Thursday, June 21, 2007

Equity Research

I had a good informational call this afternoon with an equity research analyst this afternoon. He covers the enterprise software sector for one of the well-known boutique banking/research shops. Equity research is an area I don't know much about (other than the few earnings calls I've heard and seeing analyst ratings on Yahoo Finance, etc) so it was nice to get an insiders view.

Some of the things that I learned and/or found interesting were:

- MBAs are not recruited as heavily for these roles at the mid-tier shops. These firms are tending to go younger and get analysts who are fresh out of undergrad. Bulge brackets are still going after MBAs.
- The jobs are generally very secure.
- The person I spoke to only spends 20% of their time running models. The rest of the time is spent talking to folks in the industry and research customers.
- The skills learned in an equity research role are transferrable to other buy side firms like hedge funds or mutual fund managers. You could also work in the CFO's office of a public company, or investor relations.
- The buy side firms run their trades through the company that they buy research from as 'soft' compensation. (I think this is because of the separation banks are forced to have between their IB and research divisions).

Speaking of career stuff, Blackstone's Mergers and Acquisitions advisory practice had a reception at school today. I didn't go, but it looked like there were some decent refreshments (beer) for the recruits :) I wanted to go for educational purposes but got stuck working on an operations case that's due today.

Good night!

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