Careers in Financial Markets

eFinancialCareers.
com serves the global nancial community, from students to senior executives,
as the #1 network for jobs and career management in the securities, investment banking and asset
management industries. eFinancialCareers.com includes a student Campus Connection, premier job
opportunities, career advice, salary trends and industry news to keep you on top of the job market
and ahead in your career.
Investment banking is a hot career choice
how are you going to stand out from the competition?
Gaining an edge to secure that coveted position is crucial for developing a successful career in
investment banking and related elds. The decisions you make before you even go on your rst
interview will shape your career path and determine your chances for success. This edition of
Careers in Financial Markets gives you a window into Wall Street careers and offers up the kind of
real world advice and inside view that you cant get anywhere else.
Careers in Financial Markets gives you
the competitive edge with:
Sector proles that feature descriptive overviews and trends for 21 different career paths
Career proles of professionals working in various sectors with valuable advice
Tips for nding a job that is tailored to life on The Street and how to get in
Career management articles that help you map out your career path to the senior ranks
Industry trends to allow you to gauge who are the big players and whos hiring and
whos ring
Glossary and resource guides to keep you on top of the latest lingo, and highlight
key publications to read and organizations to join
Employer proles which provide a snapshot of whos hiring in what areas
$19.95
Focus on Career Management
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Your guide to nding a job in securities and banking
2006-07
Merrill Lynch offers you unparalleled opportunities to build your
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Merrill Lynch is an equal opportunity employer.
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Achieve anything.
Welcome
Welcome to the second edition of eFinancialCareers.coms
Careers in Financial Markets.
Investment banking is one of the most popular career choices
among todays very best graduates and MBAs, so the com-
petition to secure that all-important rst foot in the door is
intense. The aim of this guide is to offer you real insights into
the world of Wall Street and the securities business, and to
give you the knowledge you need to stand out.
As you develop your career, we hope eFinancialCareers.com
will be your online companion. We serve the global nancial
community as the Webs top site for career management and
jobs in the securities, investment banking and asset manage-
ment elds. Professionals from analysts to managing directors
at the worlds leading investment banks, hedge funds, ratings
agencies and trading rms rely on us every day.
In addition to job listings, eFinancialCareers.com provides pre-
mier job market and pay analysis, employment advice and a
series of tools to help you maximize your career opportunities.
One such tool for job seekers is our series of career guides:
Careers in Financial Markets, and its sister publications
Careers in Financial Markets (UK), le Guide des Carrires en
Finance (France) and Carriere in banca e nanza (Italy). These
unique guides prole the current trends, career paths, top
players and skills required for the principal
nancial professions.
If, having read this guide, youd like to learn more about the
industry, conduct some pre-interview research, or simply post
your resume for your next job, come and visit us at eFinancial-
Careers.com. Be sure to check out our Campus Connection,
which provides news, tips, background and other information
especially for business students.
With best wishes for your future career,
Nicki Gilmour
Managing Director, eFinancialCareers.com
www.enancialcareers.com
Contents
Welcome 1
Contents 2
How to Use This Guide 3
Overview
A Career in Investment Banking 4
Trends: A Cyclical and Highly Competitive Industry 6
Sectors
Mergers and Acquisitions 8
Debt and Equity Capital Markets 10
Sales, Trading and Research 12
Quantitative Analytics 16
Alternative Investments 18
Corporate Banking 21
Foreign Exchange 22
Private Banking 24
Operations 26
Fund Management 28
Investment Consulting 32
Private Equity 34
Global Custody 36
Risk Management 39
Compliance 40
Human Resources 42
Legal 44
Information Technology 46
Marketing and Public Relations 48
Ratings Agencies 50
Information Providers 52
Finding a Job
The Recruitment Process: A Survival Guide 54
A Guide to Graduate Training Programs 56
Interview Insiders: Know Your Q&A 57
Demand High for Qualied Grads 58
Managing Your Career
Managing Your Career 60
Happy? You Should Still Keep Your Resume Ready 63
Building Effective Relationships With Mentors 64
Making Friends and Inuencing People 65
Take the Offer and Run 66
Voices of Experience 68
How the Right Recruiter Can Push Your Career 69
Recruiter Q&A: John Mazzei 70
How to Face Traders Trauma Then Trade Some More 73
How to Blow Your Career in 90 Days or Less 74
How to Future Proof Your Career 75
The Global Private Equity Club and How to Get In 76
What it Takes to Make Managing Director 78
Career Path: Joseph Ghartey 79
Career Path: Jeffrey Sherry 80
Resources 81
Careers in Financial Markets is published by eFinancialCareers Ltd, www.enancialcareers.com
Editor: Mark Feffer; Project Manager: Lena Quek; Design & Production: Michael Ballou Dudley; Marketing: Maria Slabaugh
Writers: James A. Ambrosio, Caren Chesler, Dona DeZube, Maureen Nevin Duffy, Carol Gray, Emma Johnson, Scott Krady, Lena Quek, Myra Thomas
Additional copies: cs@enancialcareers.com +1 800-380-9040; 2006-07 eFinancialCareers Ltd; no part of this publication may be reproduced without permission
Employers
For Diversity, Banks Chase the Same Talent 82
Going Global: International Career Options for Graduates 84
Better to Go Bulge or Boutique at Career Start? 85
Employer Essentials 86
Employer Proles 87
Glossary 90
Compliance and the Shape of Things to Come 92
How to Use This Guide
Careers in Financial Markets is designed to be used in conjunction
with eFinancialCareers.com, where youll nd up-to-date pay and hir-
ing news, career advice and information on employment trends in the
nancial markets. This guide will ground you in the securities industrys
different sectors and provide background information on available
career paths and the skills youll need to be successful.
To be credible at interviews, you have to know the difference between,
say, global custody and private equity, or risk management and compli-
ance. Thats why our Sectors section reects the range of professions
and skills needed for each area. The Overview presents trends and
career paths across the industry as a whole and investment banking in
particular. Finding a Job provides tips for identifying and landing not
just your rst job, but the right rst job, while Managing Your Career
explores strategies and tactics to help you move steadily up the ladder
and to the top. Finally, the Employers section outlines the major
institutions now looking to hire the best talent.
I hope this guide will inform and inspire you for your nancial career.
And, I hope youll use eFinancialCareers.com as you build your success. If
you have questions or comments, please be sure to let me hear from you.
Sincerely,
Mark M. Feffer
U.S. Editor
eFinancialCareers.com
4
Careers in Financial Markets 2006-07
A Career in Investment Banking
Is there any such thing as typical?
Each investment bank has its own personality. Some see
themselves as cutting edge while others pride themselves
on tradition. Some celebrate the art of the deal, while oth-
ers laud diligence. Many have tens of thousands of employ-
ees in ofces around the world, and some measure their
staffs by the dozen and work out of a single ofce suite.
Despite such differences, most share a common approach
to their organization. So no matter where you work, youll
probably encounter a similar retinue of job titles in similar
spots on the organization chart.
Analyst
The rst rung on the investment banking ladder is the
analyst, and its in this position that graduates invariably
begin their careers. In the language of investment bankers,
analyst is simply another way of saying trainee.
The work analysts do varies from division to division. In
corporate nance, analysts are the number-crunchers who
study a rms nancial reports and put together pitchbooks
the company and sector research that helps a bank win
business. In sales, analysts hit the phones, calling (rela-
tively unimportant) clients on various (non-crucial) matters.
Analysts assigned to the trading oor cant trade until
theyve passed their regulatory exams. Once they have,
theyre still heavily constrained until they prove theyre not
going to press the wrong button and lose millions.
Most banks keep analysts in place for three years, then
decide whether or not to renew their contracts. Of course
at that point, analysts have the option of deciding whether
they want to stay on or make their way in another rm.
Analysts being considered for promotion must demonstrate
an aptitude for leadership, the ability to present their point
of view persuasivelyeven when its contrary to the views
of othersand an understanding of both clients and their
rms needs and motivations.
Associates
Associates are analysts whove made the grade, or busi-
ness school students whove joined the bank after earning
their vaunted MBA. Typically, associates manage and
allocate work to their own teams of analysts. Here again,
they usually hold their position for three years.
Vice Presidents
Successful associates move into the role of vice president,
and its at this level that life starts to get exciting. While
the title may sound daunting, dont be deceived: Any large
investment bank has scores of VPs in its ranks.
Vice presidents in corporate nance manage the day-to-
day affairs of associates and analysts and usually have
more frequent contact with clients. Those working in sales,
trading or research often have their own book of customers,
more exible risk parameters when trading, or their own list
of companies to research. Because sales people and traders
work on their own, exceptionally talented trading-desk VPs
can potentially make more money than their rms manag-
ing directors.
At this level, career transitions are more difcult. So, many
VPs will stay in place for longer than the typical three
years. Those who dont progress at one bank often jump to
another, where they can join at the next rank: director or
executive director.
Director or Executive Director
For directors and executive directorsthe titles are used
interchangeablythe top rung of the ladder is within
reach. These men and women are the right hands of the
investment banking worlds leaders, the managing directors.
In corporate nance, executive directors help MDs handle
relationships with client companies. In sales and trading,
they call bigger and more important clients and place ever
larger trades.
Managing Directors
Managing directors sit at the upper echelons of the invest-
ment banking hierarchy. Theyre the rainmakers who deal
directly with clients and bring in business. As happens in
any pyramid structure, few of those who started as analysts
will make it to this level. One large bank promotes only six
to eight percent of its directors to managing director each
year. At Goldman Sachs, the ratio of employees to manag-
ing director is roughly 20 to 1.
At the end of the day, individual performance, revenue
generation and client service are keys to moving up the
investment banking ladder. How long should it take? Its not
unreasonable for a hungry new analyst to become a manag-
ing director by his or her early thirties.
T HI S I S WHE RE YOU NE E D TO BE .
jpmorgan.com/careers
YOU
ARE
HERE.
JPMorgan is a marketing name of JPMorgan Chase & Co. and its subsidiaries worldwide. 2006 JPMorgan Chase & Co. All rights reserved. JPMorgan is an equal opportunities employer.
AND WEVE SPENT ABOUT TWO HUNDRED YEARS GETTING READY FOR YOU. WEVE BUILT AN INVESTMENT BANK THAT DOES
MORE BIG, COMPLEX DEALS THAN ANYONE ELSE. WEVE SET THE PACE OF CHANGE IN
EVERYTHING FROM TECHNOLOGY DEVELOPMENT TO PRODUCT INNOVATION TO RESPECT FOR WOMEN AT WORK. WEVE
CREATED A BUSINESS PLATFORM THAT LETS US MEET THE GLOBAL NEEDS OF OUR CLIENTS BETTER THAN ANYONE ELSE. AND
WE HAVE CREATED A TEAM SPIRIT THAT IS STRONG AND SUPPORTIVE, WITHOUT BEING RESTRICTIVE. NOW WERE
ENTERING THE MOST EXCITING STAGE OF OUR HISTORY WITH INVESTMENT, GROWTH
AND TALENT AT THE TOP OF THE AGENDA. EVEN IF YOUVE NEVER CONSIDERED INVESTMENT BANKING AS A CAREER
BEFORE, YOU SHOULD NOW. BECAUSE, WHATEVER YOU WANT FROM THE FUTURE INTELLECTUAL
CHALLENGE, PERSONAL RECOGNITION, PROFESSIONAL FULFILLMENT, FAST-TRACK DEVELOPMENT, A RICHER LIFE, OR ALL
OF THE ABOVE THIS IS WHERE YOU NEED TO BE. THIS IS YOUR TIME.
6
Trends: A Cyclical and Highly Competitive Industry
Opportunities and volatility abound across nancial services
A life on Wall Street may be many things, but sedentary
its not. In fact, words like intense, dynamic and
exhausting come to mind. Reach the ofce of managing
director and you can make a fortune and retire young. Be
less than successful at any point, and youll be crushed
brutally and quickly.
Your success, or failure, depends on more than how
talented you are or how hard you work. Economic cycles,
market swings and a host of other circumstances subject
even well-planned careers to ts, starts and swings.
Only the Best Succeed
Investment banks pride themselves on being meritocracies.
Staffers dont move upor even keep their jobs
unless theyre very good. Following annual reviews, rms
like Goldman Sachs or Morgan Stanley regularly cull ve
percent or more of their least-performing employees. On its
Web site, Goldman Sachs lists its 14 Business Principles,
which include this thought: We offer our people the oppor-
tunity to move ahead more rapidly than is possible at most
other places. Advancement depends on merit and we have
yet to nd the limits to the responsibility our best people
are able to assume.
Performance, however, doesnt rule alone. Revenue is right
there alongside. Unless you bring in millions of dollars and
land the bonuses that go along with them, you wont be-
come a multimillionaire. Although most investment banks
cap salaries at around $250,000, bonuses for top perform-
ers add hundreds of thousands, or even millions, to annual
compensation.
Financial service rms have suppressed salaries in favor
of performance-related bonuses for the last 20 years, says
Alan Johnson, a New York-based compensation consultant.
If youre a senior person, less than 20 percent of your pay
is base salary, and the rest is down to performance. At
junior levels its likely to be 50-50.
Hiring and Firing
The potential for phenomenal pay is the upside to a nan-
cial career. The downside is the omnipresent risk of losing
your job. Traditionally, nancial rms have hired wildly
when business was good and red just as wildly when
results turned down. The rash of layoffs in the years after
2000 followed a manic hiring spree in the late 1990s. In
1996, for example, worldwide headcount at Goldman Sachs
was 6,000. By 2001, the company had 25,000 employees.
By 2004, 5,000 of those were gone. In the early part of this
decade, Merrill Lynch reduced its headcount by 24,000 over
two years. While some observers believe Wall Street has
learned its lesson, and so will avoid such swings in the
future, many others remain unconvinced.
This is an industry with an exceptionally exible approach
to recruitment. To avoid being left behind, would-be
investment bankers should develop strong transferable
skills relevant to other industries or sectors. Working for
companies with established brand names also helps build a
more impressive resume, leaving you better placed to nd a
new job when it becomes necessary.
Graduate Recruitment:
A Variable Flow
These characteristics apply to graduate recruits as well as
undergrads. In tough times, companies might cut recruitment
to little or nothing in some divisions. When business is good,
graduate hiring becomes a bonanza. In 2000, Wall Street
dramatically increased its hiring and boosted pay by as much
as 50 percent. After all, investment banks had to compete
with all those dot-com companies so in vogue at the time.
But over the next two years, the number of graduate vacan-
cies plummeted 25 percent and students found it increas-
ingly hard to secure jobs. The dot-com bubble had burst.
Today, graduates are stepping onto a promising landscape.
Investment banks and management consulting rms are
aggressively recruiting MBA graduates. In 2006, several
banks were expecting to increase their intake by around 30
percent. Whether or not the trend holds throughout 2007
remains to be seen.
Hot Sectors
Of course, the rst step is to decide where you want your
career path to lead. Are you interested in xed income?
Equities? Corporate nance? Choose carefully: Were
talking about careers here, not simply jobs and there is
a difference. Some sectors are healthier than others, and
some sectors are traditionally stronger than others.
Ted Moynihan, a partner with the management consulting
rm Mercer Oliver Wyman, suggests considering two things
when choosing where to work: the economic cycle and a
sectors long-term growth prospects. Different points of
7
the economic cycle will favor some divisions above others,
he says. However, several areas of the nancial services
industry are beneting from underlying structural growth,
regardless of the point in the cycle.
So, ask yourself: Which areas are now experiencing either
long term or structural growth?
Hedge Funds
Theres no other way to say it: Hedge funds are hot right now.
Though your rst job wont be as a hedge fund manager, the
sector offers plenty of opportunities for people to work in risk
management, compliance or information technology.
As more institutional money is invested with hedge funds,
the funds have moved into private equity and other forms of
direct capital, providing nancing for acquisitions, recapital-
izations, leveraged buy-outs, bridge nancing, growth and
distressed situations. As a result, they have increasingly
sought staffers with experience in sourcing, valuation,
modeling, structuring and negotiation the very skill sets
possessed by investment bankers from top rms. At junior
levels, hedge funds want people who have completed an
investment banking analyst program or have a few years
as an associate under their belt, regardless of whether or
not they have an MBA. At more senior levels, the funds
seek bankers who have already made the jump to the buy
side because, in the words of one recruiter, they need the
instincts and experience of an investor.
Structured Products
Structured productssuch as complex derivative instru-
ments, meaning nancial instruments that are based on
underlying stocks, bonds, currencies or assetsis another
hot area. Its likely to remain one for some time.
Futures are simple examples of structured products.
These are instruments which provide buyers with the
right to purchase a particular nancial productsuch as a
stockat a specied date and at a specied price. A more
exotic example is a rst-to-default basket, which allows
buyers to hedge themselves against market-to-market risk,
as well as broader default risk.
More complex products usually spur a greater demand
for employees, both to work on existing products and to
develop new ones. When it comes to hiring structured-prod-
uct specialists, most investment banks are driven by their
pursuit of better investment returns: Neither the equities
nor debt markets have performed all that well in recent
years, so derivatives based on underlying products have
provided some of the only avenues for investors to achieve
higher rates of return.
Those who ultimately want to work with structured prod-
ucts should train in sales, trading or capital markets roles.
Traders who work with structured products will typically
need a masters degree, or even a Ph.D., in a mathematical
subject. Operations professionals could work in derivatives
as well, clearing and settling transactions.
Leveraged Finance
Recruiters also report interest in leveraged nance special-
ists. These are the folks who raise money for companies
that are considered below investment grade by ratings
agencies such as Standard & Poors or Moodys. Usually us-
ing a companys assets as security, leveraged nance teams
put together a debt package to meet the companys needs.
Though demand is strong, most positions require at least
a few years of experience. Still, new graduates can work
their way into the sector by taking positions in credit analy-
sis, corporate banking or accounting.
Compliance
Greater scrutiny by regulators, especially in the U.S., has
prompted securities rms to hire more compliance staff
to help ensure their departments are adhering to the law
in both letter and spirit. Not only is there a premium for
compliance people now, the job of compliance is getting
bigger, says Marie Rice, a senior consultant at Jay Gaines
& Company, Inc., a Manhattan-based nancial services
recruitment rm. The market is demanding, more than
ever, people who can sort through the complexity of the
law and translate that into specic initiatives across the
corporation.
Some rms, such as Goldman Sachs and UBS, run graduate
training programs for compliance specialists. Other routes
into the area include law or the regulatory divisions of
large accounting rms, like PricewaterhouseCoopers or
Ernst & Young.
8
Mergers and Acquisitions
Big deals, long hours, lots of travel and lots of money
Mergers & acquisitions is about doing deals: the deals that
join two companies as equals (a merger), result in one com-
pany being taken over by another (an acquisition), or one
rm selling itself or one of its business units (a disposal).
M&A specialists are the people who make these transac-
tions happen. They travel the world, earning millions of dol-
lars in fees for their rms and hefty compensation packages
for themselves. Some transactions are straightforward, such
as when Engelhard Corp., a maker of chemical and materials
catalysts, was purchased by the German chemical company
BASF AG. Others have the
potential to change the face of
a global industry, as happened
when the New York Stock
Exchange and its European
counterpart Euronext proposed
becoming a single, transoceanic
nancial exchange.
The role of an M&A specialist
is a complex one and requires
a combination of skills and
personality traits, says Allan
Walker, Japan representative
for Eban, an executive search
rm with ofces in Asia, London
and New York. M&A specialists
need to be articulate, with strong verbal and written com-
munication skills that enable them to convince key stake-
holders to move one way or another, he explains. They also
should be able to conduct in-depth analysis of a companys
nancial situation and industry position while keeping in
mind the macro view, engaging in blue-sky thinking and
sharing that vision. The role entails hard work and long
hours, often working under pressure with tight deadlines,
Walker says. It requires tenacity, patience and discretion.
Most large investment banks only become involved when
a transaction will be worth $150 million or more. Smaller
transactionsthose worth between $20 million and $150
millionare usually handled by the M&A divisions of large
accounting rms.
Putting together an M&A deal is no small task. The teams
involved often work days, nights and weekends. Once a
transaction is underway, junior bankers are kept busy as-
sembling the nancial information and legal documentation
required for its completion. Just one merger can require
reams of contracts, disclosures, regulatory lings and other
documents all produced under deadline pressure.
Still, M&A is a popular choice among business school
graduates, which is a good thing for investment banks. A
survey conducted in the rst half of 2006 by Financial News
and IntraLinks, a provider of secure online workspaces to
the nancial services industry, found that 96 percent of
Europes banks planned to hire junior employees for their
M&A departments. At the same time, remember that the
number of graduates applying to a banks M&A department
often outstrips the number of available positions.
Roles and Career Paths
Mergers and acquisitions bankers are advisors. They
counsel their clients on all aspects of buying, selling and
merging with other companies. Theyre usually a part of
a broader corporate nance group that guides clients on
the processes and strategies involved in raising the money
needed to nance a transaction.
Generally, the more senior the M&A specialist, the more
contact he or she has with clients. Analyststhe most
junior of investment bankersspend much of their time
creating pitchbooks, the documents that outline a banks
ideas for a particular transaction. For example, a pitchbook
might sketch out whether a client should purchase a com-
pany and then detail how the deal should be nanced. M&A
U.S. Announced M&A First Half 2006
Advisor Value $bn No. of deals
Goldman Sachs 156.9 39
Lehman Brothers 141.2 37
Citigroup 136.5 32
Evercore Partners 107.8 9
Rohatyn Associates 89.4 1
JPMorgan 64.0 40
Lazard 44.4 9
Merrill Lynch 40.8 30
Morgan Stanley 39.0 32
Credit Suisse 38.6 35
Source: Thomson Financial
Just one merger can
require reams of
contracts, disclosures,
regulatory lings and
other documents all
produced under
deadline pressure.
9
analysts often conduct basic industry research and build the
nancial models used to price the companies concerned.
Associates, who
are one level higher
in the banking
hierarchy, oversee
the analysts work
and check their
models to make
sure theyre correct.
Supervising the
associates and
analysts are the
vice presidents.
VPs have little com-
punction about ask-
ing for pitchbooks
to be rewritten,
even if it means
the associates and
analysts stay up
all night to make
the changes. VPs
report to directors
and managing directors, the people who own the client
relationship, and so are the main points of contact between
the bank and the client.
Sometimes, a pitchbook comes to nothing. A client may not
go along with the teams suggestions, or it might engage a
rival bank. However, when a client buys into a pitchbooks
proposals the team speeds into execution mode seeing
the deal through to completion.
Skills and Qualities
Appetite for hard work
Analytical ability and statistical aptitude
Team-working prowess
Good communication skills and self-condence
Strong attention to detail
Kathleen D. Scott, Principal, RA Capital Advisors
How did you come to work in M&A?
My previous experience was in public accounting: I worked at Arthur
Andersen in San Diego for 3 1/2 years. I worked on audits of public
and private companies in a variety of industries, such as health care,
defense and not-for-prots. RA Capital was one of Andersens clients.
Its very common for public accountants to migrate over to work for
one of their clients.
Whats a typical day like for you?
If were working on a buy-side engagement, it may include overseeing
the screening process to try to nd the most attractive targets for a
client. On the sell side, I may be strategizing on how to best posi-
tion a client in order to maximize value to its shareholders. I typically
oversee the process of nding the right buyers, such as those who
are most likely to pay a premium. I get very involved with negotiat-
ing various aspects of transaction agreements, as well as assisting
clients who are looking for private nancings. I also deal with some
administrative. But overall, my job is 90 percent deal ow.
What advice would you give to students hoping to break into
the business?
An internship is the best way to determine the areas youre inter-
ested in. A career in investment banking is very demanding. People
shouldnt go into it if they want a lot of free time. It requires you to
have a well-rounded skill set, and theres no set way to enter the
eld. Some people jump right into investment banking, while others
work for a while, earn an MBA and get into it later.
What advice would you give to junior staffers?
In general, its important in M&A and investment banking to try and
stay one step ahead of the fray. By anticipating change or peoples
needs, you can demonstrate that youre thinking as a vice president or
director would. Youll go a long way in the M&A world if you tend to
perform up to a higher role rather than simply the title you possess.
Is there anything else you think is important?
A career in investment banking requires a signicant commitment.
This is a time-intensive business, but its important to maintain a
balance in your life. Particularly, when you work as a junior analyst,
its difcult to take time off because of the pressures to perform.
But you dont want to get burned out. I have two children in elemen-
tary school, and its important that I see them grow up. While its
important to be committed to your career, life is too short to ignore
everything else.
Prole
M&A specialists are
the people who make
transactions happen.
They travel the world,
earning millions of dol-
lars in fees for
their rms and hefty
compensation
packages for
themselves.
10
Debt and Equity Capital Markets
The factory oor of the nancial markets
The capital markets are the area where equity and debt
productsmore popularly known as stocks and bondsare
created, sold and bought. Created by investment bankers in
the capital markets divisions of rms like Goldman Sachs,
Merrill Lynch and UBS, these nancial products are used by
companies and institutions to raise money that will fund any
number of business activities or nancial obligations.
Stocks, which trade on the equity capital markets, or
ECMs, represent ownership interest in a company. To put
it simply, a rms value is measured by multiplying the dollar
value of each share by the
number of shares outstanding.
When a company offers stock,
investors pay for any shares
they buy. Then, their shares
value rises or falls based on the
performance of the company
and the perception of investors
on the value of the stock. In
other words, a stocks value is
often tied to how well investors
believe the company and its
stock will perform over the short, medium and long terms.
Stocks are also known as equities.
For investors, stocks earn money in two ways. First, they
allow them to share in the companys prots when it
pays dividends. Dividends are essentially a share of the
companys prots that are divided among its stockholders.
In addition, stocks can be sold from one investor to another.
Obviously, shareholders will usually want to sell their stock
at a higher price than they paid for it.
Bonds are traded on the debt capital markets, or DCMs.
Theyre a form of loan that carry a commitment for repay-
ment at a designated point in the future. Often, the bond-
holder who is eventually repaid is likely to be different from
the investor who purchased the bond in the rst place.
Between the time they acquire a bond and its redemption
date, bondholders receive interest payments in return for
the service of loaning money to the issuer. Because these
interest payments take the form of xed cash sums paid
at regular intervals, bonds are known as xed-income
products. Similarly, the bond markets are sometimes called
xed-income markets.
In addition to stocks and bonds, a banks capital markets
division can issue more complex products. Among them are
equity-linked products, which are bonds that can be con-
verted into equities at a pre-arranged price; and derivatives,
which are nancial instruments based on an underlying
product such as a stock or other asset.
According to Thomson Financial, global equity and related
volume rose 45.7 percent during the rst half of 2006, to
$321.8 billion. Even with the stock market weakening,
the second quarter of 2006 was the strongest since 2000:
Volume rose to $173 billion from $100.5 billion during the
second quarter of 2005.
Bankers working in the capital markets division cover a
range of tasks, often specializing in originating, structuring
or syndicating an issue. Originating is another way of say-
ing creating a nancial product. Structuring means assem-
bling products, while syndicating encompasses preparing
products for sale to investors.
Origination specialists are usually senior bankers who
spend much of their time on the road, meeting clients to
learn about their nancing needs and persuading them
to engage their banks services. By contrast, structurers
are distinctly desk-bound: They spend their time creating
complex products to suit the nancing needs uncovered by
origination specialists. Once the structuring work is done,
its up to syndicators to prepare the market for the sale.
They calculate the best price range, assess demand and
make sure the correct documents are in place.
Awareness of how markets work
Strong communication skills
Ability to manage multiple projects
Perseverance
In addition to stocks
and bonds, a banks
capital markets
division can issue
more comlex products
Bloomberg is the worlds leading provider of real-time nancial news, data and analysis.
Leading corporations, news organizations, nancial professionals and individuals in
more than 127 countries rely on Bloomberg. Our products drive decisions that affect
millions of people and billions of dollars worldwide every day.
BE VALUED
A determination to communicate is built into our culture. We break down barriers
between people and encourage communication by bringing colleagues together. With
no job titles or executive areas, we foster interaction at every level. We have over 8,000
employees embodying the excellence and intellectual curiosity for which we are known.
We demand much of our people; they are treated with the respect that they have earned
by helping us to become a world leader in our industry. All this means that we create an
environment in which you have unparalleled opportunity to excel.
BE CHALLENGED
We offer graduates a variety of areas in which to perform. You can get involved with
the BLOOMBERG PROFESSIONAL service, the nancial information platform that is
our core business, or join one of our media teams distributing the latest nancial and
business news. We recruit from any background and from any discipline. From day one,
you can expect real responsibility. You will work with many business areas and people
at all levels. We work in international teams and alongside people from every culture
and background on a daily basis.
BE DEVELOPED
Career development opportunities at Bloomberg are wide-ranging. Our structure
is meritocratic, meaning that there is no hierarchy or barrier to communication. The
result is that our company is geared towards progression and advancement. You will
be evaluated solely on your own performance and the contribution you make to our
business. At Bloomberg, you learn by doing and by gaining responsibility. Training is
ongoing in every team. All employees can enroll onto Bloomberg University classes to
improve their knowledge across a multitude of subject areas. We also fund job-related
external training and study towards professional qualications.
Apply online:
careers.bloomberg.com
VACANCIES FOR
GRADUATES
Finance
IT
Media
Research & Development
Sales
Internships
Vacancies also available in
Europe and Asia
APPLICATION DEADLINE:
Year-round recruitment
12
Sales, Trading and Research
Winning and losing in the secondary markets
After a nancial product is launched, its traded on a
secondary market. Here, salespeople, traders and research-
ers sign-up clients, advise them and carry out their trading
strategies and instructions. Generally, clients involved in
these markets are high-net-worth individuals, pension funds
and institutional investors.
Sales
Salespeople spend their time working the phones, calling
clients from the moment markets open until the moment
they close, as well as during the hours before and after
trading. Once theyve signed an
order, the salespeople
pass it on to traders, who buy
the products on the
appropriate market.
To succeed, salespeople must
be charming and persuasive.
Clients often need a bit of
encouragement before buying a
product, and salespeople must
be able to call them for a chat
about market conditions as
easily as to plug 20,000 shares of a companys stock or the
latest government bond.
Between the salesperson and the trader exists a hybrid:
the sales-trader. Like salespeople, these professionals call
clients to recommend securities. Like traders, they can buy
and sell the appropriate stocks or bonds after an order has
been signed.
Trading
The people who actually buy and sell products on the
secondary markets are the traders.
