Got an interview with Morgan Stanley's Prime Brokerage division. I read a brief description of it and I'm confused:
1) Is it a glorified ops position? 2) What's comp like? 3) It's not officially classified as a back office spot but how are you generating revenue (thus making it a front office)?
Thanks
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I dunno anything about the specifics of the job position or compensation, but in general, prime brokerage is front-office/revenue-generating: prime brokers keep hedge fund assets (capital which the banks use to lend/trade if i'm not mistaken), and also provide services to the hedge funds. For a firm like Morgan Stanley, this division used to at least be a very large moneymaker.
My roomate is in client services for a BB. Its back office, your servicing hedge funds and act as a portfolio administrator for the funds with additional capabilities such as securities lending and leverage services. Parts of prime brokerage are, Client services, Risk/Margin, Capital Introduction, Client Integration, and technology. I hear pay is good relative to the hours you work. Not much for exit strategies though. In terms of revenues they generate are from interest charged from their debit and short market value balances and also execution fees. Therefor I don't understand where the F/O comes in unless you can bring in balances from HF's. Good luck
Thanks for the info guys; any other input would be greatly appreciated.
How is mobility through different divisions at MS? While I think (or at least like to think) that I have other options, MS is a competitive BB, and it's just a summer stint. I'm just curious as to whether or not I can transform it into something more than just prime brokerage. I know companies like GS are extremely strict when it comes to mobilizing while companies like UBS tend to be a lot more lax as long as you prove yourself. Where does MS lie?
The PB sales guys can make over $1M. That aspect is definitely front office.
I interned there. It WAS great .. dont know what it's like anymore.. what team are you interviewing with?
Generally I would recommend avoiding Client Service. The networking was great .. the people I worked with there were well connected and introduced me to people in IBD and S&T .. PM me if you have any specific questions about PB. The comp was good when I was there but the world has obviously changed.
PB is different bc you cant really connect revenue to individuals. In trading, you have your PnL. In PB, once the client is signed, you just loan them money and stock and offer them many "free" services. Good luck
PBers work with HF ops
prime brokerage can make you a lot of money at senior levels. Especially when you have you start bringing in new hedge fund clients.
if the role is client service, that is effectively back office as mentioned above. avoid unless it is your only offer. transferring to front office from cleint service will be very very difficult (bc most guys in client service are kinda stupid and it has a bad rep). if you are sales coverage or origination, that is front office and can bring in solid cash at the senior levels.
there are also risk/trading type roles that can bring in good money and create nice opportunities. managing the overall risk of the client portfolios and your exposures is essentially trading. loaning cash against portfolios of asset collateral is like writing structured puts. not all PBs have much sophistication in this area, but MS does. although i know their PB business has scaled back a LOT ever since lehman went down.
otherwise its <abbr title="back office
">BOThe world has changed. And we must change with it.
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