Where will you get paid the most in compliance?

September 4, 2015, 7:40 am

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If you work in compliance your services are sought after across all major financial centres. Recruitment is happening on a large scale – HSBC alone hired 2,200 compliance staff globally just in the first half of 2015.

With compliance skills in high demand and short supply, salaries are rising and staff are becoming more able to move internationally.

So where should you base yourself to secure the best paid compliance jobs? To find out, we looked at recent compensation surveys from recruitment firms and produced the charts below comparing average compliance base pay (in US$) in the UK, US, Hong Kong and Singapore across five levels of seniority.

At the start of your compliance career, London offers the most lucrative average salaries – $72k and $99k for analyst and associates respectively. Upward pressure on compliance pay is, however, “levelling out” in the UK, says James Findlay, head of risk and compliance at recruitment firm Selby Jennings in London. “The job market is starting to become more adapted to the increased financial regulations affecting all institutions.”

Base pay shoots up significantly at VP level, with the US taking the lead globally and even laggard Singapore offering average salaries of $145k. Findlay says talent shortages mean candidates with between five and seven years’ experience are “always the most difficult to recruit for within the compliance space”.

If you reach the rank of director there is very little difference between gross salaries in all four financial centres, which makes Singapore and Hong Kong compelling locations because of their much lower income tax rates. Only $13k and $6k separate Singapore and Hong Kong respectively from the US in top place.

At MD-level, head to New York or at least to London. Banks typically base global compliance roles in those cities, pushing up base pay ahead of Asia, where MDs are more likely to only have regional responsibilities.

Compliance professionals at all levels can usually command high salary rises if they move to a new bank. In London increments of up to 15% are on offer, says Findlay, while Singapore’s more severe skill shortages mean 25% increases are common, adds Orelia Chan manager, legal, compliance and audit, at recruiters Robert Walters in Singapore. “We typically see the highest rises for candidates in AML, advisory and product-compliance functions,” says Chan.

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Senior bankers disclose secret sadness. Two industries that pay more than finance

September 7, 2015, 1:03 am

≫ Next: Six exciting new finance firms that could hire you

≪ Previous: Where will you get paid the most in compliance?

Money makes you happy. Right? Yes, according to a recent report from the UK Office of National Statistics, which found that greater wealth was generally equated with greater well being. And yet senior bankers, many of whom are on incomes in excess of £300k ($456k) and surely have a mountain of assets more enormous than the average, are strangely hollow and unfulfilled.

So says a new study published in the Journal of Organizational Studies and reported upon by Quartz. Academics at Queen Mary University of London and Lund University in Sweden followed six senior banking professionals over a two-year period and came to the conclusion that a successful finance career requires a total and potentially irreversible suppression of the self.

“They [bankers] literally don’t have a self—it is bypassed, put to one side,” said Maxine Robertson of Queen Mary University of London. “Despite extensive and repeated interviews with each, there was an absence of a clear or rich story of identity,” the academics said. ““Meaningfulness, emotions, and personal investment in work values were not salient in their career histories.”

The academics referred to this self-suppression as ‘Teflonic identity manufacturing’ – or the avoidance of any sort of identity associated with work.

Curiously, however, they found that even outside work, the bankers they interviewed maintained a similar sort of evasiveness. Few had unusual or interesting hobbies: money was spent in ways that would ensure they fitted in with colleagues rather than differentiated a self. However, the representative bankers suggested that they were postponing their identities rather than negating them. ‘They spoke of vague, general plans for an “expansive and independent life” in the future, after they left banking,’ says Quartz. Some talked about being able to provide for their families when they didn’t even have a partner. Ultimately, it all sounds a bit sad.

Separately, you don’t have to focus on finance if you want to earn money. The new College Salary Report from Payscale suggests that the highest paid students at mid-career are those who studied strategy or petroleum engineering. Similarly, the highest paid MBAs have focused on strategy or strategy and management. MBAs who’ve majored in corporate finance or finance rank only ninth and 11th in terms of mid-career compensation.

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UBS invents Bitcoin-like Product (WSJ)

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Barclays Info Security Push (Independent)

Barclays has hired Troels Oerting, a former head of Europol’s European Crime Center, to set up a ‘red team’ which hacks its own system in search of holes.

Jefferies Poaches From UBS (Business Insider)

Jefferies just hired a new head of European equities trading from UBS. SocGen’s co-head of US DCM just left the bank. (Bloomberg)

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Location, Location, Location (Sunday Times)

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Double Standards (Sunday Times)

Having banned flipflops at Barclays, John McFarlane has been seen hanging out in jeans and an open necked shirt.

Quote of the Day:

“Stuart Gulliver was a friend of mine. Stuart and I haven’t talked for three years because of who I am. [I’m] now the guy who’s out there with a broken sword,” Ian Hannam, the senior banker who was fined by the regulator says why he can’t be friends with other senior bankers.

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Six exciting new finance firms that could hire you

September 7, 2015, 4:19 am

≫ Next: How to earn a million in banking

≪ Previous: Senior bankers disclose secret sadness. Two industries that pay more than finance

If you’re on the hunt for finance job, it helps to know of some new firms that have launched relatively under-the-radar. Over the past month, these are some of the most interesting new hedge funds and boutiques to have set up shop.

1. Anavio Capital Partners

A London-based global event-driven fund launched by former partners at BTG Pactual and senior Goldman Sachs traders, Anavio Capital Partners got the thumbs up from the Financial Services Authority in London in August. Emiliano Leggieri, a former BTG portfolio manager, is founding partner along with Dario Sacchetti, who was previously head of private placements at Goldman Sachs.

2. EDL Capital

The London-based new vehicle of Edouard de Langlade, who was previously at Moore Capital Management, EDL was also approved by the UK regulator in August and focuses on global macro trends. Andrew Porter is COO, who joins from BCM Partners along with execution trader Joseph Dearden. Jannick Wenger is head of investor relations.

3. Florin Court Capital

A London-based quant fund with the auspicious backing of Swedish hedge fund manager Brummer & Partners, Florin Court was unveiled earlier this year by Douglas Greenig, formerly chief risk officer at Man Group. It’s now been given the go-ahead by the FCA, and has also brought in David Dennison, the former head of FX at AHL, as deputy CIO, Anthony Vinitsky, who was head of investment operations at AHL, as COO and Simon Nichols, who was head of systematic portfolio research at G-Research, as chief technology officer. Further down the tree, Alex Smyth recently joined as a trader from Brevan Howard’s systematic trading fund.

4. Natural Resources Global Capital Partners

A new boutique investment bank in London focused on the metals and mining and oil and gas sectors, NRG Capital is led by Julian Vickers, the former co-head of natural resources investment banking at Barclays who left in July. NRG was given the go-ahead by UK regulators in August, but has already been building its team. Mick Oliver, the former head of mining at CIBC and Tuikka Alaviitala, the ex-head of oil and gas execution M&A at Barclays have both joined. Vickers told us that he’ll be hiring selectively going forward.

