Best Fixed Income Desks Table
There was a discussion on WSO a little while ago where someone posted a link to a PDF that showed a pretty nice comparison of the different fixed income desks at the top banks. It has little circles that were coloured in different amounts based upon the relative weight each bank's desk had in different areas of fixed income, i.e. rates, credit, etc. Does anyone have this link or know how to find this discussion in the forum. I have been looking for the past few days and cannot find it.
Good question
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/vol…
[quote=GoodBread]http://www.zerohedge.com/sites/default/files/images/user5/imageroot/vol…]
Just curious, can we get something like this for Equities?
Note that the study having been made by Citi, Citi is not included in these evaluations of market share.
Where would you put Citi in Rates/FX? As far as I know they are very strong in EM, correct?
in that table, what bank is "stan"?
Standard Chartered
along those lines ,, why don't ppl with actual knowledge of the biz rank where they think the best shops are in regard to fixed income (e.g rates, credit, mortgages, excluding FX and commodities) with emphasis on pay, exit pops, and overall dominance of desks
DB for FX. GS for rates and commods.
I would say credit is something like:
JPM BAML Barcap Citi GS MS DB CS RBC WFS
where does Jefferies rank?
I dont know how we are ranking these firms and what "best" means, but I can say that as a hedge fund client JPM is definitely not anything close to the top at least not in rates (ie us treasuries, swaps, etc). They basically made a decision after the crisis not to try to cover smart, "fast-money" accounts in this product. But I rank desks based on how aggresive they are in making me markets...it doesnt mean that JPM isnt a good place to work in fixed income, it just means that you they have made a business decision that may limit your contact with the smarter buyside people as a salesperson or trader.
These rankings are probably based on desk revenue/PnL, not client satisfaction surveys. What you're saying makes a lot of sense - you'd expect desks which cover "fast money" clients like yourself by pricing aggressively to have lower PnL than desks which only service comparatively less sophisticated clients like corporates and mutual funds.
Would you say that the limited contact with "smarter buyside people" is a significant obstacle when traders try to transition to hedge funds from these banks that don't cover hedge fund clients?
Which banks do hedge fund clients like to trade with anyway (in rates if that's your specialty)?
I disagree that covering smart accounts is neccesarily bad for PnL. Seeing the flow of smart people and getting insight into what they are doing and thinking is part of the advantage one has as a sell-side trader...ripping off some lazy real-money guy from wisconsin may be easier, but dealing with smarter clients can be very good for a sell-side trading business.
And yes I do think it hurts traders who want to leave and go to the buyside...you dont build a good reputation as a trader by refusing to trade with anyone that you cant rip off and that type of trading has no application to trading at a hedge fund.
they are one of few imo that can make that decision given the amount of corporate business they print. fast money business isnt the easiest to trade (depending on what it is) but as bondarb mentioned there is an information component that is valuable. to me it depends on account and what type of business I see from them but in JPM case if that is considered 2-5% of PnL with a high likelihood of loss attached they could choose to show bad levels all the time which is obvious to accounts.
This is a bit off topic, but which banks are best for sovereign debt/interest rate research?
This is going to be a long post and could merit a thread of its own, but this is probably the best place to provide a thorough answer, so I'll go for it.
The pic with all the rankings, while good, is from 2009. Relative "rankings" may have changed a bit but again, this all seems very relative and ambiguous with all answers as to what rankings are seem to make more questions than answers.
Ranking could mean absolutely anything here, but I have a feeling that this is purely a metric of who sees what percentage of market volumes. That metric will include what is done electronically (REDI/Sigma-X @ Goldman, I think Autobahn is DB's platform) as well as through flesh and blood market makers. Some firms place their electronic platforms above market makers, and the other way around is true as well, but to a lesser degree. On the sell-side, this will impact how firms fare in this study quite significantly, as firms who place more efforts into satisfying clients with electronic liquidity in said products will likely fare better. If you want to learn to be a great dealer, the bank's emphasis on electronic liquidity may be of some importance to you, but using a survey or bank research to make that determination is misguided for a lot of liquid products where being a dealer is a dying art anyway.
