S&T advantages over banking? 
(Gorilla, 521 
Points) on 2/9/10 at 6:20am
Hopefully this doesn't ruffle too many feathers, but I used to work for a top BB. The kids from IBD were way more qualified than the S&T ones. S&T analysts were not recruited mainly for GPA or pedigree. There were kids with 3.3's and 3.4's from the likes of Boston College, Villanova, Lehigh, Rutgers, etc.
However, S&T numbers tend to be lower at most BB's, but there is also less applications. There are few exit ops for those in S&T since they cannot move to PE or VC or corp dev or strat consulting or other jobs. Given all this, how many S&T analysts move on to HF? I'm guessing not a lot from the hedge funds I've looked at since they are mostly ex-bankers and even a few equity research. What happens to a S&T analyst after 3-5 years? Not everyone can be a head honcho trader so what happens to the normal traders or the ones who are placed in sales, are they screwed?
plenty go to hedge funds in
by Corneliusplenty go to hedge funds in trading roles..
------------
I'm making it up as I go along.
way more qualified = higher
by LAWMway more qualified = higher gpa??
Why not PE? You can always go
by IB13Why not PE? You can always go back to business school and apply to PE's. S & T gives you plenty of investment strategy experience, effective communication skills, and sound market knowledge.
Not to mention, In S&T you move up the ranks faster and eventually make more money while working less hours. Trading and sales trading are much more exciting and rewarding than answering calls from pissed off sycophant vps demanding yet another stupid job done in record time.
If you're good at S&T, you
by killscallionIf you're good at S&T, you make the same bonuses as in banking and work less than half the hours. You can also exit into hedge funds and make just as much as PE and (again) work half the hours.
The only real downside is that your job security is less certain than in banking / PE. If you fuck up, you can lose the firm a lot of money as well as your job.
I don't know where you get
by RevslyI don't know where you get the pedigree thing, pretty sure my class' resumes would have been as strong as the IBD guys, though this was specifically FI S&T which tends to be a little more quantitative.
Anyway I agree with most of the people above. The upside is higher in S&T (comp wise) and less time working. The downside is it's a lot less stable in terms of job security and the exit ops are not as broad without going back to get an MBA. For a lot of people I know, however, this doesn't matter because they love the markets, so if its your thing then the breadth of exit ops is not a big deal.
------------------------
Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
-30 Rock
It would be nearly impossible
by CashCowIt would be nearly impossible to go from s&t to PE.
Those who go from S&T to HF tend to be execution only traders unless they are at global macro or commodities funds.
Also, would not say that
by CashCowAlso, would not say that upside is higher in S&T, unless you are in one of the prop groups like gs ssg, which generally recruit separately. S&T is generally a sales job (getting hedge funds, mutual funds, etc to execute trades through you, so you take them clubbing and shit to woo them). Still, its not a bad job for people who are very personable and good at it because no business school and you can move up the ranks quickly and make a few mil a year.
Banking leads to PE and analyst-> pm roles at fundamental hedge funds (activist, long/short equity, event, distressed, etc), which can have substantially higher upside than anyone in S&T. But hours are much longer and you have to go to business school generally.
It is not just the prop desks
by RevslyIt is not just the prop desks that have large earning potential, almost every market-making desk has a prop book also anyway.
------------------------
Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
-30 Rock
Thanks cashcow, very
by boutiquebank4lifeThanks cashcow, very informative. and I am talking mostly S&T at large banks, not prop firms or the prop arms.
During the boom years, flow
by GoodBreadDuring the boom years, flow traders in the more structured products were making way more than their IBD counterparts.
Financial Modeling Training
Guide to Finance Interviews
i dont know where some of you
by wintonheightsi dont know where some of you are getting your information from about S&T or what firms youre working at but some of these responses are bewildering. S&T recruits are NOT generally lower quality than IBD and traders often make much more than bankers.
i was a banker, were any of you? moving to trading was one of the best decisions i made in terms of compensation. read: bonus upside is definitely higher (of course its more volatile too, can you handle that?). as an analyst my comp was comparable, but when i became an associate on most occasions i made significantly more than my IBD counterparts, with the exception of few IBD areas where comp was comparable.
as REVY said, every desk tends to take risks for their position and is not only just a market maker. and the job that CASHCOW is describing is sales not trading. as a trader my number one priority was to make money,. sure i schmooze when sales brings clients around or ill shoot the sht with clients on the phone, but trust me they came second to my P&L.
now, i will concede that it is a lot harder to go from trading to PE/VC. not so for HFs. I know plenty of traders that made that move and they dont just execute trades like pawns, they make or contribute to portfolio decisions. in fact, i was offered a few of these roles from head hunters back when the sky was the limit. now, are your exit options limited compared to banking? absolutely. part of the reason i left. but if youre interested in trading, you tend to stay a trader. it takes a certain amount of balls to sit on the other side of trades every minute of the day gunning to win and knowing that for you to do so someone must lose.
