Desk Analyst/Strategist position
For those out there familiar with the role of a desk analyst/strategist, specific to credit if possible. I've been approached in casual talks about a credit desk analyst role at a BB and am trying to learn more about the position.
What's the day-to-day responsibilities for a desk analyst, what're the good aspects, negative aspects, how is the lifestyle/hours, how "disposable" is the role (i.e. easily laid off in downturn?), what are exit opportunities, and in particular how is compensation?
I understand it's essentially research generated for the trading team i.e. non-publishing, but apart from that I don't know much about the role. There doesn't seem to be much information on this site or others - I'm assuming because there aren't that many roles and recruiting is non-standard. Any color on this would be really helpful.
I'll try to answer as many of these questions that I can:
Day-to-day responsibilities: Looking into credits, evaluating investments for the trading desk, deciding where the book should be positioned, talking to clients, discussing positions with them, etc.
Good aspects: Hard, transferrable skills that are easily transferred to a similar position at other firms. The work you do is tangible (an investment is either good, bad, or neutral) and you will see the result.
Negative aspects: Not as much glamour - traders are the ones who are generally regarded as the highest "prestige" on a trading floor. Also, post-Volcker, it's harder to put trade ideas on so it's generally less of these positions going on
Lifestyle / hours: Totally dependent on the bank, but probably in the neighborhood of slightly more than straight trading hours. I would imagine 55-60 across most places
Disposable: Not sure, can't speak much to this
Exit opportunities: Hedge fund (credit), Asset Management, desk analyst at other banks, credit trading...there are probably others that I am not too focused on
Compensation: Generally from my understanding in line with being an IBD analyst. Base is probably standard across the street and you are probably compensated with a bonus that is in line with IBD analysts for the first couple of years. You could be compensated more for good trade ideas, but I'm not sure.
I wouldn't exactly describe it as research for the trading team. Research (at a bank) has a mandate to publish, a lot. Therefore, a lot of what they publish may not necessarily even be applicable or great research. As a desk analyst, every call that you make is important - if you tell a trader to buy TSLA, and it tanks, your ass is on the line. You definitely cover less credits than research, and your ideas are mostly actionable. So I wouldn't exactly say it's the same as research.
how will the election affect this role? Any thoughts? http://www.wallstreetoasis.com/forums/republican-landslide-the-volcker-…
I can't say that I'm really one to speculate on politics and financial regulation. If I had to assume, I would probably guess that no further regulations would really be implemented, but I would be hard pressed to think that Trump and a republican Congress would want to repeal Dodd-Frank and Volcker. Just my .02 though.
lax321
Thanks for the detailed response. How in-depth of an analysis would desk analysts complete on any single credit - or how many credits would be actively monitored? How big of a team would be supporting the traders? Also, would the desk analyst be focused on short-term ideas or is there room for "deep value" plays? My impression was banks are averse to holding long-term positions, since it's relatively expensive to hold capital against positions, so the desk would be more focused on short-term event driven ideas. If it's more short-term plays, then that would also affect exit opps - most of the credit funds I've seen seem to have long-term deep value strategies. My impression was the analysis desk analysts do is slightly more cursory than what hedge funds would like.. maybe I'm wrong here.
Also, on compensation - any idea how this would look with c. 3-4 years experience? i.e. no longer entry level analyst level. Thanks a lot for your perspective.
How in depth? - The answer is that you go as in depth as you want. The moment you think that a credit is no longer interesting, you stop working on it. I would imagine most situations are probably in the range of 3 weeks to 5 or 5.5 weeks of looking at a credit.
How many credits? - Depends on what you're looking at, how time consuming it is, etc. Maybe around 10-15? Definitely depends on the analyst though.
How big of a team? - Again, I hate to keep saying this, but it totally depends. Maybe on a distressed desk there's 5, on a high yield team there's about 4, and on an IG team 2-3?
In response to "deep value plays", you could be looking at some sort of catalyst that occurs in a specific earnings call, or you could be looking at a situation that takes a year or so to play out. I think it depends what asset you're specifically looking at, how liquid the credit is, etc. If you're early in your career, then I don't think hedge funds will care too much about how long your time horizon has been, given that you're one of the few people who will actually have credit experience coming out of a bank (Lev. Fin / Restructuring are exceptions, but even then they don't see how the credits really trade).
"Expensive to hold capital" - If you have a view on a certain credit, but all the while a trader is trading in and out of that credit, are you technically still holding that credit? Although at the end of every week you may be 'net long', if a trader is trading in and out of it to make markets then you're not holding a specific bond for a long period of time.
Compensation - Can't speak to that, I only know at the entry level. I would guess that the more senior you get, the more you get compensated for your ideas.
generally feel the desk analyst is a pretty good role. Those guys do a lot of research and know the names they are looking at well (including management meeting etc.). The traders tend to be less in the details and more about putting on the right trade (which sometimes mean they may sell your positions away from you to optimize the book). Should be solid exit to hedge funds
i was a desk analyst before becoming a trader. the role involves
-building a lot of excel spreadsheets -doing research originating by prompts that come from the traders (i wonder about this thing...hey Ashley, go take a look at XYZ vs ABC, and use the 1, 2, and 3 models to evaluate them and tell me which way is the best way to look at them, and explain to me why), applying existing models to new scenarios...then coming up with new models when the old models don't seem to fit.
-becoming an expert in the banks technology offerings (databases, quant modeling groups, excel math model addins) -ad hoc easy technology projects (usually in excel....learn VBA...it will come in handy, and its very easy to learn....maybe the easiest programming language)
Very often, the desk analyst is a pre-cursor role to becoming a trader (just like research). The usual timeline is 2-3 years. After that, you will often have the opportunity to either be promoted to junior trader on your desk, or you will get headhunted onto a desk at another firm (this happened to me).
The role is multi-faceted...you will be pushed to perform (sometimes a trader will need your weeks of work done an hour ago...but you're just starting)...but that will make you better. The desk analyst/strategist becomes a resource that the trading desk can lean on for many things, because of the multi-faceted expertise that you will develop...and the speed which you are able to produce tangible results (all in due time...as you will learn). You will become an expert in delegating tasks to maximize the speed to get the result you need.
This is a great role to learn, and to push yourself to perform. The stress levels can be very high at times, but the reward for a job well done is to be a member of a tight knit team, with excellent exit opps, and usually good pay via your bonus if you are good at the job.
comp is a wildcard, because you are tied to trading. If the desk has a great year (+100mm) and you were part of making that, you can get a 300k bonus your 1st year. If the desk has a shit year....you might get a 20k bonus on top of your 120k base. your fortune will be tied to the financial success of your traders...and the quality and speed of your work.
Credit Desk Analyst role at BB? (Originally Posted: 07/25/2016)
What are people's thoughts on a credit desk analyst role at a BB? (GS, MS, JP, etc.) What type of exit opportunities does it present? What are the pros and cons versus IB? What are the similarities and differences?
which bank
What kind of backgrounds do desk analysts typically have? I’m trying to break in from an unconventional background (BB Hedge Fund credit risk). The work as a hedge fund credit analyst is interesting but really not practical if I ever want to move to the buy side.
Bump, what’s outlook like these days
Desk analysts are great roles, probably the second best after being a trader. One could even argue that, at a junior level, it's even better than being a trader because a junior trader won't be doing much. Desk strats are much closer to markets than research strats, so you know what drives PnL (tangible skill that drives better exits), but can get more deep in the weeds than market makers.
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