Getting the most out of your job in SS ER

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KarateBoy

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I’ll try to be as concise as I can but a few 15 hour day can make the brain go a little mushy.
The purpose of this thread is for me to mine for good ideas on what are the important things I should do to maximize the value of my position as a junior associate at a boutique/middle-market SS investment bank.
Background:
Non-Ivy school
Still young;1-year anniversary will occur in June
First performance review went very well
Working for young but very intelligent analyst
I enjoy the work and the team
CFA level 1 candidate
My question to the member of this forum who currently or have worked in ER is:
What is the most important thing to get out of ER if your goal to maximize exit opportunities. This could mean 1) business school, 2) buyside (mutual, value, l/s, or special situation), 3) something other than industry that I may not be thinking of off the top of my head.
Now, I know the simple answer is to improve your analytical skills, develop an expertise, and network with your target fund and other professionals. But, in reality when you work 65+ hours a week with the same team, its hard to meet new people. Furthermore, I am only now have an understanding of a few companies where I can add value to a conversation with a buy-sider.
I’m am always trying to be proactive. So, I spoke with my analyst and he will let me call a good amount of his clients (on the companies I know) so that I can practice and gain exposure. What else should I be doing?
For those of you who worked at BB, how much contact/how many phone calls did you get from the buy-side?
Lastly, when do you stop learning new things about valuation/analysis in SS ER and, as a result, the job becomes mostly about keeping up-to-date with your companies and then packaging that information for the salesforce to distribute. My rough guess at this point is about 2-3 years.
P.S. I hope that individuals who do not or have not worked in SS ER can include this fact in their replies. I’d like to avoid as much of “my buddies talks to Klarman and Einhorn weekly” as possible.
 
Sounds like you’re doing everything right so far. At some point if you can tag along with your research analyst on a marketing trip it would provide some very good experience as well.
By the three year mark you should be pretty solid and be ready to make the jump to the analyst role provided there is an opportunity out there. I’ve found that its more about right place right time than it is about just being a good associate (depends on the industry and your analyst as well).
From my experience (Canadian ER at both a large bank and a boutique) the associates don’t get much air time with buy side clients. Depening on the analyst, they may be more or less proactive in letting you listen in to their conversations with clients and S&T.
Keep up the good work in the meantime.
 
KarateBoy Wrote:
——————————————————-
> I’ll try to be as concise as I can but a few 15
> hour day can make the brain go a little mushy.
>
> The purpose of this thread is for me to mine for
> good ideas on what are the important things I
> should do to maximize the value of my position as
> a junior associate at a boutique/middle-market SS
> investment bank.
>
> Background:
> Non-Ivy school
> Still young;1-year anniversary will occur in June
> First performance review went very well
> Working for young but very intelligent analyst
> I enjoy the work and the team
> CFA level 1 candidate
>
> My question to the member of this forum who
> currently or have worked in ER is:
> What is the most important thing to get out of ER
> if your goal to maximize exit opportunities. This
> could mean 1) business school, 2) buyside (mutual,
> value, l/s, or special situation), 3) something
> other than industry that I may not be thinking of
> off the top of my head.
It’s good that you’re thinking about exit opportunities. Gradually start to network with buyside clients, company management teams, competitors, industry experts, etc.
> Now, I know the simple answer is to improve your
> analytical skills, develop an expertise, and
> network with your target fund and other
> professionals. But, in reality when you work 65+
> hours a week with the same team, its hard to meet
> new people. Furthermore, I am only now have an
> understanding of a few companies where I can add
> value to a conversation with a buy-sider.
This is usually the case when you first start. However, it will change as you gain more experience unless you work for one of those analysts that want the sole glory. Also, relationships will naturally be built over time and not overnight. Continue to plant those seeds and some will come into fruition.
> I’m am always trying to be proactive. So, I spoke
> with my analyst and he will let me call a good
> amount of his clients (on the companies I know) so
> that I can practice and gain exposure. What else
> should I be doing?
Sounds like you’re on the right track. Be patient and keep at it.
> For those of you who worked at BB, how much
> contact/how many phone calls did you get from the
> buy-side?
I’m usually making more outbound calls vs. incoming calls. Hard to say on a given day.
> Lastly, when do you stop learning new things about
> valuation/analysis in SS ER and, as a result, the
> job becomes mostly about keeping up-to-date with
> your companies and then packaging that information
> for the salesforce to distribute. My rough guess
> at this point is about 2-3 years.
I’d agree with 2-3 yrs.
> P.S. I hope that individuals who do not or have
> not worked in SS ER can include this fact in their
> replies. I’d like to avoid as much of “my buddies
> talks to Klarman and Einhorn weekly” as possible.
Best of luck.
 
