Top BB FX/Rates Sales >> Macro fund... Possible??

ah's picture
Rank: Senior Orangutan | 431

Is it possible to go to a macro fund (or any hedge fund for that matter) from a sales role?

Will certainly be difficult I understand, but not even from macro sales?

From my understanding that's the most market-related sales role...?

What's an easier conversion, Macro Sales >> Macro Trading OR Equity Derives Trading >> Macro Trading?

Thanks all!

Comments (72)

Jun 30, 2011

Not to say this is normal, or likely to happen, but I have heard of a rates sales guy moving to one of the major Global Macro hedge funds to manage their rates book. This is hearsay tho, so I wouldn't say its a definite. Suffice to say, if you are in rates sales at DB/GS/Baccap you are in touch with the market, and everything is at least a possibility.

Again, I make no claims this is true, just what I heard from a buddy's rates coverage.

Jul 2, 2011

Thx.. anyone else have any insights?

I don't accept sacrifices and I don't make them. ... If ever the pleasure of one has to be bought by the pain of the other, there better be no trade at all. A trade by which one gains and the other loses is a fraud.

Jul 2, 2011

I've seen a sales guy with like 15 years go into a hedge fund trading credit products.

Jul 3, 2011
HarvardOrBust:

I've seen a sales guy with like 15 years go into a hedge fund trading credit products.

ralph cioffi?

Jul 3, 2011
threatlevelmidnight:
HarvardOrBust:

I've seen a sales guy with like 15 years go into a hedge fund trading credit products.

ralph cioffi?

Nope

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Jul 3, 2011

If you're doing sales in rates, currencies, or commodities at a top BB group, switching to a macro fund is definitely feasible. No idea how common it is, but i've heard of a few guys doing it. You develop relationships with major buyside clients, and you have a pulse on what's going on in the markets. Pretty useful skillsets.

You should check out the linkedin profiles of the employees at the funds you're interested in and see what their background is like. Linkedin can be quite useful in this regard.

Jul 12, 2011
Brady4MVP:

If you're doing sales in rates, currencies, or commodities at a top BB group, switching to a macro fund is definitely feasible. No idea how common it is, but i've heard of a few guys doing it. You develop relationships with major buyside clients, and you have a pulse on what's going on in the markets. Pretty useful skillsets.

You should check out the linkedin profiles of the employees at the funds you're interested in and see what their background is like. Linkedin can be quite useful in this regard.

Yeah rate & currencies sales... Just wanted to know if in general at least sales role in the macro space is looked at differently from sales roles in other areas, say, cash equity & equity derivs...

Thanks for the info!

I don't accept sacrifices and I don't make them. ... If ever the pleasure of one has to be bought by the pain of the other, there better be no trade at all. A trade by which one gains and the other loses is a fraud.

Jul 12, 2011

Do something macro related. FX, rates, EM, etc. It's incorrect to say bankers are the ones who go to the buyside. They are the ones who go to the FUNDAMENTAL, L/S, OR SIMILAR TYPE OF FUNDS.

Jul 12, 2011

not unusual but usually you stay in the product group you are trading ie if you are on a commodities desk you can really only go for commodities hedge funds while nat resources IBD guys can still go anywhere

Jul 12, 2011

Yes, you can make that move down the road.

Jul 12, 2011

Less conventional for S&T to go to certain HF strategies like fundamentals, but there are specific funds that specialize in short-term trading or trading a product like MBSs

Jul 12, 2011

Usually what happens is that say if you traded HY corps in S&T, you then could move to HY corps at a hedge fund as a trader for example.

Jul 12, 2011

You're incredibly broad in what you're asking. It would help if you told us in what exactly your experience is.

Jul 12, 2011

"corporate credit"=?

Jul 12, 2011

A HY desk analyst. I am looking to make the move to a hedge fund.

Jul 12, 2011

You should be an obvious candidate-I am surprised you haven't had headhunters reaching out to you? You should put out feelers with the buyside accounts you talk to as well.

Jul 12, 2011

"If I was creating the perfect macro PM I would start him on the money market desk at a sell-side bond dealership..i think interest rates are the building blocks for all the markets and they also in my opinion require the most specialized knowledge. Once you really understand the mechanics of the rates markets it makes everything else much easier. Unfortunately this type of job no longer has any "prestige" so its a rare path nowadays.

i mean sell-side sales not inter-dealer"

Bondarb on the perfect macro PM.

