MBA Job Profile: Equity Research Analyst
Many MBA students interested in a finance career think of working in corporate finance, commercial banking, financial planning, or investment banking. Rarely do they consider the more mathematically-inclined, analytical options. However, a career in equity research can be a top career choice for many finance students. It’s a valid career option for someone who is less interested in sales and communication and more interested in research, analysis, and strategy.
So, what exactly is an equity research analyst?
An equity research analyst helps analyze stocks so that portfolio managers can make better-informed investment decisions. They research companies, look at share prices, and issue recommendations on investments and M&A deals. Sometimes considered the un-glamorous and lower-paid cousin to investment banking, equity researchers are great problem solvers tasked with developing screening tools and investment models to help manage portfolios.
To be a great equity research analyst, you’ll need to be able to:
- Identify patterns in the marketplace.
- Interpret data to understand and predict a security’s behavioral outlook.
- Quantitatively analyze a stock’s statistical data compared to recent market activity.
- Create algorithms that identify stock investment opportunities.
- Understand the differences between international markets to cross-compare domestic and foreign stocks.
Equity research analysts begin their careers with a lot of financial modeling and analysis of a specific sector or group of companies. There is typically limited buy-side client interaction or interaction with top management. However, over time, your responsibilities will evolve to more report writing and formulating investment opinions and theses.
Equity Research Analyst Work/Life Balance
While an equity research analyst works long hours—typically 12-hour days—that’s nothing compared to investment banking. You may have busy seasons and times, but for the most part, your job will be relatively calm and offer some work-life balance.
Equity Research Analyst Career Advancement
However, the equity research analyst career path is less defined. You’ll generally start as an analyst for a few years before moving up to senior analyst, vice president, and then director of research. But that can be a slow process because you’re not considered as essential to the bottom line as the firm’s investment bankers.
Equity Research Analyst Salary Expectations
According to Payscale, the average equity research analyst salary is $77,901 a year with a $19,851 bonus. However, the actual range is between $53K and $143K with the largest and most prominent firms offering the highest salaries. Glassdoor’s average base salary is closer to $94,383 with analysts at J.P. Morgan earning $101,327 and Goldman Sachs analysts earning $99,699.
The majority of equity research analyst jobs are located in major metropolitan areas such as New York City, Chicago, Boston, and San Francisco, which means cost-of-living should be considered. You’ll find the highest-paid positions at private equity firms and other large financial services institutions.
Getting Started
At the minimum, you’ll need a bachelor’s degree to become an equity researcher and typically start out as an associate. Even then, a bachelor’s degree is typically not enough to get you a job at a top investment firm. Instead, you’ll need either a CFA designation or an MBA.
The CFA is mandatory for security analysis and can be earned more quickly and cheaply than an MBA. However, with an MBA you’re more likely to have the professional network you need to earn a position at a top investment firm.
Top MBA Programs for the Job
Since a career as an equity research analyst is closely linked to investment banking, the top MBA programs are fairly similar. A few solid MBA program choices include:
NYU Stern
NYU Stern is a top school for a career in investment banking and equity research. The banking specialization covers risk management and other related topics with classes such as credit risk, valuation, and risk management in financial institutions. There is also a quantitative finance specialization specifically for more mathematically-inclined finance careers. You’ll learn stochastic processes, statistics, and applied economics.
Columbia Business School
At the Columbia Business School, the Investment Banking Club provides an opportunity to learn investment banking and recruiting, helping students develop strong relationships in the industry. There is also a specific Equity Research Club, which is designed to educate, inform, and bring together Columbia MBA students interested in this career field.
University of Chicago Booth
The Investment Banking Group at Chicago Booth is equipped to help MBA students learn about the investment banking industry. The goal is to guide students to landing a successful career at an investment bank. There’s also an Analytical Finance concentration designed for students interested in risk management, equity research, and more. Classes include Advanced Investments and Advanced Models of Option Pricing and Credit Risk.
MBAs at Mastercard: A Top Recruiter Offering High Salaries
Mastercard Incorporated is an American financial services company headquartered in Purchase, New York with its Global Operations headquartered in O’Fallon, Missouri. The company processes payments between merchant banks and consumer banks who use a Mastercard-brand debit, credit, or prepaid card. Founded in 1966 as “Interbank,” Mastercard Worldwide is a publicly-traded company earning more than $14.9 billion a year.
Continue reading…Morgan Stanley Still Loves MBAs and the Feeling Is Mutual
Though interest in finance and accounting careers may be decreasing, gaining a job at an investment banks such as J.P. Morgan Chase, Goldman Sachs, and Morgan Stanley is still attractive for many MBA graduates. In 2018, a career in finance is the third most sought-after industry, according to a recent Graduate Management Admission Council (GMAC) study. Part of that reasoning is due to the high annual base salary ($115,000), which is this third highest, only behind general management ($125,000) and IT/MIS ($120,000).
So, what does it look like to work for a company such as Morgan Stanley as an MBA graduate? Is it your golden ticket to the future in 2018? We’re taking an inside look. Continue reading…
New Haas Center Seeks to Tackle Gender, Equity, and Leadership Head On
As one headline after another alleges sexual harassment against women by men in power from Hollywood to Congress, the launch earlier this month UC Berkeley’s Haas School of Business of a new Center for Gender, Equity, and Leadership (CGEL) seems more timely than ever. In fact, the idea for the center significantly predated the current media firestorm—and while its scope will certainly include sexual harassment, it will be significantly wider—addressing issues ranging from the persistent gender pay gap to inadequate maternity leave to the fact that currently only 5.6 percent of CEOs at S&P 500 companies are women.
