Muni Sales and Trading
Hi Guys, Been searching around but can't find much info. Trying to find out as much information on both sales and trading roles in a muni desk. Life as a junior guy compared to seniors, volume/flow, compensation, exit ops, Outlook etc.
depends which bank, some have high volume and deal flows as lead manager while others not so much
You're really S&T'ing based on where the Tsy yield curve and the MMD scale (Tax exempt yield curve) is. In this market, bonds are pretty cheap because Treasuries are up based on where oil is collapsing and growth concerns in Asia, Europe (no growth) and growth concerns here in the states.
Thanks for the info. Seems a lot of the stuff I find is based off retail and offerings to UHNW clients. Why does it seem muni is kind of a forgotten space? Is it a good area/desk to join, firms like MS, UBS, BAML (strong retail presence)?
I'm on the buy side (asset mgmt) in muni bond trading so I can only give you the perspective I have from being on the other side, but it would seem that with spreads collapsing in this market (at least with investment grade, can't comment on HY), the salespeople who are still thriving are doing so off the backs of their bank's primary market issuance. As far as trading goes, I've heard that sell-side traders can make more than anyone else in the sector, at least according to some of the sales guys I am covered by.
@coreytrevor: The sales guys can make a ton as well - not just the traders.
This is true. With the secondary market elevated at these levels, the primary market is where the yield is.
In the short end of the yield curve, the space is dominated by mutual funds and UHNW client seperately managed accounts. Long end is insurance companies and some other specialty buyers, as well as more retail.
Also, out of the firms you listed that are strong in retail sales, those are all correct, but Citi and especially Wells should be included with that group.
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While the big primary players seem to do well, a more interesting part of the market for sales guys are the more regional shops (Mesirow, Stifel, FTN, Robert Baird, FSW, HSE, etc). Some of these have small retail wealth networks or somewhere (as a buyer I honestly don't know where they are getting them) that allow them to get odd lots crazy cheap and grind those out all day, whereas others don't have that and are forced to play in the institutional bidwanted space with the big boys.
I would assume it's from their retail side, all those firms you mentioned do negotiated/competitive primary market issuances so on the first go around they try to get as much to retail investors as possible. I'm guessing what you are seeing is the result of those same retail buyers selling them back to the firms they bought them from and they obviously don't know what they are worth. Whereas the bigger shops are doing bigger deals and unloading their primary market to institutional as much as possible, they don't need to focus on retail as much for most deals.
@Cruncharoo: Smaller firms can unload to their institutional as well. The bulk of the focus is to institutional investors.
I do a lot of muni's on the retail/PWM side for our UHNW client. We do a mix of secondary offerings and new issues/syndicate
@Bobb: Haven't you considered moving to Institutional Muni Sales?
Yes I have. Will see how things play out when the new year hits
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