PRAVEEN KUMAR Investment Analyst Baillie Gifford, Edinburgh, UK
Software Engineer turned Strategy Consultant turned Investment Analyst with over 6 years of experience that includes a couple of years in the mutual fund industry
Industry in Focus
A fresher normally undergoes a training programme that can last anywhere from 1-3 years. Post training, one usually works under an experienced fund manager basically doing similar work as done in the training but, with more responsibilities in terms of decision making and coverage. It is not uncommon for freshers to start by looking at a few companies across sectors and post training, taking up sector or, country based coverage.
After gaining the requisite years of experience (which range from 5 to 15 years, depending on one's knowledge, skill levels and experience in investing), one can expect to become a fund manager at which point one can have one's own pot of money to invest. In this industry, there is no hierarchy and one either works as an analyst or as a fund manager.
This job is very knowledge intensive and it is not uncommon for people in this area to be extremely well read, with reasonably strong views on various issues ranging from the global economy, oil prices to more sector and company specific views.
The initial training programme aims to equip newcomers with the basic skills in valuing companies and developing frameworks to analyse them (most common being Porter’s Five Forces). On a day to day basis, one could be involved in doing research either on a company or, a sector. Research methodologies include, but are not limited to, reading industry and company specific reports (usually written by what we call sell-side analysts who usually work at investment banks and sell their research to us buy-side analysts), meeting company management, reading blogs, attending conferences, etc. For fund managers, apart from the main task of investing, additional responsibilities may include marketing their fund to prospective clients, giving presentations on recent performance to existing clients, etc.
Any basic Bachelor's/ Master's degree.
Good To Have Qualifications
An MBA from a top institute is a big plus although not a mandatory requirement. In addition, qualifications such as CFA, CA, etc are also quite useful.
Good Institutes To Study At
For a Bachelor's degree, any good institute should do. For an MBA, best places would be IIM's or, any reputed university abroad (Cambridge, Oxford, etc). One can always look up the Financial Times MBA rankings, which are releases every year to find out the top 10-15 MBA schools globally.
Above all, in this profession, one needs to have an inquisitive nature, a reasonably clear thought process, should be willing to learn continuously (especially from one's mistakes), and be prepared to put in lots of hours of reading up on companies, investment philosophies of successful investors, etc. Skills required in this industry are developed over a number of years hence, there is no checklist of good-to-have qualities that one can come up with.
Average Salary Range
For trainees, typical salaries can range from Rs.15-20 lakhs per annum (can go higher for graduates from top tier institutes). For more experienced people such as fund managers, the sky is literally the limit!
This can be an extremely exciting and rewarding industry, provided one is prepared to put in the time and effort in developing one's overall knowledge. There is no single set of skills that will give an edge in this industry or, will get one a job here but, it is more about one's personality, way of thinking about certain issues and most importantly, about one's conviction in one's beliefs and views.