Monday, March 22, 2010

Getting a Job in Asset Management

Previously, I was asked to write a post about getting a job in the Asset Management industry. While I myself am not that well versed on the buy side, I interviewed and got advice from other people who know more than I and were successful in getting interviews / offers. This is of course, beyond what is expected in any capital markets job, and this is what they had to say:

Application Materials

As always, you have to get your initial application materials in order with the hope of getting that first round interview. At the application stage, asset management companies have been known to ask for typical materials such as resume, cover letter and transcript as well as:

  • Writing samples
  • Sample stock pitches


As always networking is an important part of getting that first interview. Before you start networking, you should already be very polished, particularly on the topics of:

  • Their fund strategy and your style / fit
  • Know their holdings and weightings
  • Diversification - know the focus of the fund

To get this information:

  • Hedge funds tend to be proprietary and it will be more challenging to get info
  • Mutual funds holdings are generally public

Either way, go go onto Capital IQ / Bloomberg and find out as much as possible. Read manager's letter about their performance and strategy. Know their best performing success stories as well as their dog holdings. Know where their exposures are and what strategies they are using.

If you impress them at the outset with a networking or informational interview, that improves your chances of getting that first round interview.


For the interview, they will probably ask you a few fit questions. I've been told buyside will not ask you too much technical stuff on valuation (i.e. walk me through a DCF) because these are expected. If your resume doesn't show some experience in capital markets, I'm told you have a much lower chance of being interviewed.

Have a view of the market and ensure congruency in your view. A great piece of advice was to really understand the "off balance sheet items". The reasoning for this is because these are the items that are more difficult to value and provide you a potential differentiation advantage. If you are able to better interpret this information, this is your potential competitive advantage in the market.

Also, the "stock pitch" component of this interview is generally more intense than in other finance jobs. I've heard it described as the interview was just "10 stock pitches". Having said that, while most finance interviews usually require 2 longs and a short, it's been suggested that you have a mix of 10 long and short positions, with a mix of long and short companies and industries. Also, you have to make sure that there is congruency in your view as well as your story.

For instance, one example from an interview was: "I see that you've recommended this stock because you think the industry is strong. If that is true, why not buy an ETF of that industry rather than cherry pick stocks? What if the one or two companies you buy in that industry turn out to be dogs?"

Asset management is much more than just "buying and selling stocks" as any portfolio manager will tell you. There are many aspects that portfolio managers are responsible for in funds including:

  • Risk Management and protection or hedging strategies
  • Investment style
  • Investment objectives and goals
  • Liquidity requirements

It is important to comprehensively understand and prepare as much as possible so that you can maximize your chances of getting a successful result in your interviews.


mywealthwise said...

As a career changer that's very good insight I can use. Thanks for the post.How is the CFA prep going?

Joshua Wong said...


At the moment, CFA prep is going well. I find that Level I was more "mechanics" of finance and Level II is more "real world"? Rather than just assume we have the right discount rates, we have to understand why we add premiums or super-impose probabilities ontop of cash flows etc.

I've REALLY enjoyed going through the material as some of this is stuff I've wondered about myself to see if this works in real life.

Bose said...

Thanks for the advice, very helpful and appreciated!Accounting Careers