Wintonheights, have you ever
by CashCowWintonheights, have you ever heard of a sales trader becoming an analyst/portfolio manager at a fundamental hedge fund (i.e. long/short equity, event, distressed, activist, etc).
I have been to at least 10 of these type of funds and have never seen an ex sales trader except in the role of execution only.
definite yes to long/short
by wintonheightsdefinite yes to long/short equity and to distressed assets, dont know first hand of the other two. im talking mostly traders, i only know of one salesman that has done this.
i cannot speak for your 10 personal experiences, but moving to a HF is a very viable and popular exit option for traders. and to get more specific your HF role will be very closely related to whatever product you previously traded.
ask anyone at goldman who
by optionsplusask anyone at goldman who runs the show...definitely the traders
CashCow wrote: Wintonheights,
by untiltedWintonheights, have you ever heard of a sales trader becoming an analyst/portfolio manager at a fundamental hedge fund (i.e. long/short equity, event, distressed, activist, etc).
I have been to at least 10 of these type of funds and have never seen an ex sales trader except in the role of execution only.
Cashcow was talking about SALESTRADERS, not TRADERS.
very, very different.
of course the salestraders only execute. that's what they do back in their bulge bracket firms. their skillset is execute.
The TRADERS a.k.a. market makers, do have potential to be actual trader/investment analyst in hedge fund.
Philip Falcone, the man
by untiltedPhilip Falcone, the man behind Harbinger, one of the most famous credit/distressed shops, started in S&T
was a high yield trader at Kidder peabody, then head of HY credit @ barcap.
im sure when he was head of HY trading, he had to do client dinners a few times a week to bring in the flows. but there is also ton of fundamental analysis in HY flow trading. you constantly communicate with the credit research folks.
What are your chances of
by boutiquebank4lifeWhat are your chances of being a trader trader rather than salestrader or sales desk? Are you screwed if you don't get it coming out of the S&T analyst program?
Did you really use to work at
by Brown_BatemanDid you really use to work at a BB? I don't get how someone could have been so clueless about the markets side (no offence). Also, I think the lower GPAs on the markets side was probably a result of people taking more quantitative degrees.
.....................................
Financial Modeling Training
Guide to Finance Interviews
Brown_Bateman wrote: Did you
by RevslyDid you really use to work at a BB? I don't get how someone could have been so clueless about the markets side (no offence). Also, I think the lower GPAs on the markets side was probably a result of people taking more quantitative degrees.
The quantitative degrees was another reason I was going to point out. My class had people like MIT & Cornell Engineering/Compsci and a few math and econ majors, so you are bound to find lower gpas.
------------------------
Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
-30 Rock
I worked in PWM but perhaps
by boutiquebank4lifeI worked in PWM but perhaps you can explain. I'm also talking about incoming analysts and many of them did not have top GPA's and a top Ivy degree. Some had one or the other.
Why is there this delusion
by morningsoupWhy is there this delusion that traders make less money than bankers? They make more money and work way less hours. Just speaking to traders the pay scales are similar between S&T at the analyst level but when you start rising in the ranks, the pay starts separate real fast.
Don't get me started on prop desks either.
Not sure if this is true but I HEARD GET Co. starting analyst pay is 500k after bonus...Jane Street etc. The good thing about S&T is that it's not about connects but all based on merit since title in the prop desks don't mean anything. If you're a good trader as an analyst you can make more than the VP or MD.
Look at Andrew Hall, $100 million just from trading oil.
Second on the Goldman Sachs comment, ask them who pulls in the money, IBD or S&T?
Funny you should mention
by boutiquebank4lifeFunny you should mention that, since I worked at GS and the traders you're talking about are not the same as the ones i'm talking about (S&T analysts). Very few get to that stage and even become big balling traders.
500k starting aanlyst pay? I think that discredited your entire post.
i can't say for the rest of
by iluvhermionei can't say for the rest of his post but he actually may be right about the 500; getco starting is indeed around that from what i've heard. but yea, you're not going to get that high ever in ur first year as a BB s&t analyst.
Trading is more about raw
by CharmWithSubstanceTrading is more about raw talent than banking, which could be why some people are recruited with lower GPAs or lower "credentials" but show that they have the intuition/guts/natural intelligence to succeed at the job. Banking is teachable. If you're willing to grunt it out, you can do banking (at least at the junior levels), which is why banks are willing recruit non-finance majors with high grades because grades are just a reflection of how hard you work. Trading is about ability. Try teaching trading to someone who's never been exposed to the market in 8 weeks and see how he/she compares with those that couldn't keep their eyes off the market since they were 12 years old.
I quote what I heard from a
by chimptasticI quote what I heard from a trader at a BB take it as you may, in S&T people like kids top of their class from top non-targets (some of the schools you mentioned), more so than IBD because they spend so much time sitting on a desk with them daily. I haven't worked on a trading floor yet so I don't have an opinion on that but thats what I hear.
bump.
by Ruby Rhodbump.