Traders make snap decisions worth millions of dollars,
and can make substantial prots in the process. They get
up before dawn to be at their desks when the markets
open, and spend their days
ensconced before an array
of computer screens that
allow them to monitor the
price movements of stocks,
bonds, commodities and
other nancial products, as
well as real-time news and
research reports.
The outlook for hiring
and compensation varies
according to the type of
nancial product a trader
specializes in. In mid-2006,
Lehman Brothers and Credit
Suisse were among the
banks hiring traders as
they built new commodi-
ties teams, and investment banks continued to make hefty
prots from their trading operations.
On the other hand, many of Wall Streets traditional trad-
ing jobs are feeling the heat from an increased reliance
on algorithmic trading and technology. Some executives
estimate the sell side has lost about a third of its trading
jobs as decimalization narrows spreads and many routine
execution tasks are automated. In the long run, there may
be opportunities for professionals who can combine trading
skills with the ability to analyze and repair algorithms. Un-
derstanding when to use algorithms, when a trader has to
step in to complete an order, and how to monitor algorithm
performance through the trading day are skills that could
become increasingly important on trading desks.
Research
Researchers produce written reports that salespeople use
Wall Streets
traditional trading
jobs are feeling the
heat from an
increased reliance
on algorithmic
trading and
technology.
How successful in-
dependent research
houses will ulti-
mately be remains
an open question.
2005 Best Overall Sales Team
Rank Firm
1 Bear Stearns
2 Lehman Brothers
3 Citigroup
4 Merrill Lynch
5 Morgan Stanley
6 UBS
7 Sanford C. Bernstein
8 Goldman Sachs
9 JPMorgan Securities
10 Credit Suisse First Boston
Source: Institutional Investor
13
Damien Loh,
Foreign Exchange Options Trader, JPMorgan
What made you choose trading as your career?
I learned about trading when investment bankers came to my school
to speak to us. I wanted to be in a job that allowed me to learn
something beyond what I had learned in skill, yet allowed me to apply
what I had studied.
Can you describe a typical day?
I arrive at 6:45 a.m., when markets in London are starting to move
again with New York just coming in. I have to quote prices non-stop,
risk manage and look for new trading ideas simultaneously. I dont
stop to catch my breath until noon, when I eat lunch at my desk while
staring at the screens. As London leaves for the day, markets become
quiet and there is more time for me to read research and gure out
my prot and loss for the day. I leave work at 5:30 p.m. and it starts
all over again the next day.
What do you like most about trading?
The learning curve remains steep and its a true meritocracy. A good
trader gets promoted and compensated commensurately, without
much politics interfering with that process. I also like how it re-
quires a person to synthesize their knowledge and skills in many
disciplineslike geo-political knowledge, statistics, programming,
etc.into one job.
What skills and qualities do you need to excel in this eld?
You need an excellent work ethic. You also need to be both book
smart and street smart. Excellent communication skills are a must. A
lot of money is lost from miscommunication. And you need to be able
to handle long term bouts of stress.
Any words of advice for the aspiring trader?
A trader spends a lot of time with his or her colleagues, so besides
having the usual requisites of being smart and having a good work
ethic, students should highlight an interesting fact about themselves
on their resumes. Dont put the usual hobbies like poker or watching
movies. For example, I wrote how I was ying planes before driv-
ing and that sparked more conversations than anything else on my
resume.
Prole
to make investment recommendations to clients. They
spend their time scouring balance sheets, talking to com-
pany directors and participating in conference calls where
executives discuss their annual results and their expecta-
tions for the future. Researchers also analyze interest rates,
economies and other matters that might provide insight into
the proper valuation of nancial instruments.
In recent years, researchers have had their share of bad
press. In 2002, New York Attorney General Eliot Spitzer
imposed total nes of $1.4 billion on 10 U.S. banks after
they were accused of producing research that was biased
in favor of their corporate nance clients. Two well-known
researchers, Henry Blodget of Merrill Lynch and Jack Grub-
man of Citigroup, were barred from the securities industry
for life.
Following the Spitzer investigation, the linking of research
to use of banks other services was banned and research
houses independent of the banks have sprung up as a
result. How successful those independent houses will
ultimately be remains an open question. Since researchers
arent any longer involved with attracting business to their
rms corporate nance departments, theyre paid less than
they were before, and fewer of them have jobs. And, some
banks have moved some research operations overseas, tak-
ing advantage of lower costs and qualied talent.
continued on next page
2005 Best All-America Research Team
Rank Firm
1 Lehman Brothers
2 Merrill Lynch
3 Morgan Stanley
4 Bear Stearns
5 Citigroup
5 UBS
7 JPMorgan
8 Sanford C. Bernstein
9 Banc of America Securities
9 Goldman Sachs
14
Continued from previous page
At least one bank, Lehman Brothers, has reportedly pulled
analysts from traditional composition duties to dispense
their advice directly to client reps while sitting in the sales
room. While insiders say Wall Street has used such desk
analysts for years, recently theyve been able to earn
larger bonuses by coming up with trading ideas the desk
can successfully execute.
Traders, salespeople and researchers can be categorized
according to the products they trade, the types of clients
they sell to, or the sector they specialize in. For example,
a trader might work with foreign exchange derivatives or
corporate bonds, while a salesperson might sell equities
to pension fund investors. A researcher might specialize
in analyzing the stock price of oil and gas companies. For
salespeople and traders in particular, advancement is all
about performance.
There are two fundamental types of trader. A handful of
elite traderscalled proprietary tradersbuy and sell on
behalf of the bank itself. But the majority are ow traders
who buy and sell nancial products on behalf of their banks
clients. Salespeople tell ow traders what clients want to
buy and sell, and ow traders tell salespeople whether a
particular trade is possible at a particular price. Once a cli-
ent places an order, the ow traders must make the trade at
the agreed-on price. If they dont act quickly and prices rise,
they must sell the product to the client at a loss. However,
if prices fall, the rm sells to the client at a prot.
2005 Best Equity Trading Desk Nasdaq
Rank Firm
1 Lehman Brothers
2 Merrill Lynch
3 Morgan Stanley
4 Citigroup
5 Bear Stearns
7 UBS
8 Goldman Sachs
10 Liquidnet
2005 Best Equity Trading Desk NYSE-Listed
Rank Firm
1 Lehman Brothers
2 Merrill Lynch
3 Citigroup
4 Bear Stearns
5 Morgan Stanley
7 Goldman Sachs
8 UBS
9 Liquidnet
15
Sales
Outgoing and self-condent
Ability to grow and maintain client relationships
Excellent communication skills
Ability to understand complex products
Trading
Passionate about nancial markets
Work well under pressure
Think on your toes
Math aptitude
Research
Innovative and decisive
Ability to assimilate information and take an original
view
Excellent communication and relationship skills
James Janesky, Managing Director, Ryan Beck & Co
How did you come to work in equity research?
I graduated from Penn State University in 1984 and worked for six
years at Macys before I returned to business school at the University
of Houston. I developed an interest in equity research between my
rst and second year. I did an internship with Shell Royal Pension
Fund, and found it great to be interacting with executives at com-
panies and tracking fundamentals about stocks and investments. I
decided to work on the sell side, where we provide investment advice
to the buy sides network of retail brokers and institutional investors.
I nished graduate school in 1993 and worked in research for several
rms before joining Ryan Beck.
My day can vary depending on the time of year. I typically follow 13
stocks. I spend my day doing due diligence on companies, comprised
of independent work and outside communications with companies.
Earnings season is a rigorous period and occurs four times a year. We
evaluate what companies have reported and evaluate the quality of
those earnings. In between top-line revenues and bottom-line earn-
ings per share, there may be any number of things we help interpret
for investors. Ultimately, we make decisions as to whether individuals
should buy, sell or hold a stock. We visit companies, conduct support-
ive research, speak at conferences, and attend them, too.
Primarily, I am interacting with clients. I spend a lot of time on the
phone and also visit clients several times a year. I interact with corpo-
rate managers and independent contacts to perform due diligence on
companies. Also, I write a lot. Its the means by which we communi-
cate new information to clients.
the business?
The most important thing for anyone is to have a passion for the
work. The hours are long. There is heavy travel. You have to make
difcult decisions, like missing birthdays and recitals. You must be
passionate to be a sell side analyst.
What do you think people should be reading?
To work in equity research, its critical to be reading nancial pub-
lications such as The Wall Street Journal and the New York Times
business section. Since these publications wont cover all types of
small-cap stocks, its important to read industry publications.
Prole
16
Quantitative Analytics
Its about more than just numbers
Known to all in the industry as quants, quantitative ana-
lysts are highly sought after by investment banks and hedge
funds. Quants develop mathematical models and implement
statistical tools to assist in trading and risk management.
Once upon a time, quants consisted of Ph.D.s in physics or
mathematics with no formal training in nancial engineer-
ing. With the growth of the derivatives industry and the
increasing complexity of the nancial models used in the
markets, the aspiring quant can now choose from a number
of credible masters and doctorate programs in mathemati-
cal nance, nancial engineering or quantitative nance.
Another attractive academic qualication is computer
science. Programming skills, or a basic understanding of
computer language at the very least, are essential for many
quant positions.
Quantitative nance is in essence a multidisciplinary
enterprise, wrote Dr. Emanuel Derman, a professor at
Columbia University and director of its nancial engineer-
ing program, in Finding a Job in Finance, published in the
May 2004 edition of Risk. To be effective, you must learn
nance, mathematics and programming. If you can program,
you can always add value. If you cant, you have to be a lot
smarter to earn your keep.
There is a large demand for quants to work in statistical
arbitrage. Statistical arbitrage is a style of management
that employs complex statistical models that try to capture
small abnormalities in a securitys intraday return. Recruit-
ers say demand and pay for quant researchers is also set
to rise dramatically over the next year. There is demand
for more and more quant researchers, says Hemendra Rai,
leader of the quantitative trading and analytics practice at
recruitment rm Huxley Associates.
Can you break into quantitative analytics without an Ivy
League education? Deborah Rivera, founder of the New
York-based Succession Group, says this is actually one of
the few areas where your prospects are strong even if you
dont have an Ivy League degree. Its important, however,
that you have strong references from your professors.
Firms will also look at the quality and visibility of your
published work and its potential relevance to Wall Street.
If you publish interesting work and develop the necessary
relationships, you may very well excel in this area, Rivera
says. But the references will be key.
Rod Williams, a job market consultant with New York-
based Lee Hecht Harrison, agrees that solid references can
catapult a candidate over the preference for Ivy League
candidates, though having gone to a top school certainly
helps. The top tiers denitely help open more doors,
Williams says. However, faculty members with great
credentials and who are highly thought of in the quant/risk
world can be a big help in securing interviews, especially if
the candidate has high marks.
Williams says its also a big plus to have a work history that
relates to the eld in which youre interested. A job in front
ofce or operations, for instance, would make a candidate
more attractive.
Quantitative nance isnt mathematics or chess. Its not a
eld for brilliant idiot savants. Its an attempt to model the
world or markets and people, and you need a little wisdom
and experience to know what can work, says Derman.
Derman recommends that on top of academics, you
also learn the realities of the nancial world. Listen to
the people who live by their models. Go to practitioner
seminars and industry conferences, he says. Join the
Professional Risk Managers International Association, the
Global Association of Risk Professionals or the International
Association of Financial Engineers. Read The Wall Street
Journal and Risk, follow market rates and spreads.
Being brilliant with numbers and intellectually curious
isnt all you need to succeed. Firms are not just looking for
individuals with sizable brain power, but rather quants that
possess excellent communication skills and can interact
well with others in the business. A quant who can balance
the esoteric nature of his or her job with relating to the rest
of the business is an attractive candidate for advancement
into a management role.
Strong mathematical, programming and nance skills
Ability to work in a fast-paced environment
Keen intuition and excellent communication skills
18
Alternative Investments
The mysterious and megabucks world of hedge funds
The term hedge fund comes from the idea that money
managers can hedge their bets to ensure a prot regard-
less of whether the market goes up or down. For example,
a fund that invests in shares of Company X risks losing out
if the share price falls. To offset that risk, the fund might
buy an option giving it the right to purchase an agreed-upon
quantity of the companys stock for a set price on a particu-
lar date in the future. If the option is set at a low enough
price, the fund will prot even if the stocks price drops.
Why? Because the fund can buy the shares at a price below
the market, then resell them at market value to recover the
losses on its initial investment.
However, hedge funds arent
the only nancial institutions
to employ hedging. Banks, for
example, do it every day. What
distinguishes hedge funds from
traditional fund managers is
their willingness to push the
boundaries of normal invest-
ment techniques to achieve
unusually high returns.
Most hedge funds follow a particular investment strategy.
The most popular are:
Short Selling: Short sellers borrow assets they believe
are overvalued, then sell them. When the price falls,
they buy the instrument back at a lower price and
return it to the lender. Because theyve sold high and
bought low, their prot comes from the difference
between the two prices.
Global Macro: Instead of focusing on the movements
of particular stocks, global macro funds create and
manage their portfolios based on their reading of
worldwide political and economic trends.
Event-Driven: Managers using this strategy aim to
prot from one-off events, such as mergers, acquisi-
tions or bankruptcies.
Hedge funds are considered risky because they put money
into illiquid investments and can hold long or short stock po-
sitions. To counter this risk, some investors put their money
into funds of funds, which spread their moneyand suppos-
edly, their perilsacross several different hedge funds.
Although hedge funds have enjoyed impressive growth dur-
ing the early part of the 2000s, new money invested with
them has begun to decline. In part, this is because a variety
of other investment vehicles have become available. For ex-
ample, investors can now take advantage of private equity,
long-only funds, which offer competitive returns with lower
management fees.
Despite posting the biggest-ever gain in assets under
management in 2006s second quarter, there are hints
hedge funds may be losing
their allure when it comes
to attracting staff. During
the summer, a number of
media outlets reported on
traders and fund managers
who returned to traditional
investment banks after
leaving to dip their toes
in the hedge-fund waters.
One recruiter commented
that most junior bankers
now prefer to spend time in
the corporate world before
moving to a hedge fund.
Hedge fund jobs used to be
a big selling point, he says.
But people now are saying
they want a big name bank
on their CV for two or three
years at least.
In addition, some recruiters
speculate that a round of consolidation is in store for hedge
funds, which has led to a slowdown in hiring.
Jobs in hedge funds tend to fall into four categories:
Analysis: Analyzing the companies, markets and nan-
cial products a hedge fund invests in.
Sales and Marketing: Meeting with investors to help
sell the strengths of the fund.
Trading: Executing the investment strategy, buying and
selling nancial products according to analysts recom-
mendations.
What distinguishes
hedge funds from
traditional fund
managers is their
willingness to push
the boundaries
of normal invest-
ment techniques to
achieve unusually
high returns.
There are hints
hedge funds may be
losing their allure
when it comes to
attracting staff.
19
Steven Marotta,
Research Analyst, Wyper Capital Management
What is it like working for a hedge fund?
Its hard to generalize because every rm is different. The atmosphere
of hedge funds are largely dictated by the personalities that control
them. Here, there is one decision maker. At other funds, the deci-
sion-making process could be more collaborative. The ease at which
stocks are moved in and out of the portfolio is determined by how
much condence the decision maker has in the person making the
recommendation. If I pick a bunch of right things, have a hot hand,
that tends to build condence and, at times, vice versa.
What skills are important to be successful as a stock analyst
in this business?
I think its important to have a high degree of familiarity with the
names you are responsible for, to have a depth of knowledge of spe-
cic rms. Solid modeling skills are important to discovering the levers
in a companys operating model. However, at the end of the day, it can
be garbage in, garbage out if your assumptions arent accurate.
Interpersonal skills also are very valuable. You must have the ability
to communicate your ideas, to get along with the people you work
with, and to rise to challenges when necessary. When you are pitch-
ing a name, you will be challenged on it. So you have to be prepared,
and you cant be a shrinking violet. That is something I underestimat-
ed coming to this side of the business. You must have the information
at hand to back up your recommendations.
While I cant speak for what happens at other funds, I think that if there
is common denominator for stock analysts, it would be that you must
be able to stand up under re and have the conviction that your recom-
mendation is the right one for what your rm wants to accomplish.
What advice would you offer to students?
Get good gradesand go to class. The pedigree of the school
helps, but if you arent in one of the top schools, getting a job with
a marquee name early would help. If I had to do it over again, Id
have tried to begin my career on the buy side at a well-known shop
such as Soros or Fidelity. It may have allowed my career to advance
at a quicker pace. Not everyone can work at those types of rms, of
course, so whatever situation you land in, make the best of it. Devel-
oping a network helps, too.
Control your destiny by knowing what to do: Dont be arrogant, dont
turn people off, and think in terms of what you can deliver for some-
one who can possibly hire you.
Prole
Risk Management and Back Ofce: Settling trades,
working out a hedge funds risk exposure and making
sure everything ows smoothly. Many small funds
outsource these tasks to the prime brokerage divisions
of investment banks.
Most roles are quite distinct: If you join as a risk manager,
the chances of becoming an analyst are slim. On the other
hand, its not unknown for analysts to become traders.
The bad news is that hedge funds rarely take graduates
fresh out of school. Most are small organizations without
the time or resources to train graduates themselves. In-
stead, they prefer to hire them away from investment banks.
Math aptitude
Adaptability
Creativity
Top 10 Hedge Funds Ranked By 2005 Return
Fund Name Return % Assets $m
Dejima Fund Ltd 264.4 92.1
Gazinvest Fund 237.8 20.3
Prosperity Quest Fund 172.2 64.4
Phalanx Japan AustralAsia
Multi-Strategy Fund Ltd 152.0 5.0
Blue Sky Japan LP 142.9 571.4
Russian Prosperity Fund (Euro) 136.8 81.7
Prosperity Cub Fund 133.9 167.2
Russian Prosperity Fund USD (A) 131.9 586.0
Russian Prosperity Fund (C Shares) 128.6 454.1
Vision Opportunity Master Fund Ltd 124.9 12.3
Compiled by MARHedge
Source: The Barclay Group
Register today!
Please contact Jeannie Lee at +646.274.6213 or jlee@marhedge.com
Peter Fletcher, Parly Company SA
Stewart Massey, Massey, Quick & Co LLC
Stanley Pantowich, TAG Associates LLC
Jane Abitanta, Perceval Associates
Louise Wasso-Jonikas, Angelo, Gordon Advisors LLC
Keith Rosenbloom, CARE Capital Group
Petek Kutucuoglu, GEM Global Equities
Management S.A.
E. McClain Bradley, Eno Farms Inc.
Fred Fruitman, Loeb Partners Corp
Stan Kowalewski, Fund of Funds Group,
Columbia Partners LLC Investment Management
Harlan Peltz, Peltz Capital Management LLC
Suzanne Murphy, Acorn Partners
StormBoswick, Brompton Cross Capital
Matthew Hoffman, Mayer & Hoffman
Capital Advisors LLC
Anthony Scaramucci, SkyBridge Capital LLC
Hugh Lamle, M. D. Sass Investors Services Inc.
Francois Bloch, Amas Bank
Russ Prince, Prince & Associates
Arthur Bavelas, Resource Network LTD
Edward Renn, Withers Bergman LLP
John Bailey, Spruce Private Investors LLC
Gordon Haave, Investment & Consulting Group,
Asset Services Company
Heidi Steiger, Lowenhaupt Global Advisors
Mike Murgio, Asset Management Advisors
Peter Tobeason, J.H. Whitney Commodity and
Macro Trading Advisors LLC
Peter Panayiotou, Gulf Finance House
Eric Meyer, Shariah Capital,
A Division of Meyer Fund Management LLC
Suzy Peterfriend Ross, FamilyLegacy Inc.
Guy Benstead, Cedar Ridge Partners LLC
KEYNOTE SPEAKER
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SPEAKERS INCLUDE:
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Wealth Summit 2006
13th Annual International Conference on Hedge Fund Investments
October 22-24, 2006 Southampton Fairmont, Bermuda
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21
Corporate Banking
Some see consolidation, others opportunity
Corporate banking is the broad term given to the banking
services that large companies, governments or other big
institutions need in order to function from day to day.
These services range from the relatively simple business
of issuing loans to more complex matters such as helping
to minimize taxes paid by overseas subsidiaries, managing
the impact of foreign exchange rates or determining how to
nance the construction of a new theme park. Many institu-
tions offer corporate banking customers services to support
retirement plans, benet plans and payroll.
If a company exports its
products, corporate bankers
might also arrange a process
of international payment or put
together trade nance packages
that help ensure the rm is paid
by its foreign customers.
Often, the roles of corporate
bankers and capital markets
specialists overlap. Bankers
working in capital markets help
companies raise money by issuing equities or debt. Corpo-
rate bankers typically help clients obtain money through
loans. Neither specialty works in a vacuum, and corporate
bankers will bring in the expertise of their capital markets
colleagues when its necessary to serve the needs of their
customers.
Increasingly, corporate banking requires an understanding
of complex nancing methods, such as securitization in
which a company sells bonds based on the money it expect
to earn in the future from assets like rented shop space
or a back catalogue of popular music. Some institutions
organize teams of bankers around specic areas of industry
expertise. Bank of America, for example, says it leverages
the knowledge of in-house of industry experts with product
specialists to deliver customized nancial solutions. The
notions of customized service and specialized expertise are
common among corporate banks.
In the past ve years, the sector has changed considerably
as participants look to become bigger as a way to better
compete. Some banks have sought to strengthen their
services through consolidation. Others, such as the Royal
Bank of Scotland, have added staff and other resources
to take advantage of what they perceive as signicant
opportunities in the corporate banking marketplace. (In fact,
European banks recruited more than 3,600 corporate and
investment banking staffers during the rst eight months of
2006 to strengthen their businesses and maintain surging
prots.)
While the career path for corporate bankers can vary from
institution to institution, many start out working as credit
analysts. These folks spend
their time reviewing the
balance sheets of clients,
and prospective clients, to
determine whether theyre
likely to pay back any loans
that are made to them.
From the credit analysts
chair many bankers move
up to the ranks of relation-
ship managers, who are
responsible for making the
actual lending decisions
for a relatively small group of customers. The job requires
an intimate understanding of each clients strategy, and a
strong appreciation of the risks of default.
Not interested in relationship management? Then consider
treasury management. Professionals in this area help busi-
nesses make sure they have the cash ow to pay for goods
and services and help navigate uctuations in the value of
their foreign currency holdings. To do this, banks provide
services to streamline and manage deposits and disburse-
ments, manage cash and minimize fraud.
Corporate banks also offer positions in operations, including
such areas as technology and human resources. Various
banksincluding Citigroup, Goldman Sachs, UBS and
HSBCoffer training in corporate banking.
Demonstrable drive
Services range
from issuing loans
to determining how
to nance the
construction of a
new theme park.
Increasingly,
corporate banking
requires an under-
standing of complex
nancing methods.
22
Foreign Exchange
Not for the faint-hearted
Sometimes referred to as forex or FX, the foreign
exchange market is all about converting one currency into
another and studying global events in order to predict
uctuations in exchange rates.
Have you ever bought a foreign currency before going on an
overseas trip, only to nd its value dropped by the time you
arrived? If you have, youll appreciate the need to keep an
eye on the relative value of currencies. The challenge faced
by banks and their clients is similar, though measured on a
much larger scale. For example, a U.S.-based company that
holds hundreds of millions of euros could face huge losses
if the euro drops even minutely against the dollar.
Working in foreign exchange means predicting whether one
currency will fall (depreciate) or rise (appreciate) against
another. If depreciation is forecast, salespeople and traders
advise their clients to sell the falling currency and buy the
one thats appreciating. Its a simple variant of the market
maxim buy low, sell high.
Currencies themselves are traded on whats called the
spot market. Along with them are products called futures,
which allow investors to, basically, predict the future
direction of foreign-exchange price movements. Futures fall
into the class of assets called
derivatives, which are contracts
whose value is based on the
performance of an underlying
nancial asset, index or other
investment.
Over the last few years, the
big foreign-exchange story
has been the weakness of the
dollar, which lost ground consis-
tently against the euro from
mid-2002 to March 2005. In
the later part of the year, the
currency regained ground as the
Federal Reserve raised interest rates, and so made it more
attractive for international investors. By the middle of 2006,
a number of Wall Street rms were introducing products for
individual investors who wanted to invest in foreign curren-
cies as a hedge against the weak dollar.
Meantime, the market was expanding, with the consult-
ing and research rm Greenwich Associates reporting
that global currency trading
volume rose nearly 14 per-
cent during 2005 compared
to 2004.
Although recruiting efforts in
FX were modest in 2006, with
some observers saying activ-
ity was more about upgrading
than wholesale expansion or
change, several banks were
building their teams. These
included Bank of America,
which was completing a build
out begun in 2005, and Dresdner Kleinwort Wasserstein,
which was committed to growing its 150-person FX staff by
10 percent. In addition, investment banks, asset managers
and hedge funds were hiring FX professionals to work the
currencies of emerging markets. Merrill Lynch and HSBC
were both reported to have hired emerging market foreign
exchange professionals during 2006, and many banks see
the area as one with strong growth potential.
In FX, professionals
focus on trading
currencies and their
derivatives instead
of bonds and
equity products.
Many banks see
emerging markets
foreign exchange as
being an area with
strong growth
potential.
Best Bank in FX in North America
Rank Total votes* Banks Corporates Investors
1 Citigroup Citigroup Citigroup Citigroup
2 JPMorgan JPMorgan JPMorgan BoA
3 BoA UBS BoA JPMorgan
4 UBS BoA BNY RBS
5 BNY BNY ABN Amro Goldman Sachs
*The companies listed under this column are placings for overall votes. These
were compiled from the 2,639 respondents of the survey. Placings listed to the
right detail the voting in separate client segments.
Source: fxweek.com
Best Bank for FX Research & Strategy
Rank Total votes* Banks Corporates Investors
1 JPMorgan UBS HSBC JPMorgan
2 UBS JPMorgan JPMorgan UBS
3 HSBC Citigroup UBS Goldman Sachs
4 Citigroup HSBC ABN Amro HSBC
5 Goldman
Sachs
Goldman
Sachs
Citigroup Citigroup
23
Advances in technology have made much of the work
involved in FX more efcient. Computers have replaced
fax machines for communications purposes, for example,
with their capabilities for e-mail and instant messaging.
In addition, FX instruments have grown more creative and
complex.
Like the capital markets, the foreign exchange markets
make use of salespeople, traders and researchers. In FX,
however, professionals focus on trading currencies and
their derivatives instead of bonds and equity products.
FX trading jobs are usually split between vanilla trad-
ingwhere products are simple and trades easy to ex-
ecuteand more complex derivatives trading. As in other
sectors, sales jobs are usually divided between client types,
with some salespeople specializing in hedge funds and oth-
ers selling only to corporate clients. Researchers produce
written reports used by the salespeople to keep clients
informed of market developments and their impact.
If you specialize in FX, you also could become a structurer
who assembles complex, exotic derivative products for
clients.
Understanding of geopolitical events and
macroeconomics
Quick thinking with a good awareness of how
markets work
For FX derivatives: reasonably strong math aptitude
For structurers: patience and communications skills
Rebecca Patterson, Global Currency Strategist,
JPMorgan
Would you tell us about your role and career path?
I am part of a small team in charge of creating currency forecasting for
JPMorgan. My role involves research, interaction with the rms cli-
ents and working internally with our sales and trading professionals.
I also represent the bank to the general public, through both speaking
engagements at conferences and in communication with the press.
Before coming to JPMorgan I worked as a journalist, covering the
nancial markets and public sector. I studied journalism at the
University of Florida, and later attended the School of Advanced Inter-
national Studies at Johns Hopkins. I later earned my MBA, studying
part-time at NYUs Stern School of Business.
Generally, I work from about 6 a.m. to 6 p.m. I come in and read up
to see what happened in the markets overnight. Ill look for anything
that may present a trade idea. Ill look for anything that may change
my broader views.
At about 7:15, Ill lead our Hoot, which is our internal intercom sys-
tem. Well discuss with colleagues around the bank globally, via the
Hoot, what we expect to happen in the day ahead.
Each day can be different. There are data releases and often sur-
prises. Well seek out trade ideas around those numbers, then well
call clients. Well also have calls with colleagues to discuss different
views. There may be a presentation with a client. The challenging
thing about the job is that markets are always evolving, so you never
gure everything out. You can only hope to stay aware of how the
markets change, stay ahead of the curve. You never get bored in this
business.
What should students be reading?
Everything they can. I am a news junkie. I read The Wall Street
Journal and the New York Times online daily. The Economist is my
Bible on weekends. Its important to keep up with whats going on
in the world not just the dollar versus the yen, but broader, global
economic issues.
Markets are highly interrelated, so you have to be able to understand
the equity, bond and commodity markets and how they each could
impact currencies. Policymaking is also important, as indirectly it can
inuence portfolio and trade ows that in turn drive currencies. You
must have a natural curiosity about the world, which involves reading
and asking lots of questions.
Prole
24
Private Banking
For nancial markets diplomats with in-depth product knowledge
Private bankers help rich people manage their money as
privately and discreetly as possible. Their clients can
be anyone from chief executives to property tycoons,
investment bankers to professional athletes, pop stars to
members of a privately run family business. As different as
these clients may be, they all have one thing in common:
Theyre extremely wealthy. Typically, private banks seek
customers with at least $1 million to invest, but many only
accept those whose nancial assets are worth more than
$30 million.
A private bankers main role is to help clients manage their
money by investing wisely and avoiding risks that might
reduce the value of their assets. They also offer tax and
pension advice, help develop strategies for philanthropy
and offer guidance on estate planning.
Today, the job of private banker is becoming increasingly
complex. The array of potential investment products is
widening, the markets are becoming more volatile and the
impact of the economys ups and downs is often more dif-
cult to predict. More wealthy clients are investing in hedge
funds, which bring their own set of nuance and dynamics
to the wealth-management world. The nancial products
availablesuch as international equities, xed income
products, derivatives and real estate investment trusts
(REITS) to name just a feware far more sophisticated
then they were 10 years ago.
To succeed in this environment, private bankers need an
understanding of nancial products from basic stocks and
bonds to complex derivatives. They must get to know their
clients personally and be capable of delivering frank, care-
fully considered advice to people who are often nancially
sophisticated in their own right as well as strong-willed
and sure of their convictions.
Private bankers work primarily in three areas: They invest
money for existing clients, they build relationships, or
they manage back-ofce functions like human resources
and accounting.
