If you’re a graduate starting out in fund management, you’ll come in as an analyst. Unlike investment banks, where the term implies you’re a junior banker required to work your way up to associate over three years, an analyst in fund management is simply the first rung on a much shorter career ladder.
Analysts in fund management are learning the ropes, the fundamental skills that will ensure that they can continue into a front office role throughout their career. This means poring through the financial results of companies, learning to understand how companies make money and why. You’ll consume huge amounts of information and news on the companies and sectors you cover and will be expected to keep a sceptical outlook so that you make the right recommendations.
You’ll consume huge amounts of information and news on the companies and sectors you cover
You’ll write detailed notes that are consumed by asset management firms’ portfolio management teams and help inform their investment decisions. You’ll accompany research analysts to meetings with the executive members of companies you cover to keep up with knowledge on their prospects and strategy.
After this, you can either stay on the research path and become a research analyst, or move across to becoming a junior portfolio manager and eventually work your way up to a portfolio management position.
During these formative years, it’s likely that you’ll be studying for your chartered financial analyst (CFA) designation. This is an industry standard on the buy-side – 23% of CFA charterholders globally work in portfolio management, and 16% work in research roles. This is by far the largest proportion in any job function.
“One of the main jobs of a portfolio manager is to study vast amounts of information, work out what is important (and what is not), forecast what may happen in the future and try and work out whether this is priced in to the market. It is fascinating work and intellectually rigorous,” says Poppy Allonby, managing director and portfolio manager within the natural resources equity team at Blackrock.
It is fascinating work and intellectually rigorous
Employee churn in fund management is not as great as other parts of the financial sector and portfolio managers are often in it for the long term.
Richard Buxton, chief executive of Old Mutual Global Advisers who falls into that rare category of ‘star’ fund managers, told the FT: “My job the antithesis of the trading game at a bank, which is a young man’s game and why they burn out. I believe experience counts for a lot in fund management. Some of the best fund managers tend to be older and more mature like me or Neil Woodford [aged 53].”