Careers In Finance

Careers in Financial Markets Your guide to finding a job in banking and finance

2007-08

The Financial Job Marketplace

Your vision: To reach for the top. Our promise: Lifting you even higher.

You thrive on achievement and you want to see just how far your talent will take you. We do too. That’s why, at Deutsche Bank, you’ll be given the opportunity to realize your greatest ambitions. As one of the world’s leading financial institutions, we have the platform to take your career higher. You will be part of an innovative, modern corporate culture that celebrates achievement. Expect the better career. Find out more at www.db.com/careers Analyst Program Application Deadline: 1 November 2007 Analyst Internship Program Application Deadlines: Asset Management, Global Banking, Global Markets and Private Wealth Management - 15 January 2008 Group Technology and Operations, Human Resources, Finance, Legal, Risk and Capital - 15 February 2008

A Passion to Perform.

Banking & Financial Markets

Accounting in the City

Contents

IT in Finance

Employers

How to use this guide Sarah Butcher Editor eFinancialCareers.com

Banking and financial markets A highly competitive industry ...................................................... 02 Rungs on the ladder .............................................................................. 06 The recruitment process ................................................................... 08 Graduate training schemes ........................................................... 12 Internships ....................................................................................................... 16 Mergers & acquisitions ....................................................................... 20 Capital markets ........................................................................................... 26 Sales, trading & research ................................................................ 32 Foreign exchange .................................................................................... 36 Corporate banking .................................................................................. 38 Fund management .................................................................................. 42 Hedge funds .................................................................................................. 46 Private equity ................................................................................................ 50 Investment consulting ......................................................................... 52 Global custody ............................................................................................ 53 Wealth management ............................................................................. 54 Operations ....................................................................................................... 58 Risk management .................................................................................... 60 Compliance ..................................................................................................... 62 Data providers & rating agencies ............................................ 64 Insurance ........................................................................................................... 68

Accounting in the City Accounting City careers .................................................................... 70 Front office careers ................................................................................. 72

This guide is designed to be used together with the Student Centre on the eFinancialCareers.com website. It will help you to navigate your way around the competitive world of financial services, and provides an introduction to the careers on offer and different sectors. As well as information on front-office roles, we have sections on IT in finance and opportunities for accountants. On the website you will find the latest news on graduate hiring and vacancies, tips from senior industry figures, advice on internships and getting a job from those who’ve been through the process, plus the chance to discuss what’s going on with other hopefuls and those already in the industry. By using this guide and the website, you will be among the best-informed candidates around – half the battle in the highly competitive world of finance. Good luck in your job search,

Sarah Butcher

Student Centre

IT in finance Information technology ...................................................................... 74 IT careers .......................................................................................................... 76

Employers Employer profiles ..................................................................................... 78 Partner profiles ............................................................................................ 88

Like this book? You’ll love the website. Our Student Centre is the place to go for the inside track on getting your first job in finance. Check regularly for new features and updates at www.students.efinancialcareers.co.uk

What’s going on? The latest news for graduates, including last-minute vacancies.

Internships The best way to get a job is by doing an internship. Our Student Centre tells you all you need to know about applying for and making the most of internships. Careers in Financial Markets is published by eFinancialCareers Ltd - www.efinancialcareers.com Project Manager: Janice Chalmers; Editor: Sarah Butcher; Production editor: Graham Judge; Writers: Sarah Butcher, Nic Paton; Marketing: Alison Traboulsi; Sales: Iain Small, Alex Ross, Marc Speer, Robert Wood, Asha Wadhwani Art Director: Valerio Italiano Designer: Jane Roberts Additional copies: cifm@efinancialcareers.com +44 (0)20 7309 7777 ©2007 eFinancialCareers Ltd No part of this publication may be reproduced without permission.

Graduate programmes Your complete guide to applications and choosing between employers, plus what to expect from those who’ve been there before you.

Learn about the industry Financial sectors explained:

including information on even more sectors than are contained in this book. Career paths: profiles of professionals in different roles and at different stages of their careers, from the lowly analyst up to managing director and beyond. Jargon buster: make sure you know your assets from your equities.