On the investment side, private bankers either personally
manage their clients portfolios or offer detailed advice to
help them do it themselves. In this area, most private bank-
ers are product specialists who share their expertise in a
particular asset class, such as bonds or derivatives.
Those working on the relationship side are essentially
salespeople. They spend their time building connections
with clients as a way to sell their banks services. They of-
ten travel to meet clients and prospective clients, and strive
to demonstrate their banks commitment to its customers.
Once a relationship banker has established the clients
needs, investment specialists come in to create detailed,
specic solutions to meet them.
A decade ago, most private bankers combined the invest-
ment and relationship roles. While thats still the case in
some organizations, in most banks the industrys increasing
complexity has led to a separation of the two.
Many large investment bankssuch as Goldman Sachs
and UBSrun graduate training programs for private
bankers. Most private bankers are accepted into a training
program, which run for at least one year. If you dont nd a
place in such a program, you might move into the sec-
tor after getting experience in corporate nance or, more
particularly, fund management. Many people entering the
eld have MBAs, and communication skills and a strong
knowledge of nancial products are keys to success.
Discretion and trustworthiness
Excellent customer service skills
Knowledge and understanding of nancial markets
Global Private Banking Managed Assets First Half 2005
Institution AUM $bn
UBS 1301.0
Merrill Lynch Global Private Client Group 1040.0
Credit Suisse 520.6
JPMorgan Private Bank 300.0
Deutsche Bank 187.0
HSBC Private Banking 183.2
Citigroup Private Bank 177.0
Wachovia Wealth Management 155.1
ABN AMRO Private Banking 150.8
Goldman Sachs 140.9
Source: Scorpio Partnership
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26
Operations
The unsung, largely hidden heroes of investment banking
An investment banks operations division is known as the
back ofce. Unlike the traders, sales people, bankers and
corporate nanciers in the front ofce, the operations staff
doesnt work with customers to generate revenues and
prots. Instead, it provides support functions throughout
the bank, making sure everything from computer systems to
hiring works smoothly, that the rm is effectively manag-
ing its risk, and that its invoices go out and its receivables
are collected. Indeed, the divisions functions are so broad,
staffers typically specialize in a single area, such as human
resources or information technology.
At the divisions core is the function of clearing and settling
trades. This involves examining the records of traders to
make sure they match
the buy and sell orders
kept by the counterpar-
ties, the people with
whom a particular trans-
action was executed.
Ensuring that stocks
or shares bought and
sold by traders are
exchanged for the cor-
rect amount of money is
called settling a trade.
People who do this
work in an area called
settlements. Their
jobs include everything
from preparing the docu-
mentation required for a
sale to making sure the
bank has either paid for
all the shares it bought,
or been paid for all the
shares it sold.
The growing complexity and shear volume of tradeses-
pecially of derivatives, debt and exotic instrumentshas
given clearing and settlement staffs as much respect and
attention as the frontline trading desks. In addition, as
many operations specialists mature, opportunities are open-
ing up for professionals in junior roles.
If operations isnt where banks
make their money, its certainly
an area where they can lose
it. The more efcient a bank
is at conducting its business,
the greater the percentage
of revenue that goes to the
bottom line. Because of this,
banks are both seeking a higher
caliber of employee to work in
operations, and shifting simple
elements to lower-cost loca-
tions like India, China, Russia
and Scotland.
Along with this move offshore has come an increased
reliance on technology. Twenty years ago, clearing and
settlements were labor-intensive tasks involving a lot of
forms and enormous ling systems. Today, theyre largely
handled by computerized systems such as CHIPS, Fedwire
and the Depository Trust and Clearing Corporation (DTCC),
which hold securities in electronic form and transfer them
electronically.
This increased use of
technology and the grow-
ing trend toward offshoring
doesnt bode well for careers
in operations. On the other
hand, the jobs left behind
tend to be more interesting
and better paid.
A particularly notable area
is hedge fund operations, or
prime brokerage. These are
the back ofces for hedge
funds, offering everything
from clearing, settlement and
custody facilities to assistance in managing relationships
with investors and raising new funds. In large investment
banks, prime brokers can earn generous compensation.
Today, exception managers have the primary role in the
clearings and settlement department.
Operations provides
support functions
throughout the bank,
making sure everything
from computer systems
to hiring works smoothly,
that the rm is
effectively managing
its risk, and that invoices
go out and receivables
are collected.
If operations isnt
where banks make
their money, its
certainly an area
where they can
lose it.
27
When data in the electronic systems dont match, exception
managers are the ones who work out the reasons behind
the discrepancy. They talk to traders who claim to have sold
shares for $3 when the buyer reports the agreed-on price
was $2, or chase payments from a recalcitrant overseas
buyer who denies a trade ever took place.
While electronic systems have dramatically increased the
speed at which simple trades are processed, derivative
trades are often too complex to be settled electronically.
Many tasks in settling derivatives trade are still done manu-
allytrades are often conrmed by fax, for exampleand
the large number of documents involved creates roles for
documentation specialists. The sheer unwieldiness of these
tasks, however, is putting strong pressure on the industry to
adopt more automated solutions.
Despite their detail-oriented nature, most operations jobs
have a strategic element to them: Investment banks use
operations to analyze ways of making processes more
efcient. It falls to project managers to implement new
systems and new approaches. If you stick with operations,
at some point youll likely work in some kind of strategic or
project management role.
Deal with conicts rmly and efciently
Strong analytical and problem-solving skills
Attention to detail
Good organization and time-management skills
Brian Urkowitz, Global Transactional Client Services,
Merrill Lynch
It usually begins with 30 minutes of catch-up on e-mail or a morning
meeting. There can be conference calls with other regions. Today, it
was with Europe about business growth.
Then, I had breakfast with our summer analyst program from Dart-
mouth. As an alumni, I was able to arrange for a group of undergradu-
ate students to work here. For the next hour and a half I had a client
services management meeting. This session gathers the global Client
Service team together to discuss strategy and client issues.
I will spend about an hour and a half catching up on calls and e-mail.
Ill have an hour meeting with the team to review metrics about
clients and vendors, data that will tell us how about how we interact
with our clients, what goes well and what needs improvement. Next,
well have one-to-one meetings with each client service functional
head about controls. At 4 p.m., I reviewed the technology efforts for
our prime broker business. Later, there is a conference call about a
specic client request.
How does your role now compare with earlier in your career?
The biggest change is that earlier in my career I knew every transac-
tion that my team was involved with. Now, I am at a point where
I dont worry about specic transactions unless things go wrong.
Instead, I worry about what the business will want in the next six
months or year, and whether we are positioned to deal with it.
Until recently the challenge of an operations manager was to do it
cheaply without sacricing controls. More recently, clients have told
us that operations is now an important factor in how they decide to
do business. They want us to do it at the right price, but with greater
concern about service. That has made our work a high priority in the
company. So, the changed emphasis on the importance of operations
is a great thing for our business.
What advice would you give to junior staffers or students?
The biggest thing is to be able to look at how things are done and
ask why and can it be done more efciently. Any big brokerage house
has many processes that are 10 or 20 years old. They work very well
and are very reliable. We rely on our junior team members to be able
to critically analyze processes and recommend improvements, or to
engage senior managers to make necessary changes to increase our
level of quality. Its important to always question whether or not there
is a better way to do something.
Prole
28
Fund Management
A game of patience, prots, and pension funds
Fund managers are professionals who invest money
on behalf of clients including pension funds, insurance
companies and unit trustsotherwise known as institu-
tional investorswith a view toward making it grow. They
approach their work with a long-term view, buying nancial
products in the hope their value will rise over time.
In this world, there are two kinds of funds. First are the pas-
sive funds, sometimes called index trackers, which follow
the rises and falls of a nancial index. Typically, computers
make the investment decisions for these funds.
When most people think of fund management, they tend to
think of active fund managers, who buy and sell nancial
products themselves, investing in instruments whose price,
they believe, will rise over time. These funds invest in
everything from stocks and bonds to real estate and com-
modities such as oil, wheat and aluminum. Different clients
tolerate different amounts of risk, so fund management
rms usually run several funds at one time. Some offer fast
growth (with higher risk), while others offer slower growth
(and less risk).
Most large investment banks have their own fund-manage-
ment divisions, though these units have been pressured in
recent years. In 2005, Citigroup sold its asset-management
business to Legg Mason after it generated disappointing
results, and Deutsche
Bank sold a major part of
its business to Aberdeen
Asset Management
after senior staff left and
clients started withdraw-
ing money.
On the other hand, in
early 2006 half of the
chief executives of global
investment companies
surveyed said they ex-
pected revenues to grow
by a more than a fth
over the next three years.
The PricewaterhouseCoo-
pers Global Investment Management Survey found that 55
percent of the CEOs expected revenue growth of 20 percent
or more during that timeframe. U.S. investment rms were
less bullish, with 35 percent expecting revenue growth of
20 percent while two-thirds forecast growth of 5 percent to
19 percent. Whatever their outlook, retaining talent ranked
as one of the executives top concerns, both in the U.S.
and internationally. U.S. rms were more likely to use both
short-term and long-term incentives to recruit, retain and
motivate portfolio managers.
Fund managers focus on the business of managing. How-
ever, fund management companies also need marketers,
research analysts and operations experts.
Marketers wine and dine potential clients and persuade
them to invest money with their fund. They manage
relationships with
existing clients,
meet investment
consultants to
promote their rms,
and play a role in
the development of
new products.
Analysts help fund
managers choose
assets to invest
in. They spend
their time studying
companies results
and meeting with
the senior manage-
ment of businesses
the fund might in-
vest in or already has a stake in. Then they write lengthy
reports to communicate their conclusions.
Professionals in operations do everything from develop,
implement and manage information systems to settle and
report trades, manage projects and handle customer ser-
vice. However, many funds have outsourced the administra-
tive aspects of their operations to global custodians.
The career path for someone interested in fund manage-
ment should start with a college major in economics, and
In early 2006, half of
the chief executives of
global investment
companies surveyed
said they expected
revenues to grow by a
more than a fth over
the next three years.
continued on page 31
If you look beyo
to find the r
visit www.b
Who w
a job
dont h
think
Literal or lateral - the test
A simple vowel sets the two words apart, yet the
difference in their meanings is paramount.
The literal thinker stops at the obvious solution. But for the lateral mind,
the obvious is merely the start.
In the world of finance, the way you approach a problem could determine
the career path you take. And working out the answers to these six
conundrums could well be the start of you finding your way.
One.
Cut a 100 metre length of rope into 2 metre lengths. How many cuts do
you make?
Two.
A 10-foot rope ladder hangs over the side of a boat with the bottom rung
on the surface of the water. The rungs are one foot apart, and the tide
goes up 6 inches per hour. How long will it be until 3 rungs are covered?
Three.
Three switches outside a windowless room are connected to three light
bulbs inside the room. How can you determine which switch is connected
to which bulb if you may enter the room only once?
Four.
Take two apples from five apples and what do you have?
Five.
The day before yesterday, Jenny was 17 years old. Next year, she'll be 20
years old. How is this possible?
Six.
Youre all alone in a deserted house at night and you only have one match,
a lamp, a fire and a candle. What do you light first?
Now youve worked them all out, turn the page
to see if youre right.
Literal or lateral - the answers
One.
49.
Two.
Never, the boat rises with the tide.
Three.
Switch one light on for a minute; turn it off and turn another on.
Go into the room and feel the off-bulbs. The warm one is connected
to the first switch and the on-bulb is connected to the second.
Four.
Two apples.
Five.
Today is January 1st. Her 18th birthday was on December 31st.
This year she'll be 19; 20 next.
Six.
The match.
At Barclays Global Investors, we offer unrivalled
career opportunities in the financial arena to
those who take problem solving to its extreme.
Were constantly challenging old rules and creating new ones.
This approach has made us the worlds largest asset manager,
and one of the worlds top ten active fund managers with $1.6 trillion
worth of assets under management. We have over 2,500 employees,
2,800 clients and 11 offices worldwide.
Our development program will give you the chance to contribute your
ideas whether youre an undergraduate, Master, PhD or MBA student.
You can scientifically prove new investment theories, develop innovative
products, or manage portfolios and continually enhance the investment
process and its results, while learning about the whole scope of our business.
After all, who wants a job that you dont have to think about?
Please visit www.bgigrads.com to find out more.
ond the obvious
right answer,
bgigrads.com
wants
b you
have to
about?
31
Richard P. Cervone, Portfolio Manager,
Putnam Investments
There are two kinds, but both are focused on taking information. The
rst is a day in the ofce. Ill read the current days news to see which
companies reported earnings. Then, Ill meet with analysts to discuss
which stocks seem worth buying. Companies often come and visit us.
I spend a lot of time looking at nancial statements. Ill read annual
reports, and talk to my partner on the fund, Jim Wiess, about short-
term events that are happening at a company.
The second type of day is one where were traveling to different
companies. We meet with a variety of companies, talking to the chief
executive ofcer, the chief operating ofcer and the heads of different
business units. We also visit the stores themselves, to get an idea of
what theyre like and how they deal with customers, etc.
What advice would you give to students?
Take courses in nance and anything that teaches you about the valu-
ation of companies. Also, take a broad range of courses in areas such
as marketing and strategy, because theyll teach you to evaluate man-
agement decisions and how they impact the top and bottom lines, as
well as how the businesses operate. Learn as much as you can about
business on your own. And, its important to communicate a high level
of enthusiasm when looking for jobs at mutual funds.
What should people interested in this sector be reading?
I tell people to read major newspapers such as the Financial Times,
the New York Times and The Wall Street Journal. If you have an inter-
est in a specic industry, read trade publications that cover them. It
can be tough to keep up with all of them, so pick a few areas to gain
an edge or better understand an industry. Also, read company-specic
information, such as 10-K and 10-Q lings and annual reports. These
will help you make independent judgments about companies. The
tough part is cutting through the clutter and getting to what is most
pertinent.
Any other thoughts?
A career at a mutual fund is a wonderful career. I enjoy the balance of
working with people like my partner, or speaking directly to company
management. It involves a lot of quantitative work, like working with
nancial statements, numbers. But theres also a street corner
aspect to the business. I enjoy going into retail stores and seeing how
they do business and learning about their operations. It helps to con-
nect all of the dots when assessing a companys business.
Prole
continued from page 28
then possibly an MBA. Starting off as a buy-side analyst is
a good rst step into the working world: Its important to
have good analytical skills and use them to focus on a sec-
tor you can cover to create expertise.
Understanding of how the nancial world operates
Ability to assimilate information and pick out key
points
For researchers, an inquiring mind
For marketing experts, excellent communication skills
Top Ten Largest Asset Management Firms
Rank Company AUM $bn
1 Barclays Global Investors 1,400.5
2 State Street Global Advisors 1,367.3
3 Fidelity Investments 1,299.4
4 Capital Group Companies 1,050.4
5 The Vanguard Group 852.0
6 Allianz Global Investors 790.5
7 JPMorgan Asset Management 782.6
8 Mellon Financial Corporation 738.3
9 Deutsche Asset Management 723.4
10 Northern Trust Global Investments 589.8
Source: Global Investor Magazine
32
Investment Consulting
Strategic advisors toand scrutinizers offund managers
Investment consultants advise investors such as pension
fund trustees on what to do with their money. They help
their clients determine a proper asset allocation for their
goals, and identify appropriate fund management rms with
whom they might invest their money. In the process, they
look at the fund managers track records and try to predict
how they will perform in the future, knowing that strong
returns over the past decade dont guarantee a fund will
avoid a fall in value during the next 12 months.
To avoid turbulent stock markets, many investment consul-
tants have advised clients to switch money away from equi-
ties into bonds and higher risk alternatives such as hedge
funds. Hedge funds aim to produce positive returns in both
falling and rising markets.
Some of the larger investment consulting rms include
Watson Wyatt, Mercer, Wilshire Associates, Frank Russell
Co., Callan Associates, BARRA RogersCasey, Evaluation
Associates and Capital Resource Advisors. Each hires an
average of six to 12 new graduates per year.
Recently, the sector has been pressured by competition
from investment banks, changes in pensions and the cost of
expanding research departments. To avoid the appearance
of conict of interest, many consultants have stopped offer-
ing lucrative advice to asset managers.
Jobs in investment consulting usually fall into one of two
general categories: asset allocation and fund selection.
Asset allocation specialists advise clients whether to invest
in equities, bonds, private equity funds or alternative asset
classes. For pension fund trustees, this means helping
ensure the investments generate the returns necessary
to pay pensions over the next 30 years or more. Theirs is
a complex role that involves examining economic factors,
such as interest rate changes, as well as the timing of the
pension funds liabilities (or pay-outs) and the likely risks
and returns associated with each type of asset. To help
do all this, asset allocation specialists create mathemati-
cal models that forecast how a clients money should be
divided among asset classes.
Fund selection specialists analyze individual fund manag-
ers and ask questions about their investment strategy.
They scrutinize particular funds and write reports on the
strengths and weaknesses of each. Most investment
consulting rms produce condential lists that rank each
fund manager according to his or her likely success going
forward.
Both fund selection and asset allocation also have relation-
ship specialists, who are the sectors true consultants.
While many specialists work in research and focus on a
particular type of fund or investment product, relationship
specialists tend to be generalists. They often have a more
senior role, since
investment-consul-
tant staff members
typically begin their
careers in research
and move into
client-facing roles
only as they gain
more experience.
Most large invest-
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rms take on graduates. At some point, youll have to earn
a professional qualication such as the Chartered Financial
Analyst (CFA).
Powerful reasoning skills
At some point,
youll have to earn a
professional qualication
such as the Chartered
Financial Analyst (CFA).
Our ambition:
be the best
at what we do
For more information on career opportunities, visit https://careers.us.socgen.com
E u r o C a p i t a l M a r k e t s D e r i v a t i v e s S t r u c t u r e d F i n a n c e
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34
Private Equity
Requirements: experience or an MBA
Like the capital markets divisions of investment banks,
private equity funds raise money for companies in need of
cash. But while bankers do this by selling a rms stocks or
bonds, private equity funds do it by offering cash to busi-
nesses in exchange for an ownership stake. They become
co-owners, or even sole owners, of the companies in which
they invest.
In ideal situations, they invest in underperforming compa-
nies, turn them around, and sell their stake at a prot some
years later. Sometimes private equity companies engage in
asset stripping, or breaking up a
business and selling its assets
separately.
The money invested by private
equity funds is frequently
used for management buyouts
(MBOs), where a company or
one of its divisions is bought
by its managers. Alternatively,
the funds may be used for a
management buy-in (MBI),
where managers from outside
take over a rm.
Venture capital and private
equity are often used inter-
changeably. But strictly speak-
ing, venture capital refers to the
funding of new and developing
businesses, while private equity is more often associated
with MBOs and MBIs.
The private equity industry is booming due to the lack of
trade buyers and the relative ease with which private equity
rms can sell their investments at a prot. Usually, trade
buyers bid against private equity funds to buy underper-
forming rivals, but recently they have been doing this
less often.
Two other factors are contributing to the boom, says one
general partner of an equity/venture capital fund: First is
the relative ease of nding low-cost debt nancing which
typically makes up 50 to 70 percent of a transactions total
purchase price. Second is the fact that institutional and
retail investors have provided unprecedented amounts of
capital to private equity funds as a way of diversifying their
investment portfolios. Recently, private equity returns have
reached over 30 percent annually.
Folks in PE like the sectors creativity, independence and
lack of bureaucracy. Because private equity rms tend to be
small, juniors can benet from a atter, more intimate work
environment than theyd nd at a large investment bank.
People who work in private equity can make huge amounts
of money. They also benet from the kind of job security
most investment bankers only dream of. But dont count
on nding a job easily here: Private equity funds hire few
juniors, and they hire almost no one straight out of college
(see The Global Private Equity Club and How to Get In on
page 76).
There are two main
entry points to a career
in private equity: After
youve been working at
an investment bank for
two or three years, or
immediately after youve
received an MBA.
Typically, junior staff
members handle number
crunching and analyze
the companies in which
the fund is considering
investing. On the next
rung are the principals,
who determine whether
an investment deal is
worth pursuing and, if it
is, undertake tasks from arranging the necessary documen-
tation to negotiating the right price.
People in private
equity can make
huge amounts of
money and benet
from the kind of job
security most
investment bankers
only dream of.
In ideal situations,
private equity funds
invest in
underperforming
companies, turn them
around, and sell their
stake at a prot some
years later.
35
Imran Ali, Associate, Alta Communications
How did you get into private equity?
After the end of my rst year as an analyst in an investment bank, I
was contacted by a number of headhunters looking to place candi-
dates with investment banking experience into elds such as private
equity, venture capital and hedge funds.
I personally looked toward private equity for the in-depth nature of
the job. Unlike banks and hedge funds that operate by doing more
transactions, and quickly, private equity deals usually take more time
and require even the most junior of associates to get deep into the
weeds and understand the nuts and bolts of a company, its industry
and the dynamics surrounding a deal. In my view, it offers the best
opportunity to learn the maximum amount within a short period of
time, not just about nance but about the legal aspects of a deal and
the operational aspects of a company.
How does working for a private equity rm compare to an
investment bank?
Its similar on some levels, but overall its markedly different. The
necessity to have a strong grounding in nance and accounting holds
true, but youre required to not only have technical skills, but the abil-
ity to make good decisions using those skills. This job also requires
you to have a lot more direct interaction with parties you wouldnt
necessarily deal with as an analyst in a bank. A private equity job
requires a higher level of responsibility. An analyst position at an
investment bank provides a good platform but typically wouldnt allow
for a junior person to gain the same exposure and experience.
Whats been the most challenging aspect of your career
so far?
Just understanding the scope of what needs to be done and how to get
smart on those to-do items is the most difcult part of the job. Large
investment banks have formal training programs, but junior private
equity professionals do most, if not all, of their learning on the job.
Do you have any tips for students who want to break into
private equity?
Know your nance and accounting, and polish up those skills by work-
ing at either an investment bank or a consulting rm beforehand. Dont
be afraid to have an opinion and to take a stand on any deal or invest-
ment opportunities. Be humble and learn to work well with others
not just colleagues, but also counterparts in a deal and agents, etc.
Prole
Originators are at the top of the private equity tree. They
are usually the funds partners, who, as their title suggests,
originate and oversee deals. When one of the funds invest-
ments is sold at a prot, these are the folks who make the
most money.
Condent and outgoing
The Global Private Equity Awards 2005
North America Champions
Award Firm Name
LBO rm of the year The Blackstone Group
Mid-market rm of the year DLJ Merchant Banking
Venture Capital rm of the year Accel Partners
Best law rm (fund formation) Debevoise & Plimpton
Best law rm (deals) Simpson Thacher & Bartlett
Best debt provider JPMorgan
Best M&A advisor Goldman Sachs
Best placement agent Credit Suisse
Source: PrivateEquityOnline.com
36
Global Custody
Guardians of the worlds nancial markets
Global custodians look after the assets of their clients or,
rather, the proof of the assets: the certicates that repre-
sent stock and bond ownership. Before computers existed,
global custodians had gigantic ling systems for their core
work storing certicates of stock and bond ownership.
Today, certicates related to asset ownership are stored
electronically, making the business of custody much less
space-intensive.
Typically, global custodians charge fees of up to 0.08 per-
cent of the assets theyre managing. That might not seem
like a lot, but when you multiply
it by the billions of dollars the
industry is responsible for, youll
see it adds up quickly. Today,
the total value of worldwide
custody assets is $82 trillion
according to globalcustody.net,
a specialist Web site.
Like so many other areas of
Wall Street, fees for global
custody are under pressure as
the sectors players compete
for the same business. This is
driving custodians to branch out
into more lucrative businesses, such as securities lending
and risk measurement. In turn, small custodianswho lack
the manpower and technological wizardry for these higher
margin activitiesare gradually being subsumed into
bigger players.
Still, a lot of people are employed by global custodians. At
the end of 2005, Mellon Financial Corporationone of the
worlds larger custodians in terms of assetsemployed
a total of 16,700 people globally, while Bank of New York
employed more than 24,000 and Northern Trust had around
8,000. While some of those staffs were engaged in busi-
nesses such as private wealth management, many were
engrossed in tasks related to asset servicing. Recruiters say
the industrys appetite for staff continues unabated. Cus-
tody jobs are growing, observes one. Theres a denite
lack of people to ll the roles.
Traditionally, much of the work in global custody is admin-
istrative and repetitive. Recently, however, the custodians
role has widened to include a range of other services
including income collection (e.g. collecting dividends from
clients investments), performance measurement (calcu-
lating the returns clients investments have made over
a period of time) and proxy voting on behalf of clients at
shareholder meetings. Custodian rms usually specialize
in a particular area, so exactly what you do will depend on
where you work.
Corporate action professionals normalize and consolidate
corporate announcement informationwhich is called
scrubbing, in industry parlanceto inform clients about
company events that could impact the value of their shares.
Staffers in fund operations might record and monitor the
investments made by fund management clients, or work on
clearing and settlements. Staff in clearing and settlements
ensure that contracts and payments are in place following a
trade made by a client. Similar to operations staff working
in investment banks, a custody houses fund operations
staff looks for and resolves exceptions that occur when
trades have not been settled properly. In addition, growth
in the hedge funds sector has created demand for staff
familiar with complex derivative products and hedge fund
accounting practices, who are predictably hard to nd.
Custodians also offer more
client-focused and techni-
cal jobs. Relationship
managers, for example,
work with clients to reas-
sure them that their assets
are safely maintained.
Graduates may start out
in corporate actions or
settlements, then move
into other positions after
a few years. Few global
custodians offer struc-
tured graduate training
programs, but you can
help position yourself for the sector by speaking a second
language, grounding yourself in economics, nance,
marketing and accounting, and gaining experience with
project management.
Custody jobs are
growing, says one
recruiter. Theres a
denite lack of
people to ll
the roles.
Traditionally, much
of the work in global
custody is adminis-
trative and repeti-
tive. Recently, how-
ever, the custodians
role has widened
37
Strong communication, presentation, and selling skills
Organized and process-driven
Patrick Costello, Global Head of Network Mgmt,
Mellon Group
Can you tell us about your career path?
In the early 1980s, I owned a bar, which I managed at night while
taking classes during the day at the University of Cincinnati. During
a comparative economics class, I was stunned to learn that in 1997,
Hong Kong was going to revert to the Peoples Republic of China.
It really grabbed me. I wanted to experience it. So I made a ten-year
plan. I graduated with a bachelors degree, sold the bar, landed an
entry-level job at a discount brokerage house and started to ll out
applications to MBA programs. Then I married a partner who really
had no interest in moving to Hong Kong. End of plan until a couple
of years later when I met a co-worker who had a job that required
going to Hong Kong once a year. I set my sights on his job.
I asked questions, let it be known I was very interested in contribut-
ing to the rm by working in the same area, basically made a pest of
myself. But showing that interest led to a position reporting to this
manager, and eventually I succeeded him as his own career advanced.
For a number of years, I regularly visited Hong Kong to advance the
custody services of the bank.
I have the best job at the bank. It requires a look through the entire
organization from back ofce, where my team resides, to middle
ofce and front ofce. On top of that, my colleagues and I represent
Mellon in its relationships with nancial institutions around the
world, regularly receiving their representatives in our ofces and
performing due-diligence inspections of their sites around the globe.
Our team is pulled in many directions, giving us the opportunity to
contribute to day-to-day operations and the delivery of service to
clients, and also to help develop the product so it can maintain its
leading position in the marketplace.
the business?
My career wasnt planned. I found it. Most are. Keep your eyes open,
speak up and take in as much of the road as possible. As far as
courses go, unless you have a specic professional eld of interest,
a well-rounded base is the best course. A foundation in economics,
nance, marketing and accounting is essential. Beyond that, the real
value lies in uency in a second language, project management skills
and experience, ow analysis and an awareness of the general world.
A real plus is experience living and/or studying abroad anywhere
for any reason. The point is to get out there.
Prole
Banks by Global Custody Assets Worldwide 2006
Provider Total assets under custody $bn
The Bank of New York 11,970
JPMorgan 11,700
State Street 10,700
Citigroup 9,142
Mellon Group 4,300
BNP Paribas 4,132
HSBC Securities Services 3,200
Northern Trust 3,100
UBS AG 2,919
Socit Gnrale 2,500
Source: globalcustody.net
www.financialnewsonline-us.com
Business is like any game. It has its players, a language, a complex
history, rules, controversies and a rhythm
I learned mountains about business just by reading every financial
newspaper and magazine I could get my hands on. From them,
I picked up what deals worked and which failed, and why. I followed
peoples careers. I tried to understand what kinds of strategic moves
were criticized and which were praised
I still believe the business media is such a good teacher that I am
amazed when I meet a young person who doesnt just consume it.
Dont let that happen, this mentor is right there for the taking!
Jack Welch, Winning
R
E
G
I
S
T
E
R

T
O
D
A
Y
F
O
R

F
R
E
E
A
C
C
E
S
S
Jack wasnt talking only about Financial News Online US, but in investment banking
and securities no-one comes close to covering the game like we do.
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39
Risk Management
The brake on a banks risky activities
Arguably, risk managers have the most obvious job title on
Wall Street.
These are the people who make sure that investment banks
arent overexposed to a plummeting stock market, or dont
make huge loans to a company thats on the verge of bank-
ruptcy. They examine the business from a variety of angles
to make sure it can continue to operate in the event of a
massive computer system failure or a terrorist attack.
In recent years, the competition for risk managers has
heated up as hedge funds began using higher bonuses
to attract them away from traditional investment banks.
During 2006, capital market rms seemed to be upping the
ante, increasing their compensation for risk managers so
that, in the words of one recruiter, hedge funds will need
to dig a bit deeper into their pockets in 2006 to attract or
retain top talent.
Some observers say risk management is increasingly being
carved out from trading desks or senior management
operations, where theyve resided until recently. Hedge
funds, said one, are seeking to position risk management
in ways that are more independent from the trading side of
their business.
Risk managers break risk into several categories.
First, theres market risk, also known as systemic risk. This
is the risk that a whole group of traded nancial products
(for example, stocks, bonds or commodities) will fall in
value at the same time. Market risk is caused by events
outside of the market, such as rising oil prices, terrorist
bombs, earthquakes or a sudden rise in interest rates.
Credit risk is the danger a particular company or individual
will default on its obligations. This is becoming an increas-
ingly complex area as credit-derivative products allow banks
to trade the risk that a company will fail to repay a loan. If
the customer defaults, whoever bought the credit default
swap has to repay the balance of the loan to the bank.