Nowhere have I made any mention of how good the human dealers are at things like pricing, accommodating different types of clients (in terms of their price sensitivity and aggressiveness), p/l from prop trading, ability to jump to buyside, etc. That is because it is impossible to quantify some of these things, and the others that can be are never leaving the firm (particularly trader p/l). Also, with that Citi pic from zerohedge, you can't infer inter-desk p/l for a product group (ex: your banks cash 10s trader knows how to manage risk and has been lucky with some good ideas this year, but the swaps desk may be bleeding money from every hole. You won't know this unless you work there). So these surveys have nothing to go on in terms of trying to estimate prop trading abilities of different dealers.
For the less quantitative measures, it gets even more ambiguous. If you want to "jump to the buyside", I am assuming that is in another risk taking role, and there are very few members of this site who have enough experience to jump into another risk taking role. The idea that a junior analyst can spend as little as 0.5 - 3 years in training before taking on risk for one's own balance sheet is something that is mutually exclusive to banks and prop shops. The number of 25 year olds that run enough risk on a daily basis to be taken seriously by the buyside is effectively 0.000000 right now, and considering how risk averse a lot of these institutions have been over the last few years, I don't think that number is going higher. Also, if you want to be on the buyside, trying to become a dealer as some sort of intermediary role is kind of retarded. Dealers will train you to become dealers, not so that you can run off into the land of flowers and honey on the buyside and become instantly rich just by sitting at a desk and looking nice. If you want to be a sprinter, you run the 100m dash in training, you don't run the 10k and hope the skills translate over into your goal.
So that should give you an idea as to what these rankings and surveys seek to achieve. The rise of all the e-dealers is making the industry a lot more efficient and definitely skews the rankings in terms of market share. But if there is one thing I can't stand it is the idea that getting to a bank that is at the top of these ratings is going to make you a better trader or make you more likely to have a career that sees a positive lifetime p/l. Those are two totally different skill sets and they always have been. If you really want to run your own book or take risk quickly,then I guess knowing which bank will allow you to do that is a relevant factor. However, if your goal is to run massive size at your own or another hedge fund, banks are really irrelevant in that process because the amount of people that make it to that level in this industry is an extremely small and meaningless sample size. If you have ever managed an amount of money that was/is important to you or someone who has seeded you (for all the college monkeys out there), I think the argument that that is more relevant than any of these rankings in terms of learning to manage risk is certainly valid and I would agree with it.
Hopefully that helps someone and I didn't just throw up info onto the internet.
Great post. Couple of notes:
There are analysts that move from strategy/trading to the buyside in 2-3 years (I don't mean IBD to some fundamental fund). The caveat is that they are not going over to run huge balance sheet - if any at all - right away, but to be junior traders or assistants to PMs. As you observed, no 25 year old is going to be running enough risk at a bank that he can jump into a PM role right away.
Bondarb has posted about how most of the PMs he knows have come over from sell-side trading. You could make the argument that you learn how to manage risk as a dealer at a bank, and those risk/position-management skills are arguably even more important than idea-generation in strategies like macro. Also see Michael Platt's interview where he says he likes to hire market-makers because they know anything can happen.
"However, if your goal is to run massive size at your own or another hedge fund, banks are really irrelevant in that process because the amount of people that make it to that level in this industry is an extremely small and meaningless sample size."
Well said. There are many paths to "running massive size" at a hedge fund but you can't really plan for that. I'd argue that you can do a bit more to position yourself for a junior role at a hedge fund; whether you can move up and make it to the "massive size" stage is a function of the fund you are at, the PM you're working for, how good you are, etc.
