Investment Management 

 Investment Management

                   The Industry Explained                          

The investment management industry (IM)  also known as Asset Management, manages hedge funds, mutual funds, private equity, venture capital, and other financial investments for third parties, which include companies, pension funds, endowments, insurance companies, private banks, nonprofits, and individuals.  

The world of investment management can be divided into two distinct groups: 

source//vault guide to investment management


Where are the Jobs?

Industry Grouping

Investment management companies compete in their market niche in one of several ways, broken out roughly as follows:


Where Do BC Students get hired in Asset Management ?

This spreadsheet has hiring timelines for both juniors/seniors from classes of 21/22 including a list of companies where they have been hired.  

This is a list of top AM firms in Boston and NY



Wealth Management 

Private wealth management, also called private banking, is a specialized branch of the investment community that provides one-stop shopping for products and services needed by the wealthy—typically defined as those who have liquid assets of more than $1 million. Wealth management professionals often work closely with individuals and families to invest their money, plan for the future, and manage their finances during crises. Private wealth management is a personally rewarding and potentially very lucrative career where top performers can make more than $3 million annually.

The Vault Career Guide to Wealth Management provides an insider's perspective on what's happening in the industry, what it takes to break in, and how to advance your career. Whether you want to help create income growth for your clients or help them pay their taxes, this guide will help you master every step of your job search.  BC login required.  You can access any Vault guides by going to the BC Business library site . You can then create your own account for free and download any of the guides, it will just prompt you to sign into your account.  

KEY TAKEAWAYS


Buy Side Explained 

On the Buy Side of the capital markets, we have professionals and investors that have money, or capital, to BUY securities.  These securities can include common shares, preferred shares, bonds, derivatives, or a variety of other products that are issued by the Sell Side.

For example, an asset management firm runs a fund that invests the high net worth clients’ money in alternative energy companies.  The portfolio manager (PM) at the firm looks for opportunities to put that money to work by investing in securities of what he/she believes are the most attractive companies in the industry.  One day, the VP of equity sales at a major investment bank calls the portfolio manager and notifies them of an upcoming initial public offering (IPO) of the company in the alternative energy space.

The PM decides to invest and buys the securities, which flows the money from the buy-side to the sell-side.

Main buy-side jobs:


Sell-Side Careers

There is a wide range of careers available on the sell side, with more entry-level opportunities than there are typically available on the buy-side.  

Main sell-side jobs:

Popular sell-side firms are Goldman Sachs, Barclays, Citibank, Deutsche Bank, and JP Morgan.  Check out our list of top 100 investment banks, as well as boutique banks and bulge bracket banks.

Alternative Investments

Private Equity, Venture Capital, Hedge Funds, Real Estate 

Private Equity (PE)


Private equity (PE) is ownership or interest in an entity that is not publicly listed or traded. A source of investment capital, private equity (PE) comes from high-net-worth individuals (HNWI) and firms that purchase stakes in private companies or acquire control of public companies with plans to take them private and delist them from stock exchanges. Read here to learn about the Private Equity industry.  

source: investopedia

leverages tech in finance to improve and automate various financial activities and services.

 Here are some examples of fintech companies and other opportunities for tech-in-finance jobs.

This article is a good overview of the common career paths. 



Real Estate 

Venture Capital 

At its simplest level, Venture Capital (VC) is funding given to a startup in exchange for equity in the company. In this context, a startup can be defined as a relatively new company that is growing and in need of money to help sustain its growth, while equity is percent ownership of a company. An example of this exchange would be an investor giving $500,000 to a startup to help it grow in exchange for 10% equity stake in the startup.

Source: and a great article on it is Noteworthy

Socially Responsible Investing 

What Are Hedge Funds? How is it different than Private Equity?

Both private equity (PE) firms and hedge funds (HFs) are classified as “alternative investments” and share some high-level similarities.   For example, they both raise capital from outside investors, called Limited Partners (LPs), and then invest that capital into companies or other assets.  They attempt to earn a high return, and in exchange, they take a percentage of that return for their performance fee.  They also charge a management fee on the total amount of capital raised.

After that, however, almost everything else is different. The biggest difference is that PE firms tend to acquire entire companies using equity and debt, while HFs acquire very small stakes in companies or other liquid, financial assets such as bonds, currencies, commodities, and derivatives.

As a result, PE firms have a long-term focus (often 3-5+ years for individual companies) and spend more time on operations and growth for their portfolio companies.

Hedge funds focus on finding mispriced financial assets and benefiting from quick gains in near-term, 12-month periods. Because of this longer-term focus, PE firms require longer lock-up periods from their LPs, while redemptions are easier at HFs.

While both types of firms have management fees and performance fees, hedge funds usually charge lower percentages for both because of market factors and poor post-financial-crisis performance.

Private equity fees have fallen a bit over time, but they’ve remained close to the traditional “2 and 20” model – a 2% management fee and 20% performance fee – while the average hedge fund now charges a management fee of under 1.5% and a ~15% performance fee.

And the trend is toward even lower management fees, with performance fees that scale up or down based on annual returns.

source: Mergers&Inquisitions


More of a people person than a spreadsheet junkie?  

Check out Careers below

Brokerage Sales

Stockbrokers buy and sell investment securities on behalf of their customers.

Source"Investopedia 

Financial Planning

A financial advisor is generally someone who helps people manage their money, while a financial planner develops personalized financial plans for their clients.  


learn more here

Financial Advising 

A financial advisor provides financial advice or guidance to customers for compensation. Financial advisors (sometimes spelled as advisers) can provide many different services, such as investment management, tax planning, and estate planning. 

Increasingly, financial advisors are acting as a "one-stop-shop" by providing everything from portfolio management to insurance products.      Registered advisors must carry the Series 65 license to conduct business with the public.1 A wide variety of other licenses and certifications may be required depending on the services provided by a given financial advisor.

source: investopedia

What are the jobs?  


Junior Investment Analyst /Research Assistant 

Primary responsibilities include collecting data on a specific company or industry, using both secondary and primary techniques, creating small reports and helping the analysts in their analysis.  Often, duties include financial modeling, general monitoring of the industry (i.e., reading the industry magazines the analyst doesn't like), reporting on conference calls and other events the analyst was unable to attend, portfolio reporting and analysis tasks and gradually covering smaller-cap companies in the industry. 

Quantitative analysts

The quantitative analysts will understand the analysis requirement of the research analysts and develop a model that will help them do their analysis in a smooth fashion.   Typically a quantitative analyst will have working knowledge of computing languages like C and Java, as they will be required to write syntaxes and prepare codes for generating new models.

Portfolio Assistant

Portfolio managers have massive reporting requirements. They prepare reports and analysis of their performance and actions for current clients, government regulators, outside consultants, potential clients, upper management and the news media. Most portfolio managers want to focus on portfolio management. Firms hire portfolio assistants to assist them with these reporting and analysis issues, as well as other random problems that come up. 

Buy Side Research Analyst

A buy side analyst determines how favorable an investment seems and how well it fits with the fund’s investment strategy. Their recommendations are based on this research and analysis and made available exclusively to the firm that employs them. The success of a buy side analyst is measured by the quality of their financial modeling, analysis, and recommendations to the firm. 

Credit Analyst 

A credit analyst is responsible for assessing a loan applicant's ability to repay the loan and recommending that it be approved or denied. Credit analysts are employed by commercial and investment banks, credit card companies, credit rating agencies, and investment companies. They may also work in the credit departments of a wide range of companies.  A credit analyst gathers and reviews financial data about loan applicants, including their payment habits and history, earnings and savings, and spending patterns. The credit analyst then recommends approval or denial of the loan.