by Shen Han Lee Comments (25)

Breaking Back Into Finance: How to Resurrect a Career in Fund Management When You’re Stuck in a Dead-End Job

Breaking Into Fund ManagementImagine networking like an insurance agent with 4 kids and a crack addiction in order to make the fabled move from the back office to the front office.

Then, imagine the recession coming soon after and having to work ridiculously long hours every day, knowing full well that your division is no longer profitable but that your two superiors have fat, guaranteed bonuses in their contract.

And now, imagine getting laid off a few months later.

It’s enough to make a grown man cry – sort of like developing a receding hairline in your early twenties.

In this article, you’ll hear how our interviewee went through all this, landed up in an insipid, uninspiring government job and then somehow rose from the ashes to become a portfolio manager at a top fund management company.

Here’s what you’ll learn about his journey, and how you can do the same:

  • How to network your way from the back office to the front office.
  • What recruiting is like in fund management.
  • What to expect in interviews and how fund management interviews differ from interviews in S&T.
  • The challenges of getting a second chance in finance.

How It All Started

Q: You’ve had a pretty exciting career thus far, but before we get into the details, can you tell us more about your background?

A: I started off studying finance and economics at an Australian university. Back then, I wasn’t sure that I wanted to work in finance, but everyone I knew wanted to be an investment banker so I decided to tag along for the ride. It’s an Asian thing.

After I graduated, I started working in Interest Rate Derivatives operations for about 6 months at a major European bank, followed by a longer stint of over a year supporting a multi-strategy proprietary trading desk in the equity derivatives middle office.

Similar to almost everyone starting out in the back or middle office, I wanted to make the move to the front office. I guess you could say I was one of the lucky ones because after two years, I managed to finagle my way into the structured funds department as a junior fund manager.

Q: Looks like it’s also an Asian thing to be overly modest about your achievements.

I’m sure it took a lot more than luck to make the transition but we’ll get back to this later – do go on.

A: Well, the fairy tale does get a little rockier after the feel good start. The financial crisis hit a few months later and before I knew it, I was out of a job.

I took it easy for a couple of months and eventually settled down into a new role evaluating mutual funds for social security savings plans in a statutory board.

It was a pretty niche role and I spent a lot of time performing due diligence on external portfolio managers; if that seems even mildly exciting, trust me when I say it wasn’t.

There was hardly any challenge to the job, and saying it was exceptionally dull would be putting it lightly.

After sticking around for about a year, I managed to transfer to the Investment Management Department, which was much less painful than working on a statutory board.

I was involved with looking after insurance and in-house funds, money market placement, and recommending strategic/tactical asset allocations to the internal investment committee.

After working in Investment Management for another year, I was given the opportunity to join a respected fund management company as a portfolio manager and decided to take it up.

Q: That’s quite a lot of transferring. You seem pretty good at moving around within the company.

Why do you think that’s the case?

A: I guess it mainly stems from being fairly ambitious and constantly trying to make things happen. I don’t want to come across as some sort of über-networker because I’m not.

It’s just that I’m a firm believer in the adage that if opportunity knocks, you’d better jolly well answer.

Q: That’s true but you were consistently trying to create your own opportunities, while most others would probably be hanging around waiting for opportunity to come calling.

How did you manage to make the switch from the back office to fund management to begin with?

A: I don’t want to get all philosophical on you but I believe there are 4 different types of employees:

  1. The Doom and Gloomers – You know the sort. The ones that hate their jobs but would rather spend their entire lives grumbling about it as opposed to actually looking for a more suitable career.
  2. The Fate Believers – These guys aspire towards something better but choose to believe it’s their lot in life to follow through with a crappy career.
  3. The Soul Searchers – Employees who take time to go through the motions of finding their best fit in whatever specific job function/sector/industry they want to be in.
  4. The Blessed – The lucky ones who miraculously end up doing something that resonates with them immediately. If what they do pays well, then they’ve got the best of both worlds.

I like to think that I belong to category 3. I had spent enough time working in the back and middle office to know that it wasn’t what I wanted to be doing for the rest of my life;  I’ll be tactful here and say that it just wasn’t the right fit for me.

I knew I wanted to do something else within finance but I still wasn’t sure what I wanted to do.

You could say that my networking efforts were a lot more organic. I had been working for about 2 years and because I’m a friendly chap, I knew pretty much everyone in the company.

I never set out to network specifically to break into fund management – I only knew that I didn’t want to work in operations, so I spent a lot of time finding out more about what every other department in the company was doing.

This actually also helped a lot with my operations job because it became so much easier to work with people after building relationships.

