US vs. UK vs. Asia - starting out in S&T

Hi everybody,

in another thread I asked about some opinions towards two graduate programs in which I got admitted, LSE MFin & CMU MSCF, which would ideally set me up for BB S&T, where CMU would be good for US (NY) and Asia (HK/SGP), and LSE for UK(LDN).

But what I would like to get your view on here is: If you were to start your career in S&T today (or in 1-2 years) and you had free geographical choice, where would you start out?

Things to consider are probably:
- regulation
- business volume
- pay
- exit opps to buyside (ideally credit- or macro-related fund)

As to where I personally want to end up in - I don't really have a preference since I have studied on all three continents in the past and I pretty much liked each of them.

The thing about Europe is, the whole debt situation seems to start getting out of hand, and who knows which country blows up next to Greece... Also, the regulation is getting stricter (crazy to think about how much time today is spent on dealing with regulators); and with the whole LIBOR scandal going on, I think it really does no favor to the banking industry. Lacking growth remains an ongoing concern too.

US seems to be better off than almost anywhere in the world right now, but the question is how long is that gonna last. Regulation is an obvious concern and I think one would be foolish to think that sellside S&T is not getting hit quite hard. Although US BBs seem to have ramped up their analyst hiring recently, while cutting back on experienced hires (probably just to cut cost).

Asia - especially Hongkong and Singapore: traditionally the argument seems to have been "get the training in NY or LDN and then move to Asia, since the market and infrastructure is not well developed for starting out there". I spoke to an associate director at CMU another day and he sounded quite confident that the training in HK/SGP today can be just as good as the developed financial hubs, since a lot has happened during the last 10 years (he was a former BB trader working in SGP as an American, before retiring in 2007). And what's attractive in my mind to Asia too is, the market place is still evolving and until every major Asian economy has adapted an established insurance system, there should be considerable potential for further capital market expansion.

Any opinions and suggestions would be highly appreciated, especially if you're working in S&T in one of those regions.

Best!

p.s. Background: European engineering undergrad, internships, tri-lingual (so no language barrier in HK/SGP)

Comments (14)

 
Mar 24, 2015 - 9:40pm

It depends on what you want. If you want to try to be a career mover/shaker, I would say work in NYC/London first (with an edge to the former given a better economic situation). They are much bigger offices and where the money is made. The markets are just so much bigger and there is a lot more volume in general. Scan the 10k of BBs. Look at their breakdown of revenue and profits by region. Asia is by far the smallest. It's quite eye-opening.

Plus the real bigshots in the company sit in those offices and it's where the power is. You want to make a network in these places in case times get tough or you want references and flexibility. You can always do it for a year or two and then lateral when something internal comes up (ie. raise your hand, look like a team player, and be the NY/London person that's helpful).

Now maybe you are intrigued by Asia (being tri-lingual isn't that helpful unless you speak like Chinese, Korean, Japanese, Hindi etc). French/German etc, unless you work at banks from those places don't matter in SG/HK. Maybe you like Asian girls, food and some adventure. Easy weekend trips to run around and the lifestyle. Oh and taxes are much much lower (if you aren't a US citizen). In that case, Asia may be the way to go. The training might be on par globally at banks (I can't comment), but your colleagues may not be as good at the job or know markets as well (Asia is much more relationship based, you draw your own conclusions). The drawback is that it might be tougher to move up in your career (ie. the politics angle and smaller pond), tougher to move back if you want etc.

Now there may be others who have actually done S&T that have had an opposite experience as to what my views are (based on what I have seen in my work, mostly with HFs/PEs and talking to my friends in various parts of finance, including S&T).

Good Luck

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
 
Mar 24, 2015 - 11:50pm

I agree with this sentiment. I think it's also much easier to make the NYC/London --> Asia jump than the other way around. I'm starting in NYC BB S&T with hopes to move to Asia to take a VP level position and have a hand in the development on Asian markets. I feel like even if the training is the same you will have exposure to the big leagues so to speak in NYC and then you'll have a leg up on the competition when you move elsewhere. I, however, do not speak anything other than English so Asia could be difficult for me.

 
Mar 25, 2015 - 8:20am

Thanks for your comments!

@Jamoldo: I am actually fluent in Chinese so that part wouldn't be an issue. But since you're working with HF and PE, can you comment on the distribution of HF activities worldwide? I read another day from a HF report stating that some 70% of HF activities are still in the US today, although all the big funds are building out their Asian offices since there is more and more going on in the local time zone.

