Could some people please elaborate on what Institutional Equity Sales and trading is? To my knowledge a simplified explanation is that they execute large orders for mutual funds, hedge funds, and other big clients to make sure the market does not take too big of a hit. How do you break in to this career? Is it desirable? What are the exit opps and pay structure?
Institutional equity sales trading
Institutional equity sales people and traders work with large institutions such as wealth managers and hedge funds and communicate ideas with institutions' portfolio managers and traders. The buy side analysts will also discuss the markets with these salespeople and traders and ultimately place their trades through this desk. They only work with equities.
So there are sales people, sales-traders, and traders. Sales people call portfolio managers and buyside analysts at mutual funds and hedge funds with long and/or short trading/investment ideas. The portfolio manager will have his buyside analyst look into it and if they like the idea they will place the order through the sales guy's desk by having their buyside trader call the bank's sales-trader to relay the order to the bank's trader. Also sales-traders will proactively make calls to buyside traders to try and get orders through their desk even if their salesperson didn't necessarily give them the idea.
Best way to break in is to get recruited from college after doing internships at the bank. Or you could get a job on a desk by applying to a boutique firm with a less rigid recruiting structure and if you do well could transfer to a bulge bracket later. Pay in sales & trading is basically the same as everywhere else in the bank. Also, good salespeople with a solid track record of money making ideas can become portfolio managers on the buyside. Traders can also work on the buy side in various capacities.
User @KevinNYC, a hedge fund associate, cautioned against having expectations of gaining a research background in this group:
Keep in mind that this is a flow based business. People often join this group expecting to learn how to identify and execute profitable trades. This isn't the place to learn that. You will learn about market mechanics, reporting, compliance, and sales. Don't expect to learn about alpha generation. This skill set is one of the least transferable in the bank and there is little hiring by the buy-side except for a few execution (and not discretionary) positions.
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