Asset Management Interview Questions

What is the Asset Management Interview?

The asset management industry is very competitive and, like other segments such as investment banking or private equity, attracts top talent. In essence, asset managers are professional money managers who invest on behalf of their clients.

Due to the large number of applications, filtering candidates can take more than a month, while the typical interview process is also long and may include more than three rounds (including online and in-person meetings). The type of questions asked varies but are commonly grouped as either technical or behavioral. Along with theoretical and practical knowledge, candidates are often asked about their experience and career aspirations.

Key Areas in Asset Management

1. Markets
   1. Clear understanding of how the financial markets operate and key performance drivers
   2. An up-to-date knowledge of the current market environment
      • The performance of different assets, for example in equities, the performance of the S&P 500 Index and the MSCI World index or the MSCI ACWI, which considers emerging markets. Look at both specific return drivers and detractors
      • Interest rates and bond yields – key markets to look at are the US, the UK, the Eurozone, and Japan
      • The price of different commodities and precious metals such as oil and gold
   3. Key market events in the past and their impact on the performance of various financial assets. Some examples include the Asian Crisis (1997), the Global Financial Crisis, Eurozone Debt Crisis, Brexit, the Global Covid-19 Pandemic, and the invasion of Ukraine.
   4. Different asset classes and how are they related (for example, the relationship between equities and bonds)
   5. The relationship between the markets and the broader economy, including the influence of monetary policy on asset performance
   6. Familiarity with the respective investment universe (for example, a US large cap equity analyst/manager is expected to have deep knowledge of the companies in the S&P 500 Index)
2. Investments
   1. Solid knowledge of fundamental analysis and valuation of financial assets
      • Look at concepts like the Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Model (APT)
   2. Understanding of portfolio construction and asset allocation concepts – Modern Portfolio Theory (MPT) and Diversification are important
   3. Investment selection, portfolio management strategies and risk management techniques
   4. Investment performance measurement and reporting. It would be useful to be familiar with Global Investment Performance Standards (GIPS)
3. Legal and Operations
   1. Regulatory and compliance regimes and requirements (for example the requirements of the U.S. Securities and Exchange Commission or the UK’s Financial Conduct Authority)
   2. Different investment vehicles and product structures, such as open and closed-ended funds
   3. Specifics of transaction processing and trade execution (what is market making, how are different assets traded and how are trades settled)

Organizational and Behavioral

The types of questions asked in this part of the interview will not differ much from other investment-related roles such as investment banking, hedge funds, or private equity. Below are some key elements candidates should focus on.

1. Good knowledge of the hiring organization
   1. Firm structure and key people (the CEO and the Board of Directors, its CIO, and the heads of relevant department – for example who is the Head of Emerging Market Equities)
   2. Recent developments (any corporate news such as acquisitions, the launch of new products or services, and key people moves)
   3. Reporting accounts and financial results (go through the firm’s latest accounts and look at things like revenue and profitability numbers, headcount, liabilities and compare against previous years)
2. Behavioral
   1. Personality and career aspirations – does the candidate have good idea of the seniority of the position and where it sits within the organization, are their ambitions relevant to the position and the organization (for example if someone is applying for listed equities position, but aspires to work in private credit that may not be a good match)
   2. Cultural fit assessment – does the candidate prefer to be more independent or like a more collaborative environment
   3. Communication and presentation skills – is the candidate able to present and explain well complex findings

Explore the different asset management career prospects.

Asset Management Interview Process

First Stage – An Online/Telephone Interview

• Should a candidate’s application be successful, and they are selected for a first round interview, they would get an email/phone call from a representative of the company to schedule an online virtual or phone call.
• This first interview typically addresses the applicant’s current situation, their experience and expectations for the role.
• The expected length of this interview would be around 30-45min.

Operating Cash Flow Calculations

• If the candidate is selected to proceed following the first stage, they will be invited for the second round. This is typically a meeting with the hiring manager(s) and a member of their team.
• Typically, this meeting starts by going through the applicant’s resume and asking questions about their previous experience and qualifications.
• Candidates should also expect to receive technical questions either when discussing their job history or after that.
• Towards the end, if not touched on already, candidates would be expected to ask questions about the role and the team.
• The typical length of this interview is around 1 hour.

