What do you think has been the most desired finance careers over history? What is next?

I was just thinking how kids claiming to be growth equity "investors" today seem pretty comparable to "account executives" on trading floors in the 80s, and I was wondering how the most desired finance jobs have changed over time.

When I was in college, I remember prop desks, GS SSG, etc. were hot shit. I imagine decades before maybe being a corporate raider was the dream. Banking seems on the outs right now, and PE seems to be on the way out. Seeing a deluge of posts about growth equity and secondaries, but not sure how mainstream that is.

 

S&T was obviously the most popular throughout the 20th century. I think HF's and PE felt too out of reach for 99% of people for those to be considered the most popular, but they were definitely highly desired. 

I think that over the last 15 or so years VC has gained immense popularity. It may feel more entrepreneurial & less structured in the sense that it is more probable that a seed stage startup 50x's in value than a 25 year old utilities company. *more get rich quick opportunities for the average investor in VC than anywhere else.

I still think PE, Banking are extremely coveted roles, just less so by people who have been in the industry for a few years and reprioritize what they value most in life. 

 
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I don't know a ton about the history of "prestigious" finance jobs so take this with a grain of salt. 

I'll start way back to before WWII. At this time, banking houses led by families dominated the world of financing. These family offices, led by families like the Morgans and Rothschilds, were considered some of the most high end places to work. Their business largely focused on both advisory (M&A, RX, etc.) and financing (ECM, DCM) with other aspects of corporate banking included. This doesn't mean that there weren't the same companies there are today, there were. There was Goldman Sachs and Co., made famous by taking Sears, Roebuck, and Co. public, as well as JP Morgan and his formation of US Steel through Mergers and Acquisitions. This laid the groundwork for modern investment and commercial banking to be successful. Investment Banking reigned king in these early years. 

But after WWII, these families fell into the shadows. New laws, regulations, and the passage of Glass Steagall led to the formation of the first major Chinese wall, that between retail and investment banking. Investment Banking's financing area now appeared less prestigious in the eyes of many, who believed that the glory days of IB had come to a close. Most banks were to blame by being too risky in their stock market investments and underwriting. Thusly, most of the investment banks of the time focused largely, if not exclusively, in commercial banking. Commercial banking and retail banking dominated through much of the mid-20th century, and was widely viewed as considerably more prestigious than investment banking until the 1970s. Being a branch manager was a big title and being the person who loaned the town their money was considered an important duty. Large companies and small businesses who wanted loans could be sure to meet with their commercial banker with the comfort and knowledge that their plans could be successful with the help of the bank. It was a friendly practice, something people just liked. 

That's not to say that there wasn't investment banking, there was. Goldman, Sachs, and Co. took Ford Motor Company public in 1956 to great fanfare, and other companies began alternatives divisions in areas such as real estate. It simply, for most of this time between 1945-1975, wasn't as prominent as commercial banking. 

By the mid-1970s, the formations of new tradable products began to emerge. Futures, forwards, swaps, options, and many many other products were becoming all the rage. At that time, many began to see a new area for growth in finance, that being in Sales and Trading. People could make fortunes if they knew how to trade. Currencies, calls and puts, and more were viewed as complex, intriguing, and a lucrative business. Many began leaving the tried and true pathway that commercial banking provided to work in a hot area for growth. 

This was further compounded by the introduction of Quotron around that time. Before then, quotes were literally read off of ticker tape or through a phone-style interpreter (and yes real ticker tape was used into the 1970s). This allowed for trading to be done by mere mortals who believed they could take on the markets. 

By the mid-1980s, desks like the Lehman Bros. MBS desk, led by the likes of Lew Glucksman, Dick Fuld, and Todd Morley, were competing against Goldman Sachs' "Two Johns" Weinberg and Whitehead. Proprietary trading, where a bank could trade on its own account, led to massive profits for these divisions, and ensured longitudinal success for the next many years. Through the mid-2000s, this was seen as perhaps the most prestigious area of finance. People who managed their own books were considered genius. 

But this did not stop the formation of other top areas. The mid-1980s ushered in a new era of leveraged buyouts and corporate raiding, led by players like Blackstone and KKR began buying up the likes of some of Americans' most well-known (and in some cases beloved) companies, like Safeway (KKR), Marvel (MacAndrews & Forbes, Ron Perelman). A bust in the Savings and Loan crisis due to financing of projects with junk bonds and especially use of bonds purchased by thrifts.

This later continued into the beginning of smaller scale investments, venture capital, in the mid-1990s. Sand Hill Road companies like Sequoia proved that this kind of investment could lead to big returns (such as with their investment in Yahoo!), changing the narrative that had said this kind of investment was not very value accretive (it wasn't for companies invested in Apple or Cisco). Private Equity also saw a resurgence with purchases of Duane Reade, Domino's Pizza, and many other large companies. 

Now what does all this mean? It meant that being an investor was cool and sexy and made a TON of money. Who wouldn't want to get involved in that compared to sitting behind a desk all day yelling at people through the phone. Private Equity was hot still. 

Except, there is one more company we need to talk about. Long Term Capital Management. The creator of the Black-Scholes model and the investor in tech showed shorting was good. Hedge Funds were right there now with PE. Even after LTCM went bust, too many people liked the allure, and got in on it. 

Finally, in 2008 with the GFC and passage of Dodd-Frank, prop trading desks at investment banks were closed, ending the hegemony of Sales and Trading as the prestigious sell side roles. Since then, it's been all hail the alts. Private Equity, Hedge Funds, and Venture Capital, today, all are seen as the hottest, most unattainable roles in finance. The ones everyone goes after and dreams from the time they are a child about working in. How long this will continue before something else arises, I'm unsure. Quant is becoming bigger than ever with the rise of companies like Jane Street and Two Sigma. But today, all hail the alts. 

Edit: I'll agree that PE is on the way out, but it is still very strong. I wouldn't say that it is has totally lost its luster, but it certainly won't be the next big thing either. 

 

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