Operational risk describes the danger that something might
go wrong in the day-to-day running of the bank. Reputation-
al risk, sometimes considered a sub-sector of operational
risk, involves the possibility that something will happen to
damage a rms reputation. In the wake of nancial scan-
dals, such as the collapses of Enron and Worldcom, banks
are increasingly sensitive to reputation management.
People who pursue careers in market risk typically work on
or near their rms trading oor. Market risk specialists use
mathematical value-at-risk (VaR) models to work out the
maximum amount of money the bank would lose in the case
of a particular event. They also work closely with traders to
calculate the risk associated with specic transactions.
The people in credit risk analyze company balance sheets
and meet with company directors to determine the
organizations nancial health. By comparison, operational
risk experts review the likelihood of particular risky events
taking place, and formulate plans for handling an event if it
actually comes to pass.
Reputational risk specialists work to present the banks
best side to the public. Few banks employ these types of
specialists per se. Typically, the role is dealt with by the
banks public relations department, the human resources
department or the legal team.
If you want a career in risk management, its a good idea
to join a banks graduate training program. At some banks,
risk management training is covered by the IT or operations
department. However, some larger banks offer risk-specic
training to graduates. Hedge funds seek risk professionals
with solid quantitative skills, including Ph.Ds in quant elds
such as mathematics, statistics and physics.
Strong skills in mathematics and nance
Good problem-solving and decision-making abilities
An understanding of the bigger picture
40
Compliance
The internal watchdogs of the banking world
Compliance specialists make sure investment banks oper-
ate within the rules set by government regulators. Its a
growing area that needs people who have a healthy respect
for rules and regulations. Not only that, but compliance
staffers must be able to stand their ground when advising
professionals in other areas of the bank that what seems
like a good idea wont be looked on so kindly by enforce-
ment ofcials.
In addition to interpreting the complex and ever-changing
regulations laid down by government agencies, the compli-
ance department creates a system of rules designed to ap-
ply those regulations internally. Its staff then communicates
the rules to bank employees
and works to enforce them.
In the U.S., the primary
regulatory body for nancial
markets is the Securities
and Exchange Commission,
or SEC. The SECs main goal
is to protect investors and
maintain the integrity of the
U.S. nancial markets.
Investment banks usually
split compliance into teams
that include money launder-
ing specialists, training spe-
cialists, monitoring special-
ists and advisory and product specialists. In the aftermath
of the 2001 terrorist attacks on New York and Washington,
the government tightened money-laundering regulations
considerably through laws such as the USA Patriot Act.
In 2003, the European Union also broadened its existing
money laundering regulations.
In 2005, the bulk of the $25.5 billion spent on compliance by
the securities industry went to stafng costs, according to a
survey by the Securities Industry Association, the predeces-
sor of the Securities Industry and Financial Markets Associa-
tion, or SIFMA. Increased stafng and regular inquiries from
regulators caused the industrys compliance costs to nearly
double 2002s expenditures of $13 billion, the survey found.
Much of the cost resulted from companies increasing both
compliance staffs and their compensation, which was
pressured upward both due to the immediate need for ex-
perienced compliance personnel who were in short supply
and the elevation of the
importance of the compli-
ance function within the
rm, the report said.
Roles and
Career Paths
Jobs in compliance
vary depending on the
area. Money laundering
specialists spend their
time looking out for
suspicious transactions.
For example, someone paying cash for a large quantity of
bonds will get their attention, especially if the purchaser
is someone thats never dealt with the bank before. Money
laundering ofcers report to the Treasury Departments
Financial Crimes Enforcement Network (FINCEN).
Compliance training specialists focus on internal controls,
preaching the compliance message to the banks employ-
ees. They create and present courses explaining rules and
regulations and why bankers have to follow them.
Monitoring specialists
look out for signs that
employees may be up
to no good. Recently,
much of the grunt work
involved has been
taken over by comput-
ers, which can monitor
huge volumes of e-mail
messages each day and
spot unusual events, such
as when dormant trading
accounts suddenly come
back to life.
Compliance advisors
interpret regulations and
apply them to particular
business areas and
products. An increasing
A growing area that
needs people who
have a healthy
respect for rules
and regulations.
In 2005, increased
stafng and regu-
lar inquiries from
regulators caused the
industrys compliance
costs to nearly double
2002s expenditures.
41
number are specialists who sit on or near the trading oor
and offer advice on particular types of nancial products.
They might tell traders whether or not a particular trade can
go ahead and, if it cant, suggest alternatives that could still
be acceptable to the client. Compliance advisors need to
know a lot about trading and the products theyre advising
on. Some are ex-traders.
While graduate training programs in compliancenot to
mention entry-level jobsused to be rare, today theyre
growing more commonplace. If you dont get into one of
these programs, you could apply to one of the SECs, or
work for the compliance consulting arm of a Big Four ac-
counting rm, such as PricewaterhouseCoopers, KPMG or
Deloitte & Touche.
Self-condent and assertive
Competent understanding of legal issues
Methodical
Harold Tinkler, Chief Ethics and Compliance Ofcer,
Deloitte & Touche USA
Would you describe your role?
We try to make sure that people use the available tools or seek out
help. My responsibility is to help my Deloitte partners resolve prob-
lems and administer responsibilities to encourage ethical behavior.
We help develop tools and policies for the various practices, and we
monitor them. To do this, my job is to create an environment and en-
sure policies are consistent, and of course, enforce them if necessary.
What is a typical day like for you?
My typical day is broken down into two baskets: my internal day and
my external day.
Internally, our primary tool is an ethics help line, an 800 number that
people can call condentially to ask questions about ethics and pro-
fessional behavior. They can make a report on a matter that they think
isnt right. We can develop resolutions, and often do, as the phone
rings often and people know who I am.
Externally, we have outreach programs, including speakers at univer-
sities and to members of the nancial community.
What advice would you give you professionals interested in
your eld?
To be successful in compliance you must be able to develop a deep
expertise in areas that you oversee. It requires the ability to relate to
people and complex issues that are subject to compliance monitor-
ing many of which are client matters. You have to have a mindset
compatible with quality control. The work should be the primary
motivation.
This isnt a career or role that you work at alone. Theres a lot of
cooperation, so you need to be comfortable with working in several
disciplines, such as human resources, professional, legal and person-
nel. It also requires an understanding of client relationships. Its very
important to possess a strong sense of team.
A lot of questions come up, so you cant simply teach people about
compliance and ethics. It requires more of an ability to make them
aware of the issues theyll face. Most people never intend to do be
unethical or non-compliant. Its that the workplace is complicated.
There are many gray areas when it comes to understanding what the
requirements are and how employees go about fullling them. This is
where I can help. I can help navigate through better approaches. Its
my job to make them aware, and provide a resource for people to go
to for assistance.
Prole
42
Human Resources
The people people of investment banks
Human resources departmentscommonly referred to as
HRare responsible for the people issues that arise
in an investment bank. This means everything from hiring,
ring and paying employees to implementing workplace
policies on diversity, discrimination and employee monitor-
ing. They also manage disciplinary cases.
The mantra of HR professionals? People are an organiza-
tions best asset. This is particularly relevant in investment
banks, where the difference between a good employee and
a bad employee can be measured in millions of dollars. In
addition, hiring trends at investment banks tend to reect
the state of the nancial markets: The industry has a reputa-
tion for bulking up when times
are good and laying off large
numbers when times get tough.
In recent years, most banks
have changed the structure of
their HR departments, outsourc-
ing much of their peripheral
activity. Questions about com-
pensation, benets or employee
relationswhich used to be
addressed by HR people in each
banking divisionare now
often handled by call centers.
Consequently, fewer HR people
work inside the banks, and
those that remain face increas-
ing pressure to become more
like strategic partners, under-
standing and advising depart-
ments on business matters like
reward policies and retention of
top staff.
Jobs in HR usually t into one of ve categories: employee
relations, recruitment, compensation and benets, training
and development, and generalist. Also, the increasing
number of employment laws working their way onto the
books has generated a need for professionals with a mix of
HR and legal training.
Recently, a diversity category has begun to emerge as HR
staffs are entrusted with nurturing workforces that include
more women and more members of different ethnic and
minority groups. Our marketplace is rapidly changing, and
the workforce is becoming much more diverse. We have to
recognize the customer base is changing as well, and we
need to have people to create products in our team with
a specic experience, observes Patricia David, managing
director and global head of diversity/talent and employee
programs for the corporate and investment banking division
of Citigroup.
These efforts have gained a higher prole as, increasingly,
banks efforts in diversity involve senior executives and
business-unit leaders. Says the global head of diversity for
one bank: For diversity to take, business leaders have to be
involved. Its a key to success.
HR professionals say their work has taken on a strategic
role in an industry con-
stantly on the hunt for top
talent. As one said, for-
ward-thinking companies
are keenly aware of the
intrinsic value of having
a strong partnership with
recruiting and how that
partnership is the corner-
stone of success.
Understanding the
relationship between HR
and the investment banks
overall goals is a key to
success in this sector, along with understanding the intrica-
cies of the securities business. Often, its up the HR staff
to understand the talent markets dynamics and formulate
recruiting strategies that will attract and retain the people
needed to meet the rms business goals.
Its no easy task to nd a job as a graduate trainee in an in-
vestment banks HR department. Few banks offer such train-
eeships here, and those that do usually have no more than
two or three places. However, you have options besides
landing a spot in a training program. Because banks train so
few HR staff themselves, they often recruit expertise on the
open market. Former HR staff from Time Warner, General
Electric and PepsiCo can all be found working in banks.
People are an orga-
nizations best asset
is particularly rel-
evant in investment
banks, where the
difference between
a good employee
and a bad employee
can be measured in
millions of dollars.
HR professionals say
their work has taken
on a strategic role
in an industry
constantly on the
hunt for top talent.
43
If youre interested in working in recruitment, try to gain ex-
perience with a recruiting rm that helps investment banks
nd staff. These rms fall into two categories: contingent
and retained. Contingency recruiters get paid only if their
clients make a hire. By contrast, retained rms get paid re-
gardless of whether they nd anyone to ll a particular job.
To be a recruiter at a search rm, you will usually need
previous experience. But search rms such as Russell
Reynolds, Korn/Ferry, and Heidrick & Struggles employ
bright graduates as researchers and train them to become
search consultants. International contingency recruitment
rms such as Badenoch & Clark, Robert Walters, and
Michael Page run graduate training programs.
Linda J. Gray, Vice President, KeyBank
What made you decide this was the career for you?
My internal wiring requires a great deal of people contact. I am
motivated by the nature of solving a puzzle, and thats what recruiting
is: a detective story that unfolds. Its nding the one perfect candidate
for the one perfect opportunity.
No day is typical and thats what I love about recruiting. Your to-do
list at the beginning of the day rarely matches what youve accom-
plished at the end of the day. The key is to stay exible and prioritize
the workow to maximize your efforts and results for your clients.
I deal with strategic planning for our clients workforce planning to
achieve business goals. We conduct strategy meetings, interviews,
market research, competitive intelligence gathering and cold calling.
I also read a lot of industry publications in the marketplace to keep a
nger on the pulse of the industry, to see whats going on and if there
are any major market disruptions in which people would be looking
for other opportunities.
Whats the most challenging aspect of your job?
The most challenging aspect is nding the right cultural t. You can
assess the skills and abilities of candidates, and talk about their
credentials, but nding the right people depends on whether their
personality matches up with the culture and environment of the
company and of the line of business.
What skills and qualities are needed for this eld?
Patience. It takes a healthy period of time to nd the right person for
the right seat. You need to be very good at skills assessment, putting
the pieces together for the right picture and matching candidate
skills with opportunity. You need great people skills and you need to
think strategically.
In the past, recruiting was perceived as an order-taking business.
Today, forward thinking companies ensure that recruiting has a seat
at the strategic table. They are keenly aware of the intrinsic value of
having a strong partnership with recruiting and how that partnership
is the cornerstone of success.
Any tips for folks hoping to get into HR?
Understand the strategic alliance between HR and the business goals.
Be a trusted advisor to your client. Know your business inside and out,
know the marketplace, follow the trends, understand the competition
and formulate recruiting strategies that support the business goals.
Prole
44
Legal
From internal control to M&A advisory, calling all lawyers
Securities rms are large and complex organizations, and
most of their activities have legal implications. The job of
an investment banks legal department is to make sure all
of its contracts are watertight, that it fullls its legal com-
mitments and avoids lawsuits, but is well-defended when
they do occur.
In recent years, investment banking lawyers have come into
their own, thanks to banking scandals and the potential for
hefty nes from regulators. Some never thought a lawyer
would head a Wall Street rm but look at Chuck Prince,
the chief executive at Citigroup.
Once the banks legal counsel,
Prince was promoted to the top
job in 2003, just after Citigroup
was forced to set aside a
massive $1.2 billion to cover
the costs of litigation related to
the Enron scandal and biased
equity research.
More recently, the growth
of hedge funds has spurred
demand for lawyers who can
advise them. In fact, recruiters
say competition for lawyers
with the appropriate nancial
services experience has become
so heated, its not uncommon
for law rms to require their
hedge-fund clients to agree not
to poach from their staff. Most
law rms servicing hedge funds
are perpetually short on candidates, says Adam Zoia, man-
aging partner of Glocap Search and head of the rms hedge
fund practice. Theyre desperately seeking staff.
Increased scrutiny is pushing funds to rely more on in-house
counsel. Internally, hedge funds have become more like
a proper business and most have in-house counsel, Zoia
adds. There is more and more legal work to be done.
The career of a securities lawyer can follow any number of
paths. Some might specialize in the legal complexities of
mergers and acquisitions, while others work on the trading
oor or advise capital markets teams. Some work in the
investment banks central legal ofce, dealing with
discrimination claims, workplace issues or various types
of litigation.
M&A work can involve everything from preparing the
documents expressing one companys intention to buy
another to conducting due diligence on the company
under consideration.
If you work on a banks capital markets team, youll deal
with the legal complexities surrounding the issuance of
new nancial products. In addition, lawyers ensure that the
information provided by a company preparing to list on a
stock exchange is correct and within the law.
Trading oor lawyers advise on the legality of trades and
deal with the documents required to buy and sell nancial
products. By determining
which trades can and cant
go ahead, these lawyers
play an important role in
the development of com-
plex derivative products.
Few investment banks
train lawyers themselves.
Its usually necessary
to obtain legal training
elsewhere. This typically
means working for one of
the major law rms. For
those interested in hedge
funds, a specic back-
ground in that sector isnt
necessarily required for
a job as in-house counsel
or to work for a law rms
hedge fund clients. However, experience with nancial ser-
vices, particularly in a transaction-related eld, is a must.
If youve been a securities lawyer or in M&A, you can pick
it up, says Glocaps Zoia.
Many attorneys suggest getting exposure to the real world
as early as possible, through summer jobs and internships,
especially after your rst year of law school. Says one:
Practical work experience provides a great head start.
The job of the legal
department is to
make sure all
contracts are
watertight, that
legal commitments
are fullled, and
lawsuits are avoided
or well-defended.
Internally, hedge
funds have become
more like a proper
business and most
have in-house coun-
sel, says one search
consultant. There is
more and more legal
work to be done.
45
Ability to assimilate information and pick out
key points
Very strong interpersonal and lateral thinking skills
John Marzulli, Partner, M&A Group,
Shearman & Sterling
Could you tell us how you came to specialize in M&A?
Working in M&A was an accident. As an associate (at Shearman &
Sterling) I was assigned to M&A and quickly developed an afnity for
it. Ive done M&A work for 22 years, spending six years in our London
ofce, where I moved as a young partner. I was the rst full-time U.S.
M&A lawyer to be exported overseas by the rm. I was successful
partly because of my willingness to listen to other ways of doing things.
It varies and is what keeps you interested and devoted to succeed.
Theres always something new a new business, culture or form of
transaction. I might do an entire deal through electronic means, com-
municating with people on the phone and e-mail. Other times, contact
is in-person and there is constant travel. In one deal I made 14 trips to
Europe in 17 weeks.
Much of my work involves planning. Now, Im involved in the early
stages of a transaction, where Ill sit down with the principals and try
to understand their goals and help analyze risks. From a legal perspec-
tive, its designing a path from where the client is to where it wants to
be. Clients want us to do many things: antitrust or work with industry
regulatory bodies. Often there are roadblocks to deals such as special
litigation, contingent liabilities and problems at the target company.
the eld?
Get a real summer job. Especially after your rst year of law school,
nd a small rm that will hire you as a rst-year law clerk. After a
year of studying law solely as an academic discipline, it will do you
wonders to see action in the real world.
What should people interested in M&A law should
be reading?
If youre interested in M&A or business and commercial law, the best
thing you can do is to read The Wall Street Journal. The danger is
the belief that all you need to know is the law. Reading the Financial
Times, Fortune and Forbes help you understand the business context in
which we work and the business issues that clients are wrestling with.
Prole
Top Law Firms for M&A Target Completed First Half 2006
Legal advisor
Rank
value $bn
Market
share %
No. of
deals
Wachtell Lipton Rosen & Katz 172.3 29.8 28
Simpson Thacher
& Bartlett 161.4 27.9 53
Shearman & Sterling 149.4 25.8 40
Skadden, Arps, Slate,
Meagher & Flom 123.8 21.4 75
Dewey Ballantine 117.4 20.3 25
Cleary Gottlieb
Steen & Hamilton 117.1 20.2 29
Sullivan & Cromwell 95.1 16.4 44
Fried Frank Harris
Shriver & Jacobson 92.7 16.0 26
Latham & Watkins 91.5 15.8 99
Davis Polk & Wardwell 90.4 15.6 22
Source: Thomson Financial
46
Information Technology
The work thats increasingly outsourced overseas
An investment banks information technology (IT) depart-
ment is responsible for the web of networks, computers and
software that underpin any modern nancial organization.
Firms use technology for just about everything: communi-
cating with staff, storing information on clients, and running
complex computer models to price and trade nancial
products. They are known for having some of the worlds
cutting-edge systems, especially for their trading oors,
where nancial products and commodities are bought and
sold electronically.
In recent years, IT spending has risen along with the costs
of providing technical solutions. In pursuit of lower costs,
a growing number of banking IT jobs are being outsourced
to low-cost locations such as India and China. Plenty of
banks have offshore activities already. At least one recruiter
predicts that by 2010, internal IT departments will shrink by
a third.
The good news is that banks will still need plenty of people
in western nancial centers to liaise with overseas employ-
ees. According to technology research company Forrester
Research, there will be no shortage of future demand for
business analysts and project managers who understand the
banking business and can manage the outsourced functions.
IT professionals who want to
stay in advanced technology
are being advised to couple
their technical expertise with
deep knowledge of a vertical
industry, such as nancial
services or pharmaceuticals,
or to combine IT with busi-
ness skills, perhaps with an
MBA. Recruiters say nancial
rms increasingly seek can-
didates with a combination
of business and technology
skills, such as an understand-
ing of xed income and Java,
or knowledge of mortgage-
backed securities and C#. In
addition, says Netin Gupta
at RadixThink, a recruit-
ment process outsourcer in
Centreville, Va., most of our
clients are looking for people who can communicate well,
who can really put their point across briey and directly. A
lot of times, they have to
communicate with clients
and interact with traders
on the oor, so commu-
nication skills are very
important.
While companies want
combined skills, they often
dont offer an obvious path
to acquiring them. So, IT
professionals should keep
an eye out for positions
that offer a mentor who
might help them broaden
their role in the rm.
Roles and
Career Paths
Jobs in IT tend to fall into
one of four categories: de-
velopment, business analy-
sis, project management,
and technical support.
If you become a developer, you may be responsible for writ-
ing the computer programs that help the bank do everything
from pricing and booking trades to calculating risk. The
programming languages used by banks are usually C++,
Java and Microsofts .NET.
While developers write the programs, business analysts
look at the way technology is used in the bank and analyze
the opportunities for making it work better. A trader might
complain about the length of time it takes his computer
to execute a trade, so its up to an analyst to investigate
whether the complaint is valid. If it is, a new computer
might be needed, or some of the programming code might
need to be changed.
Business analysts help identify the potential for making
changes to a banks technology systems. Once big changes
are underway, the responsibility for managing them often
passes to another set of IT staff: the project managers.
Project managers plan, structure and fulll IT projects. If IT
development work is outsourced, project managers liaise
Financial rms are
known for having
some of the worlds
cutting-edge
systems, especially
for their trading
oors, where
nancial products
and commodities
are bought and sold
electronically.
47
with providers to ensure the work is completed correctly
and within the right time frame.
Technical support staff requires razor-sharp technical skills
and the thickest of skins to handle not only technology
problems, but the frustration of irate traders as well. Its a
role that carries a lot of
responsibility: A computer
problem on a trading oor
lasting a few minutes
could cost millions of dol-
lars. Its up to the technical
support staff to identify
and resolve the glitch as
soon as possible.
Generally, the IT staff
members in investment
banks specialize in a
particular business area.
While many work on the
trading oor, others are
based in private banking, fund management, operations, or
deal with core infrastructure requirements.
Superior programming abilities
Innovative
Client-focused
Good problem-solving and decision-making abilities
Samuel H. Gaer, CIO, New York Mercantile Exchange
How did you get started?
Believe it or not, I started as a clerk on the trading oor when I was
15. I worked there every summer until I graduated from the Wharton
School of Business in 1988, and from there I got very involved in the
business. When I graduated, I immediately went down to the oor
and started trading. I worked for a trading company on the Commodi-
ties Exchange for a number of years.
How did you go from trader to CIO?
In 1998, I left the trading oor to start a trading-software develop-
ment company. I founded TradinGear, building brokerage systems,
electronic trading platforms for hedge funds, broker dealers and
the exchange. We had very high prole clients, and in late 2002 we
licensed the system to NYMEX (the New York Mercantile Exchange).
They made an offer shortly after that for certain assets of the com-
pany, and offered me the CIO position.
I get in at 7:30 or 8 a.m. and generally use the time for administrative
work. Ive been checking my e-mails all night long anyway, because
now everyone has a BlackBerry. The rest of the day is meeting time.
We meet for various tech and trading issues. I have a meeting with
the chairman, followed by an executive committee meeting and
technology team meetings.
The most challenging aspect of my job is managing the tech team
while managing business expectations. Fortunately, because of my
background, I am able to really relate very well between the business
of trading and the technology of trading.
Any tips for the aspiring CIO?
A great resource for me is CIO magazine. Its a really good peer
resource. I was a very green CIO coming in I had been CEO in
smaller companies and was not exposed to anything of this scale
prior. Its useful to know what your peers are doing. Reaching out to
CIOs in your industry is also helpful, even if theyre competitors. Your
exchanges dont have to be about strategy. You can discuss general
CIO matters.
Prole
IT professionals
should keep an eye
out for positions that
offer a mentor who
might help them
broaden their role in
the rm.
48
Marketing and Public Relations
Manage the rms image to the outside world
Marketing and public relations people are the interface
between nancial services companies and the wider world.
Marketers try to present the rm as it would like to be seen
and concern themselves with reputation management,
meaning how a banks brand is portrayed in advertising and
promotional campaigns. PR people focus on how a bank is
represented in the media. Though related, these are two
distinct roles.
Following a rash of negative coverage of scandals related
to biased research and dubious trading deals, the role of an
investment banks PR staff has become more important than
its often been regarded in the past. Banks are increasingly
sensitive about their portrayal in the media, and staff at
most rms are forbidden to talk to journalists without secur-
ing permission from the PR or media relations department.
Like communicators in other industries, Wall Streets
marketing staffs have to contend with new types of media
competing for the attention of their audiences. So, effective
marketing and PR staffers have to keep up with changing
technology and new audience dynamics, while making sure
all of a banks communications meet regulatory and compli-
ance rules.
Investment banks typically employ both centrally-focused
marketing staff to promote the rm as a whole, and
product-dedicated staff who work alongside sales teams
to advance specic offerings. Their work can range from
sponsoring sporting events to producing brochures or
developing corporate logos. For example, ABN Amro spon-
sors Team ABN Amro in the 2005-2006 Volvo Ocean sailing
race, Merrill Lynch has sponsored professional golf events,
and HSBC purchased the naming rights to the HSBC Arena,
home of the National Hockey Leagues Buffalo Sabres.
While marketing is all about communicating with customers
and prospective customers, public relationsoften called
media relationsis about communicating with journalists.
Usually, investment banks have in-house PR departments
that encourage journalists to create positive articles about
their rm and eld queries in response to breaking news.
The PR department also helps communicate quarterly
results and manage media coverage of mergers and acqui-
sitions. If the bank is attracting negative media attention,
the PR staff engages in damage control, trying to limit the
coverages impact to the extent that it can.
Investor Relations Ranking by the Buy Side
Sector First Team Second Team Third Team
Banks/Large-Cap Wachovia Corporation Bank of America Corporation Wells Fargo & Company
Brokers & Asset Managers The Goldman Sachs Group, Inc. Lehman Brothers Holdings, Inc. Ameritrade Holding Corporation
Specialty Finance Capital One Financial Corporation American Express Company AmeriCredit Corporation
Investor Relations Ranking by the Sell Side
Sector First Team Second Team Third Team
Banks/Large-Cap Wachovia Corporation National City Corporation US Bancorp
Banks/Mid-Cap South Financial Group KeyCorp -
Brokers & Asset Managers The Goldman Sachs Group, Inc. Lehman Brothers Holdings, Inc. The Charles Schwab Corporation
REIT Archstone-Smith Trust*, Prologis* - -
Specialty Finance Providian Financial Corporation Capital One Financial Corporation -
*tied position
49
In some cases, banks
combine the market-
ing and PR functions
in a single communi-
cations department.
Such groups often
shoulder broader re-
sponsibilities, such as
communicating with
the banks own staff
and shareholders.
Few investment
banks train their
own marketing and
PR staff in-house.
Rather, they usually
hire marketing and
PR professionals with
several years experi-
ence, often gained in
a blue chip company
or top PR agency. The people who develop a banks brand
are drawn from large advertising agencies. In addition, a
number of independent PR and advertising agencies are
active in the nancial world. These may be hired by a bank
to give their own teams a boost.
Strong written and oral communication skills
Networking and relationship management
Understanding of and ability to communicate
nancial issues
Ability to grasp complex issues very rapidly
Curtis S. Chin, Managing Director, Burson-Marsteller
Can you tell us about your career path?
In journalism school at Northwestern, I worked as a reporter but
realized it wasnt for me. I met someone at Burson-Marsteller in
Washington and got a job there working for nancial institutions
and non-prots. I left for Yales School of Management and after-
ward worked as a consultant in B-Ms Tokyo ofce. But I left to serve
as a special assistant to the U.S. Secretary of Commerce in the rst
Bush Administration.
I returned in 1993 to become managing director of operations in
our Beijing ofce. I moved to Hong Kong in 1998 to oversee opera-
tions, then returned to New York in 2001. Since then, Ive focused
on counseling clients and leading teams focused on corporate social
responsibility, engagement and accountability, as well as on Asia
Pacic economic, trade and development issues.
No day is typical. Today I provided counsel to clients in San Francisco
and New York on business affairs. I called our Geneva ofce about a
conference on regulatory issues. Ill work with a team helping a client
incorporate blogs into its strategy, assist a Fortune 500 company or
government client on economic and trade issues, or talk via videocon-
ference with our CEO.
the business?
There is no single way to break into the business. Be passionate
about your work. Take time to learn about the industry and your
clients industries. Develop knowledge and a perspective that your
client and supervisor dont have. Dont be afraid of change or seeing
things differently.
What should people be reading if they want to break into this
kind of work?
Listen, read and view news broadly. Our role is to be part of a
businesss decision-making process. One way is to be aware of whats
online and ofine, and even non-mainstream media. Read publica-
tions and reports that impact your business such as trade magazines
and journals. Develop your own sources of information from people
you interact with. Reading the Financial Times, Washington Post,
New York Times, Wall Street Journal is a must, but not enough. Its
a 24-7 news cycle. The news comes via cell phone and on radio and
television instantaneously. Understanding how the media works posi-
tions you to be ahead of news. Still, dont be overwhelmed by all the
media out there.
Prole
Following a rash of
negative media
coverage of scandals
related to biased
research and
dubious trading deals,
the role of an
investment banks
PR staff has become
more important.
50
Ratings Agencies
Grading the potential of market players
The role of ratings agencies is to assess the credit worthi-
ness of companies and government agencies that issue
debt instruments to investors. Although the issuers actually
pay for the privilege of having their business scrutinized,
the agencies provide a neutral analysis of a debt issuers
ability to repay its obligations.
The ratings agency sector is dominated by three companies:
Standard & Poors (S&P), Moodys Investors Service and
Fitch Ratings. With analysts based in business centers
worldwide, S&P and Moodys are by far the largest, holding
about 75 percent of the business. Fitch, the smallest of the
three, has grown larger in recent years through acquisi-
tions. Another small but well-known agency, A.M. Best,
specializes in rating debt issued by the insurance industry.
Best touts its location in the bucolic horse country of central
New Jersey as being perfect for people seeking a stable
environment, without the inconvenience of commuting to a
major urban center.
S&P, Moodys and Fitch issue
their rankings in similar for-
mats, which makes it easy for
investors to compare the rat-
ings of one organization to the
other. A debt issuer rated AAA
(in the format used by S&P and
Fitch) or Aaa (in the Moodys
version) is judged to be almost
certain to repay its debts. Any
bonds rated Ba by Moodys
and BB by Fitch and S&P are
considered to be speculative
grade, or junk. While debt
consigned to this category will
attract investors, the issuing
company will have to pay higher yields in order to get them.
The lowest possible ranking is C. Buyers of these bonds
face the greatest prospect of not getting their money back.
Debt ratings arent static. Bonds that may have started out
with an investment grade rating can be downgraded if the
fortunes of a company, industry or government take a turn
for the worse.
The nature of debt nancing has changed dramatically
over the years and the ratings agencies have had to adapt
accordingly. For example, Moodys notes on its Web site
that its analysts follow the debt of 100 countries, 11,000
companies and 25,000 public nance issues. On top of that,
it follows 70,000 structured nance deals, a number that is
undoubtedly growing because structured nancewhich
refers to the exotic credit-derivative instruments that have
become hugely popular tools for managing riskis the
fastest-growing segment of Moodys business, according to
a company spokesperson.
Plus, Wall Street has gured out ways to securitize every-
thing from credit card debt to cosmetic surgery receivables.
Figuring out the level of risk associated with those kinds of
deals falls to the analysts in the structured nance ratings
teams, who are generally quantitative specialists. Lawyers
are also a part of the analytical teams.
