Best Route to Investment Management?

I don't think HFs look at Ibanking analysts (pre-MBA) and Associates/VPs (post-MBA) the same way. You're obviously citing pre-MBA examples, but post-MBA ibankers are a different story. Basically, I think if you want to get into a HF or something "exotic" post-MBA (which is what everyone here is or will be) then sell-side ER, or traditional buyside IM is the best route to pursue.

If you still have a choice of other top b-school opportunities (Wharton, CBS, Booth and maybe NYU and even Cornell) I would think hard before going to Kellogg for strictly IM. I think you can make a good argument that Kellogg is at least comparable to those similarly ranked schools for every other field, except for IM and HFs. But if you have no choice in the matter, you will still be able to get sell-side exposure and perhaps network into some buyside opportunities, it'll just require more legwork on your part...which isn't necessarily a terrible thing, but makes life a little more difficult.

Despite my specific examples which did pertain to pre-mba, 75% of the PMs at the shop I was at had MBAs, and were in banking, either pre or post school. Anyway like I said before, i'm only sharing my experiences and talking about what I saw more of. You think ER is better, I think banking is better - in the end, thats probably the smallest part of the equation and the actual person matters the most.

Ginetta,

Could you elaborate on exactly what you mean by "banking"? And why exactly this kind of experience would be advantageous for someone moving into investment management? I'm going back to school for my MBA with the intention to pursue an "investment banking" job, but my long-term goal is as an analyst/pm at an asset manager. My impression of associate programs at investment banks is that you can go into different areas--like M&A, research, sales, trading, etc.--but to be honest it's pretty difficult to discern the differences between some of these areas. For example, there are different types of "traders" right? You can have prop traders, but then again aren't people who are basically market-making also called traders? Basically, I'd just like to know what position qualifies as "banking" in your mind (I'm guessing M&A but I don't even really know what that job entails)?

You will not rotate like you suggest at all. In most banks, once you are in you won't rotate at all in some business lines like Sales & Trading (Deutsche is the exception here).

You can apply to IB (Financial Institutions, M&A - that stuff), Sales & Trading, other stuff (Risk, Finance), Research (Fixed Income, Equities). That is your lot, and your job comes from the relationships you develop over the summer. Typically you will be on your way in to one exact spot.

Ginetta is talking about IB. There is a wide appreciation for the art of selling people useless tat through powerpoint presentations, understanding how to value a firm and then further understanding how to tell someone it is worth more and succeed in selling them on it. Pricing merger qualities, picking out acquisition targets - that is the stuff the funds like.

From speaking with Ginetta, his experience is that this is the main feed - research guys sometimes move, but they have to be very respected, in the right field and it isn't the main path. Trading similar - you can trade flow. So can a room full of trained monkeys. If you end up being established in the right form of Prop trading, maybe a HF will come in for you (this path is tricky as Prop traders are small in number, technically focused folk - there is also a big capital, credit line vs compensation tradeoff for the trader).

The difference:

IB - doing "Deals". The stuff in B and C in the Wall Street Journal with stuff starting with $bn.

Traders - buying, selling, holding. So many types of things - credit, equities, debt, FX. So many strategies - Correlation, stat arb, flow, merger arb, momentum. So many products - Options, Debt, futures, forwards, CDS. You get a feel for products that interest you.

Sales - getting the deals for the traders to sell stuff, bringing in business

Research - writing about target prices. Valuation of companies, writing, allegedly generating business. talking on CNBC. Not in cahoots with the Traders, as per Spitzer (at least not formally).

Strategists - work sort of nearer the desk analyzing the market as a whole and creating interesting viewpoints, metrics and feeding the desk first, then potentially clients.

Great thank you.

Where do bankers in Capital Markets fall into?

Great topic guys...I too am interested in making this move post-mba. I think Ginetta is right with regards to making a move to HF pre-MBA. Banking analysts definitely have an advantage over any other occupation in terms of getting a foot in the door at various HFs. However, I would disagree with the notion that one should take an associate role in IB in order to eventually move over to IM...the reason being, while it is generally accepted that IB analysts will most likely use their analyst experience as a springboard to other careers (PE, HF, VC, F500) an associate needs to show that he is a bit more committed to IB. I would very much doubt that if you claimed in a recruiting interview that you would like to eventually move to the buyside in a couple years that an IB group would take you.

I think that for MBA recruiting, if you do not have prior asset management experience you should look for traditional buyside shops (Fidelity, PIMCO, Capital Group, Blackrock, BB asset management). I would say Research would come next, given that I think it makes you think more like a PM and you interact daily with PMs, as opposed to M&A where you are simply trying to justify the highest price possible to get a bigger fee....and then either sales and trading or M&A. Fyi, I think capital markets is kind of a go between s&t and M&A...you don't do in depth modeling analysis like you would in M&A, but you also don't work as closely with the markets as sales and traders do.

At the end of the day, if you want to be a PM you will make it happen. The asset management universe is so broad that there is no set "path" for people to follow. Look at some leading PMs and study where they came from...There are former bankers who specialize in risk/merger arbritrage (Paulson), former equity research guys (steve eisman at frontpoint), PhD computer scientists (jim simons, ren tech), traders (eddie lampert, stevie cohen), economists (gerstenhaber at argonaut), bulge bracket strategists (barton biggs)..and all have very different strategies...trend following, algorithmic trading, value, growth, distressed, merger arb, etcso all of these are legit ways to get in...you just have to work for it and produce RESULTS, no one cares about your background/degree it you can't make money...very much a meritocracy. I think for us MBA folks we should try to get as close to buyside as possible, but if we don't make it for whatever reason, keep up hope, stay focused, be passionate, and constantly NETWORK. just my 2c.

