In an era of wealth preservation, product innovation, and creation of alternative asset classes, asset management (AMC) is emerging as a promising career path. The global asset management industry is estimated to grow and reach a value of over a trillion dollars, $1,113 billion, by 2028, growing at a CAGR of over 23% for 6 straight years.
Asset management firms act as a custodian to their client’s capital, ensuring productive use of those assets in relation to the risk involved. For instance, a financial AMC would direct its clients’ capital to asset classes such as: equity, fixed income securities, real estate, and private equity. The allocation and selection of these assets would depend on the financial objective of the client and their willingness to take risk. A family office of a high net worth individual would be more likely to invest in private equity than a sovereign fund or pension fund.
As evident, the asset management industry offers a variety of career opportunities. Let’s explore the top five career paths under this category and how to get into those roles.
1. Market Research Analyst
A market research analyst is responsible for helping the fund manager make investment decisions by providing them with the required market research for a particular industry or company. Analysts prepare research reports which include business profiles, information on industry structure, financial analysis, peer analysis, and future business outlook among other information.
The asset management division of large investment banks like JP Morgan, Goldman Sachs, Morgan Stanley etc. often have openings for research analysts and offer over $90,000 for entry level positions on average. In order to secure a job as a market research analyst, one should have a Bachelor’s Degree or an MBA from a reputed tier 1 university. Courses such as CFP or CPA provide an edge to the applicant.
2. Credit Analyst
Credit Analysts are responsible for assessing the credit quality of investments in debt securities such as bonds. A credit analyst should be competent enough to interpret the underlying company’s financial health including the liquidity and financial stability of the issuer and create a credit report for the fund managers to aid their decision-making.
Considering the size of the money market, credit analysts are more likely to get a job than any other career paths. However, one must have at least 5-7 years of experience in the financial markets before aspiring to be a credit analyst. In terms of education, the requirement is similar to that of a market research analyst – an MBA from tier 1 university. However, additional courses such as CPA and CBCA carry more weight. A credit analyst could earn as much as $130,000 per year at the entry level.
3. PE Specialist
A private equity specialist manages the PE Fund of an AMC on behalf of HNI investors and family offices. They are responsible for generating relatively higher returns by investing in non-listed private companies with high growth potential.
PE investing is a highly profitable and niche segment in the asset management industry and offers attractive pay. The median annual salary for a private equity professional could vary between $300,000 to $500,000 including the variable pay, depending on the annual returns generated by the fund. Similar to the role of a credit analyst, PE investing demands experience in the financial markets. This could be in the form of investment banking, as a financial analyst or even from management consultancy.
4. Equity/Debt Dealers
Equity/debt dealers trade in market securities such as equity, junk bonds, certificates of deposits, commercial paper, treasury bills, G-secs, and corporate bonds under the guidance of the fund managers or senior traders.
One could rise up to the position of equity or debt dealer by starting as a junior analyst since the role requires deep knowledge of equity and debt markets. An MBA could help an individual secure a job as a junior analyst and later rise up the corporate ladder. The median salary for the role ranges anywhere between $75,000 to $100,000 per annum.
5. NAV Fund Accountant
With the rising popularity of passive investing, NAV has never been more important. NAV stands for Net Asset Value and is used to evaluate the performance of passive investing tools such as index funds and mutual funds. NAV fund accountant is responsible for calculation of the NAV, by recording all the flows (investments and redumptions) and the growth in assets. It requires a dual competency in accounting and finance.
The job profile is very operative as NAV is calculated on a daily basis and could pay over $110,000 per annum. Unlike the other career paths mentioned above, you can also enter the role with an engineering background, given its strong focus on mathematics. Additional courses such as CPA and Financial accounting are also very useful.
Conclusion
One can explore a career in asset management to gain the relevant understanding of equity and debt markets while also getting a handsome salary. Most of these job roles require an MBA as an educational background with a strong focus on finance and mathematics. Having experience in the financial markets or acquiring knowledge through specialised courses makes it easier to get into the industry.
Moreover, given the popularity of financial assets, the entire asset management industry is often confused with just this one segment. However, there is much more to the industry that aspirants must understand before making a career choice. Some of these segments include enterprise asset management, infrastructure asset management, public asset management, etc.
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