During 2006, Fitch Ratings created a group for rating U.S.
commercial real estate collateralized debt obligations due
to increased volumes of issuance. CDOs are pools of debt
instruments repackaged into components carrying different
levels of risk.
Ratings agencies look for people with training in nance,
mathematics, economics and similar quantitative disci-
plines. Advanced degrees arent always required but they
can be helpful in landing a job. (In the words of one analyst:
The nature of debt
nancing has
changed dramatically
over the years and
the ratings agencies
have had to
adapt accordingly.
Ratings: A Guide
Agency Moodys Standard & Poors Fitch
Investment
Grade Aaa AAA AAA
Aa AA AA
A A A
Baa BBB BBB
Speculative
Grade (Junk) Ba BB BB
B B B
Caa CCC CCC
Ca CC CC
C C C
Sources: Moodys, S&P, Fitch
51
We have people who have come in with a bachelors
degree and a thirst for knowledge.)
Typically, analysts at ratings agencies specialize in particu-
lar product types such as corporate nance, which is rating
particular companies; public nance, which follows local,
state and provincial governments; sovereign debt, which
is issued by countries; infrastructure debt, which might be
issued by a utility company or a government agency that
funds development projects like road construction; nancial
institutions; or the structured nance arena. Depending on
their area of special-
ization, staffers can
expect some element of
travel to go along with
their work.
Most agencies offer
young talent consider-
able opportunity to
grow and take on new
responsibilities as their
careers progress.
Skills and Qualications
Analytical, statistical and quantitative skills are
most desirable
MBAs or other graduate degrees useful and
sometimes required
Strong written and oral communication skills
Ability to clearly express complex issues
Self-motivation and the ability to meet deadlines
without direct supervision
Evan Tepper, Structured Finance Analyst,
Moodys Investors Service
How did you come to work at Moodys?
I graduated from the University of Michigan in April 2002 with a
degree in economics. I started out at the hedge fund Caxton As-
sociates, where I was in a quantitative group that looked at outside
trading systems. We analyzed the historical trading patterns of these
systems to determine if they would be useful to us in future trading.
I was there two years and I just wanted more opportunity for growth.
I kind of stumbled upon structured nance and it really piqued my
interest. I learned more about it and when I spotted an opportunity to
join Moodys, I did.
What is a typical day like for you?
I am part of the monitoring group, so when I come in I have a set
routine, which is to review the deals Im responsible for monitoring to
see if anything has happened that could affect our rating. Im also one
of the more senior members of the team, so Im constantly training
new members. I also work on rating new deals and participate in the
ratings committees. Im constantly on the phone with trustees and
bank contacts about deals in the market.
Can you tell us a bit about how the process works?
Every new deal is assigned to a quantitative analyst, and a legal ana-
lyst since we are reviewing contracts. But the decision on how to rate
a deal isnt made by just those two. They have to present their case
to a rating committee, justify their analyses and prove that its correct.
What skills do you think are most important for a structured-
nance analyst?
Its certainly good to have a solid quantitative background, but its
equally important to be able to communicate with people. The most
important thing is to come in motivated every day and be willing to
learn. There is so much to learn that even people who have been part
of the group for 10 years are still learning new things. You also need
to be self-motivated, because no one is looking over your shoulder.
The work is assigned to you and everyone has deadlines, but as long
as you can meet your deadlines, its a very engaging place to work,
with a lot of diversity.
What information sources or organizations should people be
aware of?
Some of the best information sources happen to be structured-nance
conferences, which take place all year long, and are organized by dif-
ferent banks, industry organizations, or by Moodys itself.
Prole
The most important
thing is to come in
motivated every day
and be willing
to learn.
52
Information Providers
Delivering data for the markets
The fuel that powers the nancial markets is a potent com-
bination of real-time news and market data. Whether its
the release of a companys quarterly earnings report, the ac-
tions of central banks on interest rate policies, a signicant
merger or acquisition or a default or bankruptcy by a major
debt issuer, market participants react to news every trading
day. Events like these, big and small, drive trading activity.
Because news inspires action, traders ultimately rely
on accurate and timely market data as a basis for their
buy-sell decisions. Trillions of dollars in stocks, corporate
and government bonds, futures, options and a seemingly
limitless number of exotic, over-the-counter derivative
instrumentssuch as swaps or collateralized debt obliga-
tions (CDOs)are bought and sold worldwide each day.
Collecting, massaging and dissemi-
nating all of this trading data is the
job of the information providers the
companies in the nancial informa-
tion industry.
The principal players in this realm
are Reuters, Bloomberg and Thom-
son Financial, a unit of the Thomson
Corporation. All three companies
have extensive news operations and
employ hundreds of people to gather
and scrub for accuracy the data they
redistribute to market professionals,
corporate clients and other organi-
zations. Another smaller player is
Interactive Data, which is 60-percent
owned by Pearson PLC, publisher of
the Financial Times. Interactive Datas subsidiary products
include Comstock, which distributes a real-time feed of
market data, and FT Interactive, a supplier of data to institu-
tional clients.
In addition to the data suppliers, many other companies
operate in specialized segments of the industry. Some
are software developers building sophisticated tools and
trading programs. Others focus on news or market analysis.
Dow Jones & Company, whose Dow Jones News Service
has been covering the markets for more than 100 years,
is one example of the latter. Its content can be delivered
through distribution partners or directly to clients. The
company has also created numerous indexes that now form
the basis for tradable securities. Many lay people know
Dow Jones primarily through its agship product, The Wall
Street Journal.
Vendors like Reuters and Bloomberg not only distribute
data to the nancial industry, they also collect it, then
consolidate and sell it back to the same institutions that
initially generated it. In over-the-counter markets for bonds,
foreign exchange, nancial derivatives, and so on, pricing
is supplied by dealers and brokers. For example, the trading
desks at large investment banks like Citigroup or Goldman
Sachs generally supply prices for securities that are in their
inventory. Think of those as the advertised or list prices,
which can differ from actual selling prices. Brokers, on
the other hand, are middlemen, and the data they provide
reect actual transaction prices. Cantor Fitzgerald was one
of the rst rms to report the prices for trades it brokered in
the market for U.S. Treasury securities, which it still resells
through its subsidiary, Cantor Market Data. Other major
suppliers of data feeds are the worlds stock, commodity
and options exchanges.
When the Internet rst became popular, data vendors feared
their role would become less important as more informa-
tion became available directly to investors and bankers
alike. That trend has proceeded more slowly than originally
feared, although it has driven consolidation in the industry.
The diversity of companies in the nancial-information
sector makes it difcult to describe a single, precise career
path. However, there are certain attributes that will lead to
career success.
Foremost is a strong understanding of how the markets
operate, which will be critical whether one enters a sales,
operations, data management or technical development role.
Technology expertise can be another important skill. Trading
is increasingly moving from telephone based, person-to-per-
son transactions to screen-based dealings that are driven
by sophisticated software programs. People with the skills
to create the algorithms that drive these programs are in
increasing demand.
The eld offers numerous entry-level opportunities.
Information companies seek individuals with a statistical
Because news
inspires action,
traders ultimately
rely on accurate
and timely market
data as a basis
for their buy-sell
decisions.
53
background or nancial training for the teams responsible
for ensuring their distributed data is accurate.
For an overview of the kinds of companies involved in this
industry, see the member page of Software and Information
Industry Associations Financial Information Services Divi-
sion at www.sd.net/about/members.asp.
Skills & Qualities
Strong understanding of the nancial markets or the
ability to learn
Analytical and statistical skills
Good oral and written communication skills
Technology aptitude or programming abilities
Software and Information Industry Association
Financial Information Services Division
Selected Members
American Stock Exchange
Bank of America
Barclays Global Investors
Bloomberg L.P.
Cantor Market Data
Charles Schwab & Co., Inc.
Chicago Board of Trade
Chicago Mercantile Exchange
Deutsche Bank AG
Dow Jones & Company
Edgar Online
Fidelity Investments
Goldman, Sachs & Co.
HSBC Holdings PLC
IBM
Lava Trading
Lehman Brothers, Inc.
McGraw-Hill Companies, Inc.
Merrill Lynch
NASD
Socit Gnrale
Standard & Poors Corporation
Thomson Financial
Tokyo Stock Exchange
Verizon Business
Richard Jacobi,
Vendor Relations Manager, Lava Trading Inc.
What are your responsibilities and how do you spend
your day?
I have responsibility for our relationships with all external vendors,
including the exchanges. We use data from a total of 40 different
exchanges. I also manage relationships with the third-party software
companies that develop applications for Lava under contract.
How did you get involved in this business?
I started at the New York Stock Exchange many years ago, in a
monitoring role. We would watch trading patterns for unusual trading
activity. Then I received an offer from ADP to become its manager of
exchange relations, which is when I rst became involved in a market
data role. After ADP, I went to work for Smith Barney, running data
management for its retail branch network. Then I spent six years
at the New York Mercantile Exchange as its head of market data. I
returned to the vendor side with Moneyline Telerate for a couple of
years before coming here.
What advice would you give to someone thinking of entering
the industry?
Ive always been on the administrative side, where you certainly need
a nancial background and a thorough understanding of the nancial
industry. You need to understand what market data is and how its
used, including all of its nuances. Market data comes in a lot of dif-
ferent avors: youve got real-time data, delayed data and reference
data, which is all the data that surround it. Historical data, corporate
actions and research information all become a big part of market
data and what the end users are looking for. A lot of my job managing
market data and vendor relationships comes down to understanding
how much is being charged and who pays for it.
What about technical expertise?
You do need to have an understanding of technology. People in this
industry need to understand how trading and analytical systems work
and how they are used. You dont need to know how to program these
systems, but you do need to understand their inner workings. For
example, when a feed is going into a black box that can redistribute
the data for multiple uses, you must have a grasp of what that means
and its implications.
Prole
54
The Recruitment Process: A Survival Guide
Your rst job could be the hardest one to land
With its reputation as a high paying and jet-setting industry,
investment banking exerts a magnetic attraction over
business students. It shouldnt come as a surprise, then,
that competition for undergraduate and graduate trainee
positions is intense. Applications are received by the tens of
thousands and the vast majority of those applying are turned
down. To lter this wave, banks use a thorough screening
process that includes on-campus events, online applications
and several rounds of interviews. If you want to make it
through, you have to stand out every step of the way.
Surviving Application Forms
The online application forms found on investment bank
Web sites eliminate over 50 percent of the applicants. Poor
academic credentials are the most common cause of failure:
Most banks seek nothing short of a 3.5 grade point average.
However, strong academic results dont guarantee an inter-
view. To weed out those with little else to offer, application
forms ask searching questions such as Describe a situation
in which you displayed leadership skills to inuence the
outcome of an event.
Students often underestimate the importance of these
questions. To do well, you should craft a detailed but con-
cise answer that backs up your claim to the skills the bank
is looking for. Thats no small challenge. Recruiters say com-
mon mistakes include answers that are too short, spelling
errors, failing to answer the question and pasting answers
from one banks application form to anothers. To ace the
application, prepare your answers ofine and proofread
them carefully. Make sure youre answering the questions.
Be brief and clear.
Its also a good idea to get your application in early. Vivienne
Dykstra, a former investment banking recruiter turned gradu-
ate recruitment consultant, believes the best applicants are
the rst off the mark. Banks are
quick to offer these early applicants
an interview as soon as possible,
she says. (For application details,
check out the Employers section.)
Surviving
Interviews
If a bank likes your application
form, you may be invited to a rst-
round interview. Here, recruiters
will probe to learn more about your skills and personal-
ity. First interviews usually take place on your university
campus, with your colleges career ofce coordinating the
interview time slots.
Usually, youll face a panel of several interviewers made
up of junior staffers from the business area to which youve
applied, as well as representatives of the banks human
resources department. This rst round is all about ensuring
youre the right kind of person for the bank. All rms have a
list of skills and personal characteristics, known as compe-
tencies, which they try to identify (see Interview Insiders:
Know Your Q&A on page 57). At this stage, the recruiters
will also test your knowledge of investment banking and
your motivation for working at their rm.
If you create a credible impression as both a team player
and a leader, and as someone who is knowledgeable about
investment banking in general and this bank in particular,
you should be invited back for more. By this point, around
300 of the original 8,000 or more applicants are left. Be-
tween half and two thirds of these will receive the coveted
offer of a full-time job.
The second round puts a greater emphasis on technical
aptitude. The bankers interviewing you will want to make
sure you can function intelligently under pressure and are in-
terested enough in their business to have more than a basic
understanding of how it works. This means applicants for
roles in xed-income sales might be asked how bond prices
respond to interest rate adjustments, and why. Applicants
for foreign exchange (FX) trading roles might be asked to
explain how interest rates adjust to the price of FX options.
Networking is the Key
In addition to the application and the interview, most banks
organize on-campus events at the universities where they
regularly recruit. Before the interview dates they also hold
networking sessions for candidates to meet both the re-
cruiters and professionals in different divisions of the rm.
These events are extremely important, says Amabelle
Cardenas, a campus recruiter for Merrill Lynch. In this
business, it is so important to network and make good con-
nections, she says. Candidates must follow-up after the
networking sessions are over and build that relationship.
Danielle Domingue, Vice President,
Investment Banking Recruiting, JPMorgan
For MBAs today, there are more careers in investment banking than
Ive seen in 10 years. And 80 to 85 percent of those people are
switching careers from places as unique as the Peace Corps, or teach-
ing or others.
You dont have to have experience in modeling, but we look at
whether you have done your homework, and why youre interested in
this eld. The hook is why youre interested. We look for honest and
smart answers.
If youre in school, go to recruiting events on campus. Show an inter-
est, ask questions and reach out. Demonstrate the strength of your
background. Be quick on your feet, have good grades and intellectual
horsepower. Were not looking for a type but for a well-rounded
background. In a client-facing role, your personality should be more
outgoing, very much the person selling to the client.
We expect an MBA to have a certain amount of polish. With under-
graduates, a recruiter can take a more mentoring approach. If you dont
have a background in nance, we recommend getting to know the
business and as many bankers as possible through a directed network.
Another key is that you handle yourself appropriately, according to the
event whether its a dinner or a one-on-one meeting. Dont have too
much condence or too much to drink, for example. We like students
to exhibit condence in themselves, but arrogance can be a huge
turn-off. Show a consistent and good face to the folks who have met
you. We want to see whether you handle yourself professionally.
Our process is very thorough but very quick. We communicate quickly
with our students about our decisions, even if its bad news. Usually
the second round of interviews is more intense than the rst. They
see up to 12 bankers for a full-time position, and most banks are
pretty consistent about that.
It serves an applicant really well if he or she is diligent with follow-up
through gracious follow-up calls. Be gracious even when declining an
offer. Bankers have the minds of elephants. We dont forget people. If
youve been turned down, say, Id really like to talk to you next year.
In summary, network, engage in constant learning and constant
teamwork, and take calculated risks. Use judgment consistently, in
a good way. A lot of that comes with time. Use the tools that exist
around you and dont be afraid to ask questions. Put in the time and
be involved in extra-curriculars. And be aware of the importance of
work/life balance.
Observations
William Richards,
Hedge Fund Relationship Director, UBS
What advice would you give to students hoping to
break into the business?
Im deeply involved with the summer intern program here
at UBS. Youd be surprised whos here. We have a young
woman from the University of North Carolina whos a phys-
ics major. We recruit from both undergraduate and graduate
programs. We have a training program for juniors in college
that gives them an intense course in nance.
Study the three most successful investors in the history of
the world: Julian H. Robertson, Jr., George Soros at Soros
Fund Management and Warren Buffet at Berkshire Hatha-
way. Read Soros: The Life and Times of a Messianic Billion-
aire, by Michael T. Kaufman, and Julian Robertson: A Tiger
in the Land of Bulls and Bears, by Daniel A. Strachman.
What advice would you give to junior staffers?
In a world where so much of what we do revolves around e-
mail, voice mail and faxes, its extremely important to make
a personal connection. When I have something important to
tell a client, I make an appointment to come see them.
Call people and say, Im thinking about getting in the
business or I work at UBS and I cover you and I want your
advice on how to cover you. Theyll never turn you down.
This country rewards risk very well. Get out on the risk
curve and be willing to have opinions on investments and
express those opinions. Having an energy for what you do is
something people notice, identify with right away, and like.
What else do you think is important?
Its a demanding business mentally and physically, so its
important to be competitive and physically in good condi-
tion. To y 11 or 13 hours to Brazil and two hours later to be
interviewing a CEO, youve got to be in good shape. Its a
marathon, not a sprint, so you need to pace yourself.
Q&A
55
56
Although graduate training programs at the countrys top
nancial rms provide a wonderful entryway to the eld,
securing a spot can be difcult. Competition is stiff in
investment banking, and rms like Citigroup, UBS, Merrill
Lynch and JPMorgan all seek the cream of the crop from
the nations leading MBA programs. Recruiting generally
takes place on-campus through the schools career services
ofce, or online, from August to November. Exact timing
differs depending on the rm and the position involved.
The requirements for all training programs are basically the
same. They require candidates to have relevant experience,
either garnered through real jobs or summer internships. If
possible, candidates should skip the online application pro-
cess and opt for face-to-face meetings during on-campus
recruiting. While it may be routine and comfortable for you
to communicate by e-mail, its generally difcult to make a
memorable impression through virtual means.
Typical of the leading rms training programs is that of
UBS, which accepts top-notch individuals with undergradu-
ate and graduate degrees, preferably candidates with a
concentration or major in business, accounting or nance.
There are some exceptions, according to Stefanie Amana-
tides, director of the banks campus recruiting efforts for
the Americas. We do hire some people with other types of
masters degrees, she says. Computa-
tional nance and nancial engineering
degrees are of big interest. Once theyre
accepted into the program, UBS places
trainees in its investment banking, xed
income and equities divisions. The major-
ity of slots are lled in UBSs New York
City and Stamford, Conn., locations.
As in the programs at other nancial
rms, trainees at UBS work full-time. The
program begins in late summer and lasts
for ve to seven weeks, depending on the
division. Its an extremely comprehen-
sive process, says Amanatides. Theyre
not in training 100 percent of the time:
Some of the time is devoted to working
with in-house and outside vendors to train in specialty areas
pertinent to the specic division. They may need to prepare
for various licenses, such as the Series 7 or Series 63.
Besides offering a strong footing in a rms inner workings,
graduate training programs groom new hires for manage-
ment roles in the company. We are looking for future
leaders of this organization. Were looking for people
with diverse backgrounds, and not ones that come out of
a cookie cutter, Amanatides notes. You have to have
certain skills, of course, like strong quantitative, communi-
cation, and analytical skills. But, you also have to have an
aptitude to learn.
In July 2006, UBS accepted about 70 MBA recipients from
the U.S. into the full-time graduate training program. While
the contest for such a limited number of slots is erce,
the competition among nancial rms for the relatively
small number of top students is also heating up, Amana-
tides says. More established investment rms, banks and
insurance companies are competing with alternative and
boutique investment rms.
Caitlin R. McLaughlin, managing director of campus recruit-
ing for corporate and investment banking at Citigroup,
agrees that competition for the best MBA students is
growing. Citigroup runs four graduate nanceand eight
undergraduate nancetraining programs. Those selected
typically have a strong MBA background. We also look for
a resume that shows success in a variety of areas, including
documented leadership responsibility, adds McLaughlin.
And on top of having a strong GPA and stellar standardized
test scores, candidates should be involved in school, ex-
tracurricular and community activities. Firms also consider
those with top grades from other tracks, such as doctorates
in mathematics, computer science or other nance and
technology-related programs.
Citigroups graduate training programs run about four to
six weeks, with a week of programming and additional
homework to complement what is learned on the job. Its
a structured program, but not at all textbook-oriented,
explains McLaughlin. This program is about taking theory
into practice. Theyre taught by senior professionals. They
might learn what it means to handle a mergers and acquisi-
tions transaction, for example. MBA trainees are accepted
into one of a number of departments, including sales and
trading, investment banking, corporate banking or global
transaction services. The lions share of the hiring occurs
in New York City, but Citigroup also hires trainees at other
regional sites.
A Guide to Graduate Training Programs
57
Interview Insiders: Know Your Q&A
Interviewers will try to trip you up
Youve lled in application forms, youve excelled in
aptitude tests. All that remains is getting through the
interviews.
Now the real work begins.
Put it down to nerves, or inexperience, but plenty of people
answer interview questions badly. One man was asked to
provide an example of his persuasiveness. He answered with
a description of enticing pigs to mate. Its surprising how
unclued-up people can be about what were looking for, ob-
serves one investment banks head of graduate recruitment.
Some mistakes are self-evident. Angela Garnett, head of
graduate recruitment at Lazard in London, recalls a man who
was asked if he read the nancial press. He said he found it
quite boring. It wasnt a good answer, Garnett says.
So, whats the best defense against gaffes during a high-
pressure interview? Preparation. You need to understand
the interview process, and anticipate the kinds of questions
youre going to be asked.
Round One: Examples, Examples,
Examples
What banks are looking for is simple: They want examples.
Most use competency-based interview techniques,
which meansin the rst round, in particularcandidates
are typically asked to provide examples of situations in
which theyve displayed a particular competency. We
look for specic examples of past behaviors which provide
examples of future potential, says Nancy Labiner, head
of Europe campus recruiting at Goldman Sachs. We dont
require investment banking experience. A candidate can
talk about a job at Starbucks if they can tie the experience
to leadership, working as part of a team or dealing with
difcult customers, for example.
First-round interviews are usually conducted by junior bank-
ers and graduate recruitment staff. You need to stand out,
because the numbers arent in your favor: At this phase,
a bank hiring 200 graduate trainees will interview around
1,600 people.
What do Banks Want?
When it comes to behaviors, most banks focus on the same
things: team building, communication skills, assertiveness,
leadership skills and being proactive. Joanne Scott of
Morgan Stanley says questions designed to elicit desired
behaviors might include Give an example of a situation
when you demonstrated leadership, or How would your
friends describe you? Questions are designed to be open-
ended. Within reason, your responses can cover any subject
area as long as theyre detailed and specic to your own
experience.
Round Two: Brain Teasers
Second- and third-round interviews are more technical, and
more frequently conducted by senior bankers. Some busi-
nesspeople like asking bizarre questions and conducting
high-pressure interviews, says Vivienne Dykstra, former
head of graduate recruitment at Deutsche Bank and now a
consultant on graduate recruitment techniques. The idea is
to put candidates on the spot and grill them until they crack,
with a view to seeing how they react under pressure.
David Schwartz, a nancial services recruiter at Highland
Partners in New York, and former global head of campus
recruiting at Goldman Sachs, says high-pressure interviews
are increasingly frowned upon. HR people have to restrain
bankers from asking these questions, he says. In the end,
a guy who knows how to solve a brain teaser wont neces-
sarily be any good at bringing in a corporate nance deal.
Sample Brain Teaser Questions
Used by Banking Interviewers:
Q. At dawn on Monday a snail fell into a bucket that was 12
inches deep. During the day it climbed up 3 inches. During
the night it fell back 2 inches. On what day did the snail
nally manage to climb out of the bucket?
A. The following Wednesday, nine days later.
Q: A man drove from Aardvark to Beeville. On the rst day
he traveled one-third of the distance. On the second he
traveled half of the remaining distance. On the third he
traveled two-thirds of the remaining distance. On the fourth
day, after covering three-quarters of the remaining distance,
he was still ve miles from Beeville. How many miles had
he covered so far?
A: 175 miles: the total trip is 180 miles. On the rst day
he traveled 60 miles, leaving 120 miles. On day two he
traveled another 60 miles, leaving 60 miles. On day three he
traveled 40 miles, leaving 20 miles. On day four he traveled
15 miles, leaving ve miles.
58
It could be called the bus syndrome: Youre waiting for a job
offer from an investment bank and all of a sudden three
come along at once. What do you do?
If job offers were buses, you might be tempted to hop on
the rst one and hope for a seat. But mismanaging the
decision-making process could take you way off the track of
your career.
Multiple Offers
In such a competitive industry, the chance of receiving
multiple offers might seem unlikely. But career experts say
top candidates could easily have multiple offers to juggle.
Were all targeting the same top students, says Kristina
Peters, head of graduate recruiting at Deutsche Bank in
New York. At business schools like Harvard and Wharton,
its not unusual for students to have four or ve different
offers.
The best candidates are heavily pursued, says Connie
Thanasoulis of Merrill Lynch corporate campus recruiting.
Top undergraduates and graduate students used to have
an average of one or two offers each, she says. Thats
gone up to three or four, with exceptional candidates having
seven or eight offers from different banks.
Dont Delay
If youre a one of those receiving three, four, seven or eight
offers, you might want to delay making a decision as long
as possible. Some students take pride in collecting offers,
says Deutsche Banks Peters. Theyre
like a badge of honor. But, remem-
ber: Every job you decline is an offer
for someone else. In the interests of
their classmates, we strongly encour-
age students to make their choices
and move on, says Julie Morton, as-
sociate dean of MBA career services
at Chicago Business School.
At the same time, delaying for
too long may mean offers explode
beneath your feet. All students will
be given an exploding date by which
to make a decision, says Brian Hood, head of graduate
recruitment at Citigroup in London, After that, an offer will
no longer be valid.
Schools typically demand banks give their students a few
weeks to make decisions. We make it clear rapidly explod-
ing offers are unacceptable, says Morton. Otherwise,
banks would be asking students to sign up at the end of
interviews.
One graduate recruiter at a bulge bracket bank says
deadlines can be stretched to a point. We are very exible.
If someone needs more time because theyre interviewing
somewhere else, we will typically give it to them. But we
wont do it twice.
Be Honest
If youre juggling multiple job offers, should you tell the
banks pursuing you? There are clear advantages to do-
ing so: Realizing youre a hot
prospect, banks might offer
additional incentives to help you
make up your mind. Certainly,
banks prefer for you to tell them
everything. We need to get
as intimate as possible with
candidates, says Merrill Lynchs
Thanasoulis. It helps if we can
get information about who else
has offered them a position,
and how that inuences their
signicant other. The more we
know, the more likely we can get
a candidate what they want.
When banks know whats going
on, they can be very persua-
sive, typically inviting candidates to meet their potential
colleagues and assigning buddies (preferably an alum from
the same school) to make frequent contact. If a spouse has
reservations about relocating to the likes of New York or
Chicago, for example, the banks lure may be extended in
that direction. Deutsche has helped spouses nd jobs, says
Peters. Another bank said it has even offered to employ
spouses itself.
Demand High for Qualied Grads
Manage multiple offers to get that great rst job
Career
experts say top
candidates could
easily have
multiple offers
to juggle.
If youre juggling
multiple job
offers, should you
tell the banks
pursuing you?
There are clear
advantages to
doing so.
60
You tune up your car regularly. You see the dentist twice
a year. You balance your checkbook monthly and take
vitamins daily. You even clean out your closet from time to
time. Its all part of ongoing life maintenance.
And your career? It needs attention at regular intervals, too.
So network. Keep your resume current. Listen when recruit-
ers call. From Day One, set down clear goals for yourself.
If you think simply having a job is enough, youve won the
battle but lost the war. Dawn Fay, New York-based regional
vice president of Robert Half International, recommends a
better strategy: making a periodic career inventory an
actual written timeline and action plan. If you dont set it
down, you dont pay any attention to it, she says.
In the inventory, itemize your skills and aptitudes, incorpo-
rate what youve done professionally to date, and include
what youve liked about your jobs and what you havent.
List your future goals and what it will take to achieve them.
Try not to be too broad, too vague or too long-term, which
can be daunting. Rather, Fay says, break it down and start
small, with attainable, short-term goals. Give yourself
check-in points. That makes it tangible.
A Tactical Plan
Then, she says, use the plan as a road map, but recruit one
or more co-pilots. A major career-management mistake, she
says, is trying to accomplish everything alone, in a vacuum.
A better approach is to strategically reach out to people
around you, she believes. Its important to enlist someone
you trust in the workplace, or a family member or friend
who knows you very well.
Use those people as sounding boards for your ideas. Ask
them how they achieved their goals and to tell you about
the obstacles they faced en route. Have them help you
assess your strengths and weaknesses, including creative
thinking, teamwork and oral and written communication
skills. And stress that you need honest feedback. Fay puts
her money where her mouth is, periodically scheduling time
to talk with her father even though sometimes what he tells
her is not always what I want to hear.
Such trusted advisors will become part of your personal
network. And having a network, experts say, is crucial to
getting ahead.
Nurture Your Network
Your foundation peer network is the people who do what
you do, not your industry or your company colleagues, says
John Challenger, chief executive of the Chicago-based out-
placement consulting rm Challenger, Gray and Christmas.
Today few people work in one company all their lives.
To establish a network, you have to get out there and
meet people. Be very engaged with your world because
thats where things come up when theyre least expected,
Challenger says. Visit customers and potential customers,
attend events within the industry and join professional as-
sociations. Share best practices and information. Build lots
of strong relationships with people who do what you do.
They know where the jobs are.
Some companies pick up the tab and pay to let you be in-
volved, Fay points out. She also suggests staying in touch
with college classmates, talking with people in different de-
partments within your company and at other rms, reading
newspapers and trade magazines consistently, participating
in relevant Internet chat boards, and volunteering at chari-
table organizations that can expand your horizons.
Al Mariano, a salary professional/consultant with Robert
Half in Chicago, points out that networking is about more
than going out for drinks with your co-workers. In addition
to his work, Mariano teaches college-level courses at night,
belongs to local civic groups and volunteers at several
non-prot organizations. Im socializing and contributing to
the community. Its a good feeling, he says. Through these
groups, I know people who say, If youre ever thinking of
transferring It gives me another layer of security.
Making a spreadsheet can help. Organize your contacts:
the people you meet along the way, those you want to
stay in touch with, both internal to your organization and
external, Fay says. Knowledge is power. The more of it
you have, the better off youre going to be.
Fay also recommends regularly touching base with people
in your network. It takes time to build relationships, and
your network might be a little bit cold if you only turn to it
in times of trouble, she says or, for instance, when you
need a job. Youd be amazed at the information you can
get or give within your network.
Managing Your Career
Its About More Than Finding Your Next Job
Dawn Fay
Regional Vice President,
Robert Half International
Al Mariano
Salary Professional/Consultant,
Robert Half International
61
Accept Challenges, Stay Current
Danielle Domingue, vice president of investment banking re-
cruiting at JPMorgan in New York, says ongoing professional
education and constant teamwork are imperative and will
enable you to take calculated career risks. Dont be afraid
to move around and try different things, she says. (Other-
wise) you can get in a rut and not be sure how to get out.