Third Stage – An In-Person Interview and Presenting a Case Study

• The format of the third stage interview differs between companies, but generally aims to do a deep dive into the candidate’s technical capabilities. They may be given a case study to prepare and present, or alternatively should expect challenging questions around markets or portfolio management and analysis.
• At this stage, normally the people attending are the hiring manager and a senior member of another team within the department. If a case study is presented, more team members are expected to attend and ask questions about the candidate’s presentation.
• The interview is expected to last between 1 – 1.5 hours.

Fourth Stage – Meeting with Senior Leaders and HR Representatives

• Being invited to a fourth stage interview is often quite good sign – normally this is the final step in assessing the candidate’s cultural fit and offers an opportunity for them to meet other members of the team
• There would normally be a senior leader of the firm (department head or in some cases a board member) showing up for at least 10-15 min, followed by a conversation with an HR representative.
• No technical questions are expected at this stage. The interview would typically last for around 30-45min.
• If successful, candidates should expect an offer within the next one to two weeks.

How to Prepare for an Asset Management Interview?

Although preparing for an interview can be stressful, there are some gradual steps that can be taken for candidates to enhance their performance. Below are our top tips:

1. First and foremost, demonstrating a solid theoretical knowledge is critical. This includes topics around portfolio construction, asset allocation, asset valuation and security selection, and risk management concepts. Below are 5 common interview questions.
   1. How do you value an asset?
   2. Tell me about different asset classes
   3. What are the biggest risks in the market?
   4. How would you construct a portfolio for a high net worth individual?
   5. What happens to yields and bond prices if the Fed raises rates?

   The portfolio manager takes a deep dive into the portfolio management process, helping you understand the core and fundamental topics, as well as new topics on the latest trends in ESG and active vs passive investing. Helping you to develop practical skills you can use to impress at interviews, whether you’re looking to break into finance or change roles.

2. Candidates are also expected to be familiar with the current market climate and have a strong knowledge of the asset class for the role they are applying. It is recommended to go through the latest market data and the weekly market commentaries from large asset managers. Below are two examples: 1) BlackRock  2) Rowe Pric
3. Asset management professionals are always on top of what is happening around the world as it can directly impact their portfolio (for example, military conflicts, natural disasters, political unrest, trade disputes, etc.) Therefore, it is always helpful to read the latest news. Among the common news sources that can be reviewed are Bloomberg, Reuters, CNBC, and the Financial Times or Wall Street Journal.
4. It is essential for candidates to do their research on the company, its key personnel, the hiring manager(s) and their team. This can be done from a range of resources such as the company’s own website, LinkedIn, government databases such as the SEC in the US or Companies House in the UK, and industry associations of which the company is a member.
5. Familiarity with the investment process and objectives as well as the portfolio of the team will make a very good impression. For example, if a candidate is applying for a role as an emerging markets analyst/manager, it would be quite well received if they look at the factsheets, monthly/quarterly commentaries and other relevant materials for products run by that team, as well as though leadership pieces. Here is an example of Fidelity’s Emerging Markets Fund.
6. Asking questions demonstrates interest and engagement. These can be company and/or team-related, as well as specifically tailored to the position – is it a newly open role, what interactions would be required with other teams, what expectations there would be within the first three months, what are the potential career progression opportunities.Learning more about the Asset management Career Path can help with these discussions.
7. Candidates could practice case studies and work through investment scenarios to demonstrate their analytical and decision-making skills. Also, doing mock interviews would help refining answers and boost confidence. It is quite important that communication and presentation skills are highly valued by potential employers.
8. Finally, candidates are expected to pay attention to their personal appearance. Since most roles in asset management require communicating with clients and various other third parties, looking professional is considered. Business attire is mandatory.

The Portfolio Manager Expert Interview will help you understand the role of a wealth manager and may help you to structure some of your answers.

Conclusion

While preparing for an interview is time-consuming, building a strategy and navigating through different sources of information is key. Many candidates tend to believe that having the technical expertise would get them the desired job, but that is not necessarily the case (especially for more junior roles). Showing the right attitude (be on time, be polite and respectful, do not interrupt or confront the interviewers) along with good financial knowledge and willingness to develop it further is often the “secret sauce” for landing a role is asset management.

Additional Resources

Investment Banking Vs. Asset Management

Investment Banking Vs. Investment Management

Investment Management Career Path

The Role of a Portfolio Manager

Portfolio Management Course