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Investment/Fund/Asset management or consultancy? What suits me better?! watch

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    I am a 2nd Year Physicist who intends on taking a graduate diploma in economics after doing a 3 year course at a top university.

    At school I have done a range of things: Marketing director of a Young Enterprise company, almost taken Media Studies to AS level (switched it for FM half way through ), was in charge of a Physics and Engineering Society and in for a couple of years was interested in making media (films, adverts, posters, marketing, etc)

    So from the list it sounds like I'd be suited to consultancy as I do have an interest in business and solving problems using creative approaches. Not so into number crunching...

    However, I have always been a shy person and have only been coming out of that shell over the past couple of years at Uni. This, I feel would hold me back in a consultancy job unless I opened up even more over the course of the next year, but I can imagine giving important presentations to clients and working in teams for extended periods of time becoming very tiring and stressful to me...

    So... I like the sound of asset management because I'd be researching businesses, perhaps applying the economic theory I'd gain from the graduate diploma and there's less of a social pressure involved (perhaps)


    Any advice or perhaps personal accounts would be ever so useful
    Cheers
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    i'll offer an example...your one year into your grad training program at an AM firm, you don't know what you don't know and you actually know even less.
    your given one week to put together a presentation on a company. you have to present it to the chief investment offer and the investment committee.
    these people have been working in the industry for over 20 years, will know when your bull****ting and are most likely partners in the firm i.e its their reputation your playing on (and their money your being given technically) and so they won't show any mercy (even worse if its a smaller company).
    whats more your playing with the life savings of your clients, if you make a mistake they will (potentially) lose a lot.
    in addition, if you make a particularly bad mistake your either getting fired or sent to sales (the equities in dallas of AM).
    if your worried about social pressure its the wrong job because your paid to make firm decisions like buy or sell and you get called out on your decisions every day by your colleagues...altho you also say you don't like number crunching so AM couldn't be more wrong. you wouldn't apply "economic theory" either, only economists do that.

    your degree (Physics) should be quite useful moving into finance a lot of skills are easily transferable i.e risk/quant positions. i don't reli know enough about this though but that is a more likely avenue although there a lot of engineering/maths grads in "qualitative" AM jobs...your perception of AM being like that is quite common tho.
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    (Original post by crcr)
    i'll offer an example...your one year into your grad training program at an AM firm, you don't know what you don't know and you actually know even less.
    your given one week to put together a presentation on a company. you have to present it to the chief investment offer and the investment committee.
    these people have been working in the industry for over 20 years, will know when your bull****ting and are most likely partners in the firm i.e its their reputation your playing on (and their money your being given technically) and so they won't show any mercy (even worse if its a smaller company).
    whats more your playing with the life savings of your clients, if you make a mistake they will (potentially) lose a lot.
    in addition, if you make a particularly bad mistake your either getting fired or sent to sales (the equities in dallas of AM).
    if your worried about social pressure its the wrong job because your paid to make firm decisions like buy or sell and you get called out on your decisions every day by your colleagues...altho you also say you don't like number crunching so AM couldn't be more wrong. you wouldn't apply "economic theory" either, only economists do that.

    your degree (Physics) should be quite useful moving into finance a lot of skills are easily transferable i.e risk/quant positions. i don't reli know enough about this though but that is a more likely avenue although there a lot of engineering/maths grads in "qualitative" AM jobs...your perception of AM being like that is quite common tho.
    Thanks for the insightful response.

    I may have exaggerated when I said that I don't like number crunching... I just don't want to solely be looking at numbers I guess.

    I am probably struggling to understand what the job really entails.

    Am I right in saying that I would be looking at companies performance sheets, acquisitions (and other things???) and evaluating how they would perform over the next few years?
    Then making a decision on one/some(?) to either buy or sell on behalf of the investors, who tell us how much they're willing to risk and the magnitude of the risk of return they're willing to put out?
    THEN do we go and tell them about our decision, like in your example, through a presentation and they either agree or disagree for you to go through with it?
    Then finally we execute the trades or tell traders to go and execute them?

    In your example surely we would have been trained sufficiently and slowly been weened into responsibilities? So then surely we should know what we're doing, to some extent otherwise why would they make us do it? Or do they just end up weeding out the weak, like you said?

    Are you speaking from first hand experience or things you've heard?
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    (Original post by ennC)
    Thanks for the insightful response.

    I may have exaggerated when I said that I don't like number crunching... I just don't want to solely be looking at numbers I guess.

    I am probably struggling to understand what the job really entails.