Jul 12, 2011

Is it really that uncommon for people to roll over from IBD to HF? Everyone talks about IBD --> PE and trading --> HF. What about banking to hedge?

Jul 12, 2011

http://www.wallstreetoasis.com/forums/the-hedge-fu...
Look for posts by Bondarb and Mr. Pink

Jul 12, 2011

On the equities side, there are often times sales going to HF's just because of the network they have with HF's due to the nature of the job.

Jul 12, 2011

I'd say it'd be tough to move to a research or prop trading role from a sales position.

I've mostly dealt with high yield debt sales people but for the most part they spend their time on the phone with clients, not doing analysis or thinking about trades/risk. It's usually pretty glaring that they are just reciting the party line from the trader or desk analyst and trying to move paper.

Jul 12, 2011

really depends what type of HF you are trying to go to. for a fundamental HF, get onto an equity or HY research desk. if you are on a flow desk (rates, credit, etc), you will be more likely to move over to a HF as an execution trader or move to a macro fund.

Jul 12, 2011

if your crushing it...why would you leave?

Jul 12, 2011

Because you are getting paid possibly under 8% of your book and 50% stock... or you could go to a hedge fund and possibly get 12-15% paid in cash.

Jul 12, 2011

How hard is it for an FX associate in sales at a top BB to get hired by an FX prop desk in global macro fund? (since FX associates in trading are just flow traders and don't really analyze the market beyond a few minutes/hours)

Jul 12, 2011

on the hedge fund. i think people are guilty of lumping everything into one gigantic pile - whereas pretty much every hedgefund is a different animal (strategy wise at least, but culture and business differs from one to another). if you go to a distressed or long/short fund, they probably want bankers. if you want to work at a fixed income or macro fund - they probably would be looking at traders. it all depends on what kind of role you played a sa trader and what you traded

Jul 12, 2011

how about moving from HF to S&T?

Jul 12, 2011

why would u want to do that?

Jul 12, 2011

I'm sorry, but that's kinda hilarious. Why would you want to do that Ken0122?

"Cut the burger into thirds, place it on the fries, roll one up homey..." - Epic Meal Time

Jul 12, 2011

there are plenty of people who go back to selling from hedge funds. Salesman in good seats can make deep into 7 figures without any of the stress associated with having to make profits trading. The lifestyle of a good salesman is much better then a below average hedge fund trader. To answer your first question, I think sell-side traders make the easiest transition to the buy side, at least in fixed income. In fact i have worked on the buy-side in fixed income for 5 years and i've never met a former banker. Might be different in equities and obviously PE shops hire almost all bankers.

Jul 12, 2011

thanks bondarb. But then why do PE hires mostly bankers? what's the difference that makes bankers more likely to be hired in a PE and traders in HF?

Jul 12, 2011

...because PE is much more about capital structure and corporate finance, whereas most hedge funds trade liquid markets. just as bankers know nothing about liquid markets trader/salesman know very little about corporate finance and cap structure (credit traders might be an exception).

Jul 12, 2011

bondarb- i dont know about plenty. dont know that being a salesperson is actually that great - at the end of the day your just running around begging for business... just as time goes on its more and more business.

Jul 12, 2011

...i know plenty...as i said a good salesman makes much more money then a bad trader at a hedge fund with much less stress.

Jul 12, 2011

bump. I've been wondering the same thing.

Jul 12, 2011

yea what's the deal?

Jul 12, 2011

Anyone who can give us a clue?

Hang in there!

Jul 12, 2011

Everyone wants to be a trader at a hedge fund...Do you all know the tuition/cost that you have to pay? Do you have any idea how high that is? The fact is, only 10% survive, and furthermore, less than 1% of them will be someone like T. Boone Pickens, Jim Simmons, Steve Cohen, or even George Soros...and yet, everyone thinks this business is easy money...

Jul 12, 2011

well i'm at the 10% in school, why not in S&T

Jul 12, 2011

probably because they pick the top 5-10% at school for recruiting, then like he said the 10% from there make it, then the 1%.. well thats what dreams are made of. so we have 1/5-1/10 x 1/10-1/100, and your looking at the top 2% - top 0.1%. If your already at the recruiting levels, you're still going to have to be at the top of the next class to stay in. its kind of like sports, high school to college to pros, but its the top few that make it to the hall of fame that everyone talks about.
PS im still in undergrad, but this is how i've been preparing myself, so i have an idea of what ill need to succeed at each level.