@Anonymoose: Congrats on your BB S&T offer! And very interesting to hear that you're interested in the Asian market place as well, even without speaking the language (I don't think it'll close any doors, since everybody in finance in Asia knows English, but if you need any infos on Asia/Culture/Chinese etc. just let me know). Since you're in BB S&T and you've probably interned there before, I'm wondering how the hiring landscape right now is for quantitative Masters students (like the MSCF) in BB S&T in the US? I guess it would be an uphill battle since the best positions (e.g. trading) are reserved for elite undergrads, at least at GS/MS/JPM. DB/Citi seem to be more open to MS students for their prestigious positions. Starting off, I would be happy to add value wherever I can on the floor, and eventually I'd love to run my own book... the career counselor at CMU told be that it's still a realistic goal coming into the program, but he's obviously biased; would you say it's realistic too? (feel free to pm)

Thank you very much for your insights, and any other comments would be appreciated.

 
Mar 25, 2015 - 3:15pm

I honestly know very little about coming from an MS program as I am coming out of undergraduate. The only masters student in my group of 15 or so interns within the mortgage department (it's big so they took a ton of interns) was on the MBS research side and I think he was studying physics or something equally quantitative. I'm sure it's doable and my guess is if you have on campus recruiting then it won't be as much about technical knowledge (unless you're looking at a quant role) but more about passion for markets / understanding current events / being able to articulate why trading interests you and why your personality will succeed in trading. I honestly know nothing about masters programs so idk what on-campus recruiting is like but as long as you have it in some form for S&T it shouldn't be that difficult. If not then you'll have to network pretty hard.

 
Mar 28, 2015 - 2:28am

HFs here are generally small with a few exceptions (Dymon, Tybourne, Myriad, Graticule, Turiya, Hillhouse, PAG). That's really it for Funds well over $1bn (I know I am missing a few). But otherwise the big shops are global funds with Asia offices... NYC in that sense is where all the big hitters sit. Ackman, Loeb, Einhorn, Novogratz, Soros etc etc etc. The market is just so much bigger, there is more sohpistication and just more angles to take on some many things... Hope this helps.

I used to do Asia-Pacific PE (kind of like FoF). Now I do something else but happy to try and answer questions on that stuff.
 
Mar 28, 2015 - 8:30pm

Thanks for all your responses!

@Anonymoose: the BBs that recruit on campus from the MSCF program for S&T are DB/Citi/USB/BNP. GS/MS/JPM recruit too but only for quant/strat/research. That said, GS in Asia do recruit MSCF grads for S&T and I know that couple of students this year got placed (and have been placed in the previous years), so this is certainly doable too.

@Jamoldo: interesting insights, although Ackman/Loeb/Einhorn wouldn't bother looking at S&T people since they're all fundamental value funds. Agree that US is still way ahead of Asia today in terms of revenue generation. However, given the opportunity, GS in Asia vs. Citi in NYC would still be a difficult choice though.

@GoodBread: Thanks for your critical view, I'm certainly not here to hear what I want to hear, so every critical view is more than wellcome. According to the information I have gathered, S&T summer internship placements for 2015 look like:

Citi: 3-4 students
BNP: 4-5
UBS: 4-5
DB: 1-2 (kinda poor since DB used to be a major recruiter from the MSCF)
GS Asia: 2-3
No data on other banks

Thats for the more "prestigious" S&T rotational internships that can naturally lead to a trading role. Since I don't have data on other firms (CS/BAML/JPM/MS), the total number of students ended up in BB S&T could be around 25-30% (close to the number on the MSCF career page).

Now, 30% doesn't sound high given the caliber of the students; also, assuming that I do not want to become a quant at all cost imaginable, this might in fact be a big gamble on my career. That said, given the fact that >50% of the MSCF class are from Asia and don't have superior verbal English communication skills (please, this is just purely objective analysis), my chances might increase quite a bit.

Right now, I tend to be inclined to take that risk, even though there is a lot at stake obviously.

LSE MFIN is one of "THE" top brand names in Europe (I think that cannot be said about CMU MSCF in the US); but like I described above, Europe and EU regulation can screw a lot of things up during the next years.

Any comments on the above?

 
Mar 28, 2015 - 9:59pm

MSCF at CMU is one of most represented course across the S&T interns in HK. Every major bank prob had 3-4 CMU students at final rounds, whether or not these students ends up with an offer and consequentially a rotation in quant or sales/trading/structuring it really depends on how capable the individuals them selves.

I am pretty sure CMU has the best CF programme in US, and all the banks knows that. I've been told by alumnis of CMU that MSCF course has 100% summer internship placement rate, and around 60-70% conversion rate from that. The biggest advantage of doing the MSCF course is that, the course is 1.5 year long, so you are eligible for SA applications.