    Am I right in saying that I would be looking at companies performance sheets, acquisitions (and other things???) and evaluating how they would perform over the next few years?
    Then making a decision on one/some(?) to either buy or sell on behalf of the investors, who tell us how much they're willing to risk and the magnitude of the risk of return they're willing to put out?
    THEN do we go and tell them about our decision, like in your example, through a presentation and they either agree or disagree for you to go through with it?
    Then finally we execute the trades or tell traders to go and execute them?

    In your example surely we would have been trained sufficiently and slowly been weened into responsibilities? So then surely we should know what we're doing, to some extent otherwise why would they make us do it? Or do they just end up weeding out the weak, like you said?

    Are you speaking from first hand experience or things you've heard?
    hmmm a lot of questions...as usual, it depends. i'll try and answer in terms of what your most likely to find in AM firms in the UK that take grads (i.e Schroders, Baillie Gifford).

    there are a few different sections. you will either be looking at equities or bonds. you may look at companies within a certain country or, more likely, an industry. this slight difference can end up with massively different outcome/investment processes...but on the whole, most AM firms will say look at an industry, speak to some people (companies, other analysts) and then report back about what is moving the industry i.e fragmentation/consolidation, margins, sales (i've been led to believe that grads make quite a few presentations to make sure they are learning something). however, most AM firms now have things like proprietary screens to pick stocks on their numbers. the end result is usually looking at spreadsheets, visiting the company, speaking to analysts and making forecasts however, everyone can do those things and not everyone can be a good analyst so there is something else there that i don't understand.

    most AM firms either run mutual funds or investment trusts...the short story is the investors have already given you the money so there will be a fund manager (who oversees the assets of said mutual fund or investment trust) who decides to buy or sell equities/bonds for the fund. you as an analyst will present to him your ideas. (vast oversimplification). however, in privately-owned firms (i.e Baillie Gifford) there is usually far more pressure on grads (generally) and presenting to partners is common. the instance i was referring to above was paraphrasing what I know happens at Baillie Gifford from people who have worked there. the way i view it is say you pick a stock and it underperforms and you have to talk about why the current price is wrong every morning for the next year, i would say that be a socially uncomfortable situation.

    about how well your trained...its a difficult question but there is no point where you can say "i know what i'm doing...this is a buy, this isn't" i.e most things are subjective. most AM firms training programs are usually about 3 years (the learning curve is very steep i've been told) and it usually takes about 5 years before they give grads any money...so make of that what you will. a lot of AM (that I am talking about) is soft skills, some people are good, some aren't and taking the CFA won't help you. I didn't mean it to sound harsh but i think as a grad you can think once i'm in, i'm fine whereas really thats just the start and they can't train you to be something your not. just my opinion tho. i hope that helped and as i say, it would be more typical for someone of your background to work in a more numerate area of finance. look at some vault guides or guides to the city.
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    (Original post by ennC)
    I am a 2nd Year Physicist who intends on taking a graduate diploma in economics after doing a 3 year course at a top university.

    At school I have done a range of things: Marketing director of a Young Enterprise company, almost taken Media Studies to AS level (switched it for FM half way through ), was in charge of a Physics and Engineering Society and in for a couple of years was interested in making media (films, adverts, posters, marketing, etc)

    So from the list it sounds like I'd be suited to consultancy as I do have an interest in business and solving problems using creative approaches. Not so into number crunching...

    However, I have always been a shy person and have only been coming out of that shell over the past couple of years at Uni. This, I feel would hold me back in a consultancy job unless I opened up even more over the course of the next year, but I can imagine giving important presentations to clients and working in teams for extended periods of time becoming very tiring and stressful to me...

    So... I like the sound of asset management because I'd be researching businesses, perhaps applying the economic theory I'd gain from the graduate diploma and there's less of a social pressure involved (perhaps)


    Any advice or perhaps personal accounts would be ever so useful
    Cheers

    With your Physics degree, your best options is to perhaps move into a quantitive role such as a quant analyst..... but I no barely anything about this, all i could advise on was sales & trading.. sorry.
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    (Original post by crcr)
    hmmm a lot of questions...as usual, it depends. i'll try and answer in terms of what your most likely to find in AM firms in the UK that take grads (i.e Schroders, Baillie Gifford).

    there are a few different sections. you will either be looking at equities or bonds. you may look at companies within a certain country or, more likely, an industry. this slight difference can end up with massively different outcome/investment processes...but on the whole, most AM firms will say look at an industry, speak to some people (companies, other analysts) and then report back about what is moving the industry i.e fragmentation/consolidation, margins, sales (i've been led to believe that grads make quite a few presentations to make sure they are learning something). however, most AM firms now have things like proprietary screens to pick stocks on their numbers. the end result is usually looking at spreadsheets, visiting the company, speaking to analysts and making forecasts however, everyone can do those things and not everyone can be a good analyst so there is something else there that i don't understand.