Q: Let me just interrupt you there for a second. Can you tell us a little more about how you managed to build up these relationships with people from other departments?

A: If you’re asking for a specific process, I’m sorry to say that I didn’t have one.

I didn’t think of it as strictly building ‘friendships’ for recruiting purposes. I was just genuinely interested in finding out more about what other people were doing at the bank.

I didn’t do the entire ‘talking to senior traders and trying to impress them’ bit. Most of my ‘networking’ was originally with the junior staff of the different departments.

Since we were roughly around the same age, it was pretty easy to strike up conversations around the pantry. After a while, this led to drinks after work. As time passed, this led to drink sessions with different groups of colleagues.

Eventually, I seemed to be on friendly terms with more or less everybody. It probably also helped that I hardly turn down an invitation to get a drink. I was actually trying to pursue a few other opportunities within the bank when an opening popped up in structured fund.

I had good references from my boss (or maybe he just wanted to get rid of me!) and I was already friendly with most of the people in that department so the question of ‘fit’ didn’t even come into play.

I still had to go through a semi-formal interview to get the job but I was pretty confident about my chances even before I got accepted.

Q: It actually sounds like you didn’t have a very difficult time making the transition.

What was the culture like regarding internal transfers within the firm?

A: I guess you could say I was at the right place at the right time, but please don’t think that my situation was an everyday occurrence.

It was slightly easier pre-crisis and things have definitely become a lot harder – but even back then, moving from the back office to the front back was still rare.

Internal transfers were a lot easier when moving across different areas of the same function, but I was probably the first person I knew of to make the switch from the back office to fund management.

It was pretty funny, actually – I think most of the people I was working with in operations were brainwashed into thinking that it was impossible to make the switch to the front office internally.

There was a widespread misconception that you could only inch slightly closer to an ideal dream job through a change of employer. I actually think hardly anybody else within the company applied for that job in structured funds.

So whatever you do, please don’t overestimate the competition.

Q: That’s a great argument for why conventional wisdom is usually wrong.

Care to share some unconventional advice on how to make this back office to front office move?

A: I really don’t think there’s a magic formula for making these types of transitions. It depends on how willing you are to put yourself out there and, dare I say it, a little luck.

You have to be willing to persevere and constantly make contact with people in the jobs that you’re interested in. This might sound like a motivational pep talk, but most people don’t even get started.

In Asia, there’s this ridiculous thing about not “losing face.” Everybody wants something better for themselves, but nobody wants to openly admit it and ask for help.

So if you’re looking to make that type of move here, you have to go against the culture and be direct – even when other people question your motives.

What’s even worse is getting started and then giving up when your first two leads don’t materialize in a job offer. You’ve got to be able to tough out the many rejections that will inevitably come along. Perseverance is the name of the game here.

Recruiting For Fund Management

Q: Right, so how was the recruiting process different between for operations-type roles and interviewing for fund management positions?

What were the actual questions like?

A: The interviews for back office and middle office roles were pretty simple because I graduated at a time when global banks were expanding aggressively in Asia for operational roles.

You didn’t need to have a whole lot of experience, and interview questions were all about ‘fit’. Hardworking, motivated graduates with can-do attitudes were the flavors of the day.

On the other hand, while I wouldn’t go as far as to say my fund management interviews were as technical as some sales & trading interviews, they weren’t a walk in the park either.

I got a lot of questions about what asset classes I found interesting, the expected returns for random asset classes, and the outlook for these random asset classes for the coming month/quarter/year.

So you need to do some research upfront there and walk in with at least 2-3 solid ideas. And if you’re not interested enough to do the research, it’s not the right field for you.

Q: So the interviews were just a lot of pitching of ideas? What advice would you give someone who was going for a fund management interview today?

A: That’s one way of putting it. You definitely have to be able to talk about the markets if you’re going into fund management.

Have views on everything: bonds, commodities, stocks and currencies.

And if you don’t know something about one of those, research it and figure out what to say: there are so many news sources and blogs out there that it’s not terribly difficult to find the information these days.

It’s important to be able to organize your thoughts and views of the industry into something coherent. Most people tend to ramble on and on without making any real sense.

See: More on how to intelligently discuss investment ideas, and how to structure your thoughts when pitching stocks.

Q: What about the all important CFA? How useful do you think it is for someone looking to break into fund management?

A: Well, it definitely wouldn’t hurt to have it. I don’t think it automatically opens the door to the industry as so many people are inclined to believe though.