Jul 12, 2011

what trader and titanboxer said is true, and I totally agree with the comparison to sports, but what about just getting to the point where we are trading for a hedge fund. What is the best route to even get the chance of trading for a HF?

Jul 12, 2011

My assumption thus far is you want to get on with a good BB trading desk, there your going to actually be trained for 2-3 years. this is training thats not offered anywhere, and if it is- there are way to many scams out there to pick through. So I would assume you would go there for the training, make it a good career for awhile. Later, the hf seems like something that maybe you would have contacts that would want you to interview, and it would just be a kind of who you know thing.

For anyone in the business, is this correct?

Jul 12, 2011

What titanboxer described is a way to do it, but it also depends on what kind of trader you want to be. For execution traders (execute what client orders), they get paid good enough money and it's more stable. You need to have good contacts and be able to bring in revenue. Another type is prop trader, and my guess is that when you guys say hedge fund traders, you mean prop traders. What you need to do is to establish an excellent track record. Once you can show them you have a good track record, then they will hire you (performance speaks for itself). A good track record consists of good risk management skills along with progression on profitability. Prop trading is really where the action is, and it's also the place where you'll have a chance to earn 2x as much as the CEO...ONLY IF you are good.

Jul 12, 2011

whats the time frame for establishing a track record? and does this mean, IBD experience wouldn't be of much help to prop trading?

Jul 12, 2011

IBD experience doesn't reflect much of how good of a trader you might be. It's a different temperment. Establishing a good track record depends on different people, again, different temperments and risk aversion.

Jul 12, 2011

Desk analyst. Very common. Reach out to headhunters and they'll reach out to you too. Talk to accounts about what you're thinking. Its part of the job anyway. If they like your ideas, they may hire you.

Jul 12, 2011
CreditAnalyst85:

Desk analyst. Very common. Reach out to headhunters and they'll reach out to you too. Talk to accounts about what you're thinking. Its part of the job anyway. If they like your ideas, they may hire you.

CreditAnalyst85 - I received an offer to join a BB corporate credit trading desk for full-time next year. New credit traders at my firm are required to work as desk analysts for roughly a year. I have read a couple of your posts on the desk analyst role, but I am not sure if I could choose to stay on as a permanent desk analyst since I was originally hired to be a trader, and this temporary assignment as a desk analyst is really part of my "trader training".

If I am unable to finagle a permanent desk analyst spot, and had to choose instead between trading (i.e. what I was hired for) versus a publishing credit analyst role, which would you recommend? Would your evaluation vary depending on the specific credit product group (IG/HY/DD/EM)?

Best Response
Jul 12, 2011
negati7epledge:
CreditAnalyst85:

Desk analyst. Very common. Reach out to headhunters and they'll reach out to you too. Talk to accounts about what you're thinking. Its part of the job anyway. If they like your ideas, they may hire you.

CreditAnalyst85 - I received an offer to join a BB corporate credit trading desk for full-time next year. New credit traders at my firm are required to work as desk analysts for roughly a year. I have read a couple of your posts on the desk analyst role, but I am not sure if I could choose to stay on as a permanent desk analyst since I was originally hired to be a trader, and this temporary assignment as a desk analyst is really part of my "trader training".

If I am unable to finagle a permanent desk analyst spot, and had to choose instead between trading (i.e. what I was hired for) versus a publishing credit analyst role, which would you recommend? Would your evaluation vary depending on the specific credit product group (IG/HY/DD/EM)?

As far as which credit product, the more "complicated" the product, the better -- both from a compensation perspective and a value added perspective. I'm not saying IG is bad, but there's far fewer levers to pull and ways to play it. In HY you have callability, clawbacks, LBOs, IPOs, interesting covenants, more complicated event driven catalysts, stressed credits, etc. Distressed, of course, has this plus even more in depth fundamental work since documents, legality, and valuation determine recovery. EM is nice because it spans IG to HY and also has wild swings because if lack of transparency and company info. As you can see, IG tends to be laggard in this case.