    most AM firms either run mutual funds or investment trusts...the short story is the investors have already given you the money so there will be a fund manager (who oversees the assets of said mutual fund or investment trust) who decides to buy or sell equities/bonds for the fund. you as an analyst will present to him your ideas. (vast oversimplification). however, in privately-owned firms (i.e Baillie Gifford) there is usually far more pressure on grads (generally) and presenting to partners is common. the instance i was referring to above was paraphrasing what I know happens at Baillie Gifford from people who have worked there. the way i view it is say you pick a stock and it underperforms and you have to talk about why the current price is wrong every morning for the next year, i would say that be a socially uncomfortable situation.

    about how well your trained...its a difficult question but there is no point where you can say "i know what i'm doing...this is a buy, this isn't" i.e most things are subjective. most AM firms training programs are usually about 3 years (the learning curve is very steep i've been told) and it usually takes about 5 years before they give grads any money...so make of that what you will. a lot of AM (that I am talking about) is soft skills, some people are good, some aren't and taking the CFA won't help you. I didn't mean it to sound harsh but i think as a grad you can think once i'm in, i'm fine whereas really thats just the start and they can't train you to be something your not. just my opinion tho. i hope that helped and as i say, it would be more typical for someone of your background to work in a more numerate area of finance. look at some vault guides or guides to the city.
    Wow ok. It does sound exciting!

    So by soft skills are you saying that it's about being able to a) communicate your investment ideas through presentations and be able to justify them. b) Being able to communicate to your colleagues and potential investments as well as whatever network you've built up over time in order to gather additional information to that which can be found on databases?

    Didn't realise there was a travelling aspect when looking at potential investment/sell opportunities, thought the only travelling was to the clients and I thought that would mainly be the fund manager rather than the analyst. By the sounds of it all the pressure is on them to make the right investment decision and the pressure on the analyst comes from the manager... so by the time you get to fund manager status (which might not happen as I think you were saying)

    It sounds like you've done a lot of research into this, thank you very much for helping me understand this.
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    yes those skills are important but i more meant analytical skills, if you just needed those skills you would work in sales. i can't reli describe what the skill is but it is basically being able to take a very complex situation and make it simple without losing any information and you need a good grasp of counterfactual thinking and risk. so typically that sort of skill is found in history or politics grads rather than physics where it is a more rule-based enviroment, i know this isn't wholly accurate. these are just my ideas tho and if anyone knew how to spot these people they wud be a millionaire.

    you don't have any contact with clients at all, only sales does. a lot of clients in AM are institutional so pension funds. most decent funds will make sure that the fund managers don't have to deal with marketing etc. and can just concentrate on managing money. funds take different views on travelling but you usually do it three or four times a year. so if you cover korea, you will go there 3 times a year. i believe there is less travel in fixed income.

    yes my general point was that it isn't possible to bull**** people, its the ultimate meritocracy, you eat what you kill. the pressure does come from the portfolio manager cos its his name on the fund and its his reputation and you'll probablly end up justifying your positions every day. but in smaller, privately-owned firms there is usually even more pressure from, and contact with, partners as they own and work in the business. so in the Hugh Hendry (Electica Asset Management now) example he worked at Baillie Gifford and had to present on Japan to the partners after a few months on the job. btw you may have worked out, this can be even more stressful if you say something they don't like even if its true. So, in the example, at this time Bailiee Gifford was opening a lot of Japan funds but the Japanese economy was about to tank so that can be a massive problem/conflict/stress. yes most people who start in AM will either go to sales or leave if they don't get made a fund manager. good firms hire wisely to stop this.

    AM is easy to understand if your interested. there is plently of info about companies esp. if you at uni and plently of books that outline accounting/finance/whatever so you can basically do, pretty much, what you would do on the job i.e research companies. no problem, everyone has to start somewhere.
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    (Original post by ennC)
    I am a 2nd Year Physicist who intends on taking a graduate diploma in economics after doing a 3 year course at a top university.

    At school I have done a range of things: Marketing director of a Young Enterprise company, almost taken Media Studies to AS level (switched it for FM half way through ), was in charge of a Physics and Engineering Society and in for a couple of years was interested in making media (films, adverts, posters, marketing, etc)

    So from the list it sounds like I'd be suited to consultancy as I do have an interest in business and solving problems using creative approaches. Not so into number crunching...

