Presentation on theme: "Types of Investment Professionals (What Are The Different Job Opportunities?) Sell Side Firm (Creates And Sells Proprietary/Primary Research) Clients."— Presentation transcript:
Types of Investment Professionals (What Are The Different Job Opportunities?) Sell Side Firm (Creates And Sells Proprietary/Primary Research) Clients are institutional investors (Hedge fund, Mutual funds, Pension funds) What are the different job opportunities? Research Sales Trading Investment Banking Corporate Finance Compliance Back office/Other
Types of Investment Professionals (What Are The Different Job Opportunities?) Buy Side Firm (Buys And Uses Primary Research To Manage Investments) Research analyst clients are internal PM, Private/High net worth managers, and Brokers Portfolio manager clients are usually individual investors in mutual funds, corporate accounts or high net worth individuals What are the different job opportunities? Research Trading Portfolio Manager Sales Compliance Back office/Other
Who Are Your Clients As A Sell Side Analyst? (What Are They Like?) Mutual Funds (Pain In Butt On Payment And Feedback) Concerned about consultants, compliance, etc. Long only Closet indexers Must own something Herd mentality Slow investment process with multiple committees Pension Funds (Limited Dealings With) Liability matching Asset allocation Hedge Funds (Quick Feedback And Payment Or Termination) How do I make money, period Timeframe Types
What Do Clients Want From Sell Side Research? (What Will Get You Paid?) Highly Valued Independent survey/research Independent thought Unique company or industry insights Access to management/ Industry conferences Knowledge of individual companies and industries Responsive to clients needs Medium Value Specific investment idea Quality of earnings estimates Low Value Sales Coverage Portfolio Advice Ratings/Stock opinion Valuation
Skill Sets Of A Sell Side Analyst (What Do I Need To Be Able To Do To Succeed?) Quantitative (Bernstein) Financial Accounting Technical Qualitative (Alethia) Ability to change on the fly (My first meeting) Detective (Mosaic Theory) Problem Solving Time Management Presentation/Marketing Industry Knowledge Personable Psych
What Is The Life Of A Sell Side Analyst Like (It Revolves Around Earnings Season) 30 -50% Travel/Client Calls On the road 8+ days a month Comes in bunches Research travel Customer meetings 20-40% Writing/Models Maintenance research (Useless! Everyone does it. No one pays for it) Initiation reports (What gets you in the door) Actionable research 20-40% Research (What You Get Paid For) Actionable research (Find a Change) Stock Picking (Why ratings are garbage) Modeling Valuation 10-20% Management, Compliance, etc.
How Do You Succeed As A Sell Side analyst (You Must Add Value) Be Right On Your Research 50% is considered good Be Early/First With Your Research Have 100’s of people calling on them Only pay top 3 (60% to 1st, 30% to 2nd, 10% to rest) Be Actionable And Make Them Money Based On Your Research Find confirm Success/Failure with strategic roadmap or strategic initiatives Independent Thought - Staying Away From The Herd And Group Think Presenting the contra case. Taking a stand/being accountable Things to remember at clients They can’t trail for long. People will pull money Outside influences (issue with Ivy league fund and Enron) They are swamped with research A large percentage of them are inexperienced
How Do You Get Paid? (Both The Company And The Individual) Sell Side Firm Research Sales Trading Buy Side Research Portfolio manager Sales Trading
Why Do Clients Pay Me? Information based on fundamental research Find the change to with strategic roadmap or strategic initiatives Customer, Competitor and end market surveys Contacts in industry Why is this important?
How Did You Get Involved In This Field (High Risk. High Reward) Sell Side Wall Street Regional Non traditional Buy Side Research Trading Portfolio management
Interview Advice (What You Need To Do At A Minimum) Know something about the company you are interviewing with Show that you can add value. Show that you can think on your feet. Show that you can solve problems. Convince me that I want to work with you in a high stress, high pressure situation for an extended period of time. Don’t lie (especially on something I can check on)