5. Ikarian Capital

A niche new hedge fund that intends to invest in therapeutics and biotechnology industries, Ikarian Capital was launched in the US earlier this month. The unusual fact about this launch is the background of the fund’s two founders. One is a lawyer and the other – Dr Neil Shahrestani – is a medical doctor who went on to work in the healthcare teams of Goldman Sachs and SAC Capital.

6. Zaaba Capital

Based in Hong Kong, Zaaba Capital is the new venture of Mohan Rajazooria, a trader who left Azentus Capital Management earlier this year. He’s a big hitter in the Asian hedge fund space –he was a managing director in Goldman Sachs’ principal strategies prop trading team and followed Morgan Aze from the US bank to start up Azentus in 2011.

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How to earn a million in banking

September 7, 2015, 6:16 am

≫ Next: Have this year’s analysts joined investment banks at a bad time?

≪ Previous: Six exciting new finance firms that could hire you

It is the perennial question. Will banking make you rich? Or will it just make you overworked and sad? If banking will make you rich, is it worth it? And what is the best method of putting yourself in the way of these riches?

The European Banking Authority (EBA) has gone some way to answering to answering the crucial question and the final sub-question in today’s report on remuneration practices and high earners in the European banking industry. If you want to earn a million in banking, the EBA implies that you should do as suggested by the charts below.

1. You must work in the City of London

There are five times more people earning €1m+ in London than in Frankfurt. There are 13 times more than in Paris.

Source: EBA

2. You might want to be an identified risk taker or member of senior management

An increasing proportion (59% at the last count in 2013) of the people earning €1m in European finance are ‘identified staff’ who are known risk takers or senior managers. Unfortunately, this means that they are also impacted by the EU’s bonus cap.

Source: EBA

3. You should work within an investment bank

This won’t come as a great surprise to anyone, but… if you want to earn €1m in finance you’re better off working in an investment bank than in a retail bank or in asset management. Column two of the chart below shows the distribution of people earning €1m+ by industry. Interestingly, around 46% of investment bank employees earning €1m+ in Europe aren’t identified staff.

Source: EBA

4. You should work in the Netherlands or Greece (EL) if you want to be paid in cash

In the UK, 64% of the pay of people earning €1m is deferred. In the Netherlands and Greece, 35% is. However, there was only one person earning €1m+ in Greece and only 32 people earning it in the Netherlands.

Source: EBA

5. If you want to earn a huge bonus, you need to be one of the best paid people in the industry

It might sound like a truism to say that if you want to be well paid in banking, you need to get a big bonus, but it isn’t. The highest paid bankers could easily be getting giant salaries instead. Actually, as the chart below shows, the more you earn in banking the higher your bonus will be as a percentage of your pay. Weirdly, the person on the highest pay bracket (PB018) received a bonus equivalent to 1,567% of salary, whilst those on the 12th highest pay bracket had bonuses equivalent to 2,518% of salary.

The EU’s 250% bonus rule, which came into effect in 2014, should be put a stop to all this. However, the rule only applies to identified staff and could yet be sidestepped.

Source: EBA

6. If you want a huge bonus, you need to work in investment banking

If a large bonus is your prerogative, it also helps to work in investment banking. As the chart below shows, bonuses in other areas of finance are modest by comparison.

Source: EBA

7. If you want to be a high earner with a high proportion of cash in your bonus, you might want to work in a control function

What with the European Union’s bonus rule, around 55% of bonuses paid to identified risk takers and managers in investment banks are in the forms of shares and other deferred instruments. Risk and compliance staff in control functions get more cash. This might be because their bonuses are smaller however…

Source: EBA

8. If you want a guaranteed bonus, you need to work in an investment bank

Guaranteed bonuses are most prolific in investment banks. They’re a lot less prolific than they used to be though…

Source: EBA

9. If you want a giant severance payment you need to work for an investment bank

The average severance package paid to individual members of identified staff in investment banks fell from €341k in 2011 to €241k in 2013. This was still considerably higher than other areas of finance, however.

Source: EBA

10. If you’re confident of being a high earner in London, you might want to work in asset management rather than investment banking

London is where all the high earners are (see point 1), and as the chart below shows, most of those high earners are working in investment banking. However, there are also 244 people earning €1m+ who work in asset management in the City. And those asset management high earners actually earn more than the bankers. Their average compensation per head is €2.2m, versus €2m in investment banking.

Source: EBA

Photo Credit: Frits Ahlefeldt-Laurvig

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Have this year’s analysts joined investment banks at a bad time?

September 7, 2015, 6:54 am

≫ Next: How to exit J.P. Morgan in your mid-30s with style. Why you don’t want to work in private equity

≪ Previous: How to earn a million in banking

Three months into the 2015 analyst class and things are looking a little uncertain. Following the volatility in China over August, J.P. Morgan banking analysts are suddenly predicting that revenues will fall 19% at investment banks in the third quarter, Standard Chartered is dumping 25% of its senior staff and clouds are gathering over Deutsche Bank ahead of its strategy update at the end of October.

It’s a shame given that it all started so well. The High Fliers UK graduate market report from January 2015 showed banking and finance firms hiking graduate recruitment by 21% in 2015 compared to 2014 (although investment banking intakes specifically increased by a more moderate 2.3%). “Most banks increased their graduate intakes this year,” says the head of HR at one international bank, speaking off the record. “It’s been a healthier year and deal-flow has been strong, so hiring more juniors sense.”

In the first half of 2015, global M&A reached $2.28 trillion, its second highest level on record. At Goldman Sachs, M&A revenues rose 62% year-on-year in the third quarter. In the circumstances, interns from summer 2015 say most of the investment banking classes received offers to join full time in summer 2016 and that banks are working hard to make sure they stay committed. “Virtually everyone in my class got an offer,” says one intern from a Swiss bank in New York. “They’ve also done a great job of continuing to sell the bank to us after the internship. And they threw a fantastic leaving party!”

Nonetheless, what goes up will probably come down again. The last time global M&A was this high was in 2007 – and we everyone knows what happened after that. Even before the events of late summer, some London-based recruiters were suggesting that M&A recruitment looked ‘toppy’. J.P. Morgan’s analysts suggest deals are likely to be postponed if volatility continues, at which point banks could decide they’ve got more juniors than they need.

Analysts in fixed income and emerging markets may have to face the reality soonest. Nomura certainly hired several summer interns into its fixed income markets business, but we couldn’t find anyone among them who said they’d received a full time offer for 2016 after the bank made at least 60 of its London staff redundant.

Not everyone is pessimistic, however. Richard Hoar, director of banking and financial services at recruitment firm Goodman Masson, says demand for analysts and associates is back up to 2007 and that while there might be some “ups and downs”, there’s unlikely to be the sort of “fundamental collapse we saw during the credit crunch.” Similarly, the head of HR says banks are making more effort than ever before to keep analysts engaged: “Nowadays it’s all about making sure the quality of work we give to our graduates is high. – They want to be inspired and to see that they’re gaining skills and finding fulfillment.”

Even so, some students are going into the industry with their eyes open. “The hours are brutal,” says one ex-intern who plans to join an IBD team in 2016. “You can’t help but wonder whether we’re just being employed as work horses to get banks through the next few years, with no prospect of advancing to VP or MD level.”

