SECURITIES LENDING at I Banks
Is securities lending considered to be a Credit Suisse and he said that his bonus and base was over $1mm. Is there any truth to that? Please elaborate
Securities lending at an investment bank
Securities lenders manage a portfolio of loans for clients. They lend out stocks (occasionally bonds) to clients who want them usually to cover shorts. The bank brokers the deal and puts up the collateral.
Most of the industry leaders in securities lending went the way of the dodo after the financial crisis.
You can get a fair amount of interactions with traders, learn about the market, and really learn about the mechanics of short selling. If you can effectively do all of those then exiting to an equity long-short fund is possible
from certified user @brotherbear"
It started as a BO function 20-25 years ago, and that may be why it still has that stigma at some firms. It's not BO, though. If you're speaking with clients, generating your own revenue/manage a portfolio of securities, and pricing anything for the market, you're FO. If you process trades and bug traders about their PnL and risk limits, you're MO. If you order the pencils, actually make the payments for trades, and fix computers when they crap out, you're BO.
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its front office, but in my opinion lame as hell. take 0 risk, 1mm for ED seems reasonable. its a pretty low risk/lower reward job.
-pat bateman
It should be easier to land a position there than other more popular areas, namely IBD and S&T.
What is the 'average' pay ceiling for say an MD in securities lending? Anyone? Anyone? Is it say like a couple mil? or less. Please chime in cuz my high is about to wear off and I just might decline a job interview if the money sucks.
Take 0 risk is not entirely true. Before the credit crunch, they took a lot of risk, and it really hurt them. Just think about the assets securities lenders bought (financial floaters, structured products), and think of how much they lost on these products when they had to mark them to market.
This year, things should be better. In the first half of the year, with an aggressive Fed, and spreads tigthening across asset classes, anything they bought should have made them money.
Risk appetite is very low now and a good question to ask in an interview is where do they think the business is headed.
I would still take the interview. It's good practice and the current job market is difficult.
I wouldn't decline any interview unless its a scheduling conflict that can't be worked around.
As far as Securities Lending goes... I know there are Securities Lending traders and sales... also... not sure, but don't securities lending traders trade short positions? You should see if that can possibly lead to a HF trading opportunity.
Im not sure what an Executive Director is... I know these titles carry different weight from one bank to the next. Is it above or below an MD?
securities lending generates revenue whether the market is good or bad. securities lending is part of prime brokerage. this business as whole is enjoying a boon. yes boon. securities lending traders, support, technologist jobs are secured in this market. ask state street, GS, MS, JPM, where they made their money last quarter
http://www.celent.com/PressReleases/20061120/SecLending.htm
I thought JPM, until as of late, didn't have a prime brokerage, but they have had Securities Lending... I'm pretty sure SL falls under the custodian umbrella more so than PB
Okay people, I think I will answer my own thread. Yesterday I met with and spoke to an MD in securities lending from JPMorgan who is a relative of an MD banker friend from MS. Top level pay in securities lending(depending on the normal and not so normal economic cycle)for MD's is in the range of $2-3mm. Not bad considering the hours are reasonable compared to IBanking. The guy said that overall pay is about half of typical IBanking positions but catches up once your an MD,ED or VP levels.
computer guy said it once, but in case you missed it, securities lending is part of prime brokerage. it really has no thing to do with trading if thats what you're thinking. basically helping hedge funds finance their positions... something they need to find the security, sometimes they need a place to hold their securities...etc
I think you're forgetting about the part of the securities lending business thats keeps custody of institutional investors' portfolios, and the traders who are lending those securities out to 3rd parties. If there are no securities lending traders, then where are brokers borrowing securities from on short-sales?
I don't really think you know what you're talking about.
FYI... this is copy-paste from someone in my directory...
International Securities Lending - Senior Trader - NY DESK
What are the hours like in securities lending and is it hard to get into from a non-target?
630-530 m-f and as tough as any other front office S&T spot
I have discovered some more on the securities lending position. In the last week I had the opportunity to meet and speak to some more key people in this field of banking. An MD from JPMorgan, Executive Director CS, VP and associates from MS. Basically, all of them love the job. They say the pay is very similar to IBD or S&T after sometime.
THIS IS THE BIG ONE.. ALL OF THEM, I REPEAT ALL OF THEM were from non target schools. The MD and ED both attended SUNY Albany- undergrad only and the VP and associates were from Baruch College and Queens College, respectively. So you do have a great shot not being from the more prominent schools, hope this helps
However, that doesnt mean that they didnt have stellar grades and other crap to land the jobs initially.
I interviewed for a prime brokerage job recently, to be an intern in the fall. I beleive securities lending falls under the PB umbrella. The guy was a trader for sure, and their floor was as busy and crazy as any trade floor. He said they make most of their revenue from "pure volume" similar to cash trading, they focus on their clients and relationships, they do take spreads on the books they trade, and they hold very big books and very small spreads. It seems like you need alot of the same skills as you need in sales to succeed in securities lending.
He also focused on that I will be answering the phones alot, and the faster they can answer the phones, the more $$$ they make, it seriously sounded mostly volume driven and less strategic than energy/FICC/derivatives.
There is alot of money in the arena though especially since the Hedge Funds are growing more and more everyday.
Im willing to bet my left nut that this will become as competetive as S&T or IBanking in the near future as it becomes more and more lucrative. The movement towards the higher "pay areas" takes longer though.
you cant go wrong with securities lending.
http://www2.goldmansachs.com/services/securities/securities-lending-pro…
Whats the comp like in Securities Lending now a days?
Anyone?
Last bump?
Securities Lending Desk - Back Office? (Originally Posted: 03/25/2010)
My friend tells me that the securities lending desk is considered back office at his firm. (Even though they generate revenue and meet clients). This is because the MD of ops watches over the desk.
