London Vs. NY .. which one do you prefer & why ?

AliceLeguay:

Hi Max,

it turns out I work for a salary benchmarking website here in London and we study a lot the investment banking industry.

Fom our findings, London is the #2 best paying centre in Europe (lagging behind Frankfurt) and in the battle between Canary Wharf and the City, bankers in Canary Wharf are better paid. The banks are increasing their staff here and in 2014, bonuses are bouncing back from 2013.

The world is getting more and more connected, if i was you i would live and work in London and experience also New York later and travel maybe to some Asian country, why limit yourself to one city, i don't know about your age but i think all people in their 20's 30's value increased mobility

I would choose NYC for school and career. The only thing that would lure me into living in the UK would be watching EPL live and Glastonbury (and great music festivals alike).

Please note that this is a very subjective opinion.

I love London. To me it's kind of like NYC but with actual history behind everything. That said, it's unbelievably expensive. And you lose like 20-25% of your income in a flat tax before any other taxes/adjustments. If you were paid in pounds the same as dollars (£100k to $100k) then you could live there but to live in a nice area of London is awesome but exorbitant.

As far as economic future/growth, I'd imagine that both will be fine.

The U.S.has a better future than the U.K. so by default NYC.

They're both the two dominant global cities and the biggest centers of finance. In terms of where you should work, it comes down to the job/role/company, your long-term goals and money.

I think NYC is the best place to work in finance right out of undergrad because having a solid NYC name brand on your resume will allow you much easier access and credibility going forward. I could see London making sense once you've moved higher up, and the compensation can make up for the high COL or you work in say emerging market currencies and need to be in London for that reason.

I don't have direct experience of working in the LevFin groups in either one of these locations but have had a lot of discussions with both junior and senior bankers in LevFin groups in New York and London. My understanding of the differences is as follows:

New York: - Epicenter of Leveraged Finance world and sees considerably more deal flow than Europe or Asia - Deals range from typical PE LBOs to corporate acquisitions; arguably corporate acquisitions have a higher hit/completion than PE deals so you're likely to be involved in more closed deals - Significant amount of HY Bonds as well as TLBs and TLAs - Best place for experience at a junior level given the amount of deal flow

London: - Fewer LevFin deals though considerably more than in Asia - Deals are largely in PE space with fewer corporate-style LevFin transactions; you're less likely to see deals through to close - More TLBs and TLAs

Lastly, my understanding is that given you work with loan markets it is very important to be with the right player in the market. I.e. well-funded wholesale bank who can put down balance sheet to win deals. Hence, European banks have a considerable advantage in Europe and, like-wise, US banks in the US. This would apply to a lot of different teams but I think especially so to LevFin given the importance of being able to use your B/S capacity in transactions.

Again, I'll caveat this by reiterating that I haven't worked in either of these teams and my knowledge is second hand and limited. Would be interested to hear other people's perspectives too.

I don't have direct experience of working in the LevFin groups in either one of these locations but have had a lot of discussions with both junior and senior bankers in LevFin groups in New York and London. My understanding of the differences is as follows:

New York: - Epicenter of Leveraged Finance world and sees considerably more deal flow than Europe or Asia - Deals range from typical PE LBOs to corporate acquisitions; arguably corporate acquisitions have a higher hit/completion than PE deals so you're likely to be involved in more closed deals - Significant amount of HY Bonds as well as TLBs and TLAs - Best place for experience at a junior level given the amount of deal flow

London: - Fewer LevFin deals though considerably more than in Asia - Deals are largely in PE space with fewer corporate-style LevFin transactions; you're less likely to see deals through to close - More TLBs and TLAs

Lastly, my understanding is that given you work with loan markets it is very important to be with the right player in the market. I.e. well-funded wholesale bank who can put down balance sheet to win deals. Hence, European banks have a considerable advantage in Europe and, like-wise, US banks in the US. This would apply to a lot of different teams but I think especially so to LevFin given the importance of being able to use your B/S capacity in transactions.

Again, I'll caveat this by reiterating that I haven't worked in either of these teams and my knowledge is second hand and limited. Would be interested to hear other people's perspectives too.

With the GBP fall off, its not that much higher anymore. Cost of living is higher in London, too. At least that's my opinion.