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How to exit J.P. Morgan in your mid-30s with style. Why you don’t want to work in private equity

September 8, 2015, 12:29 am

≫ Next: Which banking jobs are safe and which banking jobs aren’t for the rest of 2015?

≪ Previous: Have this year’s analysts joined investment banks at a bad time?

There are several important life events which interfere with your ability to extricate yourself from a banking career. The first is the achievement of a large mortgage. The second is the acquisition of a trophy spouse. The third is the birth of a child. We can’t speak for the first two, but 33 year-old Abhishek Mistry just quit J.P. Morgan despite number three. And that’s quite unusual.

Even more unusually, Mistry wasn’t pushed. Bloomberg points out that he was on top of his game: he’d just been celebrated for belonging to one of Wall Street’s top teams of mortgage bond analysts by Institutional Investor. Nor is he leaving to ‘follow his passion’ in a Fintech start-up, or to lead an ill thought-through ‘expansive and independent life’ outside banking. Instead, Mistry is leaving to devote himself to a business he’d established whilst working in finance: Mixcity Inc., which creates software for DJs.

What can you learn from his example? Leave while you’re ahead. Always have a side project. Don’t stick around when the mojo has gone (“People, in general, are less motivated,” said Mistry of finance in general). And don’t let parenthood tie you down. “Now’s the time that I can start something,” said Mistry. “A few years from now it would be a lot harder to quit the job that I had.”

Separately, maybe you don’t want to work in private equity after all. Not only is the industry stupidly difficult to get into, but once you do you’ll be stuck unless you’re prepared to leave a lot of money on the table.

Take Alex King, a former partner at London-based private equity firm HG Capital. King is reportedly taking HG Capital to court in an attempt to recover the carried interest he’s owed after resigning. King’s lawyers argue that he quit HG and lost the unspecified amount of carried interest after experiencing a ‘“negative and/or hostile attitude” from the fund’s managing partner. HG said it simply cut King’s carried interest as it didn’t need to incentivize him and his investments had performed badly. Either way, King has seemingly lost a lot: he was due to get 5.5% of the profits in the £950m HG 5 buyout fund; now he’s due to get 1.5%.

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AI Battle For Talent (Newsweek)

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Furry Loafers (Guardian)

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Quote of the Day:

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Which banking jobs are safe and which banking jobs aren’t for the rest of 2015?

September 8, 2015, 2:09 am

≫ Next: Why banks reject you when you apply direct

≪ Previous: How to exit J.P. Morgan in your mid-30s with style. Why you don’t want to work in private equity

Investment banks have started trimming headcount again. Some, such as Standard Chartered and (probably) Deutsche Bank, are making wholesale changes. This is unfortunate, since it follows one of the most stable employment markets for investment bankers in years.

A new report from research firm Coalition looks at where the jobs went in the first half of this year. – And where they’re likely to disappear between now and December.

1. Fixed income currencies and commodities (FICC) bankers fared worse in the first half

In the first half of 2015, just 800 front office investment bankers lost their jobs globally, according to Coalition. 600 of these were in the fixed income currencies and commodities divisions of investment banks, while 100 departed in both advisory and equities functions it suggests.

At the same point in 2014, 2,400 people had lost their jobs year on year. From the first half of 2012 to 2013, 4,500 people departed from the front office of investment banks. 5,400 left the year before. 2015, therefore, was looking rather good. – Until August.

2. Equities sales and trading teams were going great in the six months to June

Before last month’s equities chaos, equities teams were doing pretty well. Coalition says they were the only teams that performed better year-on-year in the second quarter, with 20% year on year gains.

3. Coalition isn’t expecting a wipe out in the second half of the year

Last week, analysts at J.P. Morgan issued a gloomy prognosis for the remainder of 2015. Coalition is less pessimistic. It thinks FICC and M&A will be flat, it suggests, while equities will be up by 12% on 2014.

4. But some FICC professionals could suffer for their under-performance in the first half

Nonetheless, with banks casting around for places to cut costs, some desks are likely to present themselves ahead of others. G10 credit was the worst place to work in during the first half, with revenues slipping by 30%, while the ongoing slump in commodities trading meant a 25% decline year-on-year. Within FICC, FX desks experienced a revival in fortunes, with revenues up by 74%.

5. If you work for a bank that’s not pulling out of prime services, you’re fine

Equity derivatives performed a lot better than cash equities, while revenues in prime services were up by 23% despite a number of investment banks looking to scale back in this capital intensive area.

6. M&A bankers are safe too

Within advisory, M&A is propping up other divisions with a 23% gain on the first half of 2014. Financials and healthcare are the places to be.

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Why banks reject you when you apply direct

September 8, 2015, 2:57 am

≫ Next: Where to work as a trader if you want to avoid the robots

≪ Previous: Which banking jobs are safe and which banking jobs aren’t for the rest of 2015?

It’s normal to be rejected by an investment bank. Goldman Sachs famously rejects 96% of the people who want junior jobs there. Morgan Stanley rejects 98% of those who fancy spending their summer at its desks.

At the junior end especially, banking recruiters are there to withhold the thousands of people who mistakenly think finance is for them. But what if you’re more senior and are applying to banks directly? Why are you still being turned down?

As more and more senior jobs are filled by direct applications, we spoke to several senior recruiters in investment banks. Speaking freely off the record, this is what they told us about turning people down.

1. You have unrealistic salary expectations

Over the past two years, banking salaries in London especially have been hiked to take account of European bonus restrictions. With banks like Morgan Stanley said to be paying much higher salaries than the rest, this has created confusion over the appropriate salary by role and level of seniority. The head of recruitment at one bank in London said exalted salary demands are increasingly blocking hiring: “Everyone thinks it’s standard to get these huge salaries for jobs, when in reality there are just a few people at that level. Too many candidates are very unrealistic.”

2. You’re not a diverse candidate

Positive discrimination is illegal, so no bank is going to tell you that you’ve been turned because you’re too white and male. However, one head of recruitment said this is an issue with direct applications.

“When we rely upon people applying through our website, we don’t get a very diverse set of applicants,” he told us. “For this reason, we tend to use headhunters who can get us the diverse applicant pool we need.”

He added that with plenty of white males applying through banks’ own websites, headhunters are increasingly becoming no more than seekers of women and ethnic minorities. In August, Financial News reported that Lloyds Bank in the UK had banned all-male short lists.

3. You’re not an exact fit

While banks employ increasingly large in-house recruitment teams, they’re not typically in the business of shoe-horning candidates into jobs they’re not entirely appropriate for. Some banks will simply ask you to upload your CV in the hope that something appropriate becomes available. In this case, “you’re in the lap of the gods”, says one senior recruiter.

4. You don’t demonstrate the company values

Virtue signalling is a big thing in banks these days. More to the point, you’ll need to signal your virtue in line with banks’ stated values. Banks like Deutsche and Barclays are having a big push on values-promotion. Make sure you’re familiar with banks’ cultural purpose before you apply – and especially before you go for the interview.

