Jun 08, 2022

Credit Risk to FO

Just want to confirm if there’s anyone out here who went from Risk to FO (S&T, IBD), and if you could share your experience during the transition.

Just want to know:

  1. What were the options available, given experience in credit risk.

  2. Any bias against for the members of the middle office that you overcame in landing the lateral transition.

Apologies if this doesn’t make sense.

 
Most Helpful

I went from summer analyst risk quant (although desk was in credit) to s&t, might not be exactly the same.  I think s&t probably more natural transition as you will probably have lots of exposure to s&t through your role (talk to the credit traders / structuring team). There are some teams in s&t (especially in credit work e.g. CLO) which are more like IB - work is deal based, focus on origination/structuring a great deal & winning business. If you have modelling skills (maybe even risk modelling skills depending on team) this could be a really natural place to move. Always will be some bias towards MO but it will only get harder to move as time goes on and you progress in the MO role. Can't really speak for IB on this but I imagine if you're polished and can show modelling skills/interest then you'll have a shot.

My advice would be to network hard - bank made me reapply to s&t including hirevue etc.. only way I got to final round was an s&t MD I met who liked my background & skillset & referred me. I spoke to maybe 20-30 people outside my team during the summer. Also have a solid story down about why you want to be in s&t, you will have to tell it 100 times to everyone you meet so make sure its good. You know when you're on the right track when people you speak to say 'yea makes sense' or 'sounds a bit like what happened to me' etc..

 

I've seen moves to front office risk and pricing functions (not really s&t but within markets). Hires from middle office to trading is pretty common however the general preference outside of laterals is people who already have domain knowledge (ops, product, tech, quant etc). If you have frequent interaction with a desk, a move to it should be very doable if you network well.

 

I went from ~2 years in credit risk to IB analyst in levfin. Honestly the conceptual portion of the work is extremely similar, but it does require a bit more people skills (much more sitting in on meetings with client, especially as you get promoted). Overall, very glad I made the switch. I think the most natural transition from credit risk is into either LevFin or DCM (maybe financial sponsors group) if you’re looking to break into IB.

 

I made this move and don't regret anything about it. I lateralled internally and for me it was a seamless process since I had my existing bosses advocating for me and there was a need in the team I moved to. Each situation and firm is different, but I think it is relatively easy to make this transition.

There are plenty of people in banking who start out their careers in other fields, many of which transitioned in from MBAs, especially at the MD level. So much of this forum is focused on things from an analyst perspective that I think it skews people's perceptions about the realities of a career in banking and what is or is not doable.

You can position your experience by focusing on product teams / industry teams where you have the most experience from a transactions perspective (e.g. if you are doing many lev fin transactions lev fin is a natural transition, etc). I personally was more interested in an industry team so I moved there, but I would say I have known a lot more about credit (bonds, term loans, etc) than my peers that has been helpful in various aspects of the job (LBO assumptions, advising on debt options, etc).

I had peers who were focused more on the trading side move into roles in teams they were working directly with as well. All options available, but most likely the move will be based on what is the most natural transition from what you are doing in your credit role. The reality is after a few months on the job all people care about is how well you are doing, they don't care about where you went to school or what your former roles were.

 

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