With regards to LSE MFIN, it pretty much on par with any other Finance course from top UK unis, the course (full time) is 1 year long, and most bank in LDN and in HK doesn't look at final year applicants for front office roles.

In terms of competition, LDN office is the easiest to get in for SA positions, they have a large intern pool and almost exclusively only european applicants.

For US office, you have to study in US to even be considered.

For HK office, US students are heavily represented (at least 60-70% of the total intern pool are from US), there will always be a few odd UK students as well, some penultimate undergraduates, some final year master students (but only at banks that accepts final year students, i.e. Citi)

In terms of regulation, EU is the heaviest regulated, US, then HK, HK trails US regulation.

Business volume is the largest in the US, for FX the largest is in the UK, but in HK, despite smaller volumes, S&T business professionals are actually given much earlier exposure and responsibility, as you will have much larger coverage of assets, and work much harder.

I believe in HK you are compensated more, at least compared to LDN. Tax is also lower in HK. Unsure on US on pay/tax.

 
Mar 30, 2015 - 5:20am

@Dawg-nuts: Thanks for your helpful comments! Actually, one of my major concerns regarding LSE is the fact you mentioned - many banks are reluctant to hire FT without previous SA at the same firm. Although I have seen many people doing a SA after graduation and converting it a few months later into FT, but that can be pretty risk too, as I have also seen a fair amount of people jumping from one internship to the next, even one year after they graduated from LSE (how stupid that looks on the resume is out of question).

What you said about HK - broader coverage, earlier responsibility, harder work - sounds very interesting. I think it would be a good idea to apply to Asia and US, and then make a decision based on the opportunities granted.

As for MSCF being the best quant finance program in the US, well I think it might be #2 after Princeton. I got dinged by Princeton (as expected), but I didn't even bother applying to NYU and Berkeley, because BB S&T recruiting is quite a bit stronger at CMU. NYU and UCB pride themselves with better buyside placements but for me personally, I'd prefer starting out in BB S&T.

And in terms of Princeton MFin: a friend of mine who was a quant major at my undergrad university managed to get in, and he said the academic rigor was not that impressive (to put it cautiously), and even though, some of the admitted students had a hart time handling the curriculum. Really, I have huge respect for Princeton; but hearing what he said just tells me that being rejected by Princeton does not imply a lack of qualification.

@Dawg-nuts: Do you also have some insights about Singapore in terms of volume/pay/regulation? E.g. I heard that HK is better for equities and SGP for fixed income.

Thanks and best.

 
Mar 30, 2015 - 10:44am

Sorry to clarify my previous comments on the LSE master programme, it is one year in duration. Most BBs in both LDN and ASIA for summer internships doesn't look at final year / postgraduate students, there is a strict condition for all (IBD/S&T) summer internship applicants to be in penultimate year of study. (there are some exceptions like Citi which do accommodate final year students etc.. but only a very small minority).

Hence if your objective is to land a summer internship, and to maximize your chance for a full time S&T role, take CMU offer.

I am uncertain of the volume/pay in Singapore, but it varies depending on the bank. In general, HK is the Equities/Credit/Greater-china-coverage hub, whereas Singapore is the FX/Rates hub (and mayb australia is the commodities hub?). However, some banks such as MS, they have their FX and all the structuring teams based in HK.

The Singapore office is smaller than Hong kong for most BBs. For analyst/associate positions, the difference in salary really shouldn't be a big factor, and it varies a lot between different teams and banks. Having said that, one of the trends that I've witnessed is, a lot of MDs, VPs from Europe are actively transferring to HK offices; so I would bet HK is the place to be in Asia, but I am really not that informed on Singapore.

 
Jun 22, 2015 - 5:43am

Dawg-nuts:

Sorry to clarify my previous comments on the LSE master programme, it is one year in duration. Most BBs in both LDN and ASIA for summer internships doesn't look at final year / postgraduate students, there is a strict condition for all (IBD/S&T) summer internship applicants to be in penultimate year of study. (there are some exceptions like Citi which do accommodate final year students etc.. but only a very small minority).

To bump up a little bit:

@Dawg-nuts" : I'd like to get the facts straight and say that what you stated here is not true. Based on my conversations with LSE students, alums and faculty - it is very common in London to do a summer internship POST-graduation, in order to secure a fulltime offer at the same firm. So final-year masters students are definitely eligible to apply for summer internships.

 
Jun 22, 2015 - 12:06pm
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