As far as publishing research, you need to realize a few things. (1) You are at the mercy of compliance and can be restricted or barred from publishing on certain names, which often are the more interesting ones. (2) You officially can only make recommendations that mostly suit long only, buy and hold mutual funds since your picks are vs. a ~ 6 month benchmark. (3) you can't react to event driven plays and have aggressive fast money ideas (4) you are not on the trading floor and the environment is banking style (5) the good news is that you will know your industry like an expert. (6) you get your name published officially and can be ranked in Institutional Investor. (7) you still talk to clients.

One thing to note is that while a senior research guy would know strategies that desk analysts do, it might be hard as a jr. person because a large portion of time is spent digging deep and modeling fundamentals and creating the publishing note/formatting. That will be your focus and then handing it off to the sr. person.

As you can see, I am obviously biased to the desk analyst role. But what's important to consider is what your end goal is. If you want to work at a very fundamental, bottoms up investment fund, publishing may be better. If you want to work at a traditional hedge fund that is slightly faster money, event driven, and trading savvy, desk analysis might be better. Also, often at funds there are research guys and then desk analysts. It's the generalist desk analysts that are a combo of strategist and trader that look to research for the nitty gritty details and then implement it.

If publishing research doesn't jive with your buyside goal, then try to trade the most complicated flow product possible i.e. distressed. However, I suggest you go in and kill it as a desk analyst. Seriously model the shit out of everything and ask a ton of questions to understand how to think of trade ideas, regardless of the sector. That's the hallmark of a true desk analyst.... A jack of all trades that can make the right call with limited experiences in any particular sector vs. a research guy. Once your year is done, then decide if you're still infatuated with a desk analyst role. If not, you will make a great trader. If yes, then your desk analyst group may not want to let you go back. Plus, kids coming out of undergrad think trading is the sexiest thing ever and there's always a lot of competition to nab a spot. I suspect that if you're a great desk analyst and want to stay put, it won't be an issue because the product group isn't losing you, you'll help make money with ideas, and it's not like they'll have trouble finding people to fill the trader position.

Wow that's was long....

    • 2
Jul 12, 2011

So how common is it that someone with an IG background would move to a Hedge Fund compared to someone with a HY background.

Jul 12, 2011
TradingBillie:

So how common is it that someone with an IG background would move to a Hedge Fund compared to someone with a HY background.

These questions are tough to answer for many reasons. I think the assumption on the site is that people count the months until a hf comes calling and then it's a no brainer to leave. Not the case at all. And no one would typically talk at the office about opps that they turned down.

Banks are often a better choice for several reasons. They definitely provide better career security, perhaps someone likes doing research and isn't tripping over themselves to manage money or focus on ideas, maybe they prefer the sales aspect of it since publishing guys spend a ton of time setting up management dinners/conventions, maybe someone can't move their family across the country, maybe they prefer banks because you can talk to tons of clients and see all the flow, or maybe you really thrive off the bulge bracket's trading floor culture vs. a collegiate, relaxed, more quiet environment at some funds. It's a misconception that people are most likely to jump at the chance. Younger people tend to be able to afford the risk.

That said, I'm sure some Hf are involved in IG bonds, but your buyside choices will likely be more long term, bottoms up, but and hold shops and lots of insurance and pension funds because of the avg very long duration of IG. Clearly more aggressive fund will likely be dealing more in HY

Jul 12, 2011

@CreditAnalyst85 Not sure how it is in credit, but I can say that in liquid AAA space that you can actually do a lot more interesting things in terms of the positions you take because of the size of the markets. Sure, one way to be aggressive is to get that yield pick-up but you can also take large positions through DV01/duration/convexity and lever up more the more liquid and highly rated your repo collateral is.

Jul 12, 2011
shortvolwhynot:

@CreditAnalyst85 Not sure how it is in credit, but I can say that in liquid AAA space that you can actually do a lot more interesting things in terms of the positions you take because of the size of the markets. Sure, one way to be aggressive is to get that yield pick-up but you can also take large positions through DV01/duration/convexity and lever up more the more liquid and highly rated your repo collateral is.

Yea I'd agree that extremely liquid products in general allow you to do a lot of things. Liquidity also means it costs less to get in and out. Definitely a place trading can be done.

Jul 12, 2011

I started my career as a desk analyst on a distressed debt trading desk at a bulge bracket, and moved to a hedge fund after a couple of years.