What is your opinion on this? Do you consider this back office? Front Office? What are the exit ops for someone who's working on a securities lending desk?
In my company it's considered back office... And the exit ops are not as great as one might be led to believe
Bump....Also interested.
my friend is at JPM rotating through their securities lending desk now and i know he didn't get into a fo rotational program so i'd say more like a mo spot seeing that they are revenue generating
Is it agency lending or a custodian bank? I would feel agent lenders operate more in a front office role-- they typically have a relationship management and sales function that make their living off of bringing assets under their arm. I would at least consider those working in the client service and prospect generation group to be front office.
I would agree that the exit ops are poor at best. Most people born in stock loan also die in stock loan... and while they work the easy hours, talk to most on the desk and your rare to find anyone that is genuinely happy they lend stock for a living.
Granted that it might not be FO, but in terms of a rotational program, wouldn't a rotation through the desk be helpful in terms of transitioning elsewhere in the bank? I would think that its would be fairly quantitative work, and would probably help if the ultimate goal was to get to S&T....
It started as a BO function 20-25 years ago, and that may be why it still has that stigma at some firms. It's not BO, though. If you're speaking with clients, generating your own revenue/manage a portfolio of securities, and pricing anything for the market, you're FO. If you process trades and bug traders about their PnL and risk limits, you're MO. If you order the pencils, actually make the payments for trades, and fix computers when they crap out, you're BO.
Sec Lending guys (at least in the buy-side) manage a portfolio of loans to clients. They're the only reason that equity long/short funds exist, and since VERY few people understand the mechanics of going short or have ever managed a portfolio of shorts, sec lending guys can exit to equity l/s funds without much difficulty.
It's not something you want to do for 10 years, but 2 years on the desk isn't bad. You'll get some good interaction with the other traders on the floor, understand a bit more about the markets, and learn about a niche area of the business. If you do your CFA at the same time, there's no reason you can't progress to running some sort of equity portfolio.
I am a stock loan lending agent if anyone would like information on how our process work, just comment to this post
Thanks for the offer. Can you run through your day? How do you manage your book/collateral quality/inventory? What is a "good day" for you or the team?
Thanks again
Securities lending? any insight!? (Originally Posted: 02/25/2015)
any insight (state street, etc.) what about CB?
State Street is a place where you can make a comfortable middle/upper-middle class living, but will never be a wall street 'rockstar' in terms of prestige. As they are one of the largest custodial banks, their sec lending operation is massive. I am of the personal opinion that they only still exist because they're so massive and touch all of the major players. State Street is sort of stuck in the 20th century while everyone else is in the 21st. That being said, everyone I've met there was pretty friendly. I would personally go for the BB
Who knows about Securities Lending- (Originally Posted: 02/26/2015)
Can anyone give me insight into the security lending group of a large AM firm? I got a great offer and I am trying to figure out what the job/role/exit opps entail. Also, not too familar with the prestigiousness (BO vs FO). One of you geniuses has to have some insight on this - let me know your thoughts. Thanks everyone in advance.
Securities lending is lending out stocks (and sometimes bonds) to those who need to borrow them -- usually to cover shorts.
The AM or bank brokers the transaction and invests the required collateral.
Basically three types of job: account exec/program manager, brokering the borrowing/lending, and investing the collateral.
It is relatively unprestigious, and relatively less profitable since some big industry players (notably AIG) blew up during the financial crisis, leading to many lawsuits and big asset owners being much more cautious with their securities lending activity.
Exit opps? IDK. Most sec lending execs I've encountered (thru work on the lawsuits) have been industry lifers. Pay for seniors is, or was, quite decent.
Securities Lending S&T (Originally Posted: 11/17/2014)
Hey guys,
I've searched all over this website, and have yet to get solid answers. Got a job offer at a BB in S&T for this specifically.
So basic questions:
1.) Is this truly S&T? I know they make a lot of money for the firm, but wanted to know where this fits in. Most people I speak to at other banks know about this desk and that it makes alot of money, but nothing past that. 2.) What are the exit opps like for this? 3.) Do you make equivalent S&T money as you move up the ranks? I noticed that a lot of individuals working on this desk come from non-target backgrounds. 4.) Can you lateral desks? Seems like sec lending is pretty niche and doesn't have transferable skills.
Thanks guys! This site is absolutely amazing for college kids. I know there are a bunch that come on here and post stupid shit but for the majority that simply come here to learn it is an invaluable tool.
FYI you posted this in the private equity sub-forum, so it may not get the attention you want here.
ah fixed, bumped. thank u for correcting me!
Yes its a "real" trading desk, yes you will be managing collateral, balance sheet and the banks inventory, yes you get to go out with other brokers/clients, yes you get paid and yes you can lateral to another desk. Every desk is niche.
Thanks MK! Anyone else?
Securities Lending - Agents (Originally Posted: 06/23/2013)
What do you guys think about securities lending agents? Searched for past threads and thought to get more recent opinions.
What are the long term prospects? Exit ops? pros and cons?
edit: reposting in Traders Train hoping for some replies? edit2: reposting in IB since still no replies :-(. I'd love to hear some feedback.
one final push?
sec lending very low risk - very safe, but very low risk - not sure about exit opps
I felt bad since no one responded :/ I hear JPM's sec lending is decent, but the head of ops overseas everything there so I don't think it's as respected as other desks.
@ gs it's decently reputable tho
bump for comp numbers...
Security Lending (Originally Posted: 01/14/2008)
So an opporunity in security lending for morgan stanley popped up on my career services website. I was wondering exactly what it was. It sounded like something in trading, is that true?
prime brokerage
so its not trading?
what are the exit opps for it?
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