The sellside is shrinking, the buyside isn’t. The number of people working on the buyside in the UK has risen 8% in three years; the number of people working on the sellside has fallen by 2.5% over the same space of time.
So, if you are among the people losing jobs on the sellside, could you get reemployed by slipping quietly into an asset management firm?
It will be hard
Not without perseverance. The buyside isn’t doing so well either. Two thirds of fund managers have failed to meet their benchmark this year. Some, like Henderson, are said to be cutting staff. Others aren’t really recruiting too much right now.
“There’s not much hiring at all among asset managers,” says Chris Manfield from search firm Manfield Limited. “Most places have headcount freezes and are reviewing how the year’s gone. It’s very quiet.”
It is happening
Hard doesn’t mean impossible, however. Some people who lose their jobs in investment banks are genuinely getting reemployed in asset management firms.
“What do investment bankers do when times get tough?” muses the head of one asset management search firm, “They look to become private bankers or asset managers.
“We’ve moved a few people from the sellside to distribution and marketing roles in funds,” he confesses.
The transition to the buyside tends to be easiest for banks’ equity researchers, who usually have a good network at asset management firms and can use this to find opportunities. It also helps if you’ve been working in a sales role in a bank and have been selling to buyside clients. “Good relationship managers in one industry are good relationship managers in any industry,” says the headhunter. “If you’ve got the relationships, you can make the transition relatively easily.”
You must attack from all fronts
You will probably not move to the buyside if you send out a few CVs and wait. Use your network, especially if you are an analyst. “It’s a small and incestuous world and you will be able to find opportunities through your own contacts,” thinks the headhunter.
You must accept a salary cut
If you’ve lost your job and aren’t getting paid anything, this may not be an issue, but if you’ve still got a job and are seeing the buyside as a defensive move, it may well be: your salary on the buyside will be substantially lower.
While investment banks have massively increased salaries, buyside firms have done no such thing. Salaries at asset management firms tend to be restricted to 150k, says Jason Mellors at recruitment firm Shepherd Little.
“Someone in their mid-to-late 30s who’s reasonably senior on the buyside could get a maximum salary of max salary of 120-150k,” muses the other headhunter. In an investment bank, it might be 300k+.
The upside, is that your bonus on the buyside is more likely to comprise lots of cash
“In asset management, it’s much more about the bonus,” says Mellors. “There are a lot of places that still pay predominantly in cash, although some do share schemes and buy-ins and may expect you put 10% or more of your bonus back into the fund.”
You will probably need a CFA
If you want to move to the buyside, it will almost certainly help if you have passed some or all levels of the CFA.
“The CFA is almost a prerequisite,” says Manfield.