Working as a Prime Broker

Hi, I originally posted this in the IB forum but I think its better fit for here since a lot of hedge fund guys seem to interact with prime brokers.

Basically I've been researching different finance jobs, and I think prime brokerage might be a good fit for me. So I was wondering if anyone could give me any insight on what a prime broker's career path, and comp might be like, as I can't find any good info on it. Also what the like hours are like in comparison to IB.

thanks

 

I interact daily with different PB's that we use. From my experience it is very much like operations work at a hedge fund. Solving breaks/fails, helping with client requests. You are essential the fact of the PB to the client. Having said that, careerwise it doesn't really scale that nicely. After a few years you may be dealing with more important clients/manage a group of PB ops people and so on. I'd say for meaningful career growth beyond that you'd want to move to the buy side and do more ops work.

 

Hi above,

can you explain more why you think PB sucks?

i know PB serve as ops for Hf clients, do their asset servicing blahblahbah... but they also are rev generating with sales/trades/relationship mgr guys there who i read sits under the SnT umbrella and earn no diff to the normal SnT guys.

there is going to be a huge number of ppl doing ops/client servicing, it fit some people anyway, but not all.

can someone confirm/share that the "Front office" people within a PB actually does share good money with other in SnT?

thankssssssssssssssssssssssss

 

Cannot comment on the job or if it is right for you, etc, but I don't think any PB job would qualify as "FO" or similar to sales and trading (I guess unless you count PB sales - they people selling the services to HF). Think of it this way - it's revenue generating in the same way as working for KMPG (et al) audit is revenue generating - yes you charge hedge fund clients for the work, but the work is still not FO (KMPG = accounting). And you are not interacting with traders/FO at your HF clients. Not commenting if this is good or bad, etc, but the bent you have seems to be leaning toward a FO role - if that is the case, perhaps better to find a junior operations role at a HF (where you will have daily interaction with traders).

 

What exactly are you looking to do? And what appeals to you about PB?

Prime brokers service hedge funds in almost every way - they give them leverage (allow them to borrow $ to trade more), hold their securities and money, lend them securities to short, help them raise money from outside investors through capital introduction, and even help them with mundane tasks like leasing office space. PBs are basically a hedge fund's lifeline to running their business.

PB reps that we talk to answer daily questions from HFs on reporting, regulations, leverage, compliance, etc. That job is considered front office but isn't glamorous in any way. PB sales is a bit better because you're building relationships with PMs and HF executives to sell your PB product i.e. why GS PB is better than JPM PB.

It's a viable career path, but I don't think anyone should be coming out of college gunning for PB. But with that said, it's not a bad option either.

 

did PB in my early years, it was fucking boring as hell. my ex-co-worker at PB became assistant vice president almost after 10 years i left the firm (he was an associate and i was an analyst when we worked together). he got his CFA (bribed his way to let people sign off for the work experience part) and still can't move to any FO roles. in the meantime, i moved on - did 2 years of grad school, 4 years of IBD and now on my 4th year in PE. lol.

 

hey did you ex-coworker work in PB wt role? client rep/ Ops? , I can foresee its shiting boring, given all clients just touch you when they need you, e.g. where's my trade/ why that rate/ fail to login to portal etc. wt did you frd do ?

I think in PB MO, the best exit opp is buyside MO, aka client side. one shd not expect to become a "trader" , just becoz you know the goddamn MO work... its unfair playfield.

what do you tink is the true PB FO roles (by true yes I mean comps) the ones I know for sure is PB Sales, PB trader(margin,repo) .... all others (rep,CS,MO , wtever you call it) are ops. though some back listed them as Securities=fo, we know its not.

let me wt you guys tink

 
Best Response

These guys don't know what they are talking about. There are roles in PB that are worth it. Most people here are referencing the client service aspect of PB which is the worst role to go into.

The only roles worth it in pb are: PB Sales, Consulting, Cap Intro or Securities Lending. PB has become one of the most profitable businesses for the large banks.

Consulting - you are working with new hedge fund launches. This can include assisting in hiring, systems, risk, etc. Essentially advisory on anything a new hedge fund would need.

Cap Intro - Capital introductions to investors.

Sales - You face off with the client and help them in anything they need done at the bank. Need better sales trading coverage? Need better research sales? They can help coordinate.

Securities Lending - you can be a demand or supply trader. Essentially you either deal with getting supply from large lenders or provide demand for hedge fund clients to short.

Pay after gaining experience for these roles can start in the mid 6 figures and rise beyond.

 
trueballer:
Any ideas as to what kind of bonuses you can expect as a 1st yr analyst in Prime Brokerage? Are bonuses on par with other areas within capital markets? Also, how is the pay as you move up to associate, vp, etc... I interned on a PB desk and will be returning to the same firm (top 3 BB) as a fulltime generalist. I really liked the people I worked with, but not sure as to where the future of this area lies.

Thanks

 

If you are smart/dependable/have personality most likely you can work your way to one of the hedge funds you service. Starting base around 70K across the street. Cheers

 

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