Hmm hard to say. GBP is weakening, however tax on analyst salaries in London is around 26% whereas in NYC I've heard it as high as 44%+. Nominal salaries are higher in London. Cost of living is very high in central London (and less central affluent areas), but it is also very high in Manhattan. Cost of living can vary wildly depending on your neighbourhood in both cities. As for the net result, it probably depends on the types of things you spend money on, their proportions, and the area of each city in which you are living.

Overall, neither city is a very attractive place to live in real terms. IMO as long as you're a junior your short-run net disposable income will almost always be higher in 2nd tier cities like Chicago, Toronto, Frankfurt, etc.

Another question:

Given the current markets, would you rather be based in New York or in London?

given the current state, I'd say Asia.

Nauru - Taxes in london are quite high actually when you consider your bonus is taxed at 40% and the VAT is 17.5%, although you are right about the salary at 26%.

In current markets, I'd like to be in a place where I'm not worried about my job, maybe HK.

in hk you do get housing allowances, which is around 25k. so that plus the 60k base will get you a guaranteed annual of 85k. plus 15k for "relocation" (same as sign on bonus) will net you 100k for the 1st year before bonuses.

there is some kind of weird ex-pat tax in hk as well. kind of complicated so banks give US citizens a free tax consultant to work out all your problems, making sure you don't double pay taxes etc.

job mkt is quite stable in hk, esp ibd. s&t is the same situation as nyc or london though.

o yeah, cost of living is pretty low in hk except for housing. but the 25k housing allowance (more than 2k a month) is more than enough to cover it if you're not picky (and whatever is left over you can keep as cash).

meal allowance of 200hkd (~$25) a day is also wayyy more than what you need. you can get a decent chinese meal for $3-4 haha

46%, that's rough man.

Are workers ought to speak foreign languages? I mean are there any American who work in Asia, yet they don't speak the country's native language?

I think Indian Banker can fully answer this question.

I have experience with both London and NY, and can easily say you get paid vastly, vastly more in London - even after taking into account the higher accommodation costs, FX, cost of living, tax etc.

In London a 2nd year analyst gets £45k salary and can easily get over £100k bonus in Sales/Trading (perhaps more £80-90k in this bear market), £75-100k in M&A at a top-10 bank. A 1st year associate gets a £60k salary and easily £100-150k bonus. £ vs $ was recently 2:1 and recently down to 1.85:1. Do the maths, you get enormously more.

And now taxes are actually less than NY - income tax on your salary is just 30% for a new graduate, 35% or so for a 1st year associate - the first £5k of your salary is tax-free, the next £35k at 20% before you start paying 40%.

Cost of food, nightlife etc not enormously more than NY, accommodation is a bit more, but small change compared to the huge amount of extra money you get being in London.

Having briefly looked at salary/bonuses vs cost of living, tax rates etc, right now London hugely beats not only NY but Dubai, Singapore, HK. Moscow may be on par.

But of course there's other factors to take into account...

=== 23yr old Associate

Kuka:

I have experience with both London and NY, and can easily say you get paid vastly, vastly more in London - even after taking into account the higher accommodation costs, FX, cost of living, tax etc.

In London a 2nd year analyst gets £45k salary and can easily get over £100k bonus in Sales/Trading (perhaps more £80-90k in this bear market), £75-100k in M&A at a top-10 bank. A 1st year associate gets a £60k salary and easily £100-150k bonus. £ vs $ was recently 2:1 and recently down to 1.85:1. Do the maths, you get enormously more.

And now taxes are actually less than NY - income tax on your salary is just 30% for a new graduate, 35% or so for a 1st year associate - the first £5k of your salary is tax-free, the next £35k at 20% before you start paying 40%.

Cost of food, nightlife etc not enormously more than NY, accommodation is a bit more, but small change compared to the huge amount of extra money you get being in London.

Having briefly looked at salary/bonuses vs cost of living, tax rates etc, right now London hugely beats not only NY but Dubai, Singapore, HK. Moscow may be on par.

But of course there's other factors to take into account...

=== 23yr old Associate

Okay so the first half of the comparison is fine. But what about the numbers for New York?

I'll immediately disagree with you on accommodation being "a bit" more in London. It is considerably more expensive in London (although London is also the nicer city to live in) and housing is generally the single largest expense for any junior person. Nightlife is more expensive in London. Restaurants are more expensive. Clothing is more expensive.