Completing your CFA takes up a minimum of at least 3 years of your life. If your sole aim is to get a job in asset management, I honestly think most people would have much better results using half that time to get to know people in the industry.

Maybe I’m feeling mildly threatened because I don’t have a CFA, but I know plenty of people who slogged for years to get the accreditation and it never got them further than an interview.

So think about it, but don’t devote 100% of your time to the exam.

A Fairy Tale Gone Awry

Q: Now we’re coming to the slightly more sensitive part of the interview. I don’t want to stir up any bad memories, but can you tell us what happened to you during the financial crisis?

Maybe you can also tell us how you felt about the entire situation?

A: It’s not a problem. My situation was fairly unusual because I actually volunteered to be laid off.

This was during a time when everybody else was desperately clinging onto their jobs; it was the height of the financial crisis and the bank was fighting just to survive.

At that point, structured investor products had gone from being wildly profitable to barely squeaking by. I was working like a dog, but didn’t even receive a bonus for the year.

The bonus pool was mainly used to pay off two large guaranteed bonuses for the seniors.

I wasn’t too pleased about that, but it wasn’t the main factor that compelled me to leave.

I actually suggested leaving because passive investing didn’t turn out like what I thought it would be.

The work was a lot more fulfilling than being in the back office, but I still wanted more out of my career.

Taking this layoff also guaranteed me a pretty sizable severance package so I decided to go ahead with it. Every once in a while, I do question whether it was a good decision.

Mostly, though, I think it was one of the smartest things I ever did.

Q: That’s good to hear. It’s still a pretty bold move, considering that the economy was in the doldrums and that finding job opportunities would have been difficult.

Did you have problems getting back into the workforce after getting laid off?

A: Yes, it certainly wasn’t easy. I took a break for a while to ‘recuperate’ from banking.

When I started looking for jobs again, it was pretty rough. It took some time to land a job that I felt would be a decent fit for my skill set. I was adamant about not taking any ol’ job but I had to be realistic about my opportunities.

Given the unfortunate economic situation at the time, the role evaluating mutual funds for social security savings plans in a statutory board was the closest fit I could find.

It was far from the perfect job but I just wanted to get back into the workforce again.

Q: Hey, all things considered, I think you ended up doing pretty well for yourself. This brings us to the end of the first part of our interview.

Thanks for taking the time to do this. I’ll be coming back for seconds soon.

A: Sure thing. Anytime!

Fund Management Series

About the Author

Shen Han Lee is a recovering stockbroker who drinks copious amounts of coffee and now spends his time writing books and creating products.

His books are available on Amazon, and you can take a look at them here.

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  1. Hi Nicole,

    I am finishing my master degree. I did 1 year as Investment analyst in small boutique last year.
    I have the opportunity to be an Assistant Asset Manager (Short term contract 1 year and half) in a quite know institution in europe > 70 Billion AUM. This will be for a multi management team (Fund of Funds) .

    Main task are :

    – Participate to the quantitative analysis of the funds and Portfolio
    – Help to select funds
    – Follow the selected one (Analysis ,communication , document)
    – Monitoring database and improve it.

    Do you think it’s a good way to start a carreer in order to be PM later ?

    Thank you a lot for everything on your website.

  2. as a chartered accountant(india)and also having cleared cfa l2 what option should i choose if my long career plan is working into fund management?
    1)get into summer analyst program of an investment bank. do IB skills have any carryover to working into Fund management?
    2) get intership at a stock broker in its equity research department.
    thanking u

    1. M&I - Nicole

      1) Yes this can help but if you’re interested in fund management I’d actually start in a fund management firm:
      2) This maybe a bit more relevant to fund management role since you’ll be analysing stocks and learning the fundamentals of investing

  3. Do you think that AM interviews will consist of modeling/valuation questions (similar to IB) or will it be more market-relevant like S&T. eg. pitch me a stock etc.

    1. M&I - Nicole

      More market oriented but they might have some valuation questions too

  4. I’ve been trying decide on what to do. I know it is inappropriate to ask this question, but I would like to know your answer, please. I live in Dubai, United Arab Emirates, and I want to study Finance to be able to enter the buy side financial industry. I want to manage my own money and other people’s money within my own firm. I want to be realistic that is why I want your opinion. Here in the Middle East Asia, the American University of Beirut is one of the top universities in the Arab countries. It is expensive, and it will cost me $60,000 to graduate and it will take four years. Here in the U.A.E, there is a university called University of Dubai, but it is not prestigious like the one in Beirut, Lebanon. It will cost me $45,000 and I graduate after three years. Which one do you think would be better for me to go to? Thank you a lot.

