Wasting my time in small-cap ER?
A year in at a MM bank covering small-cap consumer cos. I have a good senior analyst who allows for a lot of freedom and flexibility for me to explore new names, craft stock pitches, give my opinion, take ideas or notes where I want, etc. However, I can't help but feel like my time would be better spent in any sort of banking role or ER at a larger-known firm. My thinking is that maybe I am better at a stock pitch in an interview but a) I am limited in where I could get an interview not being from a traditional finance background/IB program and b) I am limited in opportunities outside any kind of public equity analyst role.
Appreciate any and all longer-term perspective here.
Bump as I’ve been experiencing the same thing
What do you like to do in life?
Your question may just be rhetorical saying go figure out what to do with your life but nonetheless…
Candidly from a career perspective not certain.
Formerly worked at a family office primarily allocating to managers with some direct stuff. At the time, I had no ability to evaluate direct stuff and definitely limited ability with managers. I think the ER has certainly upped my ability in that category but I miss the more flexible mandate of learning about every asset class, working with very seasoned fund managers, and getting to look at some direct deals. Not sure if this firm was an anomaly given lots of allocator firms segregate asset classes and/or direct/indirect teams
Also have grown interested in some of the small lower market owner/operator style investors we see pop up in our newly public small-cap consumer world. Would think a role like this would always ask for transaction experience before a fundamental analyst but really have no anecdotes to say either.
Not rhetorical.
If you don't know, at least I cannot help you. For whatever path you are wondering about, go talk to people in those realm, back solve skills / narrative needed to break in.
Blindly going into a high-pressure path like investment banking, not saying you are dead set on it, will not end well for you (and for anyone).
Happy to give thoughts but similar to above response, there doesn’t seem to be a question there.
Sure, small-cap ER could feel like a waste, but that’s not the same for everyone. It would be helpful to know why you feel that way. You also suggest banking and larger-cap ER. Obviously those are very different things, so what is the aim here?
I hear you, I suppose the question is maybe more, “for someone who candidly is still working on finding an ending career goal, would my time be better spent elsewhere”. I say banking or larger known firm from a credential perspective, understanding very different roles but in my opinion banking is the financial worlds consulting offering a lot of exit opp flexibility (outside of the typically discussed exits) and large firm for sake of having household name on a resume.
A different question maybe in the same lens but how would you articulate what you have learned in a sell-side career outside of stock-picking.
100% agree that banking and/or research in more recognizable bank will give you better exit opportunities. But that only matters if those opportunities are where you want to be. It sounds like you’re unsure, so it’s hard to say that such transitions will necessarily help you. They may be indifferent. Probably won’t hurt, other than if you happen to rotate into a less desirable work environment.
In terms of articulating your learnings in sell side, it’s a lot more than stock picking. Amongst skills used, hopefully you can speak to a combination of 1) understanding businesses and industries, 2) developing a sense of curiosity, 3) having ability to distill information, 4) communicating with different contingencies, 5) financial modeling, 6) working under stress. There are many general skills that you could speak to regarding research.
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