Challenger recommends developing skills in real-world
settings. Being heavily engaged in your work and taking
on interesting, challenging assignments that give you a
strong skill set provides the background to solve the kinds
of issues and projects companies face, he says. Having a
record in those areas demonstrates your abilities.
Additionally, keep on top of new legislation, systems and
technologies that apply to your work. Todays state-of-the-
art skills will be obsolete in ve years, so try to anticipate
the knowledge youll need to acquire.
And try working in multiple industries, Challenger says.
Forty-ve percent of people change industries when they
change jobs. Youre dened today by your profession more
than by your industry, he says. Were going back to the
age of the guild. Thus, professional certications can
provide a leg up.
Resuscitate Your Resume
Of course, you should always keep your business cards
handy. But its just as important to be able to place your
resume in the right hands at a moments notice. And that
means keeping it current.
Fay suggests updating your resume on a timetable that works
for you. That could mean tinkering with it every time you
acquire a new skill or certication, nish a signicant project
or acquire a new position within your company. Or it could
mean reevaluating it at regular intervals (every six months,
for example). Its very hard to start from scratch if youve not
kept up your resume for a long time, she says. Make time
to do the things that will save you time in the end.
Its also a good way to see if your career inventory is on
track or, as Fay puts it, to keep tabs on yourself.
Challenger recommends updating your resume each time
you nish something major, while its still fresh. The rea-
son? Companies are most interested in what youve done
within the last three to ve years. Winnow out things over
10 years old.
Charm Recruiters
Its important to include recruiters in your network. Chal-
lenger says the best time to look for a job is when youre
not that interested, adding, Dont wait until its an
emergency. Dont leave it up to others (to decide) when
you make career moves. Working through a recruiter is
often advantageous, Fay adds, because reputable recruiters
have established a level of trust and understanding with
employers.
To nd recruiters, Fay says, Talk to people you trust and ad-
mire. Ask them whether they have used recruiters, either
to apply for a job or to hire for a vacancy. Then, she says,
identify recruiters who specialize in your eld.
Remember that referrals tend to open doors, Fay says. So,
when you call a recruiter for the rst time, Use the name
of the person who referred you.
And if a recruiter calls, remain polite and professional even
if youre not job-hunting at that moment. Be gracious,
even when declining (an offer), and dont burn bridges,
Domingue says. Personal relationships are paramount in
this industry, and the world of banking is a very small place.
Maintain Balance
When mapping your career path, make sure you actually
like the kind of work youll be doing. A lot of people aspire
to be a CPA, CFP (certied nancial planner) or to work in
banking, but they just dont have a passion for it, Mariano
says. Think it through and see if its something youll
enjoy.
But dont focus on your career trajectory at the expense
of your personal relationships. When youre doing career
management, dont forget to think about where youre
headed in your personal life, Fay says. Make sure it all
ts together. Otherwise it can hurt.
Thus, she says, Keep the big picture of both in your mind.
Only you as an individual will understand the balance.
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63
Happy? You Should Still Keep Your Resume Ready
Always be ready to move
No matter how happy you are in your current job, you should
have an up-to-date resume in the hands of a recruiter.
You shouldnt have it out everywhere, but you should have
an agent looking out for what you do, because if something
attractive comes along at a good shop you want to be
notied, says Joseph Sullivan, president of International
Market Recruiters.
The notion of the best time to get a job is when you already
have one is both a clich and a widely ignored truism, adds
Alan Geller, managing director at AG Barrington in New York.
A lot of people are asleep at the wheel and they wait until
its too late, and then the call me. Often its their last day on
the job, he says, adding that its more difcult to market a
person effectively in such situations.
On top of that, Geller says, approaching recruiters when you
arent seeking a new job allows you and the recruiter time
to work together and develop a real relationship.
Maintaining Momentum
Often, changing rms is the only way to get ahead. If you
are in the same job for four years, the question is why?
notes Sullivan. If youre in a hot area like credit derivatives
or prime brokerage, businesses that are growing, and you
are being left behind, sometimes you have to leave for the
sake of leaving.
The biggest reason people want to change jobs is money,
recruiters say. For example, Geller cites some of his recent
cases: A salesman joined a
rm on a verbal agreement and
then discovered his commis-
sions didnt match what was
promised. In other instances,
company executives modied
commission plans because
their sales staffs were earning
too much.
Staffers often seek to leave
companies that have surren-
dered their competitive edge
by halting investment in new
products and innovations, or
because of a poor manager.
And, of course, change at the
top often creates turmoil and
uncertainty and cause employees to begin considering a
move toward the door. You dont owe it to your existing
company to ride out the changes, Sullivan believes. Even
if you have only been there a year, you should get into a
company that you like.
Change is good, he says. People will adapt to a new job,
get better and grow their careers.
Burnishing Your Resume
Wall Street likes people who get things done. Students
looking for ways to position themselves might want to
consider the backgrounds of the Goldman Sachs Global
Leaders, a group of 100 high achieving college students
from 20 countries. Their common thread: real accomplish-
ments, some made even before theyve entered college.
In July 2006, the Goldman Sachs Foundation brought 50
of the Global Leaders to New York. They spent a week
hearing from socially responsible corporate executives and
philanthropistspeople such as Craig Newmark of Craigs
List, Deborah Dingell of the General Motors Foundation and
Michael Gilligan of the Luce Foundationand developing
their own networks among their colleagues.
The Goldman Sachs Leaders have demonstrated theyre
people who are results-oriented. Rajeeb Dey of the Univer-
sity of Oxford, for example, founded the English Secondary
Students Association, a national organization that gives
students aged 11-19 a greater voice in education. Boryana
Atanassova of the American University of Bulgariawas one
of the founders of the UN Youth Association in Bulgaria.
Another Global Leader, Harvard Universitys Thomas Had-
eld, created and sold Soccernet.com to ESPN before he
had graduated high school. He went on to start the online
education company Schoolsnet.com with his father.
All undergraduates can take a page from the Global Leaders
playbook. You can do a lot more besides study while youre
in college, says Dey, who recommends students look for
opportunities to lead in ways that will help themselves and
their communities. In addition, think internationally, act lo-
cally, suggests Atanassova. Hadeld agrees. Its important
to spend time with people from different cultures, he said.
Its important to have respect for different approaches.
Think big, start small, scale fast, he adds. Your only limit
is your ambition.
Approaching
recruiters when you
arent seeking a new
job allows you and
the recruiter time to
work together and
develop a real
relationship.
64
While many Wall Street rms have mentorship programs,
the most useful relationships are usually those sought out
by the protg, believes Susan Battley, a New York-based
executive coach and author of Coached to Lead: How to
Achieve Extraordinary Results with an Executive Coach.
Formal programs tend to under-deliver because so much of
mentorship is not so much interest-driven, but personality-
and compatibility-driven, she says.
Battley advocates nding multiple mentors for your various
professional goals. One person may help you with concrete
ambitions like getting up to speed on technological issues,
while another may be a sounding board for more sensi-
tive, interpersonal topics. Dont put all your eggs in one
basket, she advises. Instead, cast a wide net and build a
personal advisory board.
Beverly Kaye, CEO and founder of Career Systems Inter-
national, a Pennsylvania-based career consultancy, says
a mentorships real value often isnt apparent until many
years down the road, when the mentor knows the younger
person well enough to offer truly insightful advice and feed-
back, as well as the condence to share their most prized
contacts and connections.
Long-term, a mentor gets to
know you in a way you dont even
know yourself, and they can offer
open feedback that you would
not get from others, Kaye says.
The longer you know a men-
tor, the more willing they are to
connect you with their friends and
resources. And a senior person is
in the information ow in ways
the junior person is not. They can
share warning signs, or show
them the writing on the wall.
When seeking and nurturing a
mentorship, remember:
Take it easy when approaching a potential mentor.
Ask them for coffee, or casually inquire about their
background or expertise. Asking a stranger, Want to
be my lifelong mentor? is weird.
Keep an open mind when it comes to mentors.
Consider more than one, and for goals both specic,
nebulous, long- and short-term.
Its a two-way street, so consider what you can offer
the mentor. Perhaps you have insights into new-recruit
impressions or a specic type of technology the older
person would nd useful. Or perhaps you can return the
favor of guidance with research for a specic project.
Be open and authentic. Just like a personal relation-
ship, a mentorship will be richer if you show your
vulnerabilities and weaknesses.
Remember that the mentor gets something out of
helping. Kaye, who
has mentored many
people though her
career, says there
are a number of
young people I sin-
cerely want to help
and give the benet
of my wisdom and
connections in the
eld. I get a good feeling that my legacy is living on
and that I get to expand my touch.
Building Effective Relationships With Mentors
Think outside your company for career-long nurturing
Dont put all your
eggs in one basket,
she advises.
Instead, cast a
wide net and build a
personal
advisory board.
Its a two-way
street, so consider
what you can offer
your mentor.
65
Making Friends and Inuencing People
Networking is a critical career tool
Today, networking remains a critical component of the
business-school graduates job search and their career
advancement. Even with the help of campus career advisors
and visiting corporate recruiters, a number of unadvertised
opportunities go to individuals savvy enough to connect
with key people in the industry. And, with competition for
plum opportunities at a high, networking helps separate a
candidate from the pack.
Kori Neville, associate director of the Goizueta MBA Career
Management Center at Emory Universitys Goizueta Busi-
ness School, reminds students to rst reach out to their
extended network of family, friends and work associates.
The most important contacts are the obvious ones, those
from your undergraduate and graduate school, she says.
Possibly a family friend or someone with a similar interest
can be helpful on your career search.
While Neville cautions networking isnt a substitute for
research, she says its an effective way to provide prospec-
tive employers and colleagues
with insight into your skill set.
Make sure you do your home-
work rst, though, she advises.
Youll nd that it helps to net-
work when you know your subject
matter or area of expertise. Take
the time to research and join
some of the myriad of industry
organizations and MBA associa-
tions valuable for networking.
In addition, most universities
maintain a database of alumni in
a given eld, and many of these
folks are more than willing to
help graduates of their alma ma-
ter. In nance in particular, joining
an alumni association helps to
maintain contacts.
More importantly, internships
held during graduate school can
lead to important networking opportunities, especially if
students are diligent in maintaining ties to their former
supervisor or boss. Outstanding students should also reach
out to key professors, since faculty often handle consulting
assignments for corporate America.
Networking pays signicant dividends in ones career,
but it cant be something that you merely engage in for
the short-term, says Daphne Atkinson, vice president of
industry relations for the
Graduate Management
Admission Council, a
non-prot education as-
sociation and the provider
of the Graduate Manage-
ment Admission Test
(GMAT). Atkinson sug-
gests establishing a plan
to build and develop a
network of individuals and
organizations valuable to
your career. Networking
isnt a static thing, she
points out. Remember to keep yourself in the loop even
when youre not looking for a job, because there will come
a point in time when you just may be.
Atkinson also suggests helping others with their network-
ing goals. The process has to be a two-way street to be
effective, she points out. Taking and never giving back will
eventually leave you out of the loop.
While women and minority MBAs remain underrepresented
in the nancial world, Atkinson notes that good network-
ing skills can bridge the gap. She notes that reaching
out to such organizations as the National Association of
Women MBAs, the National Black MBA Association, and
the National Society of Hispanic MBAs helps to increase
networking ties to nance rms, since these associations
specically seek to help in career development.
Remember to always be open to contacts that may be
outside of your realm of experience, she suggests. Dont
discount any source.
Internships held
during graduate
school can lead to
important networking
opportunities,
especially if students
are diligent in
maintaining ties
to their former
supervisor or boss.
With competition for
plum opportunities
at a high, network-
ing helps separate a
candidate from
the pack.
66
Youve landed your rst job. A year later a recruiter brings
you an offer of a better salary from a competing rm. You
go into your managers ofce to resign and receive a coun-
teroffer. Should you take it?
No, says Bob Deissig, a partner at the Ayers Group, a New
York-based human resources consulting company. Firms
shouldnt make counteroffers either, he adds, citing a
survey in The Wall Street Journal that showed more than
90 percent of job seekers who accepted counteroffers were
unhappy a year later. Most, in fact, ended up leaving their
rm, voluntarily or not.
In nancial services, its like musical chairs, Deissig says.
People from First Boston go to Morgan Stanley and people
from Morgan Stanley go to UBS, and it just rotates.
Why Leave?
Rather than bring in a new hire who has to learn all of a
positions responsibilities, banks and nancial services
rms seek exact ts. For the employee, pay is often the only
difference between one company and another. That means
the only pull for a person to leave their current company
is more money, says Deissig. If there isnt a lot of push,
when they go in to resign it becomes very commonplace
to counter. So, why should they leave when their current
employer just matched the salary offer?
Often, the answer is because the employee was unhappy,
either with a manager or the companys culture. In such cas-
es, his decision to accept a counteroffer will lead to second
thoughts in the months ahead. As for his managers: Theyve
just learned the employee isnt loyal, and may spend their
time looking for a replacement.
Running up the Ladder
That replacement may well come from within the company.
In a recent Robert Half survey of executives at the largest
1,000 companies in the U.S., 60 percent of the respondents
said they were more likely to promote from within than they
were three years ago. Max Messmer, chairman and chief
executive of Robert Half International and author of Manag-
ing Your Career for Dummies, says that job-hopping can
be an attractive way to advance in times of low unemploy-
ment. However, he notes, employers value loyalty, and the
best growth opportunities often are internal, particularly
among those rms that recognize the morale and pro-
ductivity benets of promoting from within. To position
themselves for those opportunities, Messmer suggests
employees make sure their managers understand their skills
and career goals.
If youre looking to moveinternally or externallyMess-
mer stresses you should know the skills required for the job
youre pursuing, and acquire any additional education you
may need. Volunteer for new tasks to demonstrate enthusi-
asm, and make your boss look good.
When Deissig evaluates candidates for their ability to move
into a more challenging position, he looks for indications of
inquisitiveness. You often can see that outside of work as
well, he says. You want to know if the person is a quick
learner, if they go outside the box rather than always taking
things in logical succession.
Finally, says Messmer, candidates should help prepare their
successor. Doing so allows you to move on with profes-
sional bridges unburned.
Learning Opportunities
We tell clients to be more exible and provide learning
opportunities, says Deissig. When they take that approach,
hiring companies provide more than just additional money
for the same opportunity: They offer candidates the chance
to learn new areas of the business.
In addition, If a person has the right experience, if they
are smart and have a degree of learning agility, it is not a
leap of faith to move that person into a bigger job, Deissig
says. The result is a win-win for recruiters, candidates and
banks. The recruiters have a wider range of people to pres-
ent, rms get to look at a group of highly skilled, eager job
candidates, and job seekers have an incentive greater than
just money. For everyone, the outcome is a loyal employee
who has grown into a new position.
Take the Offer and Run
When to make a move for greener pastures
The Official MBA Fairs
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68
Steven Marotta, Research Analyst,
Wyper Capital Management
Interpersonal skills are very valuable. You must have
the ability to communicate your ideas, to get along
with the people you work with, and to rise to chal-
lenges when necessary.
You have to be prepared, and you cant be a shrinking
violet. That is something I underestimated coming to
this side of the business. You must have the informa-
tion at hand to back up your recommendations.
Get good gradesand go to class. The pedigree of
the school helps, but if you arent in one of the top
schools, getting a job with a marquee name early
would help.
Developing a network helps.
Harold Tinkler, Chief Ethics and Compliance Ofcer,
To be successful in compliance you must be able to
develop a deep expertise in areas that you oversee.
It requires the ability to relate to people and complex
issues that are subject to compliance monitoring.
You have to have a mindset compatible with quality
control. The work should be the primary motivation.
Richard P. Cervone, Managing Director, Portfolio Manager,
Putnam Investments
Take courses in nance and anything that teaches you
about the valuation of companies.
Take a broad range of courses in areas such as market-
ing and strategy, because theyll teach you to evaluate
management decisions and how they impact the top and
bottom lines, as well as how the businesses operate.
Learn as much as you can about business on your own.
And, its important to communicate a high level of
enthusiasm when looking for jobs at mutual funds.
Rebecca Patterson, VP and Global Currency Strategist,
JPMorgan
Markets are highly interrelated, so you have to be able
to understand the equity, bond and commodity markets
and how they each could impact currencies.
Policymaking is also important, as indirectly it can
inuence portfolio and trade ows that in turn drive
currencies.
You must have a natural curiosity about the world,
which involves reading and asking lots of questions.
Patrick Costello, Global Head of Network Management,
Mellon Group
Career decisions are frightening. Take a deep breath,
relax and avoid the temptation to overanalyze your
career path. My career wasnt planned. I found it.
Most are.
Keep your eyes open, speak up and take in as much of
the road as possible.
Kathleen D. Scott, Principal, RA Capital Advisors
An internship is the best way to determine the areas
youre interested in.
A career in investment banking is very demanding.
People shouldnt go into it if they want a lot of free time.
This is a time-intensive business, but its important
to maintain a balance in your life. Particularly, when
you work as a junior analyst, its difcult to take time
off because of the pressures to perform. But you dont
want to get burned out.
Imran Ali, Associate, Alta Communications
Know your nance and accounting, and polish up those
skills by working at either an investment bank or a
consulting rm beforehand.
Dont be afraid to have an opinion and to take a stand
on any deal or investment opportunities.
Be humble and learn to work well with others not
just colleagues, but also counterparts in a deal and
agents, etc.
Evan Tepper, Structured Finance Analyst,
Moodys Investors Service
The most important thing is to come in motivated
every day and be willing to learn. There is so much
to learn that even people who have been part of the
group for 10 years are still learning new things.
Voices of Experience
Professionals offer advice on investment banking careers
Steven Marotta
Research Analyst,
Wyper Capital Management
Harold Tinkler
Chief Ethics and
Compliance Ofcer,
Richard P. Cervone
Managing Director,
Portfolio Manager,
Putnam Investments
69
How the Right Recruiter Can Push Your Career
Know what youre doing to play the game
Recruiters get a bad rap, with some of Wall Streets uniniti-
ated believing theyre a chromosome apart from telemarket-
ers. But if you think that way, think again. A good search
consultant is your ally through thick and thin, and search
rms can provide you with a network of potential jobs that
may not otherwise be available. In other words, this is an
important relationship, which you should handle profession-
ally and properly.
Your rst task? Get noticed.
Putting Yourself on the Map
A lot of job seekers think that getting attention is just a
question of barraging people with resumes and endless
telephone calls, says Allan R. Starkie, a partner at New
York-based executive search rm Riotto Jones & Company.
While Starkie says such tactics wont win you any friends,
if your phone isnt ringing, youd do well to take matters
into your own hands. To show you know what youre doing:
Its often easier to make human contact with contin-
gency recruiters. Because theyre only paid for suc-
cessful hires, contingency rms are more likely than
retained rms to consider resumes that come in over
the transom.
Ask for referrals from colleagues or friends. Janice
Reals Ellig, president of retained search rm Gould
McCoy Chadick & Ellig, says One of the best ways to
get on my radar is to be referred by someone I know,
including clients.
Research respectable rms operating in your area.
Search the World Wide Web or visit the library to
consult the Directory of Executive Recruiters, which
proles practice areas, size and salary level handled.
Send an introductory e-mail to the search partner who
handles your area at a particular rm. Follow up by
phone no more than twice. If you dont get a response,
dont nag just go to the next search rm on your
list. If you do make contact, try to get a face-to-face
appointment.
Face to Face
Use your meeting to gauge the search consultants profes-
sionalism. Look at the ofce space. Ask about the persons
experience with the Wall Street product theyre handling,
what kind of placements theyve made and what rms
theyre dealing with, says Susan Teeman, president of
contingency search rm Teeman Perley Gilmartin.
You may nd yourself opposite a less-than-professional
recruiter. If he or she is sitting on a hot opportunity, you may
still want to proceed after ratcheting down your expecta-
tions and setting a strict policy against their sending your
resume without permission.
At your initial meeting with a recruiter:
Be prepared to explain why youre different from all
the other candidates. I always ask What do people
say about you? says retained search consultant Ellig.
I want to hear in a concrete but not arrogant way
what youve accomplished and what differentiates
you. If youre going to be too shy about it, thats not
good.
Know your product, understand the movement in the
marketplace, whats going on at different rms and
whats happening in your sector.
Dont be negative about previous bosses or companies,
and dont divulge condential or proprietary infor-
mation (I dont know if I should be telling you this,
but).
Even if you dont t a current opening, keep the long view
in mind. Ask the recruiter for introductions to three people
who might be helpful as you explore your options. Good
search consultants know the value of introducing worthy
clients to one another.
To wrap up an interview, ask if its okay to e-mail every
8-12 weeks to check on new searches. And send a thank
you note. For this, e-mail is good but a handwritten note is
better.
Information Exchange
Once youve made contact with a recruiter, its important
to maintain a relationship. One way to do this is through
information sharing.
As president of the New York-based retained search rm
Jay Gaines & Company, Jay Gaines advocates building
relationships with several recruiters whose careers will par-
allel yours. You really want to share information because
recruiters can be a wonderful source of whats happening in
the industry and a good source of advice, he says.
70
Q: What can you do to be more proactive in managing
your career?
A lot of us make assessments about our career success by
benchmarking ourselves against our peers. But if youre
working in a smaller company, there arent many peers. So
what can you do? You can join an alumni association. You
can take a night course. Its all about getting into a com-
munity of fellow travelers. A lot of people do it by computer.
They form these internet chat rooms, and they talk about
their careers there.
Careers are internal. A job is external. The job is something
someone else gives you. A career is something you give
yourself.
Q: Many experts say mentors are important. How do
you nd a mentor at work?
The rst thing you should look for is common values. You
dont need someone whos doing the same job. You need
someone who shares your values or world view. Say Im
money-hungry, but youre not. Id be a bad role model for you.
There are three things you need to focus on in a career:
money, fun and learning. You have to nd people who have
those three elements in the same priority you do.
And by the way, those priorities can change. If youre trying
to start a family, you may be trying to maximize income, so
youll put money rst. Theres nothing wrong with that. And
then once you have a family, your mentor may change.
Q: So how do you nd this mentor?
Youve got to nd that person by their behavior, by their suc-
cesses, by their reputation, internally. And thats how you
identify them. And then you see their receptivity. And you
ask them if they will be your mentor.
Q: Are most people receptive?
If theyre not receptive, then youve picked the wrong
mentor. My guess is, being a mentor is considered by most
people to be an honor.
But you should wait until youre on a job for at least six
months before approaching someone. By that time, youve
established a reputation. No one will want to help you if
youre not effective in your job. If youre doing a good job,
then your contributions to the organization are apparent.
Q: What should people with nancial services jobs
be reading, to further their careers?
Books in the popular press, periodicals, newspapers. I
think all that stuff adds to your professional development.
It shows up in your job and in interviews. You know whats
topical.
Q: How should people view recruiters? As someone
constantly in their lives or someone they call when
they want to make a move?
Unfortunately, my answer is self-serving. You need a good
recruiter like you need a good lawyer or a good accountant.
Just because you havent been sued recently doesnt mean
you dont want a good lawyer. The same thing is true for an
accountant and an executive recruiter not so much to get
a new job but as a career advisor. I get a lot of phone calls
from people who arent interested in leaving their company,
but want to move internally.
Q: Speaking of which, how do you know when its
time to leave your current job?
Boredom. People say everyone is motivated by money. The
number one motivator in peoples careers is learning. The
number two is fun or fulllment. And the number three is
money. Theres something about always learning something
thats exciting. You just cant beat it. Thats how you know if
youre in the wrong job. Youre not learning anything.
Q: Is it better to stay in one place for a long time, or
to move around and get a diversied palette of
experience?
To me, neither one is better or worse. Its really whether
youre in an environment where youre learning. If you
brought a resume to me of someone who had three jobs in
10 years, but that person had the same job and responsibili-
ties in each position, thats a problem. But if you show me
someone who has had three jobs in the 10 years, and in
each job they had increased their responsibilities and had
developed professionally? Thats ne with me.
Recruiter Q&A: John Mazzei, Managing Director,
Rand Thompson, New York
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73
How to Face Traders Trauma Then Trade Some More
Using mental discipline to keep yourself on track
Trading, most industry insiders will tell you, is a business
with tremendous turnover. In order to succeed in this busi-
ness, you have to have utmost mental strength, says Evan
Lazarus, managing director of Sperling Enterprises, who be-
gan his career in 1998. Most people dont recognize that.
Indeed, Lazarus says only about 10 percent of the traders he
knew when he started remain in the business today. Sever-
al times, hes found himself in situations where he was sure
he couldnt handle the businesss mental pressure. I was at
a point where there was a wall in front of me, and I could
not knock it down, he says. However, each time, with the
help of Sperling Chief Operating Ofcer Doug Hirschhorn,
Lazarus managed to overcome his traders trauma.
Doug opened up my mind to concepts like the prospect
theory, thinking about trading in terms of points instead of
money, explains Lazarus. He helped me to understand
myself more so than anything else.
Focusing on points rather than
dollars allows you to focus on
the process of the trade, not
the outcome of the trade, says
Hirschhorn, who worked for both
the Chicago Mercantile Exchange
and the Chicago Board of Trade
before joining Sperling Enter-
prises in 2005. Or, in the words
of Alan Farley, a private trader and columnist for TheStreet.
com: Experienced traders control risk. Inexperienced trad-
ers chase gains.
Blocked And Under-Trading
Jeanne Zingaro, a private trader who trades in commodi-
ties, suffered from a severe lack of condence after one of
her trades resulted in a big loss. I couldnt bring myself to
jump back in, she recalls. Hers was a common trader pre-
dicament called under-trading, which occurs when traders
identify an opportunity but cant make themselves act. Dr.
Brett Steenbarger, a clinical psychologist who specializes in
trading psychology, likens this fear of trading to a mild form
of post-traumatic stress disorder.
To overcome such trauma, Hirschhorn encourages traders
to create a daily game plan and motto and to stick with it
as closely as possible. He also suggests keeping a journal
to help identify whats lead to their successes and their
losses. For Zingaro, Hirschorns techniques are a good
way of evaluating the day, she says. Everyone makes
mistakes, how one handles the mistake is an important
thing to learn.
Overcondence
And Over-Trading
While the lack of condence begets under-trading, over-
condence and the fear of missing out on trades can lead
to an opposite result: over-trading. Thats when we nd
ourselves putting on trades when we dont really have an
edge. We nd ourselves not really adhering to our trading
plans, says Steenbarger. Over-trading can also be triggered
by frustration from a previous loss that leads to a revenge
trade, or simple boredom from a lack of trading activity.
Tom Rice, director of trader development at Goldenberg,
Hehmeyer, says at some point most tradersincluding
himselffall prey to over-trading. Overcoming the impulse
requires self-discipline, he says. Discipline is a muscle,
you have to exercise it, he declares.
Ultimately, I believe that trading is a performance skill
that is learned through intensive exposure, and that it is an
example of implicit learning, says Steenbarger. In that
sense, the factors that make for successful performance
as a trader are the same as those that make for success
among chess grandmasters, Olympic athletes or ballet
dancers at the Bolshoi.
Battling the mental aspect of this business is the hard-
est, says Lazarus. Still, despite the difculties posed by his
career, trading has become very dening for who I am,
he says. Its mine: mine to create, mine to grow, mine to
complete. It gives me a real sense of accomplishment.
Experienced
traders control risk.
Inexperienced traders
chase gains.
74
Dont think that youve got a honeymoon period in store for
you during the rst months of your new job. In the results-
oriented world of nance, instant graticationfor your
new employer, not youis more like it.
In all cases, they expect you to hit the ground running,
says Peter Gonye, co-head of search rm Spencer Stuarts
private equity and investment banking practice. To prepare
yourself, you should certainly understand what type of cul-
ture it is before going in, adds Janice Reals Ellig, president
of the retained search rm Gould McCoy Chadick & Ellig.
Some are bureaucratic, while others are more run-with-
the-ball entrepreneurial.
Preparation begins before youve even received a job offer.
During the interview process, investigate the people whove
held your position previously, as well as your future boss
and other successful gures
within the company. Find out
whats made them successful (or
not), and learn all you can about
how they operate. Make sure
youre crystal clear on your bosss
operating style: Is he or she a big
communicator or not? Are you ex-
pected to operate independently
or check in every step of the way?
Once you start your job, dont be
surprised if youre pretty much
abandoned to your own devices
once youve been shown your
desk. Companies often dont
welcome you with open arms
because they dont know how
to, says Ellig. Theyre so busy working on things that they
seldom communicate, or fail to communicate.
The Other-Place Trap
In his former job as head of international human resources
at Merrill Lynch, Sean Woodroffe observed many instances
of over-eager but insensitive new hires committing hari-
kari. One of the classic missteps was the Ive-done-it-
better-at-the-other-place syndrome, he says. Ive seen
instances of senior executives coming in and saying, The
way you guys do things is archaic. This is the way we did
things at our company, and it was better.
Instead of coming on so strongly, take time to analyze and
understand your new environment. Acknowledge the rms
successes before taking a hacksaw to its failures and
dont voice your opinions in a critical or unattering way.
Easier Transitions at
High-Growth Firms
Not surprisingly, many new hires nd it easier to transition
into places devoid of settled efdoms. Companies that
are in a really heavy growth mode are much more uid,
says Ellig.
Slower is Better
At least one observer would like to see companies go a lit-
tle easier on new employees. To expect a stranger to come
into a company and really have credibility and condence
and be able to hit home
runs, I think is dumb,
says Jay Gaines, presi-
dent of New York-based
retained search rm Jay
Gaines & Company. He
prefers the approach of
one client, a top asset
management rm, which
tells candidates, Look,
for the rst year, we re-
ally would prefer it if you
wouldnt do anything. Learn our culture, learn how we do
things and then act.
How to Blow Your Career in 90 Days or Less
Successfully managing a job transition
Once you start
your job, dont be
surprised if
youre pretty much
abandoned to your
own devices once
youve been shown
your desk.
At least one observer
would like to see
companies go a little
easier on new
employees.
75
How to Future Proof Your Career
The right moves today mean you may be around tomorrow
Careers in investment banks
carry a distinct risk premium:
You may be earning more money
than people outside the industry,
but youre also more likely to
lose your job.
