Credit Risk Analyst - My Experience

I've seen a bunch of posts recently asking about credit analyst and credit risk positions. I figure it's probably way past time for me to give back to Wallstreetoasis, so here's my contribution.

I'll start with my background - I graduated a few years ago from a decent college (think Hopkins/UChicago/Northwestern/Georgetown). I fucked around for 4 years, had no plans on working in finance, wasn't making my way down "the path" so many finance types seem set on, and was just living it up. Come senior year, I decided I should probably get a job and so started applying to everything I could find. I only had a couple shitty "internships" on my resume, but I had good grades, good SAT scores and got some alumni to teach me how to write a resume that didn't sound retarded. I ended up deciding between an analyst position at a MM investment bank and an analyst position at Goldman in the Credit Risk Management and Advisory (CRMA) group. I thought about my options, asked people for advice, looked at the numbers, and ended up going to Goldman against what seemed to be conventional wisdom on WSO. Looking back on it now it was the better choice. Ok let's get into CRMA at Goldman...

The Position:
First things first, since this is finance let's talk money. First year was $65k salary, $10k sign-on bonus, first year stub bonus under $10k. Growth would have been slow, probably GS. I think the position at Goldman is pretty unique in that analysts were usually assigned to work on three different teams at the same time. This was probably one of the best reasons to work in GS CRMA. Because of this, you could get good exposure working with other departments at the firm. There are groups for anything where you imagine we need to lend or where credit risk is an issue. Broadly speaking, there are Industry groups who worked with IBD, Product groups who worked with S&T, and a Reporting group that dealt mainly with regulation and worked with Market Risk/Treasury/random mostly non-revenue generating roles within the firm. Within CRMA, Industry groups tended to be the most highly looked upon. It was the only group that came close to actually generating revenue. Industry groups were aligned with banking groups - Natural Resources, TMT, Industrials, etc - and analysts were involved in making loans, advising on credit rating implications from M&A activity, creating internal credit ratings and reviews of companies they cover, and approving otc derivative trades that their companies do through Goldman. Product groups were closer to the markets, looking at trades to figure out how much credit risk was generated, setting initial margin rates or otherwise trying to make slight changes to trades to reduce the credit risk, and working with the Industry groups to decide whether we were comfortable executing these transactions with our counterparties. The Reporting team worked to determine the firm's overall credit risk, looked at what was driving changes in exposures within and across products and transactions, looked at capital levels, and worked with regulators. During the eurozone crisis the reporting team was working pretty hard getting exposures and commentary for everyone. You'd often see people focusing on their Product teams during market hours. It was fast-paced and exciting, though salespeople and traders could get pretty aggressive. Industry teams were slower, as the fundamental analysis could be urgent but on a different time frame. People with a higher Industry team allocation stayed relatively late; consistently working to around 11pm, while Product-heavy analysts could leave around 8 or 9pm. The Reporting team was cyclical, with heavy work at month-end and during major one-off projects, and steady work throughout. Reporting-heavy analysts tended to stay late also, around the same schedule as Industry-heavy analysts. When I was working in CRMA, analysts tended to have a 40%-30%-30% or 50%-30%-20% time allocation amongst teams, with the majority of time focused on one of their groups. Project management and managing managers was a very important skill. Most people were going at around 90% of max capacity at most times, and CRMA taught me how to really work. Maybe it was because CRMA was such an intermediate place where everyone was heading towards something better. Maybe it was also just Goldman. Nowhere I've seen or heard about has come close.

The People/Culture:
The analysts and associates had a lot of fun and would hang out a fair amount. We had an annual ski trip that ~25ppl would go to. We'd have drinks whenever we could. There was a trip to AC. We'd do fantasy football leagues and March Madness brackets. Everyone below the MD level was young and the atmosphere was really collegial, though intense. I made some great friends there.
The work culture was unfortunately very political. People strove to get good facetime with the MD's and the couple of partners.

The Exit Opps:
I'll focus on the people who were good. Mediocre people stay, become Associates then VP's, slow down and become lifetime credit people. As you get higher up you travel more, I think mainly for due diligence but maybe also go out with the bankers. It's a cushy job, hours get relatively easy (maybe 8:30am-6pm at the VP level) and I think there was a fair amount of coasting. Bad people get fired. I've seen some of the better people leave to do:
- Investment Banking at GS
- Sales at GS
- A distressed/loan trading group at GS
- Private Equity in Asia
- Business Development at a hedge fund
- Business School (Stanford, Wharton)

Ok, that's all I got for now, I'm outta beer and bored with this shit now. Hope that helped; feel free to ask about anything that I missed or that was confusing.

 
Best Response

I've got a few:

-Why do you think this was a better choice for you than IBD?

-Did you leave this group, or are you still there? Are you planning on leaving?

-how did you weight your different exposures to different silos in GS?

good post. interesting story that a lot of younger WSOers will benefit greatly from.

 
  1. What's your next step?

  2. In your experience, is the CFA required to progress in CRMA or not required at all?

  3. Have you seen people break in from what you would NOT describe as a decent college, i.e. much below the level of JHU? Have you seen people break in AFTER they have graduated from college and done something for a year (i.e. Ops at Morgan Stanley)

Thanks for doing this.

 

Haha nope. I go to the University of Utah. ever since Goldman moved part of their operations to SLC the local universities have been blessed to have Goldman "forced" to recruit on our campuses. TBH with you i'm not familiar with the FT or SA terms... full time? And yes, I am interested in going to a top MBA program 3-5 years down the road. I have an offer on the table to work with Deloitte but really am not familiar with career paths within credit risk.. so your advice helps.

 

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