So you want a career in funds management, investing “other people’s money” in stocks? If so, you would have already come across the bewildering number of companies employing motivated individuals to do exactly that in the Australian market. The aim of this blog is to shed some light on the major differences between working for a large fund manager responsible for many billions of dollars, and a smaller boutique one with much less money to manage.

As with a smaller company in any industry, working for a boutique fund entails responsibility beyond merely the technical specification of the role. In addition to analysing stocks for investing purposes, one is invariably involved, to some degree, in the marketing aspect of the business – be it raising the firm’s profile through media interviews, giving speeches at conferences, or being directly involved in pitching for investment ratings/mandates.

Although these extracurricular pursuits are tailored-made for those interested in being more than just a cog in the machine, they can be a distraction for people who prefer to purely focus on investing. This problem can be substantially alleviated by working in a large funds management company, which has separate teams or senior figures to deal with the “non-investing” side of the business.

Big boys are best?

Meeting the management of the companies that you plan to invest in (or are already invested in), as well meeting suppliers, customers and competitors, is often considered paramount to investment success. This is significantly easier to arrange when working for a large funds manager, given its sheer clout in terms of both reputation and the amount of money to invest.

In a smaller fund, on the other hand, a lot more legwork and cajoling are required to set up these meetings. This “tyre kicking” element of the job also often entails a fair amount of domestic and international travel (e.g. to visit a company’s foreign operations). These so-called “junkets” quickly lose their appeal when working for a cost-conscious niche firm.

Perks of the work

For those so inclined, a great hidden benefit of working for a large fund manager is the sheer volume of perks. A large fund is invariably a big commission payer to the stockbroking industry, which provides trading, research and other services in return.

This means investment professionals working for large fund managers receive priority services from stockbrokers (e.g. phone calls or meetings to discuss new investment ideas, and access to company management or industry experts). And they are also frequently showered with social invitations, ranging from lunches/dinners at the finest CBD restaurants to concert and sporting tickets.

Career entry into the Australian funds management industry is fairly difficult, not because of any intellectual barriers, but because of its generally insular nature. However, for those with the luxury to choose, this blog has hopefully highlighted some issues to consider when deciding whether to work for a large fund manager or a smaller one.

Although, at the end of the day, it is your investing prowess which will determine you success, it never hurts to know what environment you are getting yourself into when you sign on the dotted line.

Blue Horseshoe is a candidate blogger with funds management experience. The views expressed are his, not those of eFinancialCareers.