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