______________________________
Freeze those knees, my chickadees!
s&T is more glorious,
by Batrick Patemans&T is more glorious, masculine, fun, its not mind numbing moron work, you have a very decent life, and make more money on average...and did i mention its fun
i dont know why anybody would choose IB over ST, unless they hate their life and want to give it away, for an hourly wage that is as good as a truckers..
That doesn't even make sense,
by boutiquebank4lifeThat doesn't even make sense, can people in the industry comment please and no more college/high school students?
S&T people come in two bags.
by EnteringRealLifeS&T people come in two bags. One is smart/mathy/quanty and the other is decently smart and a good socializer. There is money, but it depends which product. Munis = nothing other products = awesome. At the end of the day it's probably more fun then IBD could ever hope to be.
In IBD there's prestige ( i.e. the higher up you go you start walking around in fancy suits and talking things over with clients ). It's got the whole sophisticated country club feel to it, but obviously an insane amount of work/hours.
At the end of the day though, I've never heard of an IBD guy making $50mm a year. But that's happened in trading. The flow of money in trading is what led to GS being taken over by the trading guys.
However, if you're fired from your S&T job it's hard to land back on your feet. IBD guys can go work at GE or something.
If you're going to compare
by 1styearBankerIf you're going to compare the one guy who gets 50 million then how about checking out bankers like Moelis, Greenhill, Parella. Even Lorello's paycheck is a hefty sum. The top 1% of traders will always make more, but so do the top 1% of poker players. Are we going to compare Phil Ivey vs. banking just because around 50 guys in poker make more?
Banking means more exit ops and interesting work. You guys are also idiots if you think S&T is more interesting because ask any S&T analyst what he's doing. Here's a glimpse
"1. Check email
2. Get coffee
3. Conference call
4. Read news and research reports
5. Make phone calls and send IMs to clients to discuss relevant overnight events, trading flows and research ideas.
http://careers.bankofamerica.com/campusrecruiting/usfn-global-sales-trading-analyst.asp"
Don't get me started on sales. You are a middle office monkey sucking off clients all day and on the phones calling for information and relaying it with a "spin" to clients.
By next year I'll be in PE with a very high paycheck, job security, and working less hours. Not to mention most of the interesting work in hedge funds are done by bankers while the shitty ad havoc duty and execution is given to ex-traders. In the long run the banker lives a lot better. If you're going to be a good trader I would rather be at a top prop firm like Jane Street than at a bank.
does anyone know how you get
by jimbojones96does anyone know how you get into trading desk and not in sales? what if you get put in sales, can u transfer to trading? This is for BB's please help!!!
jimbojones96 wrote: does
by Revslydoes anyone know how you get into trading desk and not in sales? what if you get put in sales, can u transfer to trading? This is for BB's please help!!!
Well you specify what you are most interested in, and if its a SA, you hang out mostly with the traders. If you get put in Sales FT, it is difficult to transition to trading.
------------------------
Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
-30 Rock
Having worked on both the IBD
by eric809eHaving worked on both the IBD and S&T side - numbers on the S&T side recently are much better (especially at the top bucket level)
Exit Ops are less important because there are more promotion opportunities. How many of the 2006, 2007 analyst class are associates, how many of them are in PE funds and how many of them were fired and settled on something else.
Hours are much better on the S&T side, but the intensity is different.
Exit ops - A lot of guys move into HF or to other banks to grow/develop a desk. There is a lot of movement between different banks as well.
On the Sales side - it's the same as IBD on a senior level. If you own the relationship, you get paid. On the junior level, you're really just supporting the senior guy. The org structure is much more top heavy on the S&T side, meaning more promotion opportunities.
On the Trading side - it's about your ability to get a book and show that you can make money. The parallel with IBD is that no matter how good of a modeler you were, there isn't upward momentum for that type of role unless you leave. On the trading side, if you're good, you'll get paid and get more opportunities to expand.
eric you are discounting the
by 1styearBankereric you are discounting the later banker. Sales is first of all an easy bullshit thing to do.
VPs and MD's in banking have it much better than associates/analysts. Exit ops are not to be ignored either. PE/VC/HF are all easier coming out of banking than trading. fundamental HF's are a shoe-in. Not to mention its relatively easy going from IBD to S&T than the other way around. S&T pidgeonholes like none other.
The thing is, if you like the
by RevslyThe thing is, if you like the markets and trading, the fact that you are "pigeonholed" doesn't really matter... you're just a specialist in a product.
------------------------
Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard.
-30 Rock
iluvhermione wrote: i can't
by jjc1122i can't say for the rest of his post but he actually may be right about the 500; getco starting is indeed around that from what i've heard. but yea, you're not going to get that high ever in ur first year as a BB s&t analyst.
LOL. No first-year analyst at Getco is making $500K/year or anywhere close to that.