Myth #1: everyone will be a fund manager
This is probably the biggest misconception – asset management is not just about portfolio management. Likewise, global markets is not strictly sales and trading, while investment banking is more than just corporate finance.
Broadly speaking, an asset management house needs salespeople, investment specialists, and product managers.
A salesperson is the “eyes and ears” of the company, crafting and pitching investment solutions to intermediary or institutional clients and assessing the market demand. An investment specialist is usually a hybrid of a sales and investment role with an in-depth understanding of certain portfolio strategies and investment styles (although this role is only for experienced hires).
A product manager structures investment products for a salesperson to sell and they typically develop in-depth knowledge of related regulations through liaising with regulators and legal counsel.
Different roles will require different types of skill sets. If you insist on just being an investment analyst or fund manager, you might be killing your opportunity to join an asset management firm which offers other roles.
Whatever the role is, be prepared to handle the leg work as a junior.
Myth #2: all asset managers are the same – they just manage money.
Yes, asset managers manage money. However, it is not true that every asset management house is the same. Asset managers differentiate themselves through their business models.
Understand their key focus and capabilities: Are they targeting to become a one-stop investment solutions provider – traditional active management, ETFs, real estate investments, etc.? Or are they predominantly a fixed income manager or equity manager?
Bear this in mind when researching the company.
Interview question: So you want to join an asset management house, what investment idea would you recommend now?
There is no right or wrong answers to your recommendation.
On a day-to-day basis, the objective of investment professionals is to make informed decisions on taking long or short positions in investments. Time will tell whether they made the right calls – if the market meets your expectations, then you are right today. If not, you are wrong.
The first rule is: don’t panic. Don’t be too quick to “show off” your best stock ideas either. Your interviewer(s) could be analysing macro factors instead of companies for a living.
Set the stage for everyone by giving a brief introduction of your best stock idea. Discuss what led to your stock recommendation, as well as macro factors and potential risks that would affect your analysis.
Be ready to answer any questions thrown by the interviewers testing your thought process. Your ability to share your ideas clearly will demonstrate your level of interest for investments.
A clear, logical and structured thought process is what most interviewers are seeking here. Your ability to communicate your investment idea in a concise manner is important too. There is no other way around this, so prepare, prepare, and PREPARE!
Stepping Stones to a Permanent Career
Your best bet is to join internship and/or entry-level analyst programmes offered by major banks. Either one is a good representation of what you actually will do in asset management.
Both programmes also encompass a wide variety of roles to match their varied business needs to the wide-ranging interests of students.
