TYPES OF ORGANIZATION
Different types of organizations operate in the investment management sector. This includes asset managers, asset owners, insurance companies, hedge funds, private wealth managers, and private equity firms. These firms are typically referred to as being on the ‘buy-side’, because in order to operate efficiently they often buy in research and trading services. Investment banks and brokerage firms are often referred to as being on the ‘sell-side’ as they offer research and trading services to the buy-side.
TYPES OF JOB ROLES
A wide range of job roles exist within these different types of organizations. For front office investment decision making roles, these broadly separate into analytical roles (e.g. equity analyst), investment decision-making roles (e.g. portfolio manager), and advisory roles (e.g. corporate finance). An increasing number of roles can then be found in middle office roles (e.g. risk and oversight). The chart to the right provides more detail about three different types of front office roles.
Analyses debt issuers and structured credit products, undertakes valuations, and seeks investment opportunities in order to promote trade ideas to portfolio managers; determines the balance of risk vs reward involved in extending credit.
Covers industries, collects industry/company data, analyses companies, and builds single company earnings models to conduct valuations culminating in recommendations to trade mispriced equity securities to portfolio managers.
Identify, test and implement financial models and investment ideas by applying statistical techniques, using data-sets/quantitative tools to analyze and predict market movements and exploit market anomalies, develop efficient decision making tools to support the investment process.
Applies economic analysis to conduct macroeconomic, financial market, and sector specific research. Evaluates data, constructs proprietary models, analyses economic indicators (e.g. rates, currencies), and advises portfolio managers on asset allocation decisions.
Macro market commentator/advisor and insight generator who analyses economic indicators (e.g. rates, currencies), and advises portfolio managers on strategic and tactical asset allocation and trading strategies.
Measures and analyses performance, undertakes attribution analysis, and communicates absolute and relative fund performance data to both portfolio managers and clients via performance evaluation reports and presentations.
CORPORATE DEVELOPMENT AND STRATEGY
Internal strategy consultants at corporations, overseeing and planning both organic and inorganic corporate development. This can include decisions on projects, whether to enter new markets, and ‘voice of the customer’ work, as well as deal due diligence, negotiation of term sheets and post-merger integration.
Analyses data-sets, often from new or alternative sources, applies coding/programming skills and modern analytical techniques to databases to seek meaningful patterns and insights, and communicates relevant findings to key stakeholders. Provides support/advice to relevant teams within the organization (including investment teams) and develops tools and dashboards to improve the investment process.
INVESTMENT DECISION-MAKING ROLES
CHIEF INVESTMENT OFFICER (CIO)
Develops and communicates investment strategy and policies, inputs into business strategy, manages and develops the investment team, supervises and oversees the investment process, establishes processes to ensure investment policies are followed, and makes decisions on asset allocation, selection of external managers and risk management across portfolios.
MANAGER OF MANAGERS
Analyses and identifies professional investment managers to manage aspects of client funds through the creation of ‘fund of funds’ and/or multi-manager strategies; conducts qualitative/quantitative due diligence in selecting, monitoring and/or terminating investment managers, and tracks and evaluates manager performance.
Executes security and derivative transactions with use of market data tools, seeking best execution and minimizing market impact to trade portfolio manager strategies and/or execute proprietary or algorithmic strategies.
Devises and implements investment strategies and processes to meet client goals and constraints, constructs and manages portfolios, makes decisions on what and when to buy/ sell investments, and reports on investment performance.
MERGERS AND ACQUISITIONS (MANDA)
Advisory role, pitching on and assisting companies with equity and debt capital raising, mergers, acquisitions and restructuring.
INSTITUTIONAL INVESTMENT CONSULTANT
Advises asset owners, pension funds, and trustees on which managers, funds, asset classes, and countries to invest into as part of the investment strategy, asset allocation, manager selection and portfolio construction process. Researches funds and investment managers and coordinates selection processes.
Manages planned and ad hoc communications and meetings between public corporates and investors to assist with understanding, analysis and valuation of securities. Coaches C-suite to interact with company stakeholders, anticipates and answers key questions, and provides investor feedback to the board.
Analyses and values businesses, undertakes due diligence, negotiates the purchase/sale of companies, conducts financial engineering, improves operational performance, and undertakes asset management.
PRIVATE WEALTH MANAGER
Advise private clients (high net worth) and families on how to invest their portfolios and plan their finances to meet their objectives, and do so through high quality relationship management and client service.
Promotion, distribution and placement of financial securities and funds through idea-driven, relationship-based client engagement to portfolio managers, private wealth managers, and other investment decision-makers.
First point of contact for clients, with responsibility for pro-actively understanding and responding to their needs, articulating the products and services of the firm, and identifying appropriate investment solutions to support them.
RISK AND OVERSIGHT ROLES
Ensures firm adherence to the applicable local, national and global laws, regulations and standards of practice across jurisdictions, sets up systems to train staff, detect infractions and addresses compliance issues that arise.
Optimizes portfolios through the modelling of historic asset returns and covariances, undertaking analysis (e.g. stress-testing, scenario analysis) and suggests trades to maximize risk-adjusted returns or minimize risk exposure.