Since 2014, Kellie McElhaney has been teaching a course at Haas called “The Business Case for Investing in Women.” Regularly over-subscribed, the immensely popular class won McElhaney, an associate adjunct professor at Haas, the Earl F. Cheit Award for Excellence in Teaching. Students in the class were eager for data demonstrating that companies with greater numbers of women in leadership have higher share prices and better returns on equity and investment than companies with fewer women. In fact, so too were companies. And McElhaney delivered.
Together in a 2016 study with Genevieve Smith of the International Center for Research on Women’s advisory practice, McElhaney zeroed in on how Gap Inc. has managed to achieve pay equity at the like-for-like level and equal pay at the organizational level through its company culture, practices, and policies. The relationships that helped spur that research also led the Gap Foundation to become a founding corporate donor of the new center—contributing part of the $1.9 million McElhaney has raised to date, which also includes gifts from alumni and friends. With an ultimate fundraising goal of $10 million, McElhaney hopes CGEL will bring together leaders from many backgrounds to help advance gender and diversity in policy and business, engage male and female allies and people of all ethnicities, races, and classes around a shared goal of gender and diversity, and develop business leaders who view gender as a spectrum rather than a binary construct.
“The idea for the center has been percolating for years,” McElhaney tells Clear Admit. “We had kind of a scatterplot of things happening at Haas before, but no over-arching strategy.” In addition to McElhaney’s own research and teaching, several other Haas professors have been contributing to growing scholarship on gender, equity, and leadership. Professor Laura Tyson’s research and writing has examined how gender equity works around the globe—including how it is associated with better education and health, higher per capita income, faster and more inclusive growth, and greater international competitiveness. Currently faculty director of the Haas Institute for Business & Social Impact, Tyson will form part of the leadership team of CGEL. Professor Laura Kray, who studies gender stereotyping and negotiations, rounds out the inaugural CGEL leadership team.
“The first mission of the center will be to serve as a hub for all the things that have already been happening in pockets all over Haas,” says McElhaney. “There are already courses on power, race, gender, equity,” she explains. “In earnest, we thought to ourselves, ‘Let’s look at all that is happening here around these issues. Wouldn’t it be more effective if we could bring it all together, see what we are doing, and see where we might benefit from going long and deep?”
“At Berkeley, you can build anything—but it has to be funded first,” explains McElhaney. Encouraged by Dean Richard Lyons, she set out to raise $1 million by July 2017 as a proof of concept. In June, CGEL had garnered $1.2 million in funds. In addition to corporate funding from Gap, McElhaney also wooed significant gifts from several high-net-worth individuals through a series of strategic luncheons focused on looking at the world vis-à-vis gender equity. “A dozen individuals gave money right away, and now we’re heavy into the corporate funding component,” she explains.
Expanded Faculty Research, Policy Impact, Radical Fierce Ally-ship
Beyond continued fundraising, McElhaney intends to start 2018 with content and substance—with CGEL serving as a hub for new in-depth faculty research, corporate collaboration, conferences, training sessions, and the development of new courses related to gender, equity, and leadership. In addition to McElhaney’s own work documenting the business case for gender equity, several other Haas professors have also been engaged in pathbreaking research. For example, Professor Clayton Critcher has studied the multiple negative consequences of concealing one’s sexual orientation at work; CGEL leadership team member Kray’s recent work examines how fixed beliefs about gender roles preserve the status quo; and Professor Jennifer Chatman has helped reveal how political correctness in the workplace reduces uncertainty in relationships, encouraging greater creativity by both men and women.
Another point of focus for CGEL will be on the intersection between policy and business. “We want to bring together political and business leaders to look at the things on the political agenda that are moving us backward and how we prioritize them,” McElhaney says, offering pay data transparency and mandatory maternity leave as two examples. “We need to bring business voices into the political fold.”
Developing “radical fierce allies” will be another key priority for the center, she continues. “Men need to come to the table in terms of being ambassadors, but so, too, do women,” McElhaney stresses. “As a white woman, I am earning 80.5 cents on the dollar compared to my male counterpoints, but if I were an African-American woman, that would be 60 cents.” The center will host strategically curated salons to talk about all of these issues, drawing together women of all races, classes, and gender identities to talk about how all women need to be better allies for one another.
CGEL’s Time Is Now
Dean Lyons notes that center’s launch is well timed. “The majority of CEOs include gender equity among their Top 10 priorities, yet boardrooms and C-suites are not changing quickly enough,” he on the Haas website. “While the commitment to diversity and an inclusive work environment is there, too few have a handle on solutions. Our new center will work toward immediate change in these areas and pave the way for future generations.”
McElhaney agrees. “We have a ton of traction, and the appetite is so high for this,” she says. But not only are they hitting it at the right time, but also at the right place, which is Haas. “We have just the right mix of ingredients that other schools can’t claim,” she says. “While other schools are focusing more on diversity or counting the heads, we are focused comprehensively on inclusion in our classrooms—through our cases, our choice of course speakers, our faculty teaching methodology, and our student culture.”
CGEL’s launch will help ensure that Haas students hear about gender, equity, and leadership in every class. “This is a new center that puts on the map that this is something we care about,” she says. “We graduate 100 leaders every year—and going forward we are going to graduate 100 diversity fluent leaders. I think we are uniquely positioned to become a talisman of all things equity.”
Learn more about Haas’s new Center for Gender, Equity and Leadership.
This article has been edited and republished with permissions from Clear Admit.
Saïd Announces Equity Crowdfunding Study
Saïd announced in a recent press release that Associate Professor of Business Economics Nir Vulkan has been granted funding from the Kauffman Foundation so that he may study equity crowdfunding, a process where a broad group of investors will put their money behind a startup in return for equity. This industry is worth over £50 million in the UK alone, although very little research has been done into the market dynamics, success of campaigns to attract money and risks associated with the investment. Continue reading…
