Anybody have experience transitioning back and forth between the two?
How hard is it, what are the obstacles, and is it significantly harder to do externally than internally? At some point in the maybe 3-5 year range I’d like to make the move and will probably have the opportunity internally. However, I’m not sure I’d like to stay internal and wondered if shifting into a PM role externally from a buyside investment analyst background would be much more difficult?
Not speaking from personal experience, but my understanding from watching others is that analyst -> PM is a natural evolution for people who do fundamental research (in the quant world it’s also a path, but the expectations at each stage are a little different).
At the same time, watching a portfolio invovles extra skills that are different from analyzing a company and evaluating it’s stock price. There tend to be more macro considerations and issues relating to portfolio construction techniques, degrees of hedging, and transaction costs.
Some fundamental analysts don’t find those things interesting or inspiring, and so they tend to stay on as senior analysts rather than moving to PM. When the CFA did salary surveys, one thing I noticed is that senior analysts made nearly as much as portfolio managers, so if you decide that you are best at company analysis and don’t want to change roles, you aren’t necessarily limiting your compensation much. Portfolio managers often don’t have much time to do in-depth company analysis and so good stock pickers are still highly valued, and senior ones with a track record even more. In terms of risk reward, a senior analyst is a good gig, because they often don’t have to take as much flak for things they can’t control as PMs do, and yet there’s not necessarily a huge difference in comp.
Analysts and PM’s are equal at my company for reasons mentioned above.
Yeah I just wondered what the lateral external transition looked like.
It is rare to move to a PM role straight from an analyst role. Typically you will be a Co-PM or Assocaite PM for a few years as the actual PM team gains comfort in your ability to manage risk. What I would do is look for Co-PM opportunities internally and then look to use that experience to move externally if you can’t get to full PM internal.
This has the added benefit of experiencing a PM role and finding out if you like it at all. Just like research, it is not for everyone.
Exactly right. you’re not going to move from fundamental research analyst to PM in a snap. It will take time
BWYF makes a good point. I had implicitly assumed that there would be a co-PM stage in there somewhere, but if you are doing an external move, that would pretty much be the only way you could do it.
Obviously having some ideas about how to manage risk, position sizes, rebalancing, transaction costs, etc. would be important. showing that talent with a carve out section of your personal portfolio would help show you have some experience there, which would be more useful in getting to a co-PM role than a full-PM role, since most lateral transfers would be too risk averse to handing you a portfolio to manage by yourself if you are not already experienced in that.
Thanks guys, that was my gut instinct but I wanted to confirm.
It depends on your career goals. And you won’t directly manage money on your first buy-side day. You could be a buy side analyst, or a junior PM/ PM assistant.
I’m currently working in ER, but would love to switch to a PM role in the future. In fact, I’m taking the ER role as a learning step for a career shift later on. Fundamental analysis is a critical tool for all the big IB departments. But I don’t intend to let it be my end goal. I’m more interested and comfortable with the role of managing money and taking decisions, rather than collecting and processing data for presentation. But to each his own, they both have pros and cons, so it’s a matter of personal weight.
BS…when are you, me, and supyogov gonna grab a brew?
Send me a pm with your email or something and I’ll try to set something up. Would be fun for sure!