JP Morgan IB RIsk Exposed Part 2

There has been a lot of inaccurate (and honestly laughable) information being thrown around about the JP Morgan IB Risk division so I thought I could shed some light on the position as a first year analyst in the FIG credit risk team (and someone who interned at the group last summer). This is NOT a forum to bicker about whether it's FO/MO/BO (honestly is irrelevant) but rather to give people a perspective on what we do since it is a very unique group at JPM.

What you actually do: IB Risk is focused on any deal where JPM is using their own balance sheet to facilitate a transaction. This comes in a variety of forms: Term loans, bridge loans, revolving credit facilities, and counter-party trading facilities among others. When a deal involving JPM's balance sheet comes through the pipeline, our job is to analyze the client and the structure of the proposed deal to essentially ensue that JPM will get paid back/make an adequate return on whatever facility being provided. I like to think of what we do as similar to S&P/Moody's/Fitch: we are analyzing the credit worthiness of clients and then using that information to decide whether the proposed deal is a good idea or not. Contrary to what has been said on other things, in order for a deal involving JPM's balance sheet to become a reality, you DO need the approval of a senior manager in IB risk. It depends on the size of the facility involved for what level of approval is needed, but generally MD and up approval from IB risk is necessary. So IB risk analyzes the deal to decide if it makes sense for the firm, then can either approve/reject/propose changes. It's a simple concept to understand: if the guys in say, Syndicated Finance, didn't need credit approval for deals they could conceivably initiate any deal they wanted in order to drive up their short term fees generated while potentially risking JPM's balance sheet in the long run by extending facilities to non-creditworthy clients. If you're not working on a deal you focus on annually reviewing each client that currently has a facility with JPM to decide if anything material has changed with regard to their overall health that could warrant a change in the facility they have. (If a client is below a certain internal credit rating they may be reviewed quarterly rather than annually).

Pay: Base and signing bonus (or relocation bonus as they call it now) is the same as regular IB analysts (85K + 10k). Can't accurately comment on the bonuses as I've just started but from what I hear they have been the same or very similar to regular IB in the past (at least for the analyst level, though possibly at a slight discount, again I'm not 100% positive on this so please don't freak out and start arguing).

Hours: All depends on your group. Corporate coverage groups tend to work the most (i.e. TMT, Consumer retail, Diversified industries), while FIG hours are a little bit better (though the asset manager/funds group works corporate hours). Usually you can expect an average of 12-14 hour days. Most analysts do come in on weekends, but it's more-so just to catch up or get ahead on work rather than a senior telling you they need something by 8AM Monday morning. Unless you are on some super-deal you won't be 24/7 on call like is usually expected for regular IB.

Exit Opps: From the people I knew last summer they did very well in terms of exit opps. It's not like regular IB where headhunters are calling you daily but the opps are definitely good. I'd say the most popular option is internally lateraling within the firm (common places are moving into IB coverage or credit/equity research). People within JPM respect the group and the skill set it builds, plus the firm loves mobility so it's easy to move to another part of the bank. Nevertheless people do get buyside opportunities, though these are more focused on the credit side of things such as a distressed debt shop. M7 placement is also excellent if that's a route you are considering. All in all the exit opps are great IMO.

Culture: This is honestly the primary reason I decided to come back full time in credit risk. In general, the people in risk are great. They definitely demand a lot from you, but at the same time they are very focused on you personally (not just career development but also just personal health/life in general). Most groups are very closely knit and will have events together at least once a week (i.e. go out for drinks, dinners etc.). When one person left my group last summer to go to business school the whole team went out for drinks with her to celebrate which I thought was pretty cool.

I hope this was helpful and that I was unbiased. Feel free to contact me if you have any questions. Please don't use this forum to argue about trivial things.