What are these "other factors" you would take into account?

at the bb i was at this summer, everyone there associate and under in IBD knew at least one asian language, whether it's indian, chinese (most common), or korean. surprisingly the white guys in the bank knew how to speak chinese too, haha. most deals coming through are chinese related so frankly if you're only doing english speaking deals, it's very hard to keep someone busy in a slow mkt like right now.

have met other analysts and interns at other bbs tho who only know english. it all depends on the bank i guess

For the quality and location you get for 100 pounds a week in london (and the number of people you have to share your flat with) I think most on here will agree you get something better in New York, sharing with fewer or no other people. I'm curious as to what you consider "reasonable central accommodation" in London. Google maps link?

By 'Central' I mean anything within Zone 1. Look at London and you'll see anything within Zone 1 is pretty central - http://grimebeatsonline.com/london-underground-tube-map.gif

My friend pays £69/week to be 15 minutes walk, or a 5 minute Tube, from Canary Wharf - home of BofA, Lehman, Credit Suisse, Morgan Stanley, HSBC. 4 people sharing a 4 bed house

I paid £125/week to live near Liverpool Street, 5 minutes walk from UBS, Deutsche Bank, RBS/ABN. 3 people sharing a 3 bed flat.

You can live on your own with a studio apartment at most 10 minutes tube from your firm (whether in west end, east end or canary wharf) for about £180/week.

Again, sure, New York is considerably cheaper, fine, but the 5-figure difference in paypacket (last year, what our NYC counterparts got in $ pretty much matched what we got in £) completely trounces a couplea thousand (at most) a year more for accommodation.

=== 23yr old Associate

How is NY housing considerably cheaper, when, at least to my understanding, most analysts residing in Manhattan pay at least $1500/mo for rent?

£180/week is about £800/mo, which, given the current exchange rate, is a bit over $1400/mo.

New York, without question. That being said, if weighing an offer between the too, I'd say go London because that kind of opportunity doesn't come around every day.

Absolutely reasonable ;-)

@"Dingdong08" has done both NYC and London I think so he'll have a good opinion.

if it were me and I didn't have anything tying me down, I'd do London.

I lived in London from 04-08 and NYC at various points since the mid 90's so my viewpoint was skewed by living in London during the last boom, but at that point, and when Bloomberg ordered that study, I think London was on its way to overtaking NYC and by some metrics it did during those years. I personally ended up in London because SarbOx had really turned off my firm at the time's desire to do anything in the US public markets because it seemed like they wanted too many people involved in it to sign their lives away if some junior accountant or auditor flubbed a number the CFO was going to prison so there was very little market for IPO's on the smaller side. London kept its rules relaxed and the AIM market at the time (I work in lower to middle market PE type of stuff) was exploding and we were investing, putting some lipstick on the pig and making exits in no time on AIM. I also saw the boom years from within London and while I was in NYC often, that colored my perception of the markets at the time.

I think NYC came back better from the recession, although that may be colored by the fact that I've been back in the US since 08. Like that article states, the NYC financial markets have the advantage of having the largest economy in the world as its primary customer. That's pretty tough to overcome. But you really can't understate the benefit of London having a much better time difference to South and East Asia. I've done business in Asia from both GMT and EST zones and it's so much easier on your life when you're making that call or taking that flight from London.

If you want to be involved in more international stuff or are trading currencies or other OTC stuff, London's probably a better choice. Not that you can't do those in NYC by any means. I know that some would like to make it a competition between the two cities but I think they both have their place as financial capitals. I personally like living in London more but that's more of a personal thing of not liking every building being 40+ stories with the streets being like canyons in between skyscrapers. London's a little easier to live in with more greenspace and it's truly a city of villages, but it's still expensive as hell. It's also nice being a 2 hour train ride city center to city center with Paris, a 50 minute flight to Amsterdam, etc, in London. New York has, well, Long Island and North Jersey (just kidding). The guy who comments on the commute must be one of the few people who live in London with short commutes and must basically live in the City and work in the City (of London, where no one lives but everyone works) or in Canary Wharf (where once again no one lives) because I lived in Kensington and worked in Mayfair, which are two areas that are almost next to each other and my commute on the tube was 45 minutes door to door. I suppose commuting in from Greenwich CT or N. Jersey is longer than from within London, but that's no worse coming in from Kent or Richmond.

I do believe that the UK's relationship with the EU will have profound effects over the coming years but I can't comment with too much authority on that as I haven't followed it anymore than the most people over the past couple of years.

