Glencore - IPO

Has anyone seen the enourmous amounts of money that Glencore partners will be worth post the IPO. Ivan G himself could be worth c. $9B and some other partners (fellow South Africans like Stuart Cutler) will also be paper billionaires. Lower level partners will be worth hundreds of millions and there are a few hundred of these.

Glennys is (maybe was pre-IPO) an amazing place to work at work at. If one could hack the tough culture and make it to trader status it seems to be a far better place to work than any BB. The guys I know personally that work there are not partners, but they make way way more than most BB traders. Most are very unhappy about going public. Public scrutiny is unlikely to help comp.

I don't know what the point of this post is. But I know I should have become a copper trader at Glencore. If you don't mind buying into the culture, being stationed randomly in the DRC or some other undemocratic hellhole, dealing with dictators and entertaining clients at strip clubs then this place is the road to richest.

Screw Goldman Sachs. I'm going to trade alumina or coal at Glencore.

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Comments (30)

Apr 21, 2011 - 7:41am

is glencore all prop trading like Trafagura?

"being stationed randomly in the DRC or some other undemocratic hellhole, dealing with dictators and entertaining clients at strip clubs then this place is the road to richest." ?!? joke?

Apr 21, 2011 - 7:55am

No. You trade physicals mainly. Like the actual mineral you are dealing with. They own assets too now - like a copper mine in the DRC or Peru, Shanduka coal mine in SA. etc. No its not a joke in the slightlest. Since you are trading physical product you need to visit the mines and understand the logistics very well. To make trader you start in logistics or ops.

Client service is paramount. To keep chinese clinets happy and get deals done I have heard they will do things like organising protitutes. They source minerals in countires where others fear to tread - hence head of hellhole state relationship building. Its cowboy stuff. A machine of a firm extremely well run.

Apr 21, 2011 - 6:25pm
safricactury:
No. You trade physicals mainly. Like the actual mineral you are dealing with. They own assets too now - like a copper mine in the DRC or Peru, Shanduka coal mine in SA. etc. No its not a joke in the slightlest. Since you are trading physical product you need to visit the mines and understand the logistics very well. To make trader you start in logistics or ops.

Client service is paramount. To keep chinese clinets happy and get deals done I have heard they will do things like organising protitutes. They source minerals in countires where others fear to tread - hence head of hellhole state relationship building. Its cowboy stuff. A machine of a firm extremely well run.

if this is true, going public will kill the firm

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Apr 21, 2011 - 10:31am

no one hears abotu them because they are private and based in Baar, Switzerland. This is a $145B operation run from the middle of the mountains. But now that they are going public I feel like there will be a lot more public scrutiniy, especially since they will be very agressive in N.Resources production and logistics

Apr 21, 2011 - 10:45am

oh ok revenue my bad. The traders I know there say hq is in zug. Maybe they changed that just prior to going public - though I'm not sure why.

Apr 21, 2011 - 11:42am

Yes, depends on what's in their prospectus. They are also a Swiss based company, so I am sure they can figure something out, unlike Goldman who is in US and heavily regulated. I am not sure about the college grad flocking to Glencore, but I could say the work is a lot more hands on, entrepreneurial, and require an indepth understanding of the world. I know that sounds a little cheesy, but you need to know ports, ships, types of oil, gas, leaders, politics, new projects...everything and anything which affects the commodity from getting it out of the ground to the inventory of a major/end customer

Apr 21, 2011 - 1:58pm

Those of you who haven't heard of Glencore before need to hit the books. This IPO is a huge deal and has been all over the FT for months. I wonder if Marc Rich will get anything from this.

For some background info: http://en.wikipedia.org/wiki/Marc_Rich and http://en.wikipedia.org/wiki/Glencore_International_AG

Trafigura and Glencore are successor firms to Marc Rich's firm which he founded after leaving Phibro. Glencore has since diversified from trading and now owns substantial mining interests. Needless to say, the past few years have been rather kind to the firm.

Apr 21, 2011 - 2:31pm

I had an interview with them a few months back for a London-based Junior Energy Trader position (didn't make the cut for 2nd round, though), I was quite impressed with what I'd read, talked to and heard of them, though. Yes, if they had hired me on the condition that I would have to work in the remotest, cheese-y-ist corner of a long-forgotten canton in CH, I'd do it in less than a f'n heartbeat...!

Seeing them poised to rake in their billions now, dammit, I should have battle-prepped like crazy for that interview, they'd be compelled to make me an offer...