    1. M&I - Nicole

      If banks recruit at the American University of Beirut, I’d choose that school given the network & credibility of that school in your area. I’d suggest you to speak with counselors at the American University of Beirut and see if they have a broad network of people who work in banks!

  5. Hi,

    I’m going to be direct with this – Can I please get in contact with you? I’m based in Australia, went to an Australian university and I’d love to get a chance to speak to you about maybe exploring some career opportunities and perhaps getting some guidance on how to break into funds management.

    Hope to hear back.

    1. The author (Shen Han) can ask the interviewee but no guarantees – we are planning to run more features on fund management so those may answer some of your questions.

      1. Hi Alex

        I’ll speak to the interviewee on your behalf but as Brian mentioned, no guarantees.

        Is there anything specific that you’d like to ask?

      2. Great to hear you’ll be posting more about fund management. I feel like is my passion and would love to hear more about it.

        Can you perhaps speak about the possible training you’d get with a firm after you get in? It would appear for hedge funds, they’d have little structured training. How about institutional fund management?

        Any insights would be much appreciated.

        1. M&I - Nicole

          I don’t think training is as structured as a formal IB analyst/associate training program but I may be wrong

          1. Thanks. Is this something you can ask for part 2 of the interview? Much appreciated.

  6. Such an aspiring article!
    Brian, Hope you can offer some of your views on my bottlenecked situation.
    A little of my background: I’m turning 28 this year. I was educated in the UK, had a mathematical based bachelors degree and a Masters in Financial Maths from a target school. After graduation I have been working as a middle office Quant for the last 4 years (not with the same company though).
    I have been trying to make a transition into IBD/CorpFin and am happy to start from scratch. Last year I was fully geared up on this: applied for graduate programmes, internships, experienced hire, called up smaller firms to askfor intern and full-time opportunities and trying to networked with CorpFin guys at some events that I could get access to.
    I didn’t get much luck so far. All my grad/intern application have been rejected (I can kind of understand this as most of these would be rejected immediately by HR since I’m by no mean a grad) and the only interview I got was with a small firm. At the final round interview the Director question my verbal stills as my CV all seemed mathematical.
    I think it goes without saying that I didn’t get the job and now I’m not quite sure what’s the best next step. I’m not working for a bank so there chance for internal transfer. I’ll keep fishing small companies to cold-call then at the same time I’m thinking of going for a Masters in Banking and Finance at St Gallen in Switzerland. I know at my age I should go for a MBA but financially I really can’t afford it plus my background is not enough to get me into the top schools. And I hope to dilute the maths aura on my CV through the Master.
    1. Do you think the Master at St Gallen is a sensible move given my situation?
    2. If you are screening CVs for IBD junior roles, what would be your impression on a Masters in FinMaths then a Master in Banking and Finance? Does that look like a waste of time studying the same thing?
    3. Are you aware of St Gallen at all? Does it have a reputation in your circle?
    4. If I go for the Master, by the time I graduate I would be 30. Is that too old for a graduate candidate in recruiters’ eyes?
    Apologise for the long email. Appreciate your help and if you have any other advices on how to approach my career change I’d love to hear them. Thanks

    1. 1. Yes. That’s a good idea for re-branding purposes.

      2. They do look similar, so it’s important to point out explicitly how degree #2 was different (more verbal focus).

      3. I’ve heard of it but don’t know specifically how many / what types of banks recruit there.

      3. No, mostly since it’s more common to be older in Europe when applying. But you will probably have more luck with smaller firms at that stage.

      1. Cool, appreciate it. I just had a second thought.

        Do you think a Master in Management (not MBA though) would position me better for corporate finance jobs than the Master in Banking and Finance?

        1. It might make a marginal difference but I don’t think there’s a huge gap.

  7. I’m 21, just finished my master’s from LSE in accounting and finance, and I did not get my dream job because i have no work experience. Here i am sitting and doing an unpaid internship at an AMC. This article makes me feel a lot better!

    1. Thanks! Glad to hear it and good luck!

  8. Hey, Oceans 12 wasn’t so bad!

    1. 55% on Rotten Tomatoes…

  9. I have to say that reading this is such a relief from the feeling caused by the “7 reasons why you shouldn’t work in the back-office” posting, which has haunted my mind for months (and still is!).
    Thanks for the inspiration at the right time!
    Can’t wait to see Part 2!

    1. Thanks! Yeah, back office is still not ideal to start out in but isn’t the end of the world.

  10. This is great to hear!

    Great article as usual about beating the odds.

    1. Thanks! Glad to hear it.

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