Top tips Individual nuggets of advice from top banking professionals.

Off the record What the banks won’t tell you about getting that job – real information from people already on the ground.

Numerical tests Most banks will make you sit one and they take a little getting used to, so practise first with our online tests.

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance

A highly competitive industry Demanding workplace with outstanding rewards

Want to work in an investment bank? You’ll need to fight for it. At the start of 2007, graduate recruiters at banks and fund managers expected vacancies to rise nearly 18% to around 3,000, according to the Association of Graduate Recruiters. But tales of multi-million pound bonuses mean more people want a piece of the investment banking action. Student research company High Fliers puts the number of applicants per banking job at (wait for it) 60:1. Even if you manage to elbow 59 people aside to land one of those coveted traineeships, there’s no guarantee you’ll become a millionaire. Why? Investment banks only pay mega-bonuses to the best people, typically after six years or so, and then only when business is really good. When business is bad, banks are equally quick to make people redundant and bonuses are a lot lower.

“If you want a risk-free job, become an accountant”

eFinancialCareers.com Careers in Financial Markets 2007-08

Logan Naidu, Cornell Partnership

2

A career in banking is a bit like the lifecycle of a butterfly: you’ll have to put in time as a hardworking grub (analyst/ associate) before you can metamorphose into a beautiful winged creature (managing director). There’s a constant risk of being squished if unsuccessful – and throughout your life you’re liable to be snuffed out by an adverse economic climate. Most of the biggest investment banks are either USowned (eg Goldman Sachs, Merrill Lynch and Morgan Stanley) or continental European (eg Deutsche Bank, Credit Suisse and UBS). They carry out many activities, such as advising on mergers and takeovers; helping companies raise money by issuing bonds and shares; buying and selling bonds, shares and other securities; and managing funds.

Pay for performance Investment banks pride themselves on being meritocracies. For example, Tracey Hahn, head of leadership and talent management for Europe, the Middle East and Africa at Merrill Lynch, says the bank fosters “a meritocratic and fully inclusive work environment,” and a culture that provides people with “the opportunity to advance as high as their commitment, ambition and talent will take them.”

Banking is a competitive industry at the mercy of economic swings Pay is by performance: less than 20% of senior pay is base salary ‘Hot’ sectors include mergers and acquisitions (M&A) and risk

In plain English, this means if you work hard and have a talent for banking (i.e. make lots of money for your employer) you will both be promoted and be well paid. But don’t expect to be paid unless you perform. “Even for managing directors, banks rarely pay base salaries higher than £260k,” says Lee Thacker, partner at headhunter Heidrick & Struggles. “The rest is performance-related bonus.”

Hiring and firing Following annual talent reviews, banks such as Goldman Sachs regularly cull up to 10% of their worst-performing staff and Thacker says the practice is becoming more common. If banks get rid of 10% of staff as a matter of course even in good years, they’re a lot more brutal when business turns. According to the think tank Centre for Economics and Business Research (CEBR), some 35,000 jobs were chopped in the City of London between mid-2000 and early 2003. The bloodbath followed several years of vigorous hiring worldwide – in 2001, the global headcount at Goldman Sachs was 25,000; by 2003 it was down to 19,500. In 2007, however, banks were back on top. By the end of the first quarter, Goldman Sachs employed nearly 27,000 people globally and by mid-2006 the CEBR said employment in the City of London exceeded the previous record at the height of the dotcom boom. But after several good years and a credit crunch, are we in danger of another downturn? Banking recruiters say it’s just the nature of the beast. “There’s no doubt that we’re near the peak, but the risk of losing your job when times are bad is the natural corollary to making huge amounts of money when times are good,” explains Logan Naidu, a consultant at recruitment firm Cornell Partnership. “Banking is cyclical. It’s very rare nowadays to go into banking thinking you will never be unemployed – if you want a risk-free job, become an accountant.”

Riding the wave What can be done to minimise the risks of being rudely turfed out if things turn nasty? Philip Beddows, a partner and seasoned investment banking career coach at mentoring firm IDDAS, says the best thing is to go for a top-tier bank or boutique that offers excellent training: “If you start in division one, you can always move to division two

>

With your potential, our future is in good hands. It starts with you.