Apr 21, 2011 - 2:39pm

What kind of things did they ask you? One guy I know asks candidates if they would postpone their wedding if a client needed them. Answer no and you are dinged. Not sure if that's just him though. I've got a few connections there so might be able to get an interview - so if you could give some info on your experience that would be great.

Apr 21, 2011 - 3:44pm

No, Marc Rich will get nothing. Glencore and Trafigura were formed from an MBO of Marc Rich AG in the earlier decades. And, while he'd like the $$$, he's already a billionaire so I don't feel too bad for him. Even though the charges against him were completely illegitimate (the tax evasion and his trading with Iran was not illegal), so he, IMHO, is entitled to $$$.

Reality hits you hard, bro...
Apr 21, 2011 - 3:46pm

What person, who wants to be a commodities trader, wouldn't wanna work for Trafigura or Glencore? Now with the (limited) IPO, I may have to focus on the former, so when I make Partner I can get maximum $$$$$. lol

Reality hits you hard, bro...
Apr 21, 2011 - 3:56pm

During the PE boom, the partners cashed out and went public at the top of the boom. Anyone think this might be a similar situations? Commodity prices have been rising for a while now, and these guys might be cashing out now before an impending price collapse. Thoughts?

looking for that pick-me-up to power through an all-nighter?
Apr 21, 2011 - 6:46pm
<span><a href=//www.wallstreetoasis.com/finance-dictionary/what-is-london-interbank-offer-rate-libor>LIBOR</a></span>:
During the PE boom, the partners cashed out and went public at the top of the boom. Anyone think this might be a similar situations? Commodity prices have been rising for a while now, and these guys might be cashing out now before an impending price collapse. Thoughts?

I think this might be the sign of a top in commodities. We're seeing early signs of demand destruction and with the end of QE2 in sight and rising rates, the future of commodities is murkier. However, I could see some of the younger partners making out like bandits once secular forces push prices into even headier territory possibly as soon as later this decade. Will the increased scrutiny of being public and the appeal of commodities erode their competitive advantage? Wait and see I suppose.

Apr 21, 2011 - 6:05pm

The questions she asked me were on the general side like background (1st adult job: runner in pork bellies at CME for a huge commodities trading house), trading experience (primarily fixed-income and index-options for algo prop firm) education (undergrad +2 master's). What I thought of Glencore, what I thought they did, how I thought they did it, etc. Just your basic meet-and-greet, can-we-mesh, should-we-go-forward, stuff, no messy, trick-y, "how many golf-balls can you fit into the Pentagon"-type questions (yes, I got that question years ago for an assistant trader position!)...

My (brutally honest) personal assessment: I may have had, and brought, the steak, but I didn't make it SIZZLE for them in the interview, therefore my candidacy "fizzled"...!

Good luck...!

Apr 21, 2011 - 6:11pm

Oh, yeah: Trafig kicked back a rejection email to me so fast it made my head spin. Well screw you guys! {sniff} Who wants to be billionaire Swiss commodities trader, anyway (sob)

Apr 21, 2011 - 7:16pm

"Prostitutes?" Dammit, I knew I missed something in that interview...! I should have told her about prostitutes...! Never mind arbitrages and all of that nonsense, I could've rolled in there like Pimp Daddy: "We got ho's in different area codes" I would've snagged that spot easy. Crap. :-]

Apr 21, 2011 - 8:36pm

Yip while BBs entertain buysiders over lunch or a sports match these guys take their clients to the best prossies and strippers if they believe that's their thing. The chinese guys sourcing coal from south africa are apparently into that.

I think what may have got you through would be a demonstration that you would do absolutely anything - prostitute you mother for example - if this was a logical way to make money for the firm.

Apr 21, 2011 - 9:56pm

Your thing about the way Glencore "services" their clients isnt like uncommon. I know for a fact that my father brought his clients at Marsh and McLennan, Aon, and NearNorth (a private company) to prostitutes, went to bars, strip clubs, and some clients did drugs. This was in the 80's and 90's, but I don't particularly feel that it is going to hurt them. As a stockholder I really don't care what they do, as long as it isn't company policy (so the company couldn't be prosecuted) and they have good returns.

Reality hits you hard, bro...
Apr 21, 2011 - 10:22pm

Alot of that is still very common when doing business in Asia and Middle East still.

Also remember that even in like 2 years before the crisis voice brokers were famous for taking NYC rates and fixed income guys to "massage parlours" as apart of the entertaining.

Just because Wall Street is prudish and cant use corporate card for that kind of fun anymore, doesn't mean it don't happen elsewhere.

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