Very young MDs
I keep seeing articles on the internet about very young (29-early 30s) MDs at banks, in trading especially. How common is this is and what does it take to get there that quickly? Asking for a friend ;)
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Probably more common than IB but not that common. Typically you need one of two things - either everyone more senior gets fired (think credit in 07-08 - basically the only guys remaining were like mid-late 20s at the most, and somebody needs to be an MD), or you need to lateral to a small bank where you are tasked with building up a tiny business. If you're able to do that well, possible to make MD, but understand that this entails significant career risk. P&L is also an important driver, but not as important as you'd think.
Banks are still relatively structured, so it's not like these are are going from AS2-VP-D-MD with a promo every year.
Yep this is basically what I've seen so far and seeing the paths of those who have gotten there. The person above you moves or gets let go, opening a very clear path for promotion. To even generate the PNL associated and the risk necessary for it, you need to be in the right seat to begin with. It's basically impossible if there is someone above you who is doing very well. You will have to move.
For what it's worth, Goldman just made a 32 year old trader Partner this past cycle (believe she was an MD for a few years before that).
Probably needed more female partners
Maybe, but I don't think that was it. I have a friend who works with her and apparently this girl has been knocking it out of the park P&L-wise since she got there ~8 years ago.
i know a few people who made MD in trading before they were 30....in every case they were just good traders who hit home runs with P&L. Seat had an expected value of 10mm and the trader made 40mm...promotion from VP to Director.....then made 80mm next year...promotes again to MD. I've seen this a number of times...always based on P&L.
Which areas of trading were they in? And I’m assuming this was sell side and not AM?
rates trading
Justin Lubell made MD at Bear at like 25 yrs old after graduating from UPenn at 21. Went to SAC after and now runs GE at Citadel.
I don’t think this really happens anymore. Maybe some extremely rare cases but not like the old days. There are no new desks being started, and fewer seats on the buyside, so the older guys tend to stick around. Notice the example above is from >10 years ago
At the investment bank I work....I know an MD that is around 30 years old...he's a Sales Trader in Cash Equities, is extremely social/outgoing, quite sharp and has been able to build a fat trading book for himself.
I also know guys that are like 50 years old and only Directors (which is lower than MD at my IB). When it comes down to it, from what I've seen - it is all about how much $$$ you can bring the business. So if you are 25 and are able to build a massive book and kill it - they will put you at MD as soon as they can.
I'm talking about a small BB/large middle market bank. If you can find a niche at a large middle market bank where the structure is like what I am describing it can be quite lucrative...even more so than a very hierarchical bulge bracket. Now.... plain vanilla cash equities is likely not the best example...but hopefully this helps...
It happens, typically the reason is that most traders "comp" is somewhat tied to titles and the length/format of their retentions. You have to keep asking to move up. Also as mentioned if you make $40mm on $10mm book, to make $80mm next you need a "bigger, more var book" so only way to do this is to move up. The major issue becomes is some of these people do not want to move up since it means "managing more people" as part of the title but if they are fine with that then works easily for the firm.
Just to be clear, "vast majority" of traders comps at banks and even most firms these days is tied to retention/stock-options etc...3 years is normal. But some fast rising MDs could see 5 years or more possibly.
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