Asset Management Careers

Asset Managers fall into three basic categories: hedge funds and proprietary trading desks, mutual funds and Asset Managers, and "other" - which includes insurance companies and municipal governments, etc. Asset Managers are the "customers", or "buy side". On the "sell side" are the traders and salespeople - the Salomon Brothers, Citibanks, Deutschebanks and Nomura's of the world. (Investment bankers are a whole other ball of wax - they create stocks and bonds through underwriting, or change companies through M&A). The title is pretty much self-explanatory: a client gives money to an Asset Manager, who then invests it to meet the client's objectives.

The people on the sell side provide information to the buy side (research, ideas, meetings with officials), and try to get the AMs to trade through them (the sell side makes a commission for every trade it facilitates). These days, many banks are looking to grow their asset management business because they are largely protected against the volatility of the market. Asset Managers are generally paid a percentage of the entire amount they handle, whether they make or lose money for the client. Because their salaries are based on the amount of money they manage - Asset Managers make less money than investment bankers. They don't necessarily make big bonuses, but on the upside, they know what they're getting paid whether they make or lose money for the client.

Asset Managers are generally paid a percentage of the entire amount they handle, whether they make or lose money for the client. Because their salaries are based on the amount of money they manage - Asset Managers make less money than investment bankers. They don't necessarily make big bonuses, but on the upside, they know what they're getting paid whether they make or lose money for the client.

What asset managers say about their work

Asset Managers say they enjoy "great work hours" - an average of 60 hours/week - and for some, "the summer is a bit lighter." They gloat that, unlike traders and others on the "sell-side," they "have outside lives, thank God!" "Quality of life and work duties are very very good," beams one fixed-income research analyst. Pay is "lower than on the sell-side, but on the positive side, "there is a fair amount of stability." For some, there is travel involved: "If you're lucky enough to work with international stocks or bonds," said one portfolio manager in emerging markets, "you may be sent on reconnaissance missions. Not at the junior level, though." Those who deal with domestic markets (including junior people) do get to travel to road shows, conferences, company tours and off-site meetings. ~ Our sources agree that asset management is "a great way for young people starting out to learn about financial markets." MBAs are usually hired as portfolio managers, though some may start out as research analysts. Though it's not as hectic and stressful as other financial jobs, our contacts report that "there is a good deal of pressure to perform well." It is rare to find the cutthroat competition that is bred in other areas. As one source explains: "At the junior level, assignments that are done well are stepping stones to more responsibility and an eventual promotion. Later on, at the portfolio manager position, everyone wants to get credit for their good performance, avoid blame for mistakes, and at the end of the year have their ego rewarded with a big bonus (2 times your base or more)." At Fidelity or T Rowe Price these guys have high profiles, they're in magazines" reports one industry insider, who says that the big names in the business thrive on the media attention and "switch firms like major league ballplayers."

The pressure to perform is compounded by the fact that asset management is a business often fraught with frustration. "you have to get used to being wrong a lot of the time." Sometimes the market will move against your predi