Your ideas make a difference. At UBS, we believe in creating opportunities for every one of our employees to empower them to excel and realize their potential. We know that the best view could be through your eyes. That is why we value diversity and want to create an environment that encourages different perspectives. As a leading financial firm with offices in over 50 countries, UBS can offer the inspiration you need from all corners of the globe. After all, when you’re inspired, we all succeed. It starts with you: www.ubs.com/graduates

© UBS 2007. All rights reserved.

Global Banking & Markets

“It’s my first year on the graduate programme and I’m being trusted to handle a two billion dollar trade. That’s the difference.” Our numbers tell an incredible story of growth and global expansion. We’ve become a leader in some of the most exciting areas of investment banking. And the rapid progression of our people is vital to this success. In RBS Global Banking & Markets you can go as far and as fast as your abilities allow. No rigid hierarchies. No glass ceilings. Just extraordinary opportunities to match your capabilities. Be part of it. Find out more at www.rbs.com/gbmgraduates

The Royal Bank of Scotland. Tenth largest bank in the world. One of Europe’s leading corporate banks. 95 per cent of the FTSE 100 and 80 per cent of the Fortune 100 are customers. Now growing rapidly and aggressively worldwide.

Make it happen™ The Royal Bank of Scotland plc. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. Registered in Scotland No 90312

Continued from pg. 2

Hot sectors Bearing in mind the roller-coaster nature of the investment banking industry, it’s worth giving some thought to where you want to work. Fixed income? Equities? Corporate finance? Choose carefully. You are not just selecting a job; you’re positioning yourself in the financial services market, some areas of which are likely to be more healthy than others. Look at the individual sector articles for more detail, but for a quick guide to hot sectors, read on.

Mergers and acquisitions Mergers and acquisitions is a volatile sector in which to work. When things are hot, they’re very hot. How But when M&A deals Mon hot e stop happening, y Ku Opp dos these bankers are ortu nitie often among the s first to be shown the door. In 2007, however, M&A bankers were sitting pretty. In the first quarter of the year, deals announced in Europe rose 14% to $531bn, according to information provider Thomson Financial. And soaring M&A deals inspired banks to add staff – an April 2007 poll of 250 M&A bankers by Financial News found 69% of respondents in the UK were looking for talent. “Deal flow is still strong and a lot of banks are hiring,” says Adam Cairns, a director at Fennemore Banks.

Derivatives sales and trading Demand for derivatives specialists has been hot for years. Derivatives are complex financial instruments based on underlying stocks, How bonds, currencies and Mon hot assets. Hiring has been Kud ey Opp os driven by the quest ortu nitie for better returns and s by banks’ ability to charge more for complex derivative ‘solutions’ than for simple equities or bonds. At their simplest, derivatives may be futures, where a buyer purchases the right to buy a product at a future date and price; at their more exotic, they may be single tranche collateralised debt obligations, where investors buy debt products catering for their risk appetite. The August 2007 crisis in the credit markets and related problems have temporarily halted hiring. New products may emerge that overcome the turmoil and reinvigorate hiring, but this remains to be seen.

Risk Right now, risk hiring is hot – and even if things get a little more ‘risky’, risk analysis looks like a good place to be. “If the How cycle turns down, h ot Mon Kud ey risk hiring will hold Opp os steady,” predicts Gail ortu nitie Connolly, managing s consultant at recruiters PSD Group. “Banking is a regulated sector, so you will always need risk specialists for regulatory reasons,” she adds. Research by PSD Group suggests over 40% of banks are adding risk specialists in 2007 and another 30% are replacing staff who’ve left. The bestplaced jobs are in market risk or quantitatively-focused roles helping to price derivative products. As hiring expands, Connolly says some risk staff are getting bonuses equivalent to, or even more than, salaries – unheard of a few years ago.

eFinancialCareers.com Careers in Financial Markets 2007-08

later – the other way round can be more challenging.” If you don’t manage to get an offer from an investment bank, an ACA (accounting qualification) can also be a good safety net and allow you to move into banking later on. Naidu tells of one candidate who couldn’t get into banking in 2001, so spent three years training for an ACA. In 2004 he moved into investment banking and in 2007 got a job in private equity. “Careers in financial services are all about riding the cycle,” says Naidu. “If you can stay on the board throughout, you’ll do well. And if you fall off, you’ll need to get back on quickly.”

