Can someone help me understand what this role is?
I'm currently a back/middle office analyst (trading operations) at a BB and I have the opportunity to move into a front office team called "Credit Solutions". I recently spoke with someone about the role, but I still don't quite understand what the role is. It looks like credit repo trading, but I can't really tell. Here are the key factors:
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Our primary clients are PE firms and hedge funds.
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We lend them cash in exchange for securities. The securities are usually ABS, MBS, CMBS, CLOs, loans, etc.
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The maturities for these transactions are usually 1 month - 6 months long.
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This specific team in the bank has a multi-billion dollar portfolio of this type of financing (credit repo financing)
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This team is also responsible for collateral management and sending out margin calls to its clients
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Day to day management of underlying assets (pricing, haircuts, etc)
That's about all I know about the team so far. I feel like the bank keeps the securities on its book (thus the giant portfolio), so I don't believe it is trading because they didn't talk about market-making or having a P&L. Overall, it seems like the main goal of the team is to provide financing to our HF and PE clients. This team is definitely a profit center and reliable source of cash flow for the bank.
Has anyone heard of a team like this? I would appreciate any insight from anyone who knows what I'm talking about.
Without going into unnecessary detail since it sounds like you understand repo, it definitely basically sounds like the bank’s credit repo desk. I haven’t worked in that group but with some familiarity and having worked somewhat adjacent imagine you’d be working on a team that prices repos (both cost of funds and haircut) and coordinates with the sales coverage for the various funds / internal risk people on risk management etc.
Yes, this definitely sounds like what they were telling me. So would this be considered trading or no? I feel like I would be making trades, but I won't be considered a trader. Also, is this a legit front office role?
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