply everywhere and be confident you belong.
At this pace you should’ve left two years ago. Fortunately, you have loyalty going for you. Be ready to bring up what ideas you had that worked, failed and why. Happens to the best of us! Be courteous on the way out and burn no bridges.
Any updates about where you landed?
Did you ever leave? I somehow found this thread and I'm invested now
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