5. You’re trying for a promotion

Once upon a time, it used to be possible to apply for a new job in an investment bank and to get promoted in the process. This is no longer the case. The global head of recruitment at another bank said a lot of people who apply directly figure they’ll just try their luck. “They apply for jobs above their current title and think we might be flexible and hire them,” he says. “Sometimes we are – but rarely.”

6. You’ve got a bad reputation

Have you applied for 10 jobs at the same bank in the past month? Have you been calling the in-house recruitment team to find out why you haven’t received a response? Don’t. You will be remembered – for the wrong reasons. “There are people who keep ringing and ringing,” says one senior recruiter. “You shouldn’t do that.”

Photo credit: Lucas Moratelli

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Where to work as a trader if you want to avoid the robots

September 8, 2015, 6:04 am

≫ Next: How to beat investment banks’ psychometric tests

≪ Previous: Why banks reject you when you apply direct

Robots are coming for traders’ jobs, ‘Electronification’ is pushing into all corners of the market and human beings are being rendered either obsolete or relegated to roles as technicians or stewards for the new technology.

Which traded products are most and least affected by the march of the machines? Research firm Greenwich Associates has compiled the chart below, based upon the penetration of electronic trading in the U.S. market. Index-based CDS trading involving institutional investors is almost entirely performed by machine. So is FX trading. High yield corporate bonds are almost entirely traded by humans.

Source: Greenwich Associates

Of course, this doesn’t mean that that traders of high yield and investment grade corporate bonds are safe. Just that electronic trading systems haven’t made much headway into their areas yet. The quiet shelving of Goldman Sachs’ G-Sessions electronic bond trading platform last year might suggest systems won’t make much progress in future. Except that independent bond trading platforms like Trumid are coming from behind to ensure that electronification happens in future.

Photo credit: Justin Morgan

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How to beat investment banks’ psychometric tests

September 8, 2015, 7:30 am

≫ Next: Remember when IBD analysts at Citi requested subsidized underwear?

≪ Previous: Where to work as a trader if you want to avoid the robots

Investment banks have opened up their graduate programmes to applications. This means it’s time to perfect your CV, understand what it takes to get through the application form and highlight achievements that will set you apart from the competition. But there’s another element – the dreaded psychometric tests.

Numerical tests are well-known, but the reality is that – depending on the investment bank – students will also be tested on logical reasoning, verbal reasoning, personality profiling and situational judgement.

If this sounds daunting enough, bear in mind that the term ‘test’ is something of a misnomer. “Aside from the numerical tests, there’s no right or wrong answer,” says Mark Parkinson, a business psychologist who sets these tests for organisations. “They’re really questionnaires and giving the ‘wrong’ answer will ultimately come back to bite you, because you’re probably not suited to the job.”

Getting through numerical tests

Numerical tests are first applied during the initial screening stage of the investment banking recruitment process. These tests are online and are comparatively easy – banks will also subject their applicants to numerical tests at the assessment centre and these are more difficult.

However, to any graduate from a top university who’s studied a finance or maths degree – which, let’s face it, is where most banks tend to hire from – numerical tests should be a walk in the park. You’ll be assessed on arithmetic, fractions, decimals and ratios to varying degrees of difficulty.

“The name of the game is covering enough ground in the test so you don’t miss any questions,” says Parkinson. “It doesn’t take a mathematical genius, but if you’re not comfortable with numbers or used to a test environment, you will struggle.”

There are two common problems most people encounter. One is not making it through all the questions on time.The tests usually last 20-25 minutes and involve 18-25 questions – completing them all is a challenge. Another is not reading the question correctly – again, usually due to time constraints – and coming up with the wrong answer.

For example, you may see a simple XY graph where X is year one, year two etc. and Y is a numerical statistic. The question will ask you what was the Y figure in year three and candidates will jump to the graph and quickly tick their answer and move on, while missing that the Y column was actually cumulative. What’s more, many tests ask multiple questions on the same data set, so not taking time to fully comprehend what’s in front of you on one question can have broader implications on your score.

It’s essentially a vetting system put in place to filter out the huge number of applications banks receive. Even if you do well, you need to be in the top 30-35% of applicants to be considered, so it pays to be absolutely sure of your ability before taking the real thing.

There are plenty of places to practice – from the large psychometric test companies themselves, such as Kenexa or SHL, while other sites like Grad Diary tend to benchmark students against one another. Another factor to consider is which banks use which test providers. Historically, Morgan Stanley, BofA Merrill Lynch and JP Morgan used Kenexa and Barclays uses SHL. Different test firms have subtle differences in the rules they set, so it’s worth familiarising yourself.

Testing your logical reasoning skills

A trickier proposition entirely is getting through the logical reasoning tests.

“Investment banks are essentially looking to test your abstract thinking and whether you have the intelligence to do the job,” says Cary Cooper, professor of organisational psychology at Manchester Business School.

Verbal reasoning tests look at your ability to comprehend written material and decide what follows logically from it. There’s a standard format for these – you’ll be presented with a statement containing a lot of logical information and asked to answer the question around three standard responses:

A – True

(Does it follow logically from the information or opinions contained in the passage?)

B – False

(Is it logically untrue based on information or opinions contained in the passage?)

C – Cannot Say

One example provided by SHL is this:

“Many organisations find it beneficial to employ students over the summer. Permanent staff often wish to take their own holidays over this period. Furthermore, it is not uncommon for companies to experience peak workloads in the summer and so require extra staff. Summer employment also attracts students who may return as well-qualified recruits to an organisation when they have completed their education. Ensuring that the students learn as much as possible about the organisation encourages interest in working on a permanent basis. Organisations pay students on a fixed rate without the usual entitlement to paid holidays or bonus schemes.”

Statement 1: It is possible that permanent staff who are on holiday can have their work carried out by students.”

Abstract reasoning tests assess your ability to identify rules or patterns in data and come up with a logical solution.

“Essentially these are testing ‘horse power’ of the mind rather than intelligence,” says Parkinson. “The sort of person who will succeed in the workplace is one who can look at a problem in various ways, work out a hypothesis and test if it works. If it doesn’t, close it down and come up with something else. It tests strategic versus tactical thinking, both of which are important and desirable to employers.”

Again, he says, the key is simply to practice. The tests can be relatively straightforward, but intimidating if you’ve never encountered them before.

The softer factors: personality tests and situational judgement

Some banks also indulge in online personality tests in an attempt to gauge the ‘traits’ of potential employees. This is not really something you can fake – these questionnaires tend to pick up inconsistencies and, if you’re not suited, you’ll end up miserable.

“What they’re looking for is extroversion, neuroticism, a sense of purpose, emotional stability and conscientiousness,” says Cooper. “If it’s done properly the responses should be tailored to the individual organisation. Banks are also looking for other factors – is this person ethical? There’s no point employing a conscientious person with no ethics.”

These are the most common traits banks look for, but you really shouldn’t try to game the system, says Cooper.

“You’re not going to guess what characteristics they’re looking for, so will end up being inconsistent and if you lie then you’re genuinely not going to have the personality that will fit into the organisation,” he says.

More recently, both investment banks and Big Four accounting firms have started introducing situational judgement questionairres. This is how it sounds, you’re given a scenario with a range of actions that could determine possible outcomes and asked to suggest the best ones.