Theres no shortage of prec-
edents: In 2004, Deutsche Bank
cut 6,000 jobs, and between
2001 and 2003 Merrill Lynch
eliminated some 24,000 staff
positions. More recently, Credit
Suisse said it will cut 300 jobs
as it repositions its asset-man-
agement unit to focus on core
strengths.
So what do you do if you want
your banking career to have the
longevity of, say, Sandy Weills? The fabled Citigroup chair-
man retired in 2006 after starting out as a runner on Wall
Street during the 1960s. We asked a selection of search
consultants and career advisors for advice. Heres what
they said:
Move proactively
Build a large rolodex
Dont overspecialize too soon
John Challenger, Challenger Grey & Christmas
John Challenger, chief executive of Challenger Grey &
Christmas, the outplacement provider, says you should rec-
ognize youre not going to stay at one organization for your
entire career. When the right opportunities come along, you
should move proactively.
While youre working, Challenger says, you also should de-
vote 10 percent of your time to building a hefty rolodex and
doing favors for others. The more favors you do for other
people by connecting them and making things happen, the
more favors theyll do for you, he observes.
Challenger cautions against overspecializing in a small
organization too early in your career. Early on, its better
to be a generalist working for a larger bank, he believes.
Youll meet a lot more people and have a broader scope.
Its also easier to go from a big organization to a little one
than the other way around.
If youre based in the U.S., work for a U.S.-based
rm
Anticipate the strategic direction of the company
youre working for
Watch out for consolidation
Jay Gaines, Jay Gaines & Co.
If job security is all-important, says Jay Gaines, chief
executive of Jay Gaines & Co., a New York-based nancial
services search rm, Wall Street bankers should think about
working for U.S. banks. When Americans work for non-
U.S.-based institutions its often a much bumpier ride, he
says. Non-U.S. institutions have restructured on U.S. soil
many times.
By way of example, he points to UBS, which went through
numerous gyrations before reaching its current powerhouse
status. As well as giving up-and-coming European banks a
wider-than-average berth, Gaines advises keeping an eye on
your employers strategic direction. Look at the institution
youre working in, consider its core strengths, and judge
whether the area youre in is peripheral to the core, he
says. If it is, you could fall prey to business restructuring.
For Gaines, the securest career option is working for a
large U.S. bank that wont be subject to a takeover. If you
work for a top-four bank in the U.S., the chances that your
organization will be acquired (and that youll lose your job
as a result) are very low, he says.
On the other hand, he warns career progression will prob-
ably be slower there than at a smaller rm or a fast-growing
European bank. These are crowded places. Theres a trade-
off between the speed of advancement and lower risk.
76
Private equity funds are the kings of the capitalist system.
With hundreds of millionsoften billionsof dollars to
invest, they specialize in buying out large established com-
panies, improving them, and then selling them.
People who work in private equity can make incredible
amounts of money. They also benet from the kind of job
security most investment bankers only dream of. But if
youre attracted to a career in private equity, dont think
nding a job is easy.
Lucky Few
Private equity is one of the most popular career destina-
tions at this point in time, says Tim Butler, director of
career development programs at Harvard Business School.
It is also one of the most competitive, if not the most
competitive, industries to get into.
Guy Townsend, managing director of Walker Hamill, a
London-based rm specializing in private equity recruitment
across Europe, says most people havent much of a chance.
You need a top-class degree from a top school. If youre
coming from banking, you need to work for a top-quality
name, and you need to be ranked at the top of your
peer group.
If youre one of those few, how do you maximize your
chances of success? It all depends on where youre based.
But on the whole, experts give the same message to every-
one: excel.
Start Young
When it comes to breaking into private equity, the English-
speaking world has an advantage: U.S. funds hire junior staff
on an annual basis, and UK funds increasingly do the same.
There are two common entry points: two to three years into
a rst job after college graduation, or immediately after
earning an MBA.
The rst option is best but doesnt guarantee a job for life.
Funds typically hire with two-year contracts and then send
junior recruits to study for their MBA, with no guarantee
of being rehired. On the other hand, if you delay your initial
move until after youve received your MBA, you risk being
trumped by rivals whove already gotten experience in
the business.
The Carlyle Group, the giant PE fund with nearly $42 billion
under management, hires 15-20 associates per year. Lori
Sabet, senior vice president for human resources, says
most come from investment banking or strategy consulting.
If youre a banker, Sabet says youll be well-placed with
experience in one of four areas corporate nance, nancial
sponsors, leveraged nance or mergers & acquisitions.
The MBA Springboard
If you plan to use the MBA track into private equity, be sure
to choose the right school. Blackstone Capital Partners, a
U.S. fund with some $30 billion under management, pres-
ents to students at just three schools: Harvard, Wharton
and Columbia.
In 2005, Columbia Business School sent less than 5 percent
of its graduates into careers in venture capital or private
equity. Considering that most funds hire no more than 10
people each, this was no mean feat. Regina Resnick, Co-
lumbias head of the career services, points to the schools
historic ties with the industry. It helps that big names like
Henry Kravis, co-founder of Kohlberg Kravis Roberts, are
alumni and have been known to run roundtable discussions
for students. Private equity funds like to build relationships
with students before they hire, says Resnick. Its a very
personalized process they are not hiring in great numbers
and like to get to know people rst.
The implications are clear: If youre at the wrong school, your
chances of meeting the right people will be severely limited.
European Options
Barbara Valaperti, a Paris-based consultant at search rm
Heidrick & Struggles, says that while most funds have
well-established ofces in France, job openings are rare.
However, some funds will occasionally ll senior-level gaps
with outsiders. Valaperti says the desirable combination
includes a little banking, a little strategy consulting and a
smattering of industry experience.
If you want a job in Italy, it helps to have friends in high
places. The Italian private equity market is small and
recruitment is rare.
Speaking many languages can also be an advantage. In
Germany, for example, you need to have had international
exposure, says Jens Tonn, head of the German team at
private equity rm Candover. English is essential: There
are very few independent German funds run by Germans.
The Global Private Equity Club and How to Get In
Breaking in is tough, but the payoff can be substantial
78
Those promoted to managing director have made it.
Theyve obtained the highest title an investment bank can
bestow. They typically make more money, shoulder more
responsibility and are admitted to an elite inner circle, often
complete with its own dining rooms. Bankers who dont
make the cut are left wondering if they ever will.
Rungs to the Top
Becoming an MD is nothing like becoming an associate or a
vice president. While low-level promotions can typically be
swung with a good word from a direct boss, the selection
of MDs is a more complex process. While each bank has its
particular foibles, all start with a short list in a process that
begins at the grassroots and ends at the highest echelons.
Throughout, existing MDs play a pivotal role.
In the rst stage, vice presidents who excel in their annual
assessments are nominated by the managing director in
charge of their team. David Charters, a former managing
director in equity capital markets at Deutsche Bank, says
the luckiest VPs are nominated within just two years.
Everything needs to go according to plan: deals come in,
you get to work with big producers and they are big enough
to credit you with your contribution, he says.
In the second stage, team leaders present nominations to a
group of MDs convened especially for the purpose. Through a
process of elimination, the group assembles a list of the most
exceptional candidates. Jean Facon, a JPMorgan managing
director turned recruiter, describes the evaluation process
as collegial: Typically, a committee of managing directors
considers names on a case-by-case basis, she explains.
Once the names have been debated and the cream of
the crop is selected, the list of candidates is presented
to executives higher up the ranks. At UBS, for example,
members of the investment banking board review each
names suitability. The chairman is briefed on who is who
and approves their promotions or not, says one banker. At
this stage, disapprovals are unusual.
If you want this all-important title inscribed on your business
card, use the following strategies to boost your chances.
Make Friends in High Places
Given the pivotal role played by current MDs, who knows
you and who likes you are critical. Its the in crowd versus
the out crowd, complains one would-be MD. If youre go-
ing to make it, you need to navigate your way to using one
of the banks stars to guide you.
The solution sounds simpler than it is: Find someone senior
who likes you and respects your work. There is merit in
attaching yourself to a big producer, says Charters, the
former Deutsche MD, particularly one generous enough
to credit the team for achievements. If not, you could put in
four or ve years at VP level and still not make it.
Make Lots of Money for the Bank
Revenue generation is not the only criterion for making MD,
but its certainly one of the most important. It is not only
about long service. You have to make the fees, says an MD
and head of department at a U.S. bank.
Numbers speak louder than words, adds an MD in
equities at a German bank. Lots of people are involved in
deals, but only a few make the difference between success
and failure. You need to show you are one of the few.
Treat People Well
MDs are good managers. They should know how to bring
out the best in people. You wont be promoted if you reduce
junior colleagues to tears for making a spelling mistake. On
top of that, banks also want MDs to demonstrate their core
values (typically found somewhere on their Web sites) both
inside and outside of work.
Do All This Consistently
It wont be sufcient to make high-level friends in the
months just before promotions are considered, or to
suddenly become sweetness and light when you have a
reputation as a dragon. A late lobbying effort is unlikely
to make any difference, says recruiter Facon. You need
years of a consistently strong track record, both in terms of
performance and in adhering to common values.
Handling Failure Without Failing
Candidates typically get two shots at promotion after
graduating to the short list. If you dont make it twice in a
row, your chances are severely depleted. If that happens,
console yourself with the fact that MDs are not always
the most highly paid, and hold a heavy plate of managerial
responsibilities to boot. Or, you can try your luck elsewhere.
If a new bank really wants you, it might bring you on as an
MD, sidetracking the usual process entirely.
What it Takes to Make Managing Director
And why not everyone is cut out to be one
79
Joseph Ghartey, Head of Equity Derivatives for the
Americas, JPMorgan
Joseph Ghartey, 33, is responsible for North and South
American sales and trading, equity nance and market-mak-
ing at JPMorgan. Although he was made a managing direc-
tor at 31, when asked about his career, hes more apt to talk
about his recruitment activities: positions as co-captain of
the Harvard University recruiting team, or JPMorgans In-
vestment Bank Inclusive Leadership Council, or as co-head
of the Junior Resource Development Council of JPMorgan,
especially his role as an alumni of Sponsors for Education
Opportunity (SEO), a non-prot organization that helps
people of color achieve their professional goals.
Q: What was your initial goal when you were just
starting out at school?
Well, early on I wanted a Ph.D. in economics or math.
Q: And did you go on to graduate school?
No. An internship in the summer of 94, prior to my senior
year at Harvard University, piqued my interest in Wall
Street.
Q: Where was the internship?
The SEO helped me obtain a summer internship at Smith
Barney, where I reviewed annual reports and 10-Qs and put
together pitchbooks.
Q: And you went back to Harvard after that internship?
Yes. I graduated in 95 with majors in math and economics.
Prior to graduation, I applied to JPMorgan in sales
and trading.
Q: Not in M&A?
No, I had more interest in sales, and there were other
considerations. Sales and trading is a good entry point,
because you can start as an analyst, as I did. There are
more roles in this eld suited to mathematics, whereas
in M&A math skills are not immediately applicable at the
entry level. Also, from a pay perspective there is more op-
portunity for compensation.
Q: Did you get to use your training much in the
real world?
Oh, yes. In 95, equity, credit and other derivatives were
just becoming really hot in the States. Having a math de-
gree helped a great deal. The modeling used in structuring
deals is very mathematical. Understanding the risk param-
eters of a deal requires math, and developing models, the
statistical analysis for inputs for pricing the derivativesto
determine if the contract is priced richly or cheaplyare all
very dependent on math.
Q: It sounds like they were exciting times.
They were and still are. New products in equity derivatives
were coming online and new markets were opening up ev-
ery day. I was part of the Americas Equity Derivative Team,
specically in Latin America, Brazil, Argentina, Mexico.
Q: Exciting from an economic standpoint of course,
given the volatility in that region at that time.
It was very challenging and exciting.
Q: Did you need to be bilingual?
The math really helped more than language.
Q: Did you go into this with programming skills?
We programmed a lot to develop risk management tools
and customize applications. We probably used some visual
basic and SQL languages. But nothing that we used back in
the day is used now. Today, we use C++ and mainly object
based models.
Q: What are the hours like in sales and trading?
In the beginning we were more manual. We press a button
now to generate our P&L statement. So instead of 6:30
a.m. until 10 p.m., we nish up closer to 6 p.m., unless
were entertaining clients. Then meetings and dinner can
run late.
Q: And your charity work?
Very important to me. As an alumni member of SEO, I am
co-chair of SIRV Saving, Investing and Returning Value.
SEO places 300 interns a year.
Q: Intrinsic rewards aside, hows the money?
I started at $35,000 and Im making a lot more than that now.
Joseph Ghartey
80
Jeffrey Sherry, Investment Banker, Ryan Beck & Co.
Jeffrey Sherry, 31, is director with Ryan Beck & Co., a full
service investment banking rm with 43 ofces in 14 states.
He is responsible for the day-to-day management of deals,
maintaining client relationships and identifying and bringing
in new business. His clients are middle market companies
with revenues from $25 million up to several hundred million
dollars, predominantly in the consumer and retail industry.
Q: Could you tell us about how you got to be director
at Ryan Beck?
Well, I started with a good foundation. I graduated from
Wharton School at the University of Pennsylvania with a B.S.
in Economics with concentrations in accounting and nance.
Q: Accounting?
Yes. I actually spent my internship at KPMG, in their tax
department.
Q: And how did that work out?
Very well. The experience guided me away from the ac-
counting eld, although the skills came in handy later.
Q: So you didnt go into accounting after graduation?
No. My rst job was with Dresdner Kleinwort Benson, as
an analyst in the investment banking group. I valued deals
with prospective companies, performed research, prepared
marketing materials. This was all under the vice president
and the associates of my group.
Q: When did you move on to Ryan Beck?
In 1999. DKB was more focused on mergers and acquisition
business, and Ryan Beck offered more client interaction. I
entered as an analyst there as well, but as the only analyst,
so I had to take on a lot more functions. There was a lot of
client contact.
Q: Including road shows?
Yes, I had to participate in road shows.
Q: How did you get the introduction to Ryan Beck?
Through a friend of a friend who knew I was seeking a new
opportunity. DKB was involved in international deals and I
found the domestic, middle-tier market more interesting.
Ive been here seven and a half years now, and in that
time Ive gone from analyst to associate, associate vice
president, president and now director, reporting to the head
of investment banking.
Q: Thats pretty fast. Whats your secret?
Working really hard. There are always a lot of hours and
hard work. Its not even necessarily the hours, but the
mental acuity required to really keep on top of things. Its
the capacity to do a lot in a short amount of time.
Q: Multitasking?
Absolutely.
Q: How well did your schooling prepare you for
the challenge?
I was very lucky to get to Wharton. The nancing and ac-
counting courses they offered were really helpful to draw
upon later in the workplace. Also, the exposure to different
kinds of people and groups prepared me for relating to an
assortment of colleagues on the job.
Q: You havent gone the popular MBA route.
I chose a less formal route. I learn a lot from attending pre-
sentations, seminars and lectures on law and accounting. I
read a wide range of newspapers, magazines and journals
to keep up. And, I talk to a lot of people, which is a very
important source of information.
Q: Is travel part of the job? Youre on your way to the
airport now
Yes, a couple of times a month, to see existing clients or
meet new clients. Often its for raising capital or performing
due diligence for transactions.
Q: What kinds of changes in investment banking have
you noticed?
When I joined, there was a heavy focus on the Internet and
Internet companies. The emphasis is broader now. Were
studying consumer retail, real estate, even title insurance.
Q: Any advice for others considering entering invest-
ment banking?
Make sure its something you really want to do, because it
takes real commitment to become successful at it.
81
Information moves the markets whether its stock, bond or
futures quotes, breaking news driving commodities trading,
the release of a companys annual report or turnover among
its executives or staff.
To succeed on Wall Street, you have to keep up. Among
other things, that means staying up-to-date on develop-
ments in business, politics, economics and the world in
general. Thats no small task in todays media-crazed world,
especially if you want to focus your career in specialized
areas like hedge funds or risk management.
This list is meant as a starting point, a collection of infor-
mation resources you can use to keep abreast of whats
going on in business and general news around the world.
In addition to these, each market sector offers a variety of
trade publications that focus on narrow areas of expertise.
Dont forget to read the information presented by compa-
nies themselves in their 10-Ks, 10-Qs, annual reports and
press releases, which you can almost always nd on their
corporate Web sites.
Resources
News you should use
General Financial and Investing News
Barrons www.barrons.com
FierceFinance www.ercenance.com
Institutional Investor www.ii.com
Investors Business Daily www.ibd.com
InvestmentNews www.investmentnews.com
The New York Times Dealbook dealbook.blogs.nytimes.com
Career Information and Career Development
eFinancialCareers www.enancialcareers.com
Asian Financial Society www.asiannancialsociety.org
Association of Latino Professionals
in Finance and Accounting
www.alpfa.org
CareerJournal,
from The Wall Street Journal
www.careerjournal.com
Career Opportunities for Students
with Disabilities
www.cosdonline.org
Management Leadership
for Tomorrow
www.ml4t.org
National Black MBA Association www.nbmbaa.org
National Society of Hispanic MBAs www.nshmba.org
Sponsors for Educational
Opportunity
www.seo-usa.org
Women on Wall Street wows.db.com
Sector News
BondsOnline www.bondsonline.com
Compliance Week www.compliancenews.com
Corporate Financing Week www.corporatenancingweek.com
The Deal www.thedeal.com
Default Risk www.defaultrisk.com
Finance Asia www.nanceasia.com
Fund Action www.fundaction.com
GloriaMundi www.gloriamundi.com
HedgeWorld www.hedgeworld.com
Inside Market Data www.insidemarketdata.com
MARHedge www.marhedge.com
On Wall Street www.onwallstreet.com
Risk Magazine www.risk.net
Securitization News www.securitizationnews.com
Trader Daily www.traderdaily.com
Wall Street & Technology www.wallstreetandtech.com
Waters www.watersonline.com
General and Business News
Bloomberg www.bloomberg.com
BusinessWeek www.businessweek.com
CNN www.cnn.com
Financial News www.nancialnews-us.com
The Financial Times www.ft.com
Forbes www.forbes.com
Fortune www.fortune.com
The New York Times www.nytimes.com
Reuters www.reuters.com
USNews and World Report www.usnews.com
The Wall Street Journal www.wsj.com
Washington Post www.washingtonpost.com
82
In recent years, the nancial industry has put great effort
into hiring and retaining minorities at all levels. And while
theres no question many rms have made real progress,
entrenched corporate cultures and economic realities have
sometimes halted that evolution.
Few doubt the industrys direction will change, but at the
same time few believe complete solutions will be achieved
easily or quickly. Meanwhile, minority candidates are present-
ed with an exceptional opportunity: Because fewer women,
blacks and Hispanics are applying to business schools, nan-
cial companies are engaged in a erce war for talent.
Executives are quick to throw water on the notion that
diversity equals entitlement or lower standards. Its impor-
tant to remember that diversity and meritocracy are one and
the same, says Lance LaVergne, vice president of Human
Capital Management at Goldman Sachs and manager of the
rms U.S. diversity recruiting efforts. Observes Elizabeth
Wamai, a director at Merrill Lynch and the rms diversity
manager for Global Markets and Investment Banking,
unqualied candidates wont be successful, so theres real
pressure to make sure each hire is a good hire.
Finding Talent
To nd qualied candidates, the industry is searching both
broad and deep. Companies are reaching out to students as
early as junior high with internships and communications
programs. Theyre also working with not-for-prot groups
like Management Leadership for Tomorrow and Sponsors
for Educational Opportunity to reach young prospects, and
seeking candidates from academic areas outside of busi-
ness school, such as accounting and law.
Several rms offer fellowships and internships to promising
candidates who want to attend business school but need
help shouldering the nancial burden. In addition to net-
working, theyre advertising more in minority media outlets,
pushing recruiters to nd more candidates, sending more
staffers to job fairs sponsored by minority organizations,
and leveraging their own employee networks.
Trends
Walk onto an average trading oor of 100 people at a
Wall Street investment bank and youll see a lot of white
faces. Seventy-nine of them, in fact. Thats assuming the
staffs diversity matches the workforce described in the
SIAs 2005 Report on Diversity Strategy, Development and
Demographics. Scattered through the ranks would be nine
Asians, six African-Americans and ve Hispanics. Fifty-six
of the traders would be men 46 of them white. Of the 44
women, 11 would be of color.
Since the previous report in 2003, the proprietors of this
trading oor have hired two Asians, one African-American
and seven women. This is what many people refer to as
incremental growth. However, some observers say it may
be also a sign the industry is hiring serious people. While
on rst read a three-percentage-point rise in a diverse
workforcefrom 18 percent total in 2003 to 21 percent in
2005may not seem like much, says one, if it was 10 per-
cent, youd hear cries of afrmative action and theyre just
hiring minorities. These numbers could mean real progress.
Today, LaVergne says, the focus of many diversity efforts
is on gender, mainly because women are both a larger
demographic and more evolved politically and organization-
ally than blacks and Hispanics. There are more women in
the organization than any other minority group. They have
critical mass, he observes. However, he points out blacks
are developing that same kind of momentum, and Hispanics
are making rapid gains.
Getting Beneath the Surface
How can candidates be sure that what theyre experiencing
during recruitment reects the true company culture? First,
do your research, says Merrills Wamai. When visiting a
rm, be aware of the people youre meeting with and how
they compare to the rest of the ofce. Interviewing with
three black professionals who appear to be the only ones in
the building is probably not a good sign, she says. Wamai
suggests asking questions and listening for consistent
answers, and meeting as many people within the company
as you can, even if theyre not in your core area of interest.
Tanya Hinton, president and chief executive ofcer of Di-
versied Search Services of Chicago, suggests researching
the companys retention rate among minorities and women.
You want to nd out not just do they have diversity hires,
but do they retain minorities as well? she says. Taking ad-
vantage of professional and minority networks to talk with
people in the company is another way to learn whether its
culture truly embraces diversity, she suggests. You really
have to get in there to see how its all working in practice.
For Diversity, Banks Chase The Same Talent
Opportunities abound for qualied candidates
Ten School Diversity Alliance
www.tenschools.com
Chicago Graduate School of Business | Columbia Business School | Darden School of Business at University of Virginia | Harvard Business School
Kellogg School of Management | MIT Sloan School of Management | Stanford Graduate School of Business |
Tuck School of Business at Dartmouth | UCLAAnderson School of Management | The Wharton School of University of Pennsylvania
Our mission is to impact and influence the diversity
of MBA campuses, organizations, and the global
community. We also strive to increase the awareness
of and participation in graduate management
education by underrepresented populations.
We encourage you to attend an information session to
learn more about the value of an MBA and the MBA
application process. You will have the opportunity to
speak to admissions representatives, current students,
and alumni from different MBA programs around the
country. For dates, times, and locations please visit
our website at www.tenschools.com.
diversity = enriched experience
84
Once upon a time, wise American
graduates focused their efforts on
landing jobs in U.S. nancial rms.
Taking a position at any other kind
of bank was seen as second-best,
and chances were dicey you
could make the jump back into a
U.S. bank.
Today, thats changing. Among
the rms doing the hiring on Wall
Street are some ambitious interna-
tional players like Deutsche Bank, HSBC, BNP Paribas, ABN
Amro and Barclays Capital. Do they have what it takes to re-
tain new staff against their home-grown rivals? And how do
their cultures compare to those of U.S. investment banks?
International Options
Genuinely international career opportunities is the refrain
of Keith Yardley at HSBC Securities in Manhattan. Yardley
is head of U.S. campus recruiting and talent management
at the rm. Most of the people who come to work for us
are attracted by our ability to move them internationally,
he says.
The attraction for graduates is obvious: the chance to
embrace a career that will give them the opportunity to
travel and see the world even while they gain valuable
work experience. Rightly or wrongly, foreign banks
are perceived as having a more distinct and welcoming
culture than many U.S. organizations. Gary Goldstein, chief
executive of Whitney Group, an executive search rm for
the nancial industry, says, Many of the great American
banking cultures have been pretty much destroyed. Its one
of the faux-pas of the past few decades. Banking used to be
a very clubby industry, where people identied with the rm
they work for. Not any more.
Recruiters who bemoan the loss of Wall Street cultures tend
to sing a similar tune: Mergers change corporate culture, and
sometimes a banks business edge, for the worse. European
banks seem to have largely escaped this stigma, and global
players, such as HSBC and UBS, have managed to maintain
their corporate identities in spite of explosive growth.
Pros and Cons of Globe-trotting
Graduates with wanderlust can nd themselves in places
like Paris, Amsterdam, London or Shanghai while they learn
the ropes. Imagine the glamour: You contemplate a days
work while munching a croissant and sipping coffee in one
of Pariss boulevard cafs, or you step out for a quick dim
sum from a hawker stall in China. But there may be a price
of admission to such locales. Young employees are often re-
quired to take examinations to comply with local regulatory
demands, and some require a great deal of study which
will undoubtedly cut down your caf time.
Then theres the issue of language. International banking
may be largely conducted in English, but unless youre
posted to an English-speaking country youll still have to
bone up on the languages of your host land. It might not be
a problem at European banks for someone whos studied
French or German at school, but it could be a signicant
issue for further-ung postings that could require Manda-
rin, Japanese or Russian. Not being able to communicate
with the local population can lead to an isolated ex-pat
existence, which may defeat the purpose of visiting foreign
countries in the rst place.
Culture Shock?
For some people whove never encountered life beyond
Americas borders, new cultures can pose a challenge. At-
titudes toward work, strange customs and those linguistic
difculties can perplex the new kid on the block, and it
takes a degree of exibility and patience to learn your way
around geographically and culturally.
Even the UK, which shares a common language with the
U.S., can be incomprehensible at times. For starters you
eat biscuits with tea, not gravy; have jam instead of jelly;
wear waistcoats instead of vests, and face spellings like
avours, colours and neighbours instead of avors, colors
and neighbors.
But bear in mind: If you like seeing new places and
experiencing new things, an international career that
embraces travel to new places and a working environment
with colleagues from a multiplicity of cultures is an appeal-
ing challenge.
Going Global: International Career Options for Graduates
Expanding your horizons and your options
85
Better to Go Bulge or Boutique at Career Start?
Our nancial markets expert panel tackles this classic dilemma
Q. Im in my second year of business school. I have one of-
fer from a bulge bracket bank and a couple from boutiques.
Which would be better for my career? Im interested in both
the long- and short-range considerations.
A. Theres no use separating whats good for your career
from whats good for you as a person. Engage in an honest
conversation with yourself about your priorities and style.
Are status and prestige at the top of your list? Is it all about
the bonus? Do you thrive under rapid-re challenges or do
you prefer to order them more methodically, one at a time?
Are you a passionate proponent of your best ideas, or do
you favor a group-think approach?
The broad stereotypes of the bulge vs. boutique choice
are easy to draw. Some believe that nothing beats the
rigor and discipline of big-rm associate programs. Their
formal, systematic approach to training new MBAs typically
includes rotation through different groups, imparting a good
overview of the business. They often run valuable mentor-
ing programs and a variety of activities to help groom you
as an up-and-coming professional. The big banks typically
pay more, too. And, if youre looking for status and prestige
early in your career, this is where to nd it.
What you probably wont nd in the bulge club is the
opportunity to move up quickly and take a leading role. As
a professional at a large institution, your best ideas may
be discouraged and you may have to give up credit or edit
your thinking just when you feel most passionate about
something.
At a boutique, you can expect to function somewhat less
like a peon. Boutiques take fewer recruits from business
schools, however. In these leaner shops, you may dig your
teeth into substantive work early on. You may nd your-
self shoulder-to-shoulder with some of the best and most
experienced in their eld. The interpersonal challenges are
greater but so is the chance for advancement.
Its important to be aware that there are signicant differ-
ences shop to shop. Is the bank on the right trajectory or
do things seem a bit shaky? Just as important, what is the
group energy of the institution? What is the emotional tone,
the nuances of personal integrity (or lack thereof) that char-
acterize the human element of any business environment?
You can nd positive group energy in the right department
of a large rm or at the senior management level of a small
rm. Make sure you do nd it, though, because it will make
all the difference in taking youand your careerto the
next level.
If you would like to pose a question of your own, please
send an email to expertadmin@enancialcareers.com
The Expert Panel
Maggie Craddock
Maggie Craddock is an executive coach to
Wall Street professionals through Work-
place Relationships. She is the author of
The Authentic Career.
Kenneth Taber
Ken Taber is an employment law partner
with Pillsbury Winthrop LLP.
Rod Williams
Rod Williams is the New York City job
market consultant for Lee Hecht Harrison,
a career and leadership consulting rm.
Peter Gonye
Peter Gonye brings 14 years of experi-
ence in investment banking and 12 years
of executive search expertise to Spencer
Stuarts Private Equity and Investment
Banking specialty practice groups.
