1. Jobs in the Investments Industry II: Investment Management
Bryan Sudweeks
Fall 2007

2. Jobs in the Investments Industry
I. Investment Banking
Investment banking, Asset Management, Sales and Trading, Research
II. Investment Management
Investment Management, Investment Research,
III. Financial Planning
Investment advising, Insurance, and Estate planning
IV. Corporate Finance
Pension Fund Administration and Management
V. Financial Consulting
Pension Fund Consulting

3. I. Investment Banking and Investment Management
Objectives
A. Understand the purpose of Investment Banking
B. Understand the purpose of Investment Research
C. Understand the divisions of Investment Management
D. Know where the potential jobs are in Investment Management
E. Know how to prepare for a career in Investment Management

4. A. Purpose of Investment Banking
An intermediary between the capital markets (investors) and corporations (borrowers)
Offers strategic advice and financial analysis on Mergers & Acquisitions, Divestitures, and Capital Structure
Offers Equity and Fixed Income Underwriting (e.g.. IPO’s, High Yield Offerings)
Provides asset management advice to high net worth individuals and institutions
Provides Sales and Trading of Equity (Stocks), Fixed Income Securities (Bonds), Derivatives (Options).
Offers research and advice on publicly listed stocks and bonds to institutional and individual investors

5. Structure of Investment Banks (continued)
I-Banking
Division (IBD)
Asset
Management
Sales &
Trading
Research
Industry Groups
Corporate Finance
Product Groups
M&A
High Yield
Debt Capital Markets
Equity Capital Markets
Private Client
Services
Work with High
Net Worth Individuals
Buy and Sell
Financial
Securities
and Derivatives
Analyze all
Public information
in order to give
advice to
investors and
sales and trading
group

6. Structure of Investment Banks (continued)
I-Banking
Division
Asset
Management
Sales &
Trading
Research
Product
Group
Industry
Group
(Corp Finance)
Manage funds
for institutions
and individuals
Private Client
Services
Equity
Capital
Markets
Debt
Capital
Markets
High
Yield
Debt
M & A
Equity
Fixed
Income
Derivatives
Economic
Equity
Fixed
Income
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Health Care
Retail
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Health Care
Retail

7. Purpose of Investment Management
Major investment management divisions include:
Asset Management
Provide asset management services to investors and institutions including:
Private Wealth Management
Portfolio Management
Asset Allocation
Performance Attribution
Research
Provide research on public stocks and bonds

8. Structure of Investment Management (continued)
Investment Bank
Asset
Management
Research
Private Client
Services
Work with High
Net Worth Individuals
Analyze all
Public information
in order to give
advice to
investors and
sales and trading
group

9. Structure of Investment Management (continued)
Investment Bank
Asset Management
Companies
Asset
Management
Research
Manage funds
for institutions
and individuals
Private Client
Services
Equity
Fixed
Income
Derivatives
Economic
Equity
Fixed
Income
Derivatives
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Health Care
Retail
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Health Care
Retail

10. Top 15 Asset Management Companies
Rank Firm ASSETS UNDER MGMT (bill.)
1 Fidelity Investments $853
2 State Street Global Advisors $785
3 Barclays Global Advisors $768
4 JP Morgan Flemming Asset Mgmt. $604
5 Capital Group Cos. $589
6 Mellon Financial $537
7 Merrill Lynch Inv. Managers $529
8 Citigroup $503
9 AXA Financial (Alliance Capital) $481
10 Morgan Stanley Investment Mgmt. $415
11 Vanguard $412
12 UBS Investment Management $405
13 Allianz $383
14 Amvescap (AIM / Invesco) $334
15 Putnam Investments $315
Source: Institutional Investor

11. What are the Divisions of Investment Management?
Investment management divisions include:
Investment Management
Portfolio Management
Operations
Investment Research
Private Wealth Management

12. Potential Jobs in Investment Management
Where are the jobs in Investment Banking?
Most investment banking jobs are in analysis
Equity market analyst
Debt market analyst
High Yield analyst
Industry Analyst
Consumer products, telecommunications, real estate, finance, etc.