“The answers are based on interviews with senior business people who are doing the jobs right now,” says Parkinson. “There’s a sliding scale on the answers and you can actually get negative points for the wrong response. This is quite a crude indicator of your performance on the job.”

If this sounds intimidating, the reality can be fairly self-evident. The example Parkinson provided us with was this:

“At the end of a busy day at work you accidentally send an email containing an attachment with some confidential information to the wrong person.

Which of the following would be the best thing to do?

A Decide to leave the office and deal with any problems when you return tomorrow.

B Decide to over look your error, send the email to the correct person and leave things like that.

C Immediately send a follow up email to the “wrong” person,or if possible telephone them explaining your mistake. Then send the email to the correct person.

D Find your manager, explain what has happened and let them deal with any problems.”

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Remember when IBD analysts at Citi requested subsidized underwear?

September 8, 2015, 10:45 am

≫ Next: How much does private equity pay in China?

≪ Previous: How to beat investment banks’ psychometric tests

This year’s investment banking analysts are finding their feet in an environment which may be turning increasingly hostile. However, they are at least benefiting from big banks’ concerted efforts to cut juniors’ working hours. If you’re slaving away in an investment banking division (IBD) until 3am tomorrow morning, be thankful that you will at least have Saturday off.

15 years ago, there were no such ‘perks’. Fed up with being overworked and underpaid, one Citi analyst famously took things into his own hands and pushed for analyst empowerment. The uprising, which was recorded by various news outlets at the time but has since gone forgotten, was led by Paul Leung, a then 23 year-old first year analyst in Citi’s technology group. Leung sent a memo (the ‘Brutal Memo’) to Citi’s management listing a series of 36 demands. These included:

1. A room in which to sleep.

2. Permission to expense toothbrushes.

3. Permission to expense underwear.

4. Being mentored by senior bankers,

5. For associates hired from business schools to stop considering some work beneath them.

6. For analysts to be given more ‘big picture information’ of the deals they’re working on.

7. Faster expense reimbursement.

8. An end to the $20 cap on weekend meals.

9. Permission for analysts to get bumped up to first class on flights.

10. Casual dress when not meeting clients.

11. More social events.

12. Corporate cards where the analysts never sees the bill, but accumulates reward points.

13. Laptops with dial-up internet access.

14. Cell phones.

15. A concierge service to pick up dry cleaning.

16. Use of the company gym at weekends.

17. Easing of conflict of interest rules so that analysts can invest in deals.

18. A coffee bar.

Leung’s email was sent in April 2000 at the height of the dot com bubble, when banks like Citi were losing staff to ‘dot com start-ups’. Surprisingly, some – but not all – of his requests were implemented. Equally surprisingly, Leung stayed on at Citi for another year after he sent the memo before moving to the buy-side. He’s now an analyst at San Francisco private equity firm RS Investments. When you get a concierge to pick up your dry cleaning, you know who to thank. Even if you do have to buy your own underwear.

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How much does private equity pay in China?

September 8, 2015, 7:30 pm

≫ Next: What 50-something bankers actually do all day. How to dress to avoid the chop at Deutsche Bank

≪ Previous: Remember when IBD analysts at Citi requested subsidized underwear?

There are no shortage of reports on pay at investment banks in China. Pay at private equity (PE) firms in China is a different matter, however. – China’s PE industry is young and information is hard to come by. Rates also vary by type of firm.

One Beijing-based headhunter who specializes in PE, gives the following information about the pay level at Chinese PEs.

These are all annual base salaries. Depending upon performance, bonuses can add another 50% to 100% to form total compensation, but base salary itself has been steady in recent years.

“I haven’t seen any notable increase for PE’s base salary in the past one or two years, ” comments Sara Yue, a financial industry consultant at CGP Financial Service, a search firm.

Chinese private equity pay isn’t this simple however. Overseas private equity funds pay differently to domestic Chinese ones. Mostly, they pay more. “Foreign PEs pay several times higher than domestic PEs,” says a China-based industry insider who asked not to be named.

Even within global funds, the variations can be huge. The insider says he knows of a 24 year-old analyst at the Chinese office of one global PE fund who’s paid around 1 million RMB ($157K) a year. Another 29-year-old senior associate at a similar fund is making in excess of 3.5 million RMB ($550K).

These figures may sound pretty impressive, but they’re only half the story. In China, many PE funds allow staff to make co-investment, together with the firm, into the project that the fund is working on. For a lucrative project, even if an employee (or, a team of employees) only get to share 1-2% of the stake, the return can be hundreds of times of initial input.

Apart from co-investment, Chinese PE funds, just as elsewhere, also pay staff ‘carried interest’, based upon the profits made by the fund they’re working on when the investments are exited (sold on).

“This is how we make the most of the money,” says the industry insider, “pay accounts just for a tiny part of our total package.”

Given that this eventual return is a percentage of the initial amount of money invested, it is not unheard for senior private equity professionals to make 100 million RMB ($15.7m) from successful projects. Banks can’t match this, which seems to be why private equity as a profession tends to attract so many young bankers.

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What 50-something bankers actually do all day. How to dress to avoid the chop at Deutsche Bank

September 9, 2015, 1:19 am

≫ Next: Goldman Sachs interview questions, the definitive list

≪ Previous: How much does private equity pay in China?

You’re a 55-year-old M&A banker with a phone full of CEOs and an impressively low golf handicap. You’ve orchestrated some transformative M&A deals and once received a $15m bonus. You are a legend in your universe. So, what do you do all day?

The answer, is that you do not have fun. And, mostly, do you not cruise around schmoozing clients. In an interview with the Financial Times, Hugh (Skip) McGee, the ex-head of Barclays Investment Bank in the US and M&A supremo bemoans his life at the British behemoth.

“Between regulatory compliance and internal bureaucracy I found myself spending 80% of my time on non-client activities, which is really not fun,” complains McGee.

What with all that boring box-ticking and managerialism, McGee – who quit Barclays last year and now runs a boutique, says there’s only one thing he misses about working for a big bank and that’s hanging out with celebrity sportsmen. At Barclays, he seemingly got to fraternize with Phil Mickelson, a superstar golfer whom the bank sponsors. At least there were some perks.

Separately, if you want to get ahead at Deutsche Bank, you need to get in with John Cryan. The new CEO is reportedly preparing to front-load cost cuts when he announces Deutsche’s new strategy in late October. In the circumstances, it may be unwise to appear allied to former CEO Anshu Jain who is said to have stalked the corridors of Deutsche dressed in Hugo Boss suits and Prada Shoes. Cryan, by comparison, wears suits made by a London tailor and carries an old black leather satchel according to the Financial Times.

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Where to work in 2015 (eFinancialCareers)

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ECM Mid-rank Shortage (Financial News)

Citi’s head of EMEA ECM: “Levels of ECM activity are picking up significantly in this cycle and there is a lack of talent at the VP/ associate level due to the hiring slowdown post crisis. At the MD level, it’s much more specific to particular needs rather than expansion across the board.”

