A Career in an Investment Fund

In this article, we'll cover the basics you need to know about if you've decided to start a career in the financial market.

Keep in mind, dear readers, that I will be simplifying a lot of things here to make them easier to understand.

Financial market participants in general terms

Let's start by focusing on the companies that deal directly with investments and the relevant divisions of banks where you can also start your career. The first division we need to know:

• Sell-Side, that is companies that sell something to someone. These are the divisions of investment banks whose main task is to analyze, package and prepare the necessary documents for the subsequent sale of the company, the issuance of securities, or a public offering.
• Buy-side mostly consists of investment funds, the classification of which we will talk about later. The qualifications of buy-side employees are more critical, in a nutshell, their main task is the selection, analysis, and participation in the purchase of assets as part of the overall investment strategy of the fund.

The next two segments worth highlighting are:

• Retail investors, individuals who use their capital in their work or represent the interests of a group of investors.
• Large organizations regulated by the state, such as pension funds.

In addition to the financial institutions described above, there are intermediaries, brokers, who are often fully or partially fraudulent, or simply unscrupulous about their client's money and the fate of their employees.

Once again - the first thing to understand is that there are different types of work in the field of investments. You are interested in jobs where you have to "buy-in." If you can't find such a job, you can "sell" it first.

Where exactly to go to work: bank branches and investment fund classifications

• You can go to a bank. Usually, every major bank has a fiduciary department, analytical department, advisory, and private banking departments. The investment portfolios compiled by analysts in these departments and offered to clients often consist of stocks of large companies such as Apple, Alibaba.
• Venture Capital (VC) focuses on working with early-stage companies, usually investing in a large number of projects, most of which fail, while the successful ones recoup all costs and make a profit. Both retail and institutional investors can invest in a venture capital fund.
• Private equity (PE) funds focus on investing in companies that are not traded on the open market but already have a product and are usually clear, relatively reliable companies. They work with both equity and debt capital.
• Cryptocurrency funds work only with cryptocurrency. It's worth noting that any fund can have exposure to cryptocurrency. The amount of funds under management for cryptocurrency funds, as well as crypto exposure in classic funds, is usually small due to the small size of the cryptocurrency market relative to the classic market.
• The idea behind Hedge Funds (let's understand it that way) is to outperform the market by hedging their positions through various tools and strategies.

Also, all public company securities organizations can be divided into two types:

• value investing - which employs a strategy of finding undervalued companies using fundamental analysis and market multiples, buying them for their clients and holding them until they reach a certain value;
• active management funds, which include hedge funds and family offices seeking to outperform market growth through active action - shorting somewhere, buying options somewhere, etc.

Who to work for: the three types of roles in an investment fund

There are three main types of roles in the organizational structure of an investment fund:

⦁ IR (investment relation), Sales, Sale Side - anything related to raising money, working with clients, and selling securities/assets.

⦁ PM (portfolio manager), analysts, traders - direct money management.

⦁ Developers, technical staff, etc. - Development of the necessary software, infrastructure support, administration, administration of insurance cases, specialist in matters of whether life insurance is taxable

A career as an analyst

The finance market is changing rapidly. Last years traders are recruited less and less often because most parts of actions on the exchange market are carried out using software, and classical approaches to the formation and management of investment portfolios become outdated and frequently do not bring the necessary results. We divide candidates into two categories:

"Market" candidates mostly already have experience with securities or other assets, understand the instruments, and make suggestions based on fundamental and technical analysis.

"Mathematical" candidates work by analyzing data on a selected asset over a long period, forecasting value and volatility using mathematical models and algorithms.

A huge advantage for you will be the ability to combine your understanding of the market with the necessary knowledge of mathematics.

Subject matter expertise in one or more areas. You don't have to understand the oil market, you can be good at cryptocurrency or a less popular field, there will be a fund that can use your knowledge.

Well-developed Soft Skills will help you properly formulate and communicate your ideas and hypotheses to management.

Finding and analyzing information, along with packaging the results in documents understandable to colleagues and investors is a must-have. In addition to navigating through analytical agencies, finding the right reports, and correctly interpreting the information obtained, all this must be done quickly.

Conclusion:

With the above skills, you can count on a place in a good fund. If the knowledge is not enough it makes sense to try your hand at a "secondary" position and come back to the desired position later.