From long time senior ER analyst: pay attention to II when selecting your junior seat
Hi all, I've been a senior ER analyst for about 13 years. Part of my career story is that I was over-promoted as a young ER associate, was given senior coverage too early and I believe it ended up damaging my plateau because I didn't build enough buyside relationships as a senior assoc/VP level analyst before I was thrown into the deep end.
I've been lurking here and seen some interesting discussions, and most notably seen a lot of senior/tenured ER folks say II doesn't matter. II ABSOLUTELY matters for you assoc candidates when evaluating offers and selecting the job you take. Do not listen to people who tell you II doesn't matter.
The trope of "II doesn't matter" was invented by Research Directors making excuses for their underperforming departments and trying to cover their asses. Make no mistake: analysts who underperform in II are underperforming in the field. The vast majority of II votes are auto-submitted from broker votes, especially among the highest commission paying institutions, which also have non-solicit policies for II. That means an analyst's II ranking is a very good proxy for their economic value to their firm.
Of course, there are firm considerations. A smaller/mid-size ER platform will naturally underperform in II and it's possible that a senior analyst there can be very valuable while finishing in the 10-15 range in II within their sector. But at BB or high-prestige platforms like ISI, an unranked analyst is simply not pulling their weight. Plan accordingly and good luck out there!
You should do an AMA... im sure you have some good advice/stories over 13yrs
happy to answer any questions here. ER is in an interesting place, I wouldn't say it's either "dead" or "thriving" as a whole. What's going on is that the dispersion in "haves" and "have nots" is widening very quickly. Unfortunately BBs are very cost conscious at the moment and ER budgets are lower than they've ever been. At the same time, a high-producing senior analyst can still contribute a great deal to a large organization and be compensated accordingly. The most important time is at the front end of your career and selecting the seat, if you have options.
I'd be curious to hear your thoughts on paths to senior analyst and the most likely among them. For those of us who have been around but haven't received the nod to the senior seat, what would you say is the most likely path to that seat outside of your analyst leaving.
Setting aside current market dynamics, in a normal environment what are the best ways to gun for a senior seat? Should we ping DORs at other firms and get on the radar? Should we angle for a new but related sector at the current firm? Or do you simply reach a point where you likely won't get the nod for reasons beyond your control and should maybe look to buy-side etc, at least in my space I've seen plenty of older Sr. Associates and even Sr. Analysts jump to L/S or LO.
Appreciate it!
In my experience the promotion/coverage pathway really lies with one's senior analyst, not the DoR. I first got coverage because my senior analyst went to bat for me, and the most common way I've seen others get coverage was from their senior analyst carving something out for them. Most DoRs are just political animals, they want to avoid taking risks or making any decisions at all. If your senior analyst is in good standing, the DoR will give him/her whatever they want, including carving out some names for you.
I was 28 when I got my first senior coverage and that was too young I think. My career has gone very well I'd say, I'm ranked and I'm probably in the top 3-5 of my peers in terms of comp, but I do regret not having more time as a senior associate/VP level guy and more apprenticeship with a mentor I respected. So my advice is to not feel too anxious if you're pushing early/mid 30s and still waiting for your senior seat.
And you're right, in the buyside "war for talent", the hiring window from the sell side has certainly expanded. It used to be 3-6 years of experience was the window, and that was it. Now, like you say, there are plenty of examples of much more seasoned sell siders making their first move to the buyside, just because the buyside is so hungry for plug and play talent. So again, this is probably another reason not to feel too anxious if you think you've been waiting for senior coverage for too long.
Encouraging to hear. Don't want to be stuck in the "tweener" stage forever sitting around with 3-4 names to myself while still helping on the rest of the universe. At the end of the day, autonomy (as far as content, day to day, etc) and, let's be honest, comp doesn't really kick in until that senior seat is reached. Until then you're more or less capped.
The "tweener" stage I think really depends on the sector. Obviously in Biotech, you can step up from that initial 3-4 names into a very large offer somewhere else in a larger role. I've seen guys go from senior assoc, to 3-4 stocks under senior coverage, to a seven-figure seat inside of 3 years. And not just like barely across seven figures, I mean legit seven. And this can happen v quickly. Biotech is a bit unique, but there are similar paths in software, internet, and even Industrials which is very hot right now.
Does anyone know how to access the II ranking for a given analyst without subscribing to II?
What are your views on switching sectors as a junior? I.e. <3 years exp, in a more obscure team in financials or energy etc. to something more general like TMT, Consumer, Industrials. Let's assume current seat is on a top II team.
The thing to keep in mind is that the more "glamorous" sectors are also more crowded and therefore more competitive. I think there are like 60 analysts covering GOOG, for example. No analyst is going to have an edge in that stock, but all the analysts covering GOOG are also covering smaller, very actively traded internet stocks and fighting for limited investor attention/bandwidth. So the benefit of sticking with some of the less trodden sectors is you have an easier field and probably better access to managements, etc. The stories about biotech analysts making $5-$10M are entertaining and inspiring, but there's probably a far greater number of analysts in that sector who get flushed out.
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Yes definitely aware of this. This has been part of the internal conflict. (Also not in the US so it's not quite as crowded I'd say). Super niche industry with a lot less competition Vs super broad and exciting industry with more competition. But there's a middle ground somewhere.
What about the whole concept of moving at all, do you think with 2-3 YOE, you're already too far gone to make a major sector move?
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