Home Advantage (Financial News)

Only JP Morgan, Goldman Sachs and Morgan Stanley can properly call themselves top-tier banks in every region.

Equities Boost in Europe (Financial Times)

Suddenly, the European IPO industry is springing back to life.

Big Tech Hire at J.P. Morgan (New York Times)

J.P. Morgan just hired a big US tech banker from BofA.

Ongoing Boom in M&A? (Business Insider)

M&A bankers have nothing to fear from a turning cycle.

Banking Comp Beats Consulting (The Tally)

Mid-career bankers earn two to three times more than mid-career consultants.

Not At All Competitive (NY Times)

Neurosis at Blackstone: “Blackstone is not really a business per se,” Mr. Schwarzman said. “It’s a mission to be the best.”

Quote of the Day:

“I’m not here to mudsling, I’m here so the truth about foreign exchange at Citi is heard once and for all. Senior management responsible for a lack of control were afforded anonymity. I see that as being unfair,” FX fixing trader fights back.

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Goldman Sachs interview questions, the definitive list

September 9, 2015, 5:00 am

≫ Next: Are these the best investment banks to work for on Wall Street?

≪ Previous: What 50-something bankers actually do all day. How to dress to avoid the chop at Deutsche Bank

You’ve landed an interview with Goldman Sachs. Well done: you’re in a serious minority. What should you expect? Goldman Sachs has a reputation for interviewing people until it hurts, so if they like you, you can expect to be grilled from all sides repetitively – often by a panel of people.

We’ve assembled a list of 61 interview questions which Goldman Sachs candidates claim to have been asked in the past. Most of these were asked of candidates joining the firm at analyst or associate levels.

While you should prepare for the sorts of questions below, the key thing to know before you interview at Goldman is that you need to be 100% familiar with everything in your resume. The firm itself says this is and most of the candidates who’ve interviewed with the firm report that they were heavily grilled on the minutiae of their CVs. For example, if you’ve written that you took a Java programming course back in 2012, be ready to talk about it – in depth.

If you’ve interviewed with Goldman and want to share an interview question, add it to the comments box at the bottom of this page, or email us at Editor@eFinancialCareers.com.

Fit Questions from Goldman Interviews

Walk me through you CV?

Which was your preferred class at university?

What are your strengths?

What are your weaknesses?

Which of your skills and experiences make you appropriate for this job?

What motivates you in life?

What would make you satisfied?

Why Goldman Sachs?

What makes Goldman Sachs different to its competitors?

Why do you want to work for this division of Goldman Sachs?

Why do you want this job at Goldman Sachs?

How do you know you want this job at Goldman Sachs?

What skills do you think are required to do this job?

Can you talk about a mistake you made in the past, and how you overcame it?

Who is the most famous and influential person you would like to meet and why?

Can you talk about a challenge you faced in the past? How did you overcome it?

Can you tell me a time when you failed to meet a deadline?

What’s more important- deadlines, or the quality of work?

Can you give an example of a time you streamlined a process?

Talk to me about your previous jobs.

What are you strengths?

What are your weaknesses?

Which role do you usually play in a team?

What would your team mates say about working with you?

Why would your team mates choose to work with someone else instead of you?

Would you rather be captain of a losing team or the regular member of a winning team?

Give an example of a time you acted as a leader.

Describe a time when you worked in a team where there were disagreements.

Would you say you’re a perfectionist?

IBD (Investment Banking Division) Questions from Goldman Interviews

Walk me through an LBO analysis.

What factors can lead to the dilution of EPS in an acquisition?

If you are in a business that wants to preserve cash, what type of inventory accounting method would you use (LIFO or FIFO) in a time of rising prices, and why?

What is Minority Interest and why do we add it in the Enterprise Value formula?

Briefly walk me through a discounted cash flow analysis. (including WACC).

Why can’t you use EV/Earnings or Price/EBITDA as valuation metrics?

Discuss a deal you have read about recently.

How do the three financial statements fit together?

Which is the best method of valuing a company and why?

(If you make it through the first round of interviews for IBD at Goldman, you’ll be expected to complete a case study interview. There’s an example of a GS case study here.)

Markets Questions from Goldman Interviews

How would you value a company which was very successful until recently, but lost market share due to a single event?

Which structured equity product would you issue in the current market conditions?

Explain the options Greeks.

Explain what a put option is.

Explain the assumptions behind Black Scholes.

Is gold overpriced?

Are equities overpriced?

What’s moving the markets now?

What’s happening to market volatility and why?

What’s your top stock pick?

Why are you better than other candidates on picking stocks?

How should a bank evaluate the creditworthiness of a counter-party?

Tech Questions from Goldman Interviews

What differentiates propositional logic from first order logic? Which is better?

When should you use functional programming vs. objected oriented programming?

How could you set up a recursive function so that a smart language / compiler could evaluate the function and never run out of memory?

Talk me through the concept of inheritance in C++.

Talk me through the Java design patterns you know.

Brain Teasers and Other Questions from Goldman Interviews

Estimate the value of the tie industry in the UK.

How many airplanes are in the sky above New York City at any moment?

What is the angle between the hour and minute hand of a clock at 3.15?

If you were shrunk to the size of a pencil and put in a blender, how would you get out?

When you heat a sausage in the microwave, the tear is always lengthwise. Why is that?

If I gave you €10m, would you either buy a 5-star hotel in the centre of Paris or 5 cheap motels along the ring road?

Photo credit: BS Wise

Follow @MadameButcher

↧

Are these the best investment banks to work for on Wall Street?

September 9, 2015, 8:15 am

≫ Next: Fintech pay, myths and realities

≪ Previous: Goldman Sachs interview questions, the definitive list

If you’re working for an investment bank on Wall Street it helps to know what your peers think of your employer. Working for the most sought-after bank on the street can only enhance your career prospects. Working for one that doesn’t garner much respect can have the opposite effect.

Vault.com, the ranking and reviews website, has just released its top 50 banks for North America. Blackstone tops the list, followed by Goldman Sachs and Morgan Stanley – the exact top three as last year.

More interestingly, the boutique banks’ stars have risen. Evercore moved from sixth to fourth, Centerview Partners is in fifth, and Houlihan Lokey and Greenhill & Co both moved up a spot.

J.P. Morgan, meanwhile, slipped a hefty four places from fourth to eighth.

For the ranking Vault places a 40% weighting on prestige, 20% on culture, 10% on compensation, 10% on business outlook, 10% on overall satisfaction and 5% each on work-life balance and training. What J.P. Morgan is falling down on, exactly, isn’t clear.

And, in case European investment banks’ second tier status on Wall Street wasn’t clear enough, Credit Suisse was the only Continental bank to make the top ten.

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Fintech pay, myths and realities

September 9, 2015, 9:57 am

≫ Next: The art of avoiding apologising, even when you say sorry

≪ Previous: Are these the best investment banks to work for on Wall Street?

If you’re leaving financial services to work in a financial services technology (‘Fintech’) start-up, you’re probably not expecting to get rich right away. – You’re probably expecting to ‘follow your passion’. But you’re almost certainly still expect to get rich, one day.

