For many who want to work on the buy side, investment banking is a means to an end. They know where they want to end up and enter the on-cycle recruiting process with their eyes on that prize. On-cycle recruiting is the obvious way to transition. But it can be hard to stay focused when you are starting a job with one foot out the door. And not everyone is ready to make that commitment two weeks after starting their first job out of college. What many Banking Analysts do not realize is that buyside opportunities will be available throughout their two year program, into their third year and even the first year as an Associate through “off-cycle recruiting”. There are many ways of getting to the buy side.
Ideally, you should spend at least a year in your initial investment banking program before thinking about switching roles. It is important to build skills and have enough reps to succeed in your next position. Once you hit that one-year mark, you can evaluate what you still need to learn and whether you are ready to move on to your next opportunity.
In general, the easiest times to move to the buy side are 1-4 years out of college, and 1-2 years after business school. Typically candidates at that stage are not yet entrenched in any one way of thinking and are perceived to be easier to train. The transition to the buyside becomes more complicated as your career progresses. Experienced bankers can be prohibitively expensive for investment firms to hire. There is skepticism that a more experienced banker can learn to think like an investor. Taking a step back in compensation and responsibility becomes more difficult as life’s expenses increase. So, if you are considering a move to the buy side, evaluate your current skills, consider the types of funds you want to target, identify how you can make the switch, and begin taking steps to make your move.
We recommend casting a wide net for target opportunities and evaluating seats in private equity, private credit, public markets, family offices, mutual funds, insurance companies, asset managers, and cross capital investors. Each takes a different approach to investing and may lead to a different longer term career trajectory. Coffee chats and introductory interviews (if available) can help clarify the direction to pursue.
As you consider your options, remember that interviewing too broadly can make it hard to balance your job responsibilities with recruiting. Once you are far along in the process, make sure the role looks like the right move for you. Consider the company culture and what drives success there, as well as what the exit options may be from that job. Review your options with your mentors, if you can do so without risking your current employment. It can be hard to resist the temptation to take the first thing that comes your way. Some candidates have expressed concern that a first job offer will be the only buyside offer that they will receive. We see things differently. If you get one offer to move to the buy side, you will likely receive others over time. That offer indicates that you are a strong candidate, and you are thinking the right way.
When you decide to make a move, be patient, and make sure it is the right move for you, especially if you’ll be leaving an investment banking program before the end of your second year. If you leave the program early and the new role does not work out, there will be a third job on your resume in a brief period of time. Your resume is going to look messy. As we discussed earlier this year in a previous post, switching jobs often makes you look unreliable and can harm your ability to find great opportunities in the future.
Regardless of what asset class or strategy you land in, you will learn to think like an investor and can apply those skills to future roles. If possible, spend one to two years learning and building your skillset in the first buyside role before moving again. Buyside firms heavily recruit individuals who have two years of banking and two years in a buyside role, colloquially known as 2+2’s, who choose not to go for their MBA.
In sum, those interested in the buyside can access more opportunities through off cycle recruiting. We recommend taking your first year to focus on learning and doing your best work before you start recruiting. The prime recruiting window is 2-4 years out of college. Since it becomes harder to leave after your first year as an associate, you can consider a wider array of funds to maximize your options. Do not feel like you must accept your first job offer. There will be other options. Make sure the offer you accept is from a firm where you can spend two years at least. That first buyside job can be a steppingstone to other buyside opportunities, and the foundation of a successful career.