13. Jobs in Investment Management (continued)
Asset Management
Research
Research Analyst
Analyst
Senior Analyst
Portfolio Manager
Partner
Product
Group
Industry
Group
(Corp Finance)
Consumer Products
Technology
Telecommunications
Real Estate
Utilities
Health Care
Retail
Equity
Capital
Markets
Debt
Capital
Markets
High
Yield
Debt
Assistant Analyst
Research Analyst
Analyst
Senior Analyst
Assistant Analyst
Research Analyst
Analyst
Senior Analyst
Research Analyst
Analyst
Senior Analyst

14. Jobs in Investment Management (continued)
What are the different types of analyst positions?
Analysts position vary depending on who they are doing research for, i.e., sell-side versus buy-side research
What are sell-side analysts?
Analysts whose work is used for selling securities to investors, i.e. Research, Sales and Trading, etc. Analysts prepare the research for potential investors in the hope that investors will buy and sell companies through the I-bank
What are buy-side analysts?
Analysts whose work is used in the process of buying securities for specific portfolios, i.e. Asset Management, Private Wealth Management, etc. Analysts prepare the research and then act on that research to buy companies.

15. The Analyst Position (continued)
Why are Investment Management analyst positions so hard to get?
They provide instant exposure to senior management teams of the largest companies in the world
They have the highest exposure, learning potential, and salary of any job in the Financial Services Industry (out of college)
They give opportunity to work in small teams, with learning from senior partners
After you have built experience in the field, it offers wonderful opportunities at top business schools and companies

16. Compensation
The median total compensation for investment professionals is $170,000. Total compensation has increased materially since bottoming out in 2003 due to positive market conditions.
Source: CFAI & Russell Reynolds Associates Investment Management Compensation Survey

17. The Analyst Position (continued)
What are the skills gained as an analyst?
Financial modeling and strong quantitative work
Solid Understanding of Corporate Capital Structure & Capital Markets
Solid understanding of companies and industry composition and structure
Professional presentation analysis

18. The Analyst Position (continued)
What are the responsibilities of an analyst?
Financial Analysis and Modeling
Discounted cash flow and Free cash flow analysis,
Comparable company
Precedent transactions, and
Leveraged buyout
Client Exhibits and Presentations
Market research and competitive analysis
Client interaction
Roadshow execution management

19. The Analyst Position (continued)
What type of work do Analysts do?
Company Analysis (both buy and sell side)
Financial forecasting
Strategic analysis
Industry Analysis (both buy and sell side)
Portfolio implementation, construction, and reporting and attribution
Investment policy statement
Portfolio construction and management
Portfolio reporting and attribution
Whatever is needed to attain company goals and objectives

20. The Analyst Position (continued)
What are the criteria used to select analysts?
There is a record of achievement
A strong academic record
A balanced individual with extracurricular activities
A good employment history
Strong communication skills
Evidence of being a team player
A tireless work ethic
Attention to detail
A strong analytical capability (with examples)

21. How to Prepare for a Career in Investment Management
Understand the industry, the positions, and the lifestyle
This is a wonderful but crazy industry
Are you suited for the lifestyle—very long hours
Start building your contacts
Meet with as many of the visiting speakers as possible
Do well in your classes
A strong GPA is important
Have a good financial analysis project to leave with potential employers as an example of your best work
Look to beginning your CFA program
It is looked on highly in the industry

22. A Career in Investment Management
Don’t get discouraged
Understand yourself and your goals
Work hard and be patient—Faith precedes the miracle
Keep your priorities in order
Obedience is the first law of Heaven--do what you should
He will help take care of the rest
Follow the Spirit
Stay worthy of the Spirit
He is your competitive advantage--stay worthy of His help
Remember the Lord’s hand in your blessings
Always be appreciative of his blessings
Remember to share them with others