Great point and this is something that I should have touched on as well. There are certainly roles at funds for people with brief sell-side experience working in strategy or as assistant PMs, and there is a lot of value in this. Actually, if I knew I wanted to manage risk and had the choice between doing coffee and lunch runs for a PM with a great track record or making markets for slightly more money, I think the answer should be very clear. If it is not, then you probably won't make it to the stage where you can manage any large risks anyway.
great thread, in
Best/most sought after fixed income desks? (Originally Posted: 04/19/2010)
Which fixed income desks are the best/most sought after? Which have the greatest potential upside?
Do you mean specific products or specific banks?
specific products
This is a silly question. In 2006, it was Structured Credit.
aeneous, I received an offer from Prudential Quantitative Analyst program which focuses on Fixed Incomes. Its a 4 year program, and you'll end up with a CFA. It started this year, and who knows where you can go from there, but it was pretty legit. If you are a big math person, I suggest you check it out.
Which Fixed Income desk has the most promising future? (Originally Posted: 12/08/2015)
Hi everyone,
I have an internship in London in Fixed Income S&T and was wondering what desk would have the most exciting future and provide the most interesting opportunities? Would something like algo trading be a good idea because more and more processes are becoming automated? Would prop trading at a BB (even though I'm aware not much of it goes on) provide the best exit opportunities? And what products are best for building up your skillset and job security?
Sorry if I seem quite clueless; I'm still doing a lot of research and trying to find out how everything works.
Thanks in advance, HRR
depends on the bank
Are there any general trends? Like I know Commodities is generally going down. Would the computer and technology-based desks have a more positive future?
i wouldn't want to do that a bank, but that's me
You mean as opposed to a pure prop trading firm?
Find the desk(s) that your bank has large market share / competitive advantage in. Those are the desks you should be targeting.
Best specialty within fixed income consulting? (Originally Posted: 05/24/2011)
Which of the following specialties within fixed income are the best to specialize in for someone about to start their career? By best, I mean interesting and profitable.
credit derivs interesting imo, but honestly it really depends on your interests...IG is probably the least interesting.
My picks would be HY, LL, EM, in that order.
Hy/distressed (more distressed) - You will learn a ton about equity and CDS.
money markets are the nervous system of the financial markets, good place to start a career. i also think rate derivatives and FX are interesting too.
Pick the area that YOU are most interested in, who cares about what others are interested in
See what gets ur attention... When you open the WSJ, what do u look at first? If currencies, then FX If companies, IG or HY/Distressed (HY/Distressed require much more analysis) etc.
And in regards to profitability - if you're good you'll get paid in any of these. So you might as well like the area you're in
You're wasting your time taking a poll here. It's like asking people what's their favorite color
Rates is definitely the best place to start, it drives everything else.
culture/feel/hrs of fixed income desks (Originally Posted: 03/09/2011)
can anyone comment on the hours/ quantitative abilities required of these respective desks in fixed income---trying to make a proper decision in terms of rotations
especially people with prior experience in these areas---
emerging markets debt (sales and trading)
rates---sales & trading (treasuries---agencies)
corporates---IG---High grade (not high yield)
munis----converts----
thanks
I have a friend/mentor on the west coast who works at one of the only sales/trading desks for junk bonds. He's normally in from 4/415 am to 245/3pm. I don't know how applicable this is to NY, but just add 3 hours. 7/715 to 545/6?
Sounds really nice.
4/415 - 245/3 sounds like it would be awesome once u get used to the early start
imagine waking up at 330 on a cold winter morning
even if i slept early i would be horrified
x
What about structured products like mortgages? Anyone have insight on these desks?
general rule is credit has longer hours than macro, and structured credit has the longest (think midnight)
new guys on the mortgage desk tend to get in around 6:00-6:30 and clear off around 8:00-8:30. obviously, this range becomes contracted as you move up.
new guys on the mortgage desk tend to get in around 6:00-6:30 and clear off around 8:00-8:30. obviously, this range becomes contracted as you move up.
Where I interned, the structured credit trading guys came in later (around 8am) and left much later than everyone else.
why do structured credit guys work so late?
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