Getting Started in Portfolio Management

In general, portfolio manager assistants screen for potential investments, monitor portfolio characteristics, and assist in client relations. Recent college graduates typically will spend 2 to 4 years in this role before returning to business school or migrating to a role in the investment research department.

This position varies among the firms in the industry, and the role itself differs depending on which segment of the firm you work in --mutual fund, institutional or high-net-worth. For instance, high-net-worth portfolio assistants spend more time working with clients, while institutional assistants spend more time monitoring and analyzing portfolios. Regardless, the general assignment focuses on supporting the portfolio manager.

Portfolio manager assistants are often instrumental in the process of screening for potential investments. Using the general strategy of the investment product --such as market-capitalization, earnings growth, valuation multiples or industry --the assistant screens all available stocks in the market (about 10,000) to identify the smaller list that meets the portfolio's criteria. The screened list for an active portfolio varies, but typically ranges between 100 and 300 securities. Portfolio manager assistants then gather additional research for the portfolio manager to begin the process of fundamentally analyzing the potential investment.

Once investments are made, portfolio manager assistants are responsible for monitoring the reconciliation of the trades. In this role, they work with the operations staff to assure that the portfolio is properly updated and performance records are accurate. Most firms have separate operations departments that reconcile trades and produce monthly client reports. However, many of the smaller firms require their portfolio assistants to perform the operations function as well. You should be aware of this, and clarify the exact job responsibilities when applying and interviewing for the job.

Portfolio assistants also participate in the process of client service, although the proportion of time spent in this area depends on the type of client being served. For instance, an assistant to a mutual fund portfolio manager would spend very little time on client service. Institutional and high-net-worth portfolio managers have fewer clients and they meet with them once or twice a year. Intermittently, their clients require vast and detailed investment reports and market commentaries. While marketing helps prepare these formal presentations, the portfolio manager assistant plays a crucial role in collecting economic and market data for the investment commentary and portfolio analysis sections of the report.

The position requires a person who understands capital markets, is capable of meeting deadlines and enjoys working on multiple projects simultaneously. The downside is that the reporting and operational components of the job have a quick learning curve and then become repetitive. Furthermore, it is not the best place to learn how to really value companies. Rather, you are being exposed to the years of experience that the portfolio manager possesses. Most important, portfolio manager assistants receive the benefit of seeing a broad picture of investing money across several industries, whereas research assistants typically get exposure to one component or sector. All in all, in the right setting, the position is a great introduction to the industry and a worthwhile apprenticeship to pursue.

Uppers

• Broad exposure to the industry
• Reasonable working hours
• Direct exposure to portfolio managers

Downers

• Less formal training process
• Some operations work
• Repetitive assignments