    However, I have always been a shy person and have only been coming out of that shell over the past couple of years at Uni. This, I feel would hold me back in a consultancy job unless I opened up even more over the course of the next year, but I can imagine giving important presentations to clients and working in teams for extended periods of time becoming very tiring and stressful to me...

    So... I like the sound of asset management because I'd be researching businesses, perhaps applying the economic theory I'd gain from the graduate diploma and there's less of a social pressure involved (perhaps)


    Any advice or perhaps personal accounts would be ever so useful
    Cheers
    Hi there,
    I am currently a third year (out of four) physicist at St Andrews uni, and I'm hoping to go in to a career in AM.

    To answer your question straight off the bat, I have a strong preference for AM over consultancy so I would much prefer AM, but consultancy is probably much easier to get in to (eg with the big4).

    For AM you also need an understanding of businesses and economics, it's not "number crunching", that can all be done on computer now.

    This summer I have an internship at an AM firm and an internship with Ernst and Young (in tax, not consulting) organised, as well as a short internship at Moneycorp, a currency exchange brokerage/risk analyst. I did a short internship last summer at an AM firm, I loved it, and they almost 'headhunted' me back for this summer, which I gladly accepted.

    When you say you are averse to giving presentations, that is very important in AM (not sure how much vs consulting), it is definitely something you will need to get over/improve on. I got to a final round AC with Morgan Stanley Investment Management and one of the few tasks they made us do was give a presentation - it is super important!

    If you have any more specific questions about me (we're from similar backgrounds by the sounds of it?), AM or the application process don't hesitate to ask, just quote me please. I know almost nothing about consultancy though, or consultancy vs AM. Which area of consultancy would you be interested in?
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    I think, overall, that I am kicking up a fuss over the people aspect of things. I'm not a complete social freak or anything and it's not like working at an AM firm is all about being good at making friends unless you're ranked higher and are communicating to clients, but even then it's more about delivering the goods and being a respectable character. I have a misconception that I will be pressured into becoming 'one of the guys' when really this is a work environment not a social club. And by the time I get around to it, I'll probably have grown up some more and be fine with it all...

    I've already proved to myself that I can do well at formal events, I enjoy and can do well at speaking one to one with people, I rarely/never step on anyone's toes and I have a beautiful loving girlfriend who will support me all the way. I guess I'm at a crossing point between the old, shy me who used to be too afraid to speak to anyone but the quietest people, or contribute to group discussions and the current/future me who enjoys being sociable most of the time, meeting new people and expressing ideas and opinions. And I think this will become more prevalent as I become more and more knowledgeable about the given field I'm in. When I became very interested in Economics at A2 I was willing to discuss in classes and I was feeling much more confident in my ability to speak up about it, because I actually knew what I was talking about..... Now I guess I've lost that momentum because I don't give a monkey about Physics like I did when I was UCAS-ing. Basically if I know my ****, at least to the same level as my colleagues I'd be fine with it all.

    Correct me if I'm wrong but surely at the end of the day the things that I'm thinking of applying for just require you to get along with people so that we can work together to figure out the best advice for our clients. No one can be Mr. Charming all the time, this isn't a popularity contest.

    Having said that if I want to get anywhere with this I'll have to become quite a likeable guy, I take it. And that point would be quite a few years on by now if all goes well (hahaha...) so I should have fully matured by then anyway.

    /rant

    Would anyone agree with the general gist of that rant or am I falsely reinforcing myself?
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    Also, in conclusion:

    An ideal consultant has excellent people skills and can build and maintain positive relationships with ease. So they'd be one of those popular people who everyone knows and likes because the job is so people intensive.

    This may be a just out of my depth in terms of my social stamina, as I can wear out in social situations a bit faster than my peers.

    Bit of a shame because I like the idea of helping businesses run themselves better and finding new and creative ways of improving systems... maybe I'll have to just start my own some day... :moon:

    Fair conclusion?
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    (Original post by ennC)
    Also, in conclusion:

    An ideal consultant has excellent people skills and can build and maintain positive relationships with ease. So they'd be one of those popular people who everyone knows and likes because the job is so people intensive.

    This may be a just out of my depth in terms of my social stamina, as I can wear out in social situations a bit faster than my peers.

    Bit of a shame because I like the idea of helping businesses run themselves better and finding new and creative ways of improving systems... maybe I'll have to just start my own some day... :moon:

    Fair conclusion?
    That is true, but at the end of the day the work is results-focussed, being socially good is important too but having an interest in the job and ability are really important too. Don't let that discourage you!
 
 
 
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