In Search of Balance – What’s Next for Equity Research Analysts?
As the equity business within larger investment banks continues to represent an unstable platform, mid-level Analysts are increasingly looking towards what might be next in their career. More than at any other time, there has been a change in mindset among candidates prioritising stability and work life balance that is driving a trend of movement into other markets.
Traditionally, the natural exit strategy for Equity Research Analysts is to join the buy side. The direct skillset overlap of analysis of public market investments and recommendations has made it a logical choice for those looking for the next step in their finance career. But increasingly, analysts are looking at other options. Over the last two to three years we have seen rating agencies increasingly able to attract mid-level equity analysts, with candidates of this background now making up around 80% of placements. Given the research, analytical skill and understanding of company valuation required during the rating process, the fit seems natural for those from the sell side.
The strong attraction of rating agencies lies in their being a more stable platform, with continued expansion within Asia even during times of financial market downturn. They also offer more family-friendly working hours. Whilst the pay structure cannot compete with the investment banks, we have seen a trend in candidates accepting of this. Up until five years ago, this attitude has been absent from the market. The change in mindset among candidates today has deprioritised money and elevated work life balance.
The move to rating agencies also provides mid-level analysts with the opportunity to expand their experience into fixed income, providing longer term flexibility to move between equity and fixed income products as the market changes.
Equity Research Analysts at VP and Director level interested in discussing the dynamic market and what opportunities might exist within more stable platforms, are welcome to contact me.