Accepted Offer for S&T. Downside to applying to Buyside?
Did a summer internship at BB S&T. Got offer to start after graduation. After summer, took on a part-time internship at a big HF doing research and random tasks for PMs who need info. I want to work somewhere like that some day.
An experienced bank friend told me to gtfo of S&T and start applying to all HFs to do the same thing I was doing as an intern.
Some of my other friends tell me that starting at a bank is a good way to start a career, perhaps better than starting directly on buyside because of all the contacts I would build. Plus the unstructured buyside "training" might not be good for the long term.
I know getting offer to start at buyside straight out of school is very rare, but is there any downside to trying? Is it possible/likely that my bank would find out that I am looking so soon, even before I've really started there? And what if I did get an offer, would it be horrible to leave the bank so soon? Should I just stay content with the offer I have?
Depends on your long-term goal to work in S&T or buyside.
If you've signed the contract, reneging a contract may put you on a blacklist
Depends on what kind of research you'd be doing / mentorship you'd get at the HF. If you want to do fundamental analysis and can get taught this at the HF and do it regularly this is worth considering. This also depends where you get placed within S&T - i.e. if you'll get exposure as a desk analyst or something on the credit side maybe that's a better opp. Overall hard to generalize without knowing 1) style/size of HF (which seems like you don't really know latter yet), 2) where you are getting placed in S&T, 3) and what you want long term.
id say if you ahve the chance to go for something that you know you want to end up in then do that. No point in going a long road. You will learn waht you need to along the way. You will gain MUCH more contacts working on the buyside. As a trader on the sellside only contacts i made were inter dealer brokers, on the buyside I talk to guys from every major bank, meet company management on a weekly basis, get to meet other investors at conferences, have all research and trading on the sellside as a resource etc. I find people who say go S&T first are those people that just like to pass on information without actually analyzing the situation in a way.
Agree with derivstrading. As an "experienced bank person" myself now looking to transition to the HF side, I would give a leg for the chance to move to a HF now, much less start at one out of college. S&T is dying and you won't learn much, if anything at all. We have a junior guy on our desk and I can't decide if I feel sorrier for him or for myself.
Hey, to start on the sell side S&T, with possible aim to eventually end up in a HF let's say 5 years down the line. Would you recommend to start on FX options or Rates/Credit structuring? Thanks!
Structuring in S&T is a very niche skill set and will be a very hard sell to most HF's. At least FX options trading is very marketable to macro funds (not to mention very interesting, in my opinion). If you want a fundamental HF then neither of those will work. You should do IBD instead.
@whalesquid123: given that you are working in trading - what product classes do you think are dying and what products still provide attractive pay/learning/exit opps? Is it EM/HY or rates derivatives because of less liquidity? Would love to hear your insights man, especially now, when I still have the chance to do an MFin and jump to the IBD side (lol)
@Dawg-nuts: you posted quite a few insightful comments in my thread about BB S&T and I actually thought that you were already in the industry, but you seem to be indecisive too in terms of IBD vs. S&T?
Try to do rates options or FX options - juniors on those desks seem to be heavily recruited into junior trader positions at macro funds. You will learn more there than on any delta one desk. Getting on an options desk should be the highest priority (tied with the quality of the people), ahead of even the firm prestige (means little in trading). For example, Citi FX options over GS cash equities.
I'm already in S&T, I just actively seeking opinions from someone else with more experience than I do
Agree with many points in the thread. S&T is a dying business, some desks more so than others, but the industry as a whole is going away. The only guys I know in S&T that are truly enjoying what they do are the guys on the proprietary trading side, that only handle proprietary trading and absolutely no market making. You will probably be doing some form of market making and these days from what I hear, that mostly involves monitoring systems and algorithms as well as some client facing.
Go to the hedge fund, not sure what you're talking about regarding "unstructured" formation. It'll be far more interesting, niche, and beneficial to your long-term career in portfolio management than the broad training you'd receive at a bank.
whalesquid123: Thanks for your helpful response!
EnergyHOU: hard to imagine that the very division once accountable for 80% of a wall street investment bank's profit is "going away". But please help me understand: If S&T as a whole just disappears, whom should institutional and alternative investors buy from and sell to? Whom should corporations turn to to hedge their FX/oil/rates exposure? Who should package and sell structured products that give investors exposure to whatever they want? The whole systems would be quite disfunctional without S&T ans an intermediary don't you think so...
S&T absolutely does no account for 80% of an investment bank's profit, that is insane and I'm not sure where you're getting that number.
When I say "going away" I don't mean the industry is going away, I'm saying the business you think you're going into is going away. The days of you managing a hundred plus million dollars on the desk, managing proprietary positions for the bank, etc. are over. A lot of the guys I know in S&T are doing mostly systems monitoring on the market making side and handling client calls where and when necessary. It's just a different business, especially since 07-08 with the implementation of the Volcker Rule. All I'm concluding to essentially is that if you're going to S&T because you want to "trade", you will be deeply disappointed, once again based off what my contacts tell me (nearly all of them are trying to get out). I don't think the experience is bad, just don't get trapped.
Youre basically right, but to clear up some things...
Traders aren't just monitoring system's or handling client call's. What traders ARE doing, and a lot more of, is agency trading. Simply put, matching buyer's with sellers. Desks can still essentially place a prop position by disguising it with Bid-Ask (high bid if you want to buy, low ask if you want to sell), but this is becoming a tougher feat with regulation. Before I left the desks, management considered the best trader as the one who rcv'd the most riskfree trades (agency); not the guy who actually was the best at 'trading'.
This is a vastly different business model than 10 years ago. Back then, management didnt care how you made money, just as long as you made $$$. You could go days without trading with a custy, but as long as you made money, no one batted an eye. Hell, My old mentor was a credit trader and he told me that he even had SPX and other equity prop position's in his book. Unfortunately, these wild and fun times of the trading desk appear to be over.
Thanks for your clarifications. Well I might have confused profits with revenue, but I definitely heard from different sources (including Greg Smith who wrote "Why I left GS") that for a considerable period during the 2000s, S&T has accounted for the bulk of a bank's income.
And in terms of being deeply disappointed - I have absolutely no expectation to come in and start punting; in fact, I would 'like' to do client business, but with a good amount of risk managing involved, so that I can use my brain to run the book, instead of putting everything into a machine and playing babysitter. That's why I asked about asset classes that still provide that kind of learning opportunity.
Now that we've mentioned FX options, Rates options - what other products you think are still intellectually stimulating?
Agency is the formal term I was looking for, thank you.
I think overall everyone appears to have a solid mindset about the business and the right motivations, so on that basis you can't lose. I didn't want to appear like the downer of the group telling people to run away, I simply wanted to point out facts about the industry and how it has changed since early 00s. Best of luck guys!
Anonymoose Hey, thanks again for yor helpful contribution :-) You're right, generalizing S&T is definitely pointless as it seems. MBS/ABS sounds quite interesting - what kind of background did traders on your desk have? UG/MS/PHD? As I can imagine that securitized products require a fair amount of quantitative aptitude.
EnergyHOU Thanks and just to make it clear: I think nobody should come here to just get to hear what he/she wants to hear, and it is the critical assessments and views that make boards like this actually valuable for prospective candidates. Best of luck to you too!
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