It's a well worn path for a reason: the skill set is almost exactly the same, you get amazing exposure to the entire Street if you work on visible credits at a young age, and (separately but relatedly) you are always talking to a cross section of the smartest investors in any given credit. If you have a good team and bosses who let you grow, I honestly think it's the best seat in the bank. You get a valuable and highly transferrable technical skill set, you get to experience taking risk, and you do no BS work...I don't really know how to use powerpoint...all my bosses cared about was good thorough analysis on my credits which led to P&L. Oh, and you have a life. 12-13 hours a day, no weekends is common.

Avoid IG, really....based on my experience I never really saw anyone make the move from IG desk analyst to a hedge fund. It's not as much fundamental credit work, it's industry trends and relative value....you'll cover dozens of credits and not be able to get particularly deep on any single one of them.

Publishing is probably a good place to cut your teeth, but it's really painful and loaded with BS (waiting for compliance to clear your publication until 1am or whatever).

Jul 12, 2011
RNR2243:

I started my career as a desk analyst on a distressed debt trading desk at a bulge bracket, and moved to a hedge fund after a couple of years.

It's a well worn path for a reason: the skill set is almost exactly the same, you get amazing exposure to the entire Street if you work on visible credits at a young age, and (separately but relatedly) you are always talking to a cross section of the smartest investors in any given credit. If you have a good team and bosses who let you grow, I honestly think it's the best seat in the bank. You get a valuable and highly transferrable technical skill set, you get to experience taking risk, and you do no BS work...I don't really know how to use powerpoint...all my bosses cared about was good thorough analysis on my credits which led to P&L. Oh, and you have a life. 12-13 hours a day, no weekends is common.

Avoid IG, really....based on my experience I never really saw anyone make the move from IG desk analyst to a hedge fund. It's not as much fundamental credit work, it's industry trends and relative value....you'll cover dozens of credits and not be able to get particularly deep on any single one of them.

Publishing is probably a good place to cut your teeth, but it's really painful and loaded with BS (waiting for compliance to clear your publication until 1am or whatever).

Agreed on every level

Jul 12, 2011

Given that I just started my roll as an IG desk analyst within the last 2 months, what would you recommend I do to make the move to a HF? Should I possibly wait for an opening in Distressed/ HY? Should I reach out to head hunters now?

Last summer I spent my entire summer of my SA stint in Distressed, but they weren't hiring any desk analysts.

Jul 12, 2011

Would you guys agree that in HY/DD the desk analyst adds more value than the trader, whereas it's the opposite for IG (better to be a trader than a desk analyst)?

Jul 12, 2011
negati7epledge:

Would you guys agree that in HY/DD the desk analyst adds more value than the trader, whereas it's the opposite for IG (better to be a trader than a desk analyst)?

Is your whole question based on the premise of better to make it to a hedge fund?

As far as value added, a trader vs. analyst in distressed and high yield adds value in their own way -- that's why the two roles exist. If you mean which builds better skills for a traditional hedge fund, well I suppose it's the desk analyst. I still suppose it's the same in IG. I'm no expert in IG but I get the feeling the line separating the trader and analyst value added is much more blurred. I mean a trader needs to know what going on in his sector, but the analyst also has insight into that. I suppose the analyst has more time to dedicate to looking for mispricing a without gettin distracted by flow business.

To the guy in an IG desk analyst role now: my opinion (and I stress MY) is that it looks terrible to be reaching out to Headhunters after you've been there 2 months. What are you going to tell them? You wanted HY and didn't get it. Either they'll assume you weren't good enough or that you can't just take another equally decent role (in the grand scheme of things) and build a career -- i.e. you're living your life 3 years ahead.

You have 2 years as an analyst. Kill it where you are and worry about getting a bid for associate. If you can't even get that, it'll make looking for a job even harder. Maybe if you get associate you would have networked INTELLIGENTLY and COVERTLY enough that when a position comes out. The HY/DD sees that an IG guy at least has the credit basics to hit the ground running as an associate.

Don't get blinded by living 4 years ahead and be so fixated on hedge funds that you make a bad impression, people know you'd rather do something else, or find out your interviewing. You're hired as desk analyst in IG. Until you came here I'm assuming you we're happy. Be happy, do I killer work, and strike when an opportunity comes. Guaranteed if you get too worked up about this, people will notice or get a feeling.

Jul 12, 2011
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Jul 12, 2011
Jul 12, 2011