Regarding new financial centers in the East: they'll definitely become more important but, and this is an entirely different conversation, I don't think China's emergence is a guaranteed smooth and quick process by any means. HK's having its protests now and I wouldn't doubt over the coming years seeing more those on the mainland. But that's just my opinion.

@"Dingdong08" thanks for your thorough inside! from ur perspective, where d u start ur career if u could choose? i m only talking about the professional point of view, not lifestyle etc. assuming the same job, which city d position u better for your career (i know both do it well) after having worked there for 2,3 years?

Thx guys!

In London, until last year BB SAs were being paid anything between £35-38k p.a on a pro-rated basis. Currently, I think £1 = $1.55 (approx).

On that note, what's with the disparity in comp between London and NYC?

I have several friends at BBs and almost all of them as first years pulled in around 75K GBP incl sign on which at GBP/USD = 1.6 = $120K......compared with NYC analysts who are getting $70+10+50-65

Comp between the two is pretty close at the analyst level, NY bonuses were a bit higher, base is roughly identical. London is a more expensive city though.

What's the tax situation like? 50% for both NY and London?

This is a silly question. You realise EM isn't one thing? It's a combination of different local markets. As such, Latam trading will be biggest in NY, European emerging in London and Asia Emerging in HK/Singapore... it's not rocket science.

Same goes for G10, US rates will be biggest in NY, EUR/GBP in London, etc etc.

As far as FX, London is definitely the most active.

i am a macro rates trader, i have worked both in London and NY, and I find london to be better but is just because of the time zone...in London you get a good part of the Asia session, all of europe, and all of the US during normal waking hours. But defining one city as the "center of FI" is somewhat dubious...different markets trade primarily out of different cities.

Thanks guys! If one is interested in oil/middle east, would you say that London is a better place (as it is closer) then? I get that US has more Latam focus, and was wondering about London's exposure to Middle East. Thanks!

Middle East markets are traded mainly from the London floor. I'm not entirely sure about oil though, no exp in commods.

NYC

All Americans will beat me, but I say, starting in London is better than in NY.

When you want to get in MsC Finance at LSE, the best way...

And I never realized why you guys think that quants are something great. They´re just programmers and analytics. The "real" trading is automatized or done by traders without quant background.

There are no succesful quant traders making a few hundreds of millions. Best traders have no quant background.

Mark McGoldrick and desk Pierre Henri Flamand and desk Pierre Andurand Morgan Sze and desk Richard Lee Ed Milman Boaz Weinstein

Yeah, who is that Jim Simons guy anyway? How about cliff asness or the PDT guys?

I would agree however that London tends to have a higher take-home all things considered, and that it's a great place for rates and fx, g7 or EM.

Incidentally, does anybody know what Mark McGoldrick did at CIBC and before that? I remember him having a pretty non-traditional background which showed how far you can get with some hustle. I remember seeing that in an article but I can't find it anymore.

Wouldn't you say it is extremely difficult starting out in London if your from the US though? I would love to work in London for a few years while I'm young but have read it can be a pain unless your already working for a company who will sponser you.

A lot of people in London are trying to run to NY, it seems. Not sure about career prospects but if it's a lifestyle choice you intend to make, I'd steer well clear of London. Though I haven't actually worked in NY and most of my views are formed through convos with people, NY seems better than London on almost every count I can think of: pay, quality of city life, taxes etc. Also, don't forget that the socio-political environment for banks and bankers has turned very, very hostile in the UK, with daily talks in newspapers and by politicians of windfall/bonus taxes, pay caps, stupid regulations etc. You're basically made to feel like you caused every ill of society (of which there are many in a welfare state like the UK). Most of this may well blow over post-election but I honestly think if you want to try something a bit 'different', go for Hong Kong/Singapore/Tokyo.

London is better for currency and certain types of exotic products, but for everything else NYC wins out easily. And as the above poster said, Britian along with the rest of Europe is pretty close to socialism. If Labour wins next month, expect more taxes and regulations that will severely limit your ability to make lots of money. And NYC is a much better city than London.

Don't go to soviet UK

awesome town, if you are american, i'd recommend you live abroad for a bit just to round out your life ... travel to europe on the weekends, etc

go where the work is interesting

As someone mentioned, London is the center of FX trading, so it see's the most flows, particularly on the derivatives side.