Thanks for the feedback.
I should probably clarify that I just finished my undergraduate studies so becoming an analyst after 3 years of experience is not within the realm of possibility.
I’m currently 22 years old and the youngest analyst at my bank is in his early 30s with a CFA and a MBA.
kcin Wrote:
——————————————————-
> Sounds like you’re doing everything right so far.
> At some point if you can tag along with your
> research analyst on a marketing trip it would
> provide some very good experience as well.
>
> By the three year mark you should be pretty solid
> and be ready to make the jump to the analyst role
> provided there is an opportunity out there. I’ve
> found that its more about right place right time
> than it is about just being a good associate
> (depends on the industry and your analyst as
> well).
>
> From my experience (Canadian ER at both a large
> bank and a boutique) the associates don’t get much
> air time with buy side clients. Depening on the
> analyst, they may be more or less proactive in
> letting you listen in to their conversations with
> clients and S&T.
>
> Keep up the good work in the meantime.
 
How did you get a junior analyst spot without at least passing Level I and not attending an Ivy? Did you go to a really good school and ace the program? What state do you work in?
 
MIT, Stanford, Chicago, Nwestern or any of the top liberal arts schools?
 
I did not go to any school listed above.
I was a finance and accounting major.
I went to a Big 10 school and was fortunate enough to be introduced to professionals in the industry through my professors. Its a really good program from my perspective but I’d rather be vague on the details to protect my identity. I hope that all the detectives out there respect my wish to stay anonymous.
I work in IL.
 
Identify a niche that you can start developing (maybe a certain market, skill, presentations, etc) that can hopefully compliment your goals later on?
 
I have witnessed a few associates become analysts at 26 but that is the youngest. Again it was more of a right place right time situation or they fit the profile of what the firm was looking for.
The chances of you making the jump from associate to analyst covering large cap names is generally very small in your mid to late 20’s I’ve found. You won’t get any respect from the buy-side as they are looking for someone with a few gray hairs. On the other hand, firms will often give their more experienced associates an opportunity to cover the small cap names and promote their development in a more step wise manner.
Again this is just what I’ve seen and heard from my experience in ER.
 
Being an analyst at 26 is pretty incredible. I doubt that the dynamics at my firm will play out in such a way that I can replicate that success. Moreover, I don’t think I’ll stay at my firm for that many years unless the paychecks becoming overwhelming (unlikely :))
Thanks for the advice though.
More is welcome.
kcin Wrote:
——————————————————-
> I have witnessed a few associates become analysts
> at 26 but that is the youngest. Again it was more
> of a right place right time situation or they fit
> the profile of what the firm was looking for.
>
> The chances of you making the jump from associate
> to analyst covering large cap names is generally
> very small in your mid to late 20’s I’ve found.
> You won’t get any respect from the buy-side as
> they are looking for someone with a few gray
> hairs. On the other hand, firms will often give
> their more experienced associates an opportunity
> to cover the small cap names and promote their
> development in a more step wise manner.
>
> Again this is just what I’ve seen and heard from
> my experience in ER.
Can you be any more specific?
Aristotle Wrote:
——————————————————-
> Identify a niche that you can start developing
> (maybe a certain market, skill, presentations,
> etc) that can hopefully compliment your goals
> later on?
 
Bump.
I’d be interested in hearing other people’s stories too.
 
KarateBoy Wrote:
——————————————————-
> Being an analyst at 26 is pretty incredible. I
> doubt that the dynamics at my firm will play out
> in such a way that I can replicate that success.
> Moreover, I don’t think I’ll stay at my firm for
> that many years unless the paychecks becoming
> overwhelming (unlikely :))
>
> Thanks for the advice though.
>
> More is welcome.
Not in ER here but I would just say you have plenty of time to make bank. You are clearly in a great spot. Don’t be too hasty to jump for a quick paycheck.
 
I completely agree.
The timing of my “jump” will be determined by what presents the best learning opportunity more than anything else.
 
