What Would Analyst Forum Do? I’ve been searching for a new job for the past 2-3 months and have benefited greatly from the advice and knowledge of some of the posters here. I’m happy to say that I have closed the deal on a number of offers, and subsequently received a counter-offer from my current firm. Both the top offer at a hedge fund and the counter-offer at my firm seem like great opportunities, offer roughly the same compensation, and would require approx. the same number of hours per week. I would appreciate feedback on which seems like the better offer and any issues I should consider about each. Senior Equity Analyst at a small but growing Hedge Fund Pros: -Generalist approach – learn about a lot of industries and companies -Receive mentoring from an investor with a great track record -Huge opportunity to grow and advance within the firm and the industry (most of the previous people who had held this position at the firm are now running their own funds or are PMs, made possible, in part, with the help of the fund manager) -Small team with little or no bureaucracy and political BS -Office is in a very nice suburb outside of a major financial center Cons: -Requires me to move to a new city where I don’t know anyone -Unknown risk – there is always the chance that I won’t get along with the people in the office, the fund blows up (unlikely but possible), and any other adverse events that might take place -As always, the opportunity might not be as good as I think it is (this could happen anywhere though) -I’m not sure what my exit opportunities would be after this – perhaps b-school, perhaps going to a larger fund, perhaps starting my own fund -May have small company problems Coverage Analyst (equity research) at a regional sell-side firm Pros: -I would build out coverage of an industry from scratch and have 100% control over the investment decision making process -I already work here, so I don’t need to move or make any changes (this is a real plus since I have a sweet set up) -I know what to expect at my current firm, and even though it’s not perfect, it’s stable and a reasonable place to work -I would continue to receive mentoring from our top analyst (I have been working with him for the last two years and he has taught me a lot) -I have equity in the firm and would get more equity after the promotion Cons: -No room to advance – I could make more money, but this is effectively the highest attainable position in my firm (below only the Director of Research and the company CEO). This is standard for an analyst position. -I really don’t like some of the people I work with -A lot of bureaucracy and political BS – the firm has jerked me around a couple of times and it’s far to say they don’t have my best interests in mind (this is why I was originally looking for a new job) -The industry I would be covering is not that sexy, although I would rotate to a new industry after 3-4 years -Firm does not have a great name brand Basically, the hedge fund opportunity is higher beta – if it works, it could really work, and if it doesn’t work, I could end up wasting a certain amount of time and not having much to show for it. Of course, I would almost certainly learn a good deal, but if it doesn’t work out, then I effectively passed up an MBA or MBA +1 level position and might have a hard time finding a similar position at another firm. Oh, and in terms of qualifications, I have a BA, passed all the CFA exams, and have a little over two years of experience in a front office research role. Thanks for your help and for reading my absurdly long post.

Personally I’d go with the first job

I think the hedge fund role would be more interesting to you and would provide for more upside. You’ll have to live with the compensation volatility but that’s a decision that most people on the buy-side choose to make – I have former colleagues at the top hedge funds that have already been told to expect minimal bonuses. In any case, judging by the verbiage of your posts, it sounds like you have already decided on the first job, so you should just go for it. In fact, if a “con” for the sell-side analyst role is lack of advancement, I don’t know why you would even consider it. I personally tend to leave jobs as soon as I recognize there are not advancement opportunities.

+1 I personally tend to leave jobs > as soon as I recognize there are not advancement > opportunities.

Good points, numi. As noted, I am obviously leaning toward the hedge fund opportunity, but I am not sure how to fully evaluate the risks of the position. I have done a lot of DD on the firm, but to some extent it will be a leap of faith. That is a good point about not being able to move up on the sell-side, although a lot of people do willingly become “analysts for life” and seem relatively happy with that. I tend to consider myself more driven than that, and would probably need to leave the firm in 3-5 years to become a junior PM at a buyside shop, so I guess from that perspective it makes sense to just leave now and get on the PM track without spending time on the sell-side. In terms of comp, yes, there will be vol. but I try to look at total comp – cash + non-cash comp. The non-cash comp could potentially be very high if I end up learning as much as I think I could. I know everyone has their own philosophy when it comes to work and earning money, but I would rather learn the game to the greatest extent possible than worry about the size of my bonus in the early years. I’m not talking about short-changing myself, but you get the point.

Bromian, I’m in a similar situation to you in regards to your current place of employment (i.e., small hedge fund, learn a ton, surrounded by great people, in suburbia, etc.)… In my opinion, it comes down to what you want to be doing for the rest of your life. My take on your post is that you really don’t know. For me, getting to the buy-side upon graduating was a dream come true. I have aspirations of one day running my own fund - the experience I’m currently getting is about 100x that of which I could receive on the sell-side. Plus, I’m not burdened with tedious jobs such as writing lengthy initiation reports, marketing, etc. That being said, it sounds like the biggest factor you’re weighing is long-term earnings potential (if not, why else would you be even considering the sell-side). Even if that’s the case, though, I would still argue buy-side. There are plenty of opportunities out there, especially among larger hedge funds, which are constantly trying to snatch-up talent. The biggest thing you need to ask yourself is what you want to be doing for the rest of your life. If you really love the thrill of generating alpha, then your decision is easy. Edit: To me this decision isn’t even close, stick with what you’re doing and continue to evaluate opportunities that come up.

Good post, EMHdenied. It’s clear that I would like to run my own fund someday or partner with someone else to run a fund. I didn’t want to go into this too much since my first post was long enough, but essentially it comes down to whether or not it would be better to go to the buyside now, or get more experience and seniority on the sell-side and then move to a larger hedge fund or AM shop. Staying on the sell-side would almost certainly be a longer path to the same end, but I am acutely aware of the need to gain the “right” kind of experience in order to be successful in the future – i.e., it doesn’t matter how much money you make in your current role or next role if you aren’t learning to invest properly. In that sense, I know exactly what I would get by staying, and it would be “pretty good,” whereas if I leave for the hedge fund, the experience would most likely be amazing or terrible. It sounds like I better just suck it up and take the hedge fund job with the understanding that I am taking a risk and will have to live with the consequences good or bad.

You only live once - take the risk.