Glencore vs Vitol
Quite a specific q but how do the two compare against each other in terms of comp, culture, trading style, etc?
Interested particularly in Europe and in the energy desks.
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Lol, are you juggling two offers?
Vitol probably has the edge on comp on average from what I have heard. More of a pure trading model for sure.
Glencore is from the Marc Rich school, relationships are the heart of the business.
Thank you. Can you clarify a bit as to the difference between a pure trading model and a relationship model? I thought relationships are key for all physical commodities traders.
Pure trading as explained below.
Marc Rich school meaning much of the physical business is still very old-school, not with a banking mindset like at say Mercuria. Mercuria will cut business lines they don't see an edge in fairly quickly. Glencore and Trafi will maintain size and relationships to catch the big moves when they come even if the dull years can be pretty dull.
Comp: like for like, Vitol pays better. But like for like is rare so you will find plenty of Glencore traders who get paid more than Vitol traders.
Culture: Ivan G has been banging on about how Glencore is no longer a trader but an asset manager. Vitol is trying to stay loyal to its pure trading DNA but it's also moving in the same direction. FWIW, this is a common trend amongst the big players. Trafi loves describing itself as a 'mini major' these days...
majors are not paying bonuses this year though, and probably next year as well
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They issued a press release last year starting off saying they are not a major “but...” - and then you had pages of how they are building up, their EnP, taking large scale positions, looking at longer term profit and generally how they want to act like Shell.
Can anyone provide any insight on how Trafigura compares to the two? Are they more like Vitol or Glencore? In terms of strategy/culture/comp etc. Thanks
Trafi is more like Glencore in terms of biz approach.
Culturally it's very cutthroat. There's a reason why they call it the place set up by people who thought Glencore was too morally restrictive...
Also has a rep of underpaying pound-for-pound against its competitors.
Thanks for the insight
Definitely very cut throat, selfserving as well
Also at Traffi you'll never be a trader through their graduate program. They only hire experienced people. Vitol you'll start as a Commercial Analyst where you'll do ops first and then slowly over a few years move into a trading desk. Glencore has a rotational program but if I'm not mistaken you can get hired as a junior trader on a desk as well. In terms of culture what I hear is Traffi is the most cut throat of the three.
As entry into commodities of you're not going for the TDP of Shell/BP then I'd say in order of preference: Glencore, Vitol and then Traffi.
Also for Glencore specifically, given in recent years the margin in the oil business has been decreasing they are focusing on generating a profit form origination or investment into asets (terminals etc).
Thanks for the info
I have a serious question. Why would Shell and BP not be as cutthroat? Is it just down to culture and risk tolerance or something?
Also what is the logic behind Trafigura being notoriously cutthroat and also underpaying? Idk, it just seems like it would make more sense for them to pay the best.
Shell & BP are oil majors. Trading is just one of their revenue streams. For oil majors the major revenue stream is their upstream. When oil is high the upstream division just simply prints money leading to booming profits. Trading is part of their downstream business. If you look into their financial statements you'll see in good years downstream does not make nearly as much money as upstream makes. However, trading/downstream is like a hedge against low oil prices. These divisions come to life when oil prices are down and upstream is not making much money. That shortfall is made up the trading/downstream. So though there is a pressure to perform in trading at major oil majors because you're being paid to take risks its not exactly a eat what you kill kind of environment.
For trading houses without the upstream business they need to make sure trading secures oil for their assets like blending plants and that their product traders are able to find homes for their product. Lets take Shell for example. They are one of the major producers of one of the gasoline components used for blending. The component being produced by their refinery can be first diverted across their own systems and the excess can be sold on the market. Traffi has a system but not as extensive would be my guess. So any product that they are producing even as by product that they cannot use they need to trade them out.
Combine such an environment with a culture that from the beginning has been about making money with people willing to push the boundaries and you end up with cutthroat trading houses.
Also Traffi pays their traders really well if I'm not mistaken.
I would say the comparable to the broader trading business is majors (Shell, BP, Exxon, Chevron) = banks and trade shops (Vitol, Trafi, Glencore) = HF. The majors (ex-BP) generally don't run the spec risk that the trade shops and funds run. Further I would say the seat matters more than the firm but generally would say people move to Vitol/stay there more so than at either Trafi or Glencore.
I agree with BP and Shell having better cultures. I'm not 100% sure of the reasoning, but they do actively promote a better culture than most places. I've seen bonuses tied to how enjoyable the person is to work with.
It’s really impossible to talk about comp, because it’s so political and really varies so much.
At the trade house i was at, i saw a mid level guy running a book make 20mm, and he got 300k bonus. A more senior guy who’s been at the trading house for 20 years ran a desk lost money overall, but lost less money than the guy before him, and rumor was he got 3mm. Moral of the story is that pay varies wildly and things are less linked to performance than you think they are
Can I ask why you switched from commodities to fixed income? I went the other way around
At one of the firms mentioned in the post and it seems that HF can pay more
Please tell me that’s not a common scenario.
I’m at a macro fund so we do everything, not just FI
outside of compensation, i found the idea of trading 1 product really really boring. I couldn’t imagine spending 35 years only trying to predict where soybean spreads will go.
Where does Mercuria and Gunvor stack into the group among Glencore, Vitol, and Trafigura?
Mercuria and Gunvor are good places to work.
They are excellent places. Newer which is probably why they aren’t treated - in the layperson’s eyes - together with the other three. But will nonetheless be stronger in some commodities - in mine (LNG), Gunvor is top notch, certainly stronger than someone like Glencore.
They are also smaller which means that a lot of their growth is poaching, rather than organic, but this occurs across the industry.
What is the best approach to getting onto a trading desk with Mercuria or Gunvor in N. America?
what about castleton or freepoint?
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