Couple of key observations (just skimming your original post):
(1) You need to improve conciseness by a longshot. My guess is that your senior analyst is having you do a lot of detailed analysis/write-ups that the buy-side doesn’t actually care about. Think about how you can get your key points across as quickly and convincingly as possible. If you’re aspiring to get to the buy-side at some point, lack of brevity is going to be a real problem in making that transition.
Now…to your question about getting the most out of your job in SS ER – here are the things that I found most helpful looking back on my own career, and also speaking with buy-siders:
(2) Understand where consensus is on your calls and how your point of view is actually differentiated. If you can’t articulate this to a client in 1 minute or less, chances are your views aren’t that different which sadly means you’re not adding any valuable insights. Hard to stay in the business of investing if this is an issue.
(3) Learn how to speak with management teams and ask questions that give you useful insights. This will be hard to do on your own and especially if your boss isn’t good at leading meaningful discussions with management teams. My senior analyst in sell-side research wasn’t particularly good at it – he took a “boil the ocean” approach so we’d have these 45-60 minute calls with management/IR which just made me want to gouge my eyes out. But somewhere within that call we’d get a useful nugget of information. Still, this isn’t how you want to spend your time. I only figured out how to ask informative questions of mgmt teams when I worked in PE, but I think it is a skill that hedge funds value at least from what I can tell as I’m going through MBA internship recruiting now.
(4) NETWORK with buy-siders! This is the most useful thing you can be doing. Don’t spend anymore time coming up with a few thousand extra rows on your excel model or getting buried in details…go out and talk to people. This is how you really figure out investor sentiment on stocks and also build out your own relationships. I didn’t network enough with asset managers and hedge funds while I was on the sell-side because I wanted to go do private equity / leveraged buyouts instead. However, now that I want to go into hedge funds (and not do PE anymore) I wish my rolodex on the public equities side was a bit thicker.
Hope this helps…
 
Thanks numi. What type of fund of fund do you hope to get into?
“You need to improve conciseness by a longshot.”
I agree completely. I re-read my original post and I realized I could convey the same information in less than half the words.
 
No problem….happy to help.
I’m flexible about investment strategies since there’s a lot for me to learn, and I’m still early enough in my career where I can be adaptable to different approaches as long as I have a good mentor.
However, given my background in equity research and private equity, I’m definitely best suited for funds that focus on fundamental, bottoms-up value investing in equities. I only recently started my hedge fund internship search, but I’m primarily targeting long-short equity funds and market-neutral funds.
Anyone hiring for the summer? :)
 
numi,
One point that I’m inclined to disagree with you about is the value of very detailed analysis and write ups. I know that a most buy-siders will not read a 10-30 page reports (or even a 2 page report), but by putting it together
1) You educate yourself about the company and can speak about it more intelligently with potential investors
2) Separates you from the other analyst as a result of having non-consensus ideas and supporting evidence
3) Great way to prove your worth to large, existing shareholders. Speaking with shareholders teaches you what are their key concerns and expectations.
#3 is more important than knowing what key concerns/expectations are of the sell-side analyst.
I think my biggest strength is taking generic sell-side speak such as “pent-up demand” and “accelerated market share gains” and putting a realistic number on it. I now need to work on the selling and networking part.
Sounds like your goals are similar to mine. I’d love to end up in a Baupost Group/Greenlight Capital/Pershing Square quality fund.
I know, I know: big dreams :)
 
You can educate yourself in a lot of different ways instead of putting everything in writing. Once you publish a report, you’re potentially eroding away all your competitive “edge” in a sense. But anyway, I’m not trying to bash analysts that do extensive write-ups – it’s all about prioritization – and there are too many analysts that will mash things into the same report and maybe one or two of the ideas are truly differentiated, but they’re so poorly organized or prioritized that it’s hard to know. Therefore these analysts are not good analysts because they’re trying to play with broad brushstrokes rather than really knowing what drives value in the stock.
I don’t know that my goals are similar to yours since I don’t know what your goals are, or whether they’re going to change in the next few years (they probably will). I’m over half a decade out of undergrad and currently in business school, and have spent time in private equity and corporate strategy as well. I think these other experiences add more color/specificity around the types of post-MBA roles I’m looking for, whereas I think you’ve just started your career and should try to take in as much as you can learn about a bunch of things. Incredible how much you can learn while on the sell-side as long as you can keep an open mind, both about business and about life.
 
Another thing to add is that there is a benefit when you put it in writing; you get credit for putting together an update report (the director of research likes to see that) and the sales department has a tangible product to peddle.
Overall, I think we generally agree on what is valuable or not and I appreciate the advice.
 
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