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 along with an MBA is typical to be considered for an Analyst position at the firms above, as well as traditional mutual funds like Fidelity and T. Rowe?
Work Experience:
New sell-side ER associate at a well-regarded boutique in my industry coverage
1-year Big 4 valuation experience
Academic:
3.8 GPA / Top 50 Undergrad (Business program was ranked top 10)
760 GMAT - (Aiming for Columbia's Applied Value Investing Program / Booth / NYU / Berkeley / UPenn)
CFA level I candidate
Ideally I would like to work two years in my current role before applying to B-school, however I don't want work experience be a negative consideration since I know these are very competitive positions.
Also, I would appreciate any advice beyond the question topic. Like many others, the logical and rational approach of the Intelligent Investor was an enlightening moment. Since then I've been steadily entering the world of value investing. I've decided this is the direction I want to take my career, so any thoughts and advice here is welcome.
Thank you!
When you feel you're ready (mileage may vary and it's not really about the years you spent, although the quicker the better obviously). It's about a mixture of (1) luck, (2) fit, and (3) demonstrating your value-add during the interview and/or networking process. Out of the above, you can control (3). A proxy, for example, would be to look up the CBS value investing competition on YouTube - when you think you can come up with a pitch similar in quality to the top teams, you'll likely have a good shot.
Thanks quattroblanc,
Appreciate the response. Will check out the value investing competition you mentioned. Best!
I would try to lateral into one of those shops as an experienced associate (i.e. 2-3 years experience) hire. I know both Brandes, Hotchkis, and D&C are open to these types of candidates. It may not be an analyst role but it has several advantages: 1) clear path towards an analyst role 2) looks very strong on your resume 3) don't have to pay for a MBA + opportunity cost. If your dream career is working at one of those then just forget about a MBA for now.
If you're set on getting a MBA, you need at least 2 but preferably 3 years of experience for most of the top programs. You'll also have to work to distinguish yourself from a crowded field of finance applicants.
Either way keep in mind that getting an analyst position at any reputable firm is VERY difficult, especially since the industry is stagnating and staffing levels are remaining stable to declining, if anything.
models_and_bottles
I appreciate the response, those are definite options to consider. My worry with lateraling as an experienced associate is that the analyst position is not guaranteed. While coming from an MBA, I would be directly applying for the role.
I'm also new to my role and think I would want to stay for at least 2-3 years. After that, the decision is either to lateral as a research associate at an asset manager or to pursue an MBA. I guess I'm trying to gauge if the cost of an MBA is worth the chance at moving directly to an analyst role.
Thanks again man, let me know if you have any more thoughts.
A few more thoughts:
I would try to lateral after 1-2 years, or at least begin getting your resume out there after a year or two. This would still give you time to get a MBA if things didn't work out.
Implicit in my advice is that you need to ascertain whether the associate / senior associate role is likely to lead to an analyst position. At a firm like Brandes it most likely would not. At D&C or probably Hotchkis it could. The firm should be able to give you some indication about this when you interview.
Again I think you are overestimating the chances of a MBA leading to you landing an analyst role at a west coast value manager. There are only a few of these spots a year and who knows if there will be any in the year you graduate. What's your plan B? Are you willing to work at a manager in NYC of Chicago? Willing to work at a non-value manager? What if you can't land an analyst position coming out of your MBA, what will you do then?
Personally a MBA worked out for me very well, but I can easily imagine a scenario where I wouldn't have landed a good job and would have had to settle for a second tier manager, or living in a city I really didn't want to. The costs of a MBA were HUGE for me since I was coming from one of the aforementioned managers. Think $400k or more between tuition and foregone compensation. If I ended up at a second tier manager I would probably still be working to break even on that investment.
I agree with the above that this is going to be a very difficult transition to make. Not impossible, but difficult. I'm an analyst at a west coast AM shop and know people at each of the firms you mentioned. Of the three, Dodge is going to be extremely tough to break into. They basically exclusively hire from HBS and Stanford, and they have not done much hiring in the past few years as near as I can tell. Brandes is a similar story (although they will recruit more broadly). The positions there are just extremely few and far between. I'm not sure how their performance has been recently but I know a few years back they were outflowing pretty heavily and just not in a position to hire. The LA shops might offer you a better chance... there are a handful and some of those strategies have been strong.
In any case, I would encourage you to get a solid amount of experience pre-MBA on the sellside. Probably 3-5 years. That will give you time to tick off the CFA box and really build your contacts with some long-only peeps which will help immensely when you start recruiting. I am a big advocate of the MBA just from a personal enrichment/phase of life perspective, but there is obviously a cost/benefit that you'll have to run there.
I do agree that this industry could look very different in five years, which may make it exponentially harder to break in by then. As the MiFid stuff makes its way to the U.S. I expect a lot of good sellside analysts will be hitting the Street looking for jobs on the buyside. There is going to be tons of consolidation of both sellside research and L/O platforms so the total number of jobs will be under pressure. That is something to keep in mind if you're planning a multi-decade career. Until the old guard starts to retire, it is going to be really tough for these firms to have active recruiting pipelines (which is a shame because I think younger investors are more likely to outperform here but that is a separate discussion...)
Good point on MiFid, not something I considered.
An MBA seemed like the surest path to one of these roles, and ever since I got my gmat score, I thought the road to a top MBA and eventually one of these firms was secured. I guess daydreaming has to end at one point. For now, I'll just keep on grinding and learning.
I really appreciate the well thought out response since it seems like you've taken a path similar to what I want to follow.
Solid write up jankynoname +1
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