Some people certainly do become rich out of Fintech. David Gurle, the California-based founder of Perzo Inc, a chat and messaging start-up which Goldman Sachs bought into last August, probably has or will have a healthy bank account. Ted Bailey, CEO and founder of Dataminr, a company that ‘transforms real time data’ into ‘actionable signals’ may also be feeling fairly financial confident having recently raised $130m in ‘growth capital‘ from some of the industry’s biggest investors (including Vikram Pandit, John Mack and Goldman Sachs).

For the most part, however, our research suggests people working in the financial technology space aren’t walking around in golden flipflops eating kobe beef wraps. They’re saving money. And they’re trying, desperately, to get their firms to break even.

“I’ve seen a lot of former bankers entering the fin tech sector in the past couple of years,” says Damien Regent, a former UBS managing director, turned investor and non-executive director in technology companies. “But if you’re a founder there will be very little cash in the early days. – It’s difficult to get a significant salary until the business grows, attracts funding and brings in some contracts. Even so, most people are more interested in options and stock than high cash salaries. But to make real money as a founder you’ll need the business to be sold and to monetize your shares.”

It’s no surprise, therefore, that many of the ex-investment bankers turned fintech entrepreneurs we speak to aren’t actually drawing a salary from their business. Instead, they’re paying their way with savings – savings that were usually accumulated over a decade of bonuses in banking.

How long will the lack of income last? Nikolay Storonsky, a former equity derivatives trader at Credit Suisse, told us he funded his fintech firm, Revolut, himself between June 2013 and early 2015 until the product was launched. 18 months then? Maybe – but our research suggests that even established Fintech firms pay their founders little, and their employees even less.

Take Crowdcube, the UK equity crowdfunding website, which claims to have 100,000 users and was authorised by the UK Financial Conduct Authority in February 2013. The company’s most recent publicly available annual report (for the year ending September 2014) reveals that the eight directors earned an average of £27k each over the previous 12 months.

More generous is Funding Circle, a peer to peer lending service formed in August 2010. For the year ending December 2014, Funding Circle paid its average employee £58k and its average director £64k. The highest paid director earned £166k and the company made a loss of £1.3m on a turnover £1,1m.

Leaving banking for Fintech might make you fulfilled and fashionable. It probably won’t make you financially secure.

Follow @MadameButcher

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The art of avoiding apologising, even when you say sorry

September 9, 2015, 6:15 pm

≫ Next: The most vigorous 27 year-old trader at Morgan Stanley. Worst paid job in international finance

≪ Previous: Fintech pay, myths and realities

The recent slump of China’s stock market has caught out a lot of fund managers, leading to some soul-searching and apologies from some of the most prominent money managers in the country. Among them is a private equity fund called Niufeng, which suffered a loss of 63% in just three months’ time.

You would assume Niufeng’s fund manager should feel a little humbled, admit its mistakes and make sincere apologies to its investors. Instead, the fund manage issued an open letter which doesn’t sound apologetic at all. It turned out to be a very good example of how to apologise without really saying sorry. If you want to apologise and save face, here are some pointers.

1. Find some unlucky peers

The letter says: “We built up positions in early June, which happened to be very bad timing. But all the funds that built up positions at that time suffered a lot. Almost no one is exempt.”

So, when you did badly, try to find as many others as possible who did equally as bad. Remind your audience that you too are a victim and are in good company.

2. Sound triumphant with (blind) optimism

The letter says: “We are confident that Niufeng is a wrong victim of the market rout. It will shoot up back in the same way it nose-dived.”

There is no evidence or data or logic to back this up. Never mind, there are always people who buy into this type of blind optimism.

3. Quote a big name

The letter cites George Soros’s “uncertainty principle” to find excuses that no one could accurately predict where the stock market is going to.

Hang on, to be precise, Soros has never established anything like the “uncertainty principle”. It is a concept from the quantum mechanics that dates back to the 1920s. But so what? Soros is a name too big to challenge. By aligning himself with Soros, the fund manager was effectively trying to take some pressure off himself. Even Soros couldn’t predict the market, what do you want me to do?

4. Insist the investment is really right

The letter states the shares that the fund has bought are all those of high-quality companies. It also claims that the very reason why the fund didn’t sell in the slump to cut loss is because of its long-term view as a value investor. “We feared that we might lose those high-quality companies if we did cut loss”.

To the fund manager, it seems to be a good strategy trying to persuade the investors to hold a long-term view so as to divert their attention away from the key question of damage control. At the same time, try to convince that the companies it bought into are good ones. It would be stupid to part with these good companies just because of a short period of slump. Good luck with that.

5. Canonize the internet

The letter explains that the fund will keep focusing on companies in the internet and e-commerce sector.

Internet is a buzzword in today’s China. When the whole nation is encouraged to show some entrepreneurship, and the easiest and quickest route to fame and wealth seems to be the internet, you may imagine some investors may let off the fund manager this time for getting the buzzword right.

But wait, this may not include Alibaba – China’s leading e-commerce company and one of the nation’s role model of internet companies. Its share price dropped almost a third in the past three months.

6. Tie up with the Premier

In one instance, the letter refers to Chinese Premier Li Keqiang’s government work report earlier this year and quotes Premier Li’s grand strategy of “internet +”.

In China, policy plays an extremely crucial role. Any announcement or change of policy can potentially become a booster (or killer) to the stock market. Investors would assume that anything supported by government policy could only go up. A psyche of “what the Premier said can’t be wrong. So don’t blame me.”

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The most vigorous 27 year-old trader at Morgan Stanley. Worst paid job in international finance

September 10, 2015, 1:32 am

≫ Next: The real reasons people love and hate working for Goldman Sachs, J.P. Morgan and Morgan Stanley

≪ Previous: The art of avoiding apologising, even when you say sorry

There are fit and healthy 27 year-old traders. And there are ultra-marathon runners who run into the office at 6am wearing a 26 pound backpack. Sergey Ionov is one of the latter.

We’ve reported on the strange correlation between working in financial services and running ultra marathons before. Anything from 20% to 30% of the participants in these grueling events work in finance. Ionov is among them.

“At the end of the day you go to the medical check-point and have the swarms of ticks you’ve collected somewhere in the swamps removed from your skin,” he tells FinBuzz of his 250km six day run through Brazil. Ionov prepared for the experience by running into Morgan Stanley’s London office carrying the heavy backpack and wearing wet shoes. If you don’t inure your feet to the damp you can, “have a whole leg turning into a huge blister,” he says.

All of this is apparently good for your career. “I normally work 12 hours in a row and get very tired. It helps you to relax and even find better solutions to work-related problems,” says Ionov. Running ultra marathons and raising money for charity also makes colleagues think better of you: “They know you have achieved something great in spheres of life other than finance and at the same time you are able to fulfill your daily duties professionally.” Anyone else thinking of running through swamps is advised to ‘just do it’ and have a consistent training plan.

Separately, the Financial Times has unearthed a poorly paid job at the helm of international finance. Admittedly, it’s in academia rather than actual financial services, but the job title is assistant professor in international political economy at the prestigious London School of Economics. The pay? $80k. As the FT points out, high London property prices mean you’d be hard pressed to live near to work on that.

