Advice for Structured Products/Securitization IB?
I’m going into a FT role at a MM IB on the structured finance/products team (as an analyst on the banking side, not structuring). The team deals with MM CLOs and ABS (esoteric, consumer, auto, small business, etc.) primarily.
I did intern on the same team during the summer and quite enjoyed it, but as I’m going into the role full-time, I was wondering if there’s anything I should know about the space and what my career trajectory might be? Pigeonholing is something I’m concerned about and a possible lack of exit opportunities. If I end up not liking it, would lateraling to something more traditional like DCM or LevFin be feasible? I understand the structured role is very much asset focused as opposed to business oriented.
Also, are there any materials I should utilize to get further prepared for the roles? I’ve looked at many pre-sales, but if there’s any books to read or specific technical/modeling skills I should try and acquire, I’d appreciate any suggestions.
Thanks!
Based on the most helpful WSO content, here’s what you need to know:
Understanding the Space: Structured finance and securitization are highly technical and niche areas within investment banking. Your focus on MM CLOs and ABS (esoteric, consumer, auto, small business) means you'll be working on asset-backed securities, which require a deep understanding of the underlying assets and cash flow modeling. This is a specialized skill set that can be highly valuable but may also lead to concerns about pigeonholing.
Exit Opportunities: While structured finance roles are niche, they do offer exit opportunities. Common paths include:
Avoiding Pigeonholing: To keep your options open:
Preparation Materials:
Career Trajectory: While structured finance is asset-focused, it can lead to roles in private credit, asset management, or even broader IB roles if you position yourself well. The technical expertise you gain is highly valued, but maintaining a balance between specialization and generalist skills will be key.
If you’re proactive in building transferable skills and networking, you can navigate potential concerns about pigeonholing and keep your career trajectory flexible.
Sources: "Exit Opps" and the sequential nature of early finance careers, Exit opps for Structured Finance/Securitization?, Finance Career Path & List, Advice from people who left?, Just got an IB offer, how do I prepare?
Bump
What's the difference between Banking/Origination and Structuring in ABS, if you (or anyone else) doesn't mind?
Sorry for the late response.
From what I experienced, the bankers are more so involved in getting the deal documents finalized (mostly legal things), as well as helping with the loss analysis on the proposed basket of underlying loans. They’re also more involved in direct interactions with the issuer and prospective investors at roadshows, etc.
The structurer is involved heavily with the actual financial engineering of the securities (more “quant” ish role). They’re responsible for separating the various tranches based on the credit enhancement they might offer, as well as stress testing each tranche to see how much losses can be incurred (to avoid principal writedown and default) under many given scenarios.
Overall bankers/originators are much more involved with the market dynamics, helping to get the bond priced, legal documents, and talking to investors. Structurers are more involved with creating the capital structure of the bond, given its mechanics, and stress testing each tranche.
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