I'm most interested in the Strategist role. Can you tell me more details about its job requirements and what kinds of MBAs will help achieve that position?

This is on point. Although, you should note that those traditional buy-side shops you listed are incredibly difficult to get into, even with previous buy-side and/or sell-side experience, e.g. each only takes a few people a year from a pool of candidates across all of the top schools. More often the natural springboard for the career switcher is to go sell-side (research) out of the MBA, and then buy-side later. Out of the dozens of MBA colleagues I've met that are doing IBD (corp fin), not one has said they want to be a PM or do HF after IBD, they all see IBD as a long-term career, or else PE, Corp Dev, VC, Entrepreneurship, etc. as the end-game. However, some that are doing S&T are also interested in IM and buy-side opportunities down the line.

quick question for you guys..in terms of schools which could provide best route to buyside...we all know chicago, columbia, stern, wharton are the big dogs for this. But can anyone share some insight as to other schools that may not be ranked as high, yet are still good options for those that are looking for schools perhaps a tier below these. I'm thinking Ross, Darden, Cornell, Tepper? Also, I've heard kellogg places surprisingly well...anyone know about this?

University of Wisconsin - Madison

the address is below (the forum won't let me add the prefix)

bus.wisc.edu/asap/MBA-CFA-Student-Investment-Fund/placement.asp

Love this thread. Thanks for all the tips everyone.

I am choosing between Sloan and Wharton. Have some personal reasons to be in Boston, but am wondering how much this hurts my chance of cracking IM since Wharton has the stronger reputation/network. Coming from Consulting. Thanks!

There is a little bit of a deceptive selection of individuals there, msbroker. To the average MBA student it is a little hard to expect that the route to Investment Management is possible from a multitude of directions if one were to have a couple of tens of millions in seed capital to throw in yourself (Paulson, Cohen and many of those guys did). Similar you can start a firm if someone wants to throw cash at you once you have proven yourself (many of the Tiger Cubs and Soros offshoots for instance).

The question at large is how you get into that position, and how you go about choosing to do it. I would be prepared to bet that a good 80% of people *if* they were multi-millionairres and well paid, would probably find that their dreams of IM are suddenly AWOL.

Finally, the claim that IB firms want everyone to go from Associate to VP is absurd. The firms recruit 100s of IB Associates knowing the nature of attrition and the demands of the job lose well over half - the banks understand the exit opportunities that exist and why people would want them, and how working on deals can become suddenly not what you want to do after 3 years not seeing your girlfriend / wife or kids. They will happily take you on the aim of a three year commitment, just like they do analysts. If you are any good at that point, they will certainly fight to keep you.

In some ways it is the nearest IB people get to working with Option values.

My intent was not to be deceptive. Are the people I mentioned outliers?? Yes. Absolutely, clearly not everyone in IM is making $4billion a year. I was simply trying to show that relative to other careers, the path to working in IM is not necessarily as straightforward as it is for other careers. Take PE for example, I know that if I wanted to work at blackstone corp pe, I would have gone to a top school, worked at gs or ms m&a, and then either go to HBS or make the direct switch following my analyst stint. Look at top guys in PE, all have similar profiles...whereas look at top money managers, they have much more diverse backgrounds.

I also never meant to convey that ALL associates are expected to work in banking forever. Obviously they have many options available to them, it's just on this thread people seemed to think that since many IB analysts make the transition to IM, that it's the same for associates. It's not. But does that make IB a bad plan B if you don't get a job as an asst PM at Fidelity. Not at all...but for me personally, I know that I'd be happier working with PMs in research, and if that didn't work, I'd be happier in s&t executing trades with PMs, and then if that failed, I would try to work on a PWM team that actively manages client assets, and if I didn't get that, then m&a would make sense.

You're right, a lot of associates change their mind and realize that m&a isn't what they want to do. That is fine for them, but I think most people on this thread already know they don't necessarily want to work on deals, but want to manage money (I think). As I said, the people I mentioned are all outliers, but they are among the best, and I would bet are in the other 20% of the folks you mentioned. Is the average mid cap equity PM at columbia funds going to quit if you gave him $50mm...probably...but if he did, and you worked at the fund...to your point as to how do you get into that job...would you hire the midcap guy from a blackrock fund, or would you hire the research analyst from UBS you took a recomendation from, or maybe you would bring on the guy from deutsche's trading floor who you spoke with this morning and have known for yrs...or...the guy who knows how to work his DCF so as to get the highest inflated price so he can collect the biggest fee (This isn't meant to disparage bankers, they're great folks, just making a point). This is what I mean that there is no really set path, it's more about networking/being as close to the buyside as possible and having something that can somewhat resemble a track record...that is if you aren't lucky enough to get there through the extremely competitive mba recruiting in the IM space. Like ppl discussed, to eventually make it through, you need to display passion for the markets. I would like to think of myself as one of these passionate people, but if I don't make directly out of school, I would make it there some other way....but m&a prob wouldn't be at the top of my list. But that's just me....and to each their own...

Thank you msbroker and 3underscore! Now I'm starting to get it!

Great posts, especially 3underscore, msbroker, and cougarblue! Could you provide insights about getting into fixed-income research and strategy positions?