Goldman Sachs Interview Questions (eFinancialCareers)

You’re interviewing with Goldman Sachs. Congratulations. Know this first.

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Goldman Exceeds Pay Expectations (WSJ)

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Buy-Side Career Choices (Financial Times)

Do you want to work for a hedge fund or a private equity fund or for a hedge fund that has received an investment from a private equity fund?

Barclays Toughens Up (Bloomberg)

John McFarlane says Barclays will be making some “tough calls” in the coming weeks.

Citi Whistle-Blower (Reuters)

Ex-Citi FX trader blows the whistle in court, says the bank front ran clients undertaking M&A deals.

Asian Exits (Bloomberg)

Investment bankers are leaving Credit Suisse in Asia because they don’t like its emphasis on wealth management.

Hottest Hedgie (WSJ)

Eisler Capital: the hottest hedge fund start-up in London

Temasek Hires (Financial News)

Temasek just hired Rob Williams, a Citi investment banker, for its London office.

Quote of the Day:

“The eroticisation of women’s physical appearance is a way of exercising power over women. It silences women’s professional attributes as their physical appearance becomes the subject.”
Female lawyer fights back after being told her LinkedIn profile picture looks “stunning”.

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The real reasons people love and hate working for Goldman Sachs, J.P. Morgan and Morgan Stanley

September 10, 2015, 3:47 am

≫ Next: This is what happened to the last people who went to work for Edward Eisler

≪ Previous: The most vigorous 27 year-old trader at Morgan Stanley. Worst paid job in international finance

As we reported yesterday, a new guide to the best Wall Street banks to work for has been released by Vault. Blackstone comes out top, even though – as has been pointed out – it’s actually spinning out its investment bank and combining it with the boutique founded by Paul J. Taubman. Goldman Sachs comes second. Morgan Stanley comes third. J.P. Morgan has sunk to eighth.

The rankings aren’t the only reason to look at the Vault, however. The site has also accumulated testimonials from people working for each firm suggesting what makes them good employers, or not.

We’ve extracted some of these below. The reality is that most bankers love and hate their employers for the same reasons: wherever you work, you’ll like your colleagues, you’ll hate the hours.

Why people love working for Goldman Sachs

1. Your colleagues are great: “smart, ambitious, talented people,” and, “You are surrounded by individuals who are very passionate about what they do. The bench strength at GS is second to none.”

2. Everyone works together: “Culture of teamwork that drives us to continually improve and find better ways of doing things.”

3. You’re on this exciting journey: “So many opportunities to expand and grow within the firm.”

4. The work is interesting: “I’m never bored and I am always challenged.”

Why people do not love working for Goldman Sachs

1. You’re exploited: ““Overworked and underpaid,” and, “Continually increasing workload, with fewer and fewer resources to execute.”

2. You’re exhausted: ”Long hours and early meetings.”

3. It’s bureaucratic: “Plethora of processes that sometimes stifles innovation.”

4. Other people don’t like you: “Incorrect external opinions of culture and values.”

Why people love working for J.P. Morgan

1. The people are really exceptional: “Great culture and colleagues—working with very smart, driven, motivated people.”

2. You’re reaching for the stars: “Career development opportunities are truly unlimited.”

3. The training programs are pretty good: “I know that the firm is hugely focused on developing junior talent and is constantly looking for opportunities to improve the analyst/associate programs.”

4. You get paid a lot: “Competitive compensation.”

Why people do not love working for J.P. Morgan

1. You spend all your time at work: “Stress, high expectations, work life balance.”

2. It’s not lean and mean: “Sometimes the processes to accomplish projects can be slow because it’s a big company.”

3. You can never kick back and just be mediocre: “High expectations – the work is demanding.”

4. Unless you’re ‘passionate’, it sucks: “If you aren’t passionate about what you are doing every day at work, you may lose interest and burn out.”

Why people love working for Morgan Stanley

1. The people are just great: “The smart, genuine people and culture of collaboration and teamwork,” and, “Top quality people doing top quality work.”

2. You feel special and work with clients who are special too: “Very prestigious firm with great clients.”

3. The work is interesting and meaningful: “Interesting, challenging, impactful work.”

4. Morgan Stanley will not expect you to be an automaton: “Respect for the individual, focus on ideas/creativity.”

Why people do not love working for Morgan Stanley

1. You’re doing that creative impactful work a lot of the time: “Long hours.”

2. You don’t get paid much for it: “Compensation.”

3. It’ll be like the civil service: “Bureaucracy.”

4. There aren’t many females to look up to: “Not enough women in senior management roles.”

Photo credit: Kerr Photography

Follow @MadameButcher

↧

This is what happened to the last people who went to work for Edward Eisler

September 10, 2015, 5:58 am

≫ Next: Where will you get paid the most in risk?

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American-born Edward Eisler is hot. He is one of the smartest people you’ll ever meet, according to those who’ve met him. He retired from Goldman Sachs aged 42 and describes himself as an investor and philanthropist. He’s a trustee of the Tate. He has a gigantic house in London’s Holland Park, where he’s trying to build a basement to house his extensive art collection. And now he’s opening the hottest new hedge fund in London.

The Wall Street Journal reported yesterday that Eisler has already assembled a team of 12 people to work for Eisler Capital, his new $1bn macro hedge fund which is due to launch early in 2016. The identity of the new employees remains unknown: Eisler Capital isn’t yet registered with the Financial Conduct Authority and the incorporation documents at the UK’s Companies House list just one director: Eisler himself.

Before rushing to send in your CV, however, it’s worth bearing in mind that not everything Eisler touches turns to gold. Since leaving Goldman Sachs in February 2012, he hasn’t just been collecting art and playing golf. In December 2012 Eisler helped set up DMC Partners, a high profile emerging markets private equity fund which was planning to raise $2bn to invest in Sub-Saharan Africa but gave up as sentiment on emerging markets turned sour last year. Employees at DMC were only conclusively terminated in June this year according to a filing with Companies House.

So, where are they now? Philippe Costeletos, co-founder of DMC, is now running the international business of Colony Capital, a US real estate investment fund. Sam Wisnia, an ex-Goldman partner who spent 20 months at DMC joined Deutsche Bank in a senior fixed income and analytics role in January. Nana Sao, an ex-Goldman Partner who spent 18 months at DMC has formed his own fund, Sao Capital Management. Markus Gloel, a former vice president at DMC, has gone back to TPG Capital, the private equity fund he worked for previously. And DMC’s general counsel, Matthew Gerber, has gone off to become general counsel at hedge fund TowerBrook Capital Partners.

Only one ex-DMC employee, Charlie Power, ex-DMC CFO, does not appear to back in full-time employment. Power is now offering his services as a consultant, which is likely to be a matter of choice rather than necessity.

Eisler has chosen a difficult time to venture into macro trading. Macro hedge funds have not been performing well with conditions so tough at the start of the year that veteran macro manager Paul Tudor closed a fund. In the event that Eisler’s next venture doesn’t fare well either, his latest employees can at least draw encouragement from the swift rehousing of his last lot.

Photo credit: Dan_H

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