86
Employer Essentials
A snapshot of institutions operating within the nancial markets
Company Address Telephone Graduate Website
ABN Amro 55 East 52nd Street, New York, NY 10022 212 409 1000 www.graduate.abnamro.com
Banc of America Securities 9 West 57th Street, New York, NY 10019 800 432 1000 www.bofa.com/careers
Barclays Capital 200 Park Avenue, New York, NY 10166 212 412 4000 www.barcap.com/campusrecruitment/
Barclays Global Investors 45 Fremont, San Francisco CA 94105 - www.bgigraduatecareers.com
Bear Stearns 383 Madison Ave. New York, NY 10179 212 272 2000 www.bearstearns.com/careers
Bloomberg, Inc. 731 Lexington Avenue, New York, NY 10022 212 617 2000 careers.bloomberg.com
BNP Paribas 787 7th Avenue, New York, NY 10019 212-841-3000 www.bnpparibas.com
CIBC World Markets 425 Lexington Avenue, New York, NY 10017 212 856 4000
www.cibcwm.com/wm/careers/
campus-recruitment.html
Citigroup 383 Greenwich Street, New York, NY 10013 212 816 6000 www.oncampus.citigroup.com
Credit Suisse First Boston 11 Madison Avenue, New York, NY 10010 212 325 2000 www.csfb.com/standout/
Deutsche Bank 60 Wall Street, New York, NY 10019 212 250 2500 careers.db.com
Franklin Templeton Investments 100 Fountain Pkwy., St. Petersburg, FL 33716 - www.franklintempletoncareers.com
Goldman Sachs International 85 Broad Street, New York, NY 10004 212 902 1000 www.gs.com/careers
HSBC 452 5th Avenue, New York, NY 10018 212 525 3735 www.hsbcusa.com/careers
JPMorgan 270 Park Avenue, New York, NY 10017 - www.jpmorgan.com/careers
KeyBanc Capital Markets 127 Public Square, Cleveland, OH 44114 800 KEY2YOU www.key.com/jobs
Lehman Brothers 745 7th Avenue, New York, NY 10019 212 526 7000 www.lehman.com/careers
Lincoln International 500 West Madison, Suite 3900, Chicago, IL 60661 312 580 8339 www.lincolninternational.com
Macquarie Group 125 West 55th Street, New York, NY 10019 212 231 1000 www.macquarie.com
Merrill Lynch 250 Vesey Street, New York, NY 10080 - www.ml.com/careers
Morgan Stanley 1585 Broadway, New York, NY 10036 212 761 4000 www.morganstanley.com/careers/recruiting
Piper Jaffray 800 Nicollet Mall, Minneapolis, MN 55402 800 333 6000 www.piperjaffray.com/careers
RBC Capital Markets Corp. One Liberty Plaza, New York, NY 10006 212 428 6600 www.rbccm.com/0,,cid-16882_,00.html
Socit Gnrale 1221 Avenue of the Americas, New York, NY 10020 - https://careers.us.socgen.com
UBS 677 Washington Blvd., Stamford, CT 06901 203 719 0629 www.ubs.com/graduates
87
Company Address: 731 Lexington Avenue
New York, NY 10022
Telephone: 212-617-2000
Graduate Website: careers.bloomberg.com
Company Address: 787 7th Avenue,
New York, NY 10019
Telephone: 212-841-3000
Graduate Website: www.bnpparibas.com
Company Snapshot: At Bloomberg, each of our
8,000 employees embodies the excellence and intel-
lectual curiosity that we are known for. We demand
much of our people; they are treated with the respect
that they have earned by building us into a world
leader in our industry. We give them every advan-
tage in their careers, with top-ight education and
windows for advancement. All this means that we
create an environment in which you have unparal-
leled opportunity to excel.
We have many arenas in which you can shine. You
can work for our core business, the Bloomberg
Professional service, or join the teams of any of
our media products, from our television and radio
networks to our magazines and books. We have a
reputation for excellence worldwide, and our employ-
ees are the key to maintaining our reputation.
Take a look at who we are. The challenges. The
rewards. The opportunity. We know youll like what
you see.
Headcount: 8,000 employees
Training Offered: At Bloomberg we offer our
employees a wide range of training and career devel-
opment opportunities. Our internal repository, Bloom-
berg University, is a place where employees can go to
search for instructor-led training, self-study courses
and other special training events. Regardless of your
job function, were devoted to helping you develop
your career. Whether youre interested in sharpening
your technical skills or learning how to contribute
more effectively, BU has something for you. We offer
skill-building courses in employee development and
job-specic courses in nancial markets, sales, news,
PC/technical training and our products. Bloomberg is
truly a company that believes leaders can be made.
If managing people is your passion, our Leadership
Development track is structured so that employees in
any stage of their supervisory career can benet. We
have three levels of courses that will enhance your
skills and build a strong awareness of what it takes
to be a mentor, coach and leader at Bloomberg.
Company Snapshot: BNP Paribas is a global leader
in banking and nancial services, and ranks among
the worlds top 15 banks by market capitalization
and total assets. The North American operation is a
critical component to this strategy with over 14,000
employees across the continent. BNP Paribas activi-
ties in the U.S. include Corporate and Investment
Banking, Retail Banking and Asset Management and
Services.
Financial Report: Please see www.bnpparibas.com
for annual report.
Headcount: 14,000 in North America
Graduates Hired Per Annum: This is a new pro-
gram for the U.S. Our goal is to hire approximately
60 Analysts & Associates this year.
Approximate Graduate Hires 2006: 50 hired into
Analyst and Associate Program in the U.S.
Graduates are recruited into: Various positions
across the entire Bank i.e. Fixed Income, Equities &
Derivatives, Corporate Finance, Leveraged Finance,
Risk Management, Trading Operations, etc.
Training Offered: 5 week intensive training includ-
ing: 30 to 50 hours of on-line product specic pre-
course work, 2 weeks of intensive product training,
post-course study, orientation and company overview,
business/technical related coursework based on level
and position, professional development courses (busi-
ness writing, negotiation, selling and presentation
skills), teambuilding and multicultural awareness.
Internship Info: 12 week formal internship develop-
ment program
Skills Required: Strong analytical and quantitative
skills, excellent leadership and communication skills,
team oriented individuals with interest and desire in
nancial markets
Application Deadline: For consideration, please
contact your individual campus career service ofce
for application deadlines or submit your cover letter
and resume indicating area of interest to
campusrecruiting@americas.bnpparibas.com.
Company Address: 45 Fremont, San Francisco,
CA 94105
Graduate Website: www.bgigraduatecareers.com
Company Snapshot: Barclays Global Investors is
the worlds number one index fund manager and one
of the worlds top ten active fund managers. From
inventing the worlds rst index fund in 1971 and
the rst quantitative active strategy in 1978, weve
pioneered change and led investment innovation.
BGI has more than $1.6 trillion assets under manage-
ment and over 2,800 clients worldwide. We offer
funds focusing on active, index and asset allocation
strategies, as well as being the global leader in
exchange traded funds (ETFs) via iShares, and one of
the worlds largest securities lenders.
Financial Report: Visit our website for more
information.
Headcount: Over 2,800 employees in 11 ofces
worldwide.
Graduates Hired Per Annum: c60 full time (global);
c50 internships (global)
Approximate Graduate Hires 2006: 45 full time
(global), 35 internships (global)
Graduates Are Recruited Into: Research, Portfolio
Management, Trading, Business/Product Develop-
ment, Sales/Marketing, Strategy, Securities Lending,
Operations, IT development: Locations - San Fran-
cisco, London, Hong Kong, Singapore & Tokyo.
Training Offered: All employees, including interns,
have access to seminars, e-learning and classes to
suit requirements. Those joining the full-time pro-
gram, start with a three week induction at our Head
Ofce in San Francisco, combining technical, busi-
ness and interpersonal skills development. Over the
year you will develop in-depth specialist expertise
relevant to your area, through formal and informal
education and will be supported through professional
qualications.
Internship Info: Our 10 - 12 week summer internship
positions are open to penultimate year students.
Skills Required: An excellent academic background,
strong interpersonal and team-working skills and
high quality communication skills. Additional require-
ments vary depending on the role applied for. Please
see the website for details.
Application Deadline: Full time program: October,
8th 2006. Internship program: January, 7th 2007
88
Company Address: 270 Park Avenue, New York, NY
10017
Graduate Website: www.jpmorgan.com/careers
Company Address: 127 Public Square,
Cleveland, OH 44114
Graduate Website: www.key.com/jobs
Company Snapshot: JPMorgans global client fran-
chise, built over 200 years, is the foundation of our
business and distinguishes us from our competitors.
We serve over 22,000 clients in over 100 countries,
making ours one of the broadest client franchises
in the industry. And we have the ability to deliver
the breadth of the rms capabilities, tailored to the
needs of our diversied clients in local markets. Be-
cause we put our clients interests rst as we provide
them with the best advice and solutions for their
long-term needs, we have earned an award-winning
reputation in the industry as an inuential banking
and business innovator. Our analysts and associates
play a key role in sustaining this reputation and grow-
ing the business. As a rm that relies on the quality
of our talent, we are committed to investing in each
employees professional and skill development.
Headcount: Approximately 20,000 employees glob-
ally in the Investment Bank
Approximate Graduate Hires 2006: 300 full-time,
300 summer
Graduates Are Recruited Into: We offer full-time
and summer opportunities in Corporate Finance,
Sales & Trading and Research for advanced and
undergraduate degree candidates. PhD candidates
can apply to summer and full-time opportunities in
Quantitative Research and Fixed Income Strategy.
Training Offered: Closing the gap between theory
and practice, our training programs are widely ac-
cepted as the best in the global nance sector, taught
by top industry professionals and our own most
experienced and inspiring people. We leverage a full
range of teaching methods (lectures, case studies,
hands-on exercises, simulations). Advanced profes-
sional certication is supported, and we encourage
deeper skill set development through continual train-
ing opportunities that keep employees on the cutting
edge of investment banking.
Skills Required: We want to meet people who are
intellectually curious, results-driven, team-oriented,
innovative, client focused; with well developed
analytical, communication and leadership skills; and
an ability to work in a fast-paced team environment.
Demonstrated academic excellence and solid work
experiences are crucial.
Company Snapshot: Cleveland-based KeyCorp is
one of the nations largest bank-based nancial ser-
vices companies, with assets of approximately $92
billion. Key companies provide investment manage-
ment, retail and commercial banking, consumer -
nance, and investment banking products and services
to individuals and companies throughout the United
States and, for certain businesses, internationally.
Financial Report: Please visit Keys website for
up-to-date details. www.key.com
Headcount: Key employs 19,300+ employees across
the US with businesses in 45 different states.
Graduates Hires Per Annum: Approx. 10-15
Undergraduate Hires Per Annum: Approx. 50-75.
Approximate Graduate/Undergrad Hires 2006:
Approx. 60-90
Graduates Recruited Into: Associate Program in
Investment Banking is highly focused on building
advanced skills in nance.
Training Offered: This program requires new
Associates to receive uninterrupted training for 8
weeks. The program includes classroom lecture, case
studies and hands-on group exercises. Industry Seg-
ment heads lead presentations on lines of business
and product support groups. Each Associate is given
individual time to meet with Managing Directors to
gain an understanding of business segments. Outside
vendors such as, Training the Street, will teach
on nancial modeling, and valuation techniques.
Additional vendors include presentation skills and
business writing.
Additional Topics Include: Understand industry
and corporate compliance; Identify the components of
and develop an effective pitchbook; Analyze nancial
statements; Perform and analyze nancial modeling
and valuation techniques. Access database tools and
strategic information (research and resources).
Internship Info: 5-10 internships are offered for the
Associate Program per year (MBA level)
Skills Required: The ideal candidate is a highly
motivated and talented individual with the desire
to embark on a career in Investment Banking. The
candidate will be quantitatively and nancially-ori-
ented, possess the ability to succinctly express ideas,
have a positive, can-do attitude and will thrive in a
fast-paced and intensive team environment. Graduate
degree in Finance, Economics or Accounting.
Application Deadline: 11/1/2006
Company Address: 388 Greenwich Street,
New York, NY 10013
Graduate/Undergraduate Website:
www.citigroupcib.com/careers
www.oncampus.citigroup.com
Company Snapshot: Citigroup Corporate and
Investment Banking achieves the extraordinary for
our clients around the world. To provide our clients
with best-in-class products, services and execution,
our businesses are organized into three groups:
Global Banking, Global Capital Markets and Global
Transaction Services. This structure enables us to
leverage our product breadth and geographic scope,
and effectively align our resources with our clients
needs. Working together, our businesses respond to
client needs and provide the right solutions based on
a complete global understanding and appreciation of
our clients circumstances. And our clients gain the
advantage of working with a truly unied corporate
and investment bank.
Financial Report: You will nd links to our Annual
Report and Investor Relations by visiting
www.citigroupcib.com/media/
Headcount: There are approximately 55,000 employ-
ees in the Corporate and Investment Bank globally.
134 Associates / 850 Analysts globally
Graduates Recruited Into: We recruit for approx.
13 Analyst programs and 8 Associate programs
globally, offering a wide range of opportunity, includ-
ing: Global Banking, Global Capital Markets, Global
Transaction Services, Global Corporate Services
Training Offered: Most of our programs offer a com-
prehensive training program including orientation and
classroom training.
Internship Info: Summer Internships are available for
most of our programs.These programs are designed to
give you a 10-12 week experience preparing you for
full time opportunities. To nd out more please visit
our website: www.oncampus.citigroup.com
Skills Required: Each of our programs is unique and
requires different skills sets. In general we look for
highly motivated candidates with a strong work ethic,
high energy level, superior academic performance,
personal integrity, commitment to excellence, strong
communication, interpersonal, and solid quantita-
tive skills. We encourage candidates to apply to our
programs from a diverse range of academic back-
grounds, it is not necessary to major in a traditional
nance program.
Application Deadline: Apply online at
www.oncampus.citigroup.com. The general time
to apply for full time positions is in Sept/Oct and
Jan/Feb for summer positions. We advise candidates
to consult with their career management ofces on
campus for deadlines specic to their schools.
89
Company Address: 250 Vesey Street, New York,
NY 10080
Graduate Website: www.ml.com/careers
Company Snapshot: Merrill Lynch is a leading
global nancial management and advisory company
with a presence in 36 countries across six continents.
It serves the needs of both individual and institutional
clients with a diverse range of nancial services,
including: personal nancial planning, securities un-
derwriting, trading and brokering, investment banking
and advisory services, trading of foreign exchange,
commodities and derivatives, banking and lending,
insurance, research.
Headcount: Merrill Lynch has approximately 50,000
employees globally.
Graduates Hired Per Annum: Globally, we recruit
approximately 550 - 600 analysts (at the undergradu-
ate level), and between 150 - 200 associates (at the
graduate level).
Approximate Graduate Hires 2006: Same as above.
Graduates Are Recruited Into: Merrill Lynch
hires analysts into every business including: Global
Markets & Investment Banking, Global Private Client,
Merrill Lynch Investment Managers Research and
our Corporate & Enterprise programs (which include
Technology, Accounting & Finance, HR and Opera-
tions) and associates in Global Markets & Investment
Banking, Global Private Client, Research and Risk
Management.
Training Offered: Each business offers on the job
training and some form of classroom training.
Internship Info: Merrill Lynch offers summer intern-
ship opportunities in all campus recruiting programs.
The work is challenging and the feedback interns
receive is honest and constructive. The 10-week
program includes business specic learning opportu-
nities, and rm-wide events such as a Global Senior
Speaker Series. There are many opportunities to work
closely with senior management and to network with
other interns.
Skills Required: Required skills vary by business,
but overall, Merrill Lynch is interested in candidates
with exceptional quantitative abilities, teamwork
skills, communication skills, along with creativity and
initiative. Each business lists what they are particu-
larly interested in on the website at
www.ml.com/careers.
Application Deadline: Interested students must
apply online at ml.com/careers as early as pos-
sible in the Fall semester. In addition, should we
be interviewing on your campus, please follow the
instructions of your Career Services Ofce.
Company Address: 1221 Avenue of the Americas,
New York, NY 10020
Graduate Website: https://careers.us.socgen.com
Company Snapshot: One of the largest nancial
services groups in the euro-zone, Socit Gnrale
employs more than 103,000 people worldwide
in three businesses: Retail Banking & Financial
Services, Global Investment Management and
Services, and Corporate & Investment Banking
(CIB). With a U.S. workforce of over 2,700 employ-
ees1,500 of which work in the CIB divisionthe
country represents one of Socit Gnrales biggest
overseas operations. The U.S. team delivers a
robust range of services to targeted multinational,
institutional and sector-based clients in industries
where the rm has demonstrated expertise, including
Financial Institutions, Oil & Gas, Utilities, Media &
Telecom, Aerospace, Gaming & Lodging and Sports.
This focused industry approach is integrated with a
diversied product mix to service some of the worlds
largest corporations and high growth clients.
20 analysts for the New York ofce
Graduates Recruited Into: Targeting top North
American schools, Socit Gnrale seeks under-
graduate students with a GPA of 3.5 or higher with
majors in Financial Engineering, Mathematics,
Marketing, Finance or general engineering. Strong
academic performance, exceptional interpersonal
skills, and superior analytical, computer and commu-
nication skills are essential. The rm values individu-
als who can interact with all organizational levels in
a collegial and constructive manner, and encompass
elevated negotiation, problem-solving and deci-
sion-making skills. Initiative, integrity and creativity
distinguish successful candidates, who must also
possess Socit Gnrales values of innovation,
professionalism and team spirit.
Training Offered: The Analyst Training Program
begins in June with a two-week introduction to the
rm and its capabilities. Analysts in Sales/Trad-
ing/Financial Engineering roles then transition to
on-the job-training sessions on the trading oor. For
Analysts in Corporate Finance and Origination roles,
the curriculum continues with instruction in advanced
accounting, nancial modeling, valuation, corporate
nance and marketing. Analysts are placed in a prod-
uct or corporate nance group, depending on their
interests and the rms needs, after they are recruited
but prior to the start of the training program.
Application Deadline: Interested students should
submit resumes to us-careers@sgcib.com.
Company Address: 11 Wall Street, New York, NY
10005
Graduate Website: www.nyse.com
Company Snapshot: NYSE Group, Inc. (NYSE:
NYX) operates two securities exchanges: the New
York Stock Exchange (the NYSE) and NYSE Arca
(formerly known as the Archipelago Exchange, or
ArcaEx, and the Pacic Exchange). NYSE Group is
a leading provider of securities listing, trading and
market data products and services.
Headcount: Approximately 3,000
Approximate Graduate Hires 2006: 16
Graduates Recruited Into: Member Firm Regula-
tion Examiner Trainee Program: Candidates selected
will examine nancial, operational and oor activities
of members and member rms to ensure compliance
with NYSE and SEC rules and regulations. They will
participate in an on the job training program designed
to provide the additional knowledge necessary to per-
form the responsibilities of an entry level Examiner
effectively and to develop a basic understanding of
the fundamentals underlying the securities industry.
Qualications include the following: Bachelors
Degree in Accounting or Finance with a minimum of
9 credits in accounting and a minimum grade point
average of 3.0, computer literacy and ability to travel.
Market Surveillance Analyst Trainee: Ana-
lyze computer generated surveillance alerts and
complaints concerning trading in listed securities.
Prepare market reconstruction of transactions and
analyze market data. Assist in investigations of aber-
rational trading activity by upstairs traders, program
traders, oor brokers and specialists, including le
organization, document control, digesting testimony,
summarizing documents and trading records. Prepare
closing memoranda with recommendations for regu-
latory action when appropriate. Qualications include
the following: Bachelors Degree with a minimum
grade point average of 3.0, strong written and verbal
communication skills., strong analytical and computer
skills. Securities industry experience, nance or busi-
ness background a plus.
Internship Info: Each summer a limited number of
college students are hired to work for the NYSE in
non-trading-oor departments. The program runs for
10 weeks, beginning at the end of May and ending
in the rst week of August. Application deadline is
April 1st.
90
Back Ofce
Refers to all the behind-the-scenes processes at an investment
bank, which dont directly bring in revenues. Most of the work is
largely IT-related or administrative.
Block Trade
A trade that involves a large quantity of stock (e.g., 10,000 shares
or more) or large dollar amount of bonds (e.g., $200,000 or more).
Bonds
Unlike equities, bonds are a kind of debt. Instead of getting a bank
loan, companies sell bonds and promise to pay the money back to
whoever buys them in X years time. Until then, they pay the bond-
holder a small amount of money each year. Because the amount of
money paid annually is xed at the start, bonds are also known as
xed income products.
Bulge Bracket Bank
A nebulous term referring to the biggest and best investment
banks. The U.S. banks Goldman Sachs, Morgan Stanley and Mer-
rill Lynch traditionally possess bulge bracket status. More recently,
the term has been extended to gigantic rivals such as Citigroup,
JPMorgan, Deutsche Bank and UBS.
Buy Side
A generic name for organizations that buy nancial products (se-
curities) in an attempt to make money out of their changing value.
Fund managers are buy side rms, as are hedge funds.
Clearing and Settlements
The activities that take place behind the scenes after a nancial
product has been traded. In the rst part (clearing), banks add up
all the trades done with one company, and look at any problems
that arise. In the second part (settlements), the products traded
are delivered in return for payment.
Commodities
Raw materials such as precious metals or grains whose contracts
are bought and sold on commodities exchanges.
Debt Capital Markets (DCM)
Responsible for soliciting, structuring and executing investment
grade debt and related product businesses, including new issues
of both public and private debt.
Derivatives
A derivative is a nancial device that is based and priced on
another nancial product (e.g. a stock, bond or foreign currency),
or on changes in a nancial index or rate (e.g. the Dow Jones
index of the 30 largest U.S. companies, an interest rate, or an
exchange rate). When you buy or sell a derivative you dont buy
or sell an actual product, but a contract linked to that product.
For example, someone buying a simple stock option (a kind of
derivative) acquires the right to purchase a stock in the future at a
pre-ordained price.
Equities
Another word for company stocks or shares. The name comes from
the notion that stockholders share equally in the ownership of the
company (according to how many equities they own).
Equity Capital Markets (ECM)
Undertakes the origination, structuring, marketing and pricing of
public offerings and private placements of equity and equity-re-
lated securities.
Exotic Products
Complex derivatives. Exotic derivatives are typically linked to
several underlying assets or rates. For example, the price of an
exotic derivative may depend on the average price of 20 different
stocks, plus changes in the interest rate, and will only pay out
if the value of these underlying variants reaches a certain level.
Exotic products are cutting edge, as opposed to vanilla products,
which are a lot simpler.
Front Ofce
The revenue-generating areas of the bank. People in the front
ofce interact with clients to bring in business and create prots.
Front ofce employees include salespeople, traders and corporate
nanciers. Front ofce bankers typically earn the most money.
Futures
A kind of derivative product entitling the buyer to purchase a spe-
cic amount of a nancial product for a specic price at a set time
in the future. When that point in time arrives, if that price turns
out to be below the actual price of the product, the owner can sell
the product on for a prot.
IPO
Initial Public Offering, meaning the rst time a company sells
its shares on the open market. Privately owned companies that
launch on the stock exchange oat an IPO, for example, as a
way to raise capital.
Glossary
Banking terminology the top banks will expect you to know
To search the full glossary online, visit our Campus Connection
Jargon Buster. www.enancialcareers.com/campus
91
Middle Ofce
As its name suggests, the middle ofce is positioned between the
front and back ofce of a bank. People who work in the middle
ofce are not strictly revenue generators, nor are they strictly
administrative staff. The middle ofce is concerned with risk man-
agement and the calculation of prot and loss. People who work
here are, therefore, typically risk managers and accountants.
Origination
As opposed to execution, (doing a deal), origination is the
word bankers use to describe the process of winning business in
the rst place. Origination bankers are senior bankers with strong
client relationships.
Pitchbook
The research books that junior bankers (analysts) typically compile
to help senior M&A bankers win business. They involve a lot of
hard work (and sleepless nights) and include everything from infor-
mation on potential takeover targets to research on the particular
market in which the target rm operates, as well as the sales
pitch the banking team will make to the target company.
Price/Earnings Ratio
The P/E ratio is a popular statistic used to analyze whether the
price of a stock is reasonable. It is calculated by dividing the cur-
rent price of a stock with that companys earnings per share.
Primary Market
The nancial market where investors buy brand new securities
which havent been traded anywhere else previously. Shares re-
leased during an IPO are sold on the primary market, for example,
as are newly released bonds, or subsequent issues of new shares
by companies already oating on the stock exchange.
Sarbanes-Oxley
The Sarbanes-Oxley Act came into force in 2002. It followed a
series of corporate scandals and aimed to protect investors from
companies that falsify their accounts. Under Sarbanes-Oxley, cor-
porate executives who deliberately misstate accounts face longer
prison sentences. One of the most signicant parts of the Act is
Section 404, which says companies must le reports showing they
have control over their internal processes. This has created plenty
of work for accountants (who oversee the report writing), and
plenty of bureaucracy for banks and other companies that have to
produce a paper trail proving internal controls exist.
Secondary Markets
The markets in which existing nancial products are exchanged
between investors. The New York Stock Exchange and Nasdaq are
secondary markets, for example.
Securities
All nancial products that can be bought and sold. These include
shares, bonds, and derivatives.
Securities and Exchange Commission (SEC)
The federal agency that enforces securities laws and sets
standards for disclosure about publicly traded securities, including
mutual funds. It was created in 1934 and consists of ve com-
missioners appointed by the U.S. President and conrmed by the
Senate to staggered ve-year terms. To ensure its independence,
no more than three members of the commission may be of the
same political party.
Sell Side
Refers to organizations that sell nancial products to clients,
including fund managers (buy side). Investment banks are sell side
organizations, for example.
Short Selling
The practice of selling stock that you dont own. This can be
advantageous when you borrow stock, sell it expensively, and then
buy it back cheaply when prices have fallen.
Structuring
The process of assembling complex nancial products.
Underwriting
The process by which banks agree to buy any leftover shares in
an IPO or other share issue. Banks charge an underwriting fee to
cover this risk.
Universal Bank
A bank that deals with companies, fund managers and other
professional investors, and that also deals with members of the
public who have bank accounts with it (known as retail inves-
tors). Citigroup and JPMorgan Chase are examples.
Vanilla Products
Another word for a simple derivative. The most common are
swaps (exchanging one nancial product for another) and options
(which gives purchasers an option to buy a stock or bond some-
time in the future at a pre-ordained price).
92
By Rick Ketchum
If youre contemplating a career in the nancial industry,
dont overlook the real opportunities that await you in the
compliance side of the house.
What do I mean by compliance? Simply put, it is the
responsibility of regulatory compliance ofcials to ensure
that securities rms and their employees do not violate
U.S. Securities and Exchange Commission and New York
Stock Exchange rules. While easy to say, it is anything
but simple. It requires dedicated professionals who are
thorough, familiar with the rms business, and able to put
technological systems to work to build a strong control sys-
tem that can detect potential violative activity. An effective
compliance system is critical to building investor condence
because it protects the rm from disciplinary actions and
reputational harm.
If youve earned a degree in business, accounting or law,
or if you have experience as a trader or registered repre-
sentative, you have valuable knowledge and skills that can
allow you to move over into the regulatory world. Through
compliance, you can gain a deeper understanding of how
a securities rm works and you can be part of the rm that
has been expanding rapidly in recent years. You can enjoy
substantial access throughout a company.
The experience you gain may also increase your mobility.
Business-side leaders in many rms see compliance person-
nel as having broad understanding of how the organization
operates and an ability to formulate a control environment
that can protect the business. So, in time, you may be able to
move over to trading, risk management or investment banking
functions, if that interests you. Strong compliance with rules
and the law has come to be recognized as good business.
I have dedicated most of my career to being a regulator.
After earning my law degree, I went to work for a law rm,
and then moved to the SEC. There I was able to marry the
legal skills I had developed with the practical problems of
that essential government agency. I eventually moved on to
NASD and the Nasdaq Stock Market. After a brief stint at
Citigroup, I landed my current job as chief executive ofcer
of NYSE Regulation, Inc., the not-for-prot subsidiary of
the NYSE Group. My organization oversees trading at the
New York Stock Exchange, NYSE Arca, and activity by our
member rms. NYSE Regulation also ensures that compa-
nies listed on the NYSE and NYSE Arca meet our nancial
and corporate-governance listing standards.
I have found great satisfaction being part of an effort to
ensure the health of the capital formation process and
strengthen a culture of compliance in the securities industry
both of which are critical to a strong and vibrant economy.
To understand the role of todays compliance professional,
it is important to understand what the securities industry
has gone through in the past few years. While the industry
has demonstrated dynamism and creativity, over the last
decade it also suffered from wide-ranging regulatory lapses
the collapse of Enron, WorldCom, and other compa-
nies; the research analyst conict-of-interest settlement;
specialists trading ahead of customers, to name just a few.
These shortcomings caused the securities industry and
regulators to step back and reexamine what, in some cases,
was business-as-usual in order to anticipate and prevent
future scandals. Increased spending on compliance was a
necessary response. The industry needed to increase its
commitment to ensure the protection of investors.
While regulators were beeng up their staff and resources,
and meting out tougher penalties to deter violative behavior
and create a culture of compliance, the securities industry
was also changing.
The biggest realization was that regulatory settlements
and private lawsuits could dramatically impact shareholder
value. Business leaders came to recognize that they had not
committed enough resources to get the job of protecting
investors done right. Many rms reorganized their compli-
ance efforts.
Today, top compliance ofcials often report directly the
rms CEO. The tone at the top has changed for legal and
compliance ofcers and theres been a dramatic expansion
of responsibility.
What does that mean for you?
A career in compliance is an enormously rewarding oppor-
tunity to make a difference not just for the organization
that you work for, but also for investors everywhere.
Compliance and the Shape of Things to Come
NYSE Regulations CEO on Compliance and its opportunities
Rick Ketchum
Chief Executive Ofcer,
NYSE Regulation, Inc.
Merrill Lynch offers you unparalleled opportunities to build your
career. Our premier brand and global capabilities create a strong
foundation for you to explore a range of diverse career options.
Working within a dynamic environment, you will contribute to our
company's business growth and momentum. It's a great time to join us.
Work alongside industry-leading professionals to deliver exceptional
solutions to our clients. Expect to be a contributor, a collaborator,
and a colleague.
For more information or to apply online, visit ml.com/careers
Merrill Lynch is an equal opportunity employer.
[ ]
MERRILL LYNCH
limitless potential
growth and momentum
inspiring colleagues
ml.com/careers
The road to the top just got shorter.
When I started at KeyBanc, it was obvious I could gain as much
responsibility as I desired. Having worked at New York investment
banks, Ive found that the work is the same. Here at KeyBanc, I have
the benet of greater client exposure and potential for advancement.
Dina Patel Associate, Consumer Group
M.B.A. Kellogg School of Management; B.B.A. University of Michigan
Fast track to success.
KeyBanc Capital Markets offers you the career opportunity of a lifetime. You will join
an organization that is relationship-driven and focused. As one of the most respected
corporate and investment banking institutions in the United States, KeyBanc Capital
Markets has gained a reputation for delivering strategic ideas and innovative solutions.
Our integrated bank model and industry expertise provides creative capital-raising
solutions, advisory services, derivative capabilities, equity, debt sales and trading.
Our markets include: Diversied Industries, Energy, Consumer, Industrial, Healthcare,
Financial Services, Technology and Mergers & Acquisitions.
To learn more about joining our team of motivated, successful individuals,
please contact Dawn Zima at dawn_m_zima@keybank.com.
Achieve anything.
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Investment banking is a hot career choice
how are you going to stand out from the competition?
Gaining an edge to secure that coveted position is crucial for developing a successful career in
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Sector proles that feature descriptive overviews and trends for 21 different career paths
Career proles of professionals working in various sectors with valuable advice
Tips for nding a job that is tailored to life on The Street and how to get in
Career management articles that help you map out your career path to the senior ranks
Industry trends to allow you to gauge who are the big players and whos hiring and
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Glossary and resource guides to keep you on top of the latest lingo, and highlight
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Focus on Career Management
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Your guide to nding a job in securities and banking
2006-07

Careers in Financial Markets

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