I'm going to describe my specific situation here, but to a certain extent, I think this thread could be relevant for anyone with a buyside trading background who is thinking about what their options outside of HF's might be.
I’m a VP, currently working on a CVA desk at a major foreign bank, and have been in the role for nearly 2 years. Prior to this, I was a prop trader (mainly focused on credit, but also did some equities) at the same shop for about 5 years. I also have an MBA (top ten but not HSW).
I discussed my move from prop to CVA in a response I gave someone in another thread just by way of introduction since I’m new to WSO, but in short, it was simply because prop trading is being regulated away by Dodd-Frank / Volcker rule so our desk was shut down and personnel moved. I’ve had a several opportunities to join hedge funds over the years, and have strongly considered doing just that, but what’s kept me at the bank (one of the major foreign banks) is that I’ve felt there is more opportunity to move around and gain new experiences in different areas. This appeals to me, and on top of that, I am interested in managing a business down the line in my career rather than simply being a line trader/investor (a division head type of role), so again, it has seemed to me that it makes sense to stay with a bank. And just to add, while I certainly wouldn’t say that I’d ignore comp in my decision process, it’s not the main driver as I’ve been comfortable enough with that.
What I was hoping to gather is feedback on my options at this point in my career as I am not leaning toward staying in CVA for the long term. I have some thoughts on this, and I’d really appreciate anyone’s input on 1) whether I’m reasonable in my views; and 2) whether there are any other things I should consider at this point that I might be missing. I’ve ordered them by how strong of a candidate I think I might be viewed as, not by my level of interest.
1) Move to a HF. During my time as prop trader, I produced solid results, always returning over 20% (and this includes the tricky ’08-’10 period that collectively is a good indicator of skill, where perma-bears and perma-bulls both got run over). So I traded credit successfully during the credit crisis, down and up. I think between my results and the contacts I have, this is a reasonable option (and I have periodically received informal inquiries from guys I know about joining their shops). But as I mentioned above, I’m keen on running a business line when I have more experience, so moving to a HF doesn’t necessarily fit in with that long-term goal and therefore I wouldn't say this is my top choice despite it being what could be the best fit with my experience.
2) DCM or Debt Syndication. These seem like a very natural fit to me in the sense that I know both the credit and rates markets very well and have good experience / track record from the investor’s side. I also know I would enjoy working with clients and do this well (as a CVA trader, our own sales/marketing group can be viewed as our “clients” so in a related sense I have experience with this).
3) Leveraged Finance on the IB side. This seems like a good fit because I have highly relevant modeling experience from my prop days as I was active in the HY and distressed markets. Again, I’d bring the investor’s viewpoint to the team, with a solid track record. This also fits into the client-facing role I believe I’d enjoy so I think this could be my top choice if presented with all the options.
4) Coverage IB. From the prop seat, I did a decent amount of work on event-driven strategies, so I have experience looking for opportunities and doing the related analysis across asset classes. I have never run a deal team, but again I think the prop and general markets experience would presumably make me a great MD down the line because I certainly “think like an investor”. But VP, maybe not so much.
5) PE. I summered at a PE when I was in b-school (got an offer but didn’t like the shop). This has some appeal to me but it’s ranked last here because I’m not sure how well-viewed my experience would be at a PE shop. Without any doubt, I’d be looking at a post-MBA associate role rather than a VP-equivalent position.
One thing not on my list at all is going to sales or a sell side trading desk. I’m confident I could do either of these, on both IG and HY, but I really am looking for something more strategic and transaction-based.
Anyway, apologies for the long post but there was lots of stuff to mention here. Any feedback would be greatly appreciated and would benefit anyone else with a prop background who is thinking about other paths. This is all part of my process of figuring out what to do next, and I believe I’m getting to a crossroads in my career so the next move will have to be a smart one.
