There is no point working for an investment bank anymore...

Sorry to bump only just found this thread, I take issue with your last point, having worked on both sell side and buy side. It's clear to see that a lot of sell side jobs are very limited with regards to exit opps, working on an equity derives sales desk, an equity sales trader etc etc you will find that there is nothing for you after you sit on one of those desks. At least with the buy side you have the opportunity to start your own thing.

Point taken, although lots of hedge funds are started by sell-siders so I don't think that's an exit opp unique to the buy-side.

From a personal perspective, it strikes me as a smarter move to start a career in a large organisation for two reasons. Firstly, if it transpires the product area / role you choose as a graduate isn't all you hoped it would be, then you can probably find a new role within the same firm. Secondly, if it transpires financial services isn't all you hoped it would be, then a brand-name BB will probably serve you better as a passport into any other industry / business school than an anonymous HF.

That said, if you're passionate about a particular product and know that you was to go the distance with it, then buy-side is definitely the right place to be.

I agree with your points about starting of at somewhere 'large' and with a good brand name especially. Simply just because of the training you receive. Whether that be at blackrock, fidelity, schroders etc.

I'm not sure if most HF's have started from the sell side. Most HFM you know may have but most of the ones that I know haven't, there are so many out there that it would difficult to say which has the lead.

My last point is more general, all I'm trying to say at the end of the day is that people have to be forward thinking. Don't just go on any old desk because it have GS, JPM at the reception, because if you get culled which happens far to much in the sell side then you haven't really got any other options. Trust me I've spoken to tons and tons of people who have been there, some were fortunate enough to be culled after a 20 year stint and thus could retire, some were culled 5 years after joining and explained to me that it was the only thing they could do and with the market they were covering contracting the job was just pointless in terms of compensation.

On your last point, you could add that finance has pretty much topped. If you look at stuff like the ratio of wages in finance to rest of economy then read the news (UBS ending FICC) it is pretty hard to feel like a 'brand name' is going to help much (they don't really care if they have to can you 6m into grad scheme, your a worker). If barriers on capital accounts increase further (as in EMs) then finance is pretty much over. More specifically, if you look at people who are 'brand names' in the 'brand names' they are not doing well outside of IBs (Edoma). Finally, it is also pretty clear that a ton of jobs are going to get outsourced over the next five years, some of this will be 'front office'.

Basically, some people got very lucky being in the right place at the right time, they didn't create much value, they didn't need to be that smart, and the money is pretty much all gone. Confusing that with these places being full of smart/talented people seems pretty foolish. It makes more sense, if your interested in finance, to get a job somewhere that can makes money rain or shine and where you won't be outsourced/replaced by a computer i.e asset management/wealth management. Unfortunately, 'brand names' here are more difficult to find.

You're overrating asset management in your last paragraph. Seeing as most funds do nothing but provide you with different types of risk exposure, your choice of employer basically comes down to finding the luckiest fund. Which means that whether or not you start your career with a "good name" basically depends on luck.

There are very few consistent strong performers in asset management. Look at Paulson & Co, Citadel, LTCM, GS Quant Alpha etc. which lost more money than they had earned for their clients ever in short amounts of time... I guess you could join Berkshire, but if you're in it for the money don't bother.

At least with the investment banks you have some faith that their business models are sustainable (people will need financial intermediaries), even if that market is changing drastically and even if the banks over hired.

If you believe EMT then fine but not every one does. Even if you don't, AM is a far better business than IB (you don't get paid on performance). If you have a solid AUM (Edoma is probably an example of why this is important) and institutional accounts then you can make far more, far more consistently than in IB. The same economics probably apply to IBD outside BBs tbh. It is also true that some AM places are known for good training regardless of anything else i.e. Baillie Gifford.

(On your examples, you can just as easily give examples of people who have performed consistently. It seems important though that all those funds are fashionable and relied on one or two strategies for "outperformance". The market/prices are a totally social construction so stuff like this happens, the point is though that the only strategy that works is no strategy. More to the point, with stuff like equities it makes far more sense to invest based on value rather than a theoretical construction (remember these supposed "risks" are just invented by people to rationalize data) of what the market was/has been like in the past. I don't think risk exposure applies to under $50b either, it isn't pretty clear that EMT doesn't apply if your running less than this, depending on asset class. Either way, there is no easy answer in investing.)

Also, people don't need investment banks. Derivatives are obv not needed but if you look at US from 1945 until late 1960s there was pretty much no banking system and the economy did fine (In the early 1950s, the total amount of government debt was a multiple of the total business/commercial/mortgage debt combined). The increase in "need" is totally artificial and based on political change (i.e.deregulation/Washington Consensus) as opposed to moving towards a 'better version' of the world. Obv, people need finance but given the changes already made, it is pretty clear that IBs are toast (My guess is that investment/retail will get split eventually as well).

Even if you don't believe in EMH how are you going to pick a winner when it comes to AM? Seeing as no one in academia has figured it out, what makes you think a grad will be able to pick one? And it's silly to think that somehow investment banks are going to get displaced but for some reason beta hoggers aren't going to get displaced by index funds. It's the fastest growing sector in AM for a reason, some smarter shops realize this (BlackRock, PIMCO for instance) but running an ETF is definitely not as labour intensive as a normal fund so not exactly much space there. And the non-index funds that survive are going to be much cheaper than they used to be, so a less lucrative sector.