5

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance Expect to spend at least three years on each rung of the ladder

Rungs on the ladder From analyst to MD – the ‘typical’ investment banking career The City of London, as this guide makes all too clear, offers a feast of roles, opportunities and career paths. But whether you join a small European investment bank or a large US bank, you’ll encounter (roughly) the same job titles, in the same order of importance.

Analyst This is the lowest position of all; in investment banking, ‘analyst’ is another way of saying ‘graduate trainee’. What analysts do varies from division to division. In corporate finance, analysts are number crunchers who put together ‘pitchbooks’ (research to help banks win bids) and analyse a company’s financial products.

“At every level you need to show you are able to increase productivity, anticipate market changes and add value” Esther Oxenbury, JPMorgan

In sales, analysts telephone relatively unimportant clients on non-crucial matters. On the trading floor, analysts can’t trade until they’ve passed regulatory exams – and even then, they are heavily constrained. At most banks, you will be an analyst for two to three years. The bank then decides whether or not to renew your contract and you have an option whether to stay on.

eFinancialCareers.com Careers in Financial Markets 2007-08

As few as 6% of directors go on to become managing directors

Vice-president At this level, life starts to become exciting. The title sounds grand, but don’t be deceived: VPs are plentiful at any large investment bank. As a VP, you will manage the day-to-day affairs of the associates and analysts beneath you and are likely to have more contact with clients. You’ll typically be a VP for three years, but you could be here for much longer, as the job can become a bit of a sticking point.“Once you make it to VP, further progression is not guaranteed. It depends on a much greater number of variables than at analyst and associate level,” says John Harker, head of HR at Citi. VPs who fail to progress at one bank tend to move to another, where they can join the next rank – director or executive director.

Executive director or director Executive directors or directors (the titles are interchangeable) are the right-hand men and women of the real potentates – the managing directors. Executive directors help managing directors cope with the daily whims of client companies. In sales and trading, they have bigger and more important clients to call, or even larger trades to place.

Managing director

Associate

You’ve made it! Managing directors (MDs) are the upper echelons of the banking hierarchy. MDs are the people who deal directly with clients and bring in business. Very few people make it this far. At one large US bank, only 6% to 8% of directors are promoted to MD each year. At Goldman Sachs, there are around 1,200 to 1,500 MDs for 25,000 employees. Whether you’re a lowly analyst or an MD, progression ultimately comes down to adding value. “Do not sit back and wait to have your career managed for you. You have to be first and foremost accountable to yourself for your success,” says Richard Moore, EMEA head of campus recruitment at UBS.

The next rung on the ladder, associates, are analysts who have made the grade or business school students who joined after studying for an MBA. Associates typically have a team of analysts in their charge, to whom they allocate work . Expect to be an associate for another three years before moving up to the next rung – vice-president (VP)

Although this hierarchy exists across banks, it’s less noticeable in sales and trading divisions where you work on your own to make money. If you’re an exceptionally talented VP on the trading desk, there is every chance you could earn more than an MD.

How to move to the next rung?

6

Many vice presidents move banks to make it to the next rung

Demonstrating the drive and motivation to succeed and learn are key, asserts Esther Oxenbury, head of investment banking graduate recruitment at JPMorgan, where everyone is issued with a ‘road map’ of what they need to do to progress. “At every level you need to show you are able to increase productivity, anticipate market changes and add value; to be competitive,” she says.

Exception to the rule

Some think steel and glass. We think meeting of minds.

Mention global finance and people will often think of big buildings of glass and steel, marble halls and swift lifts. But offices are only offices and we have to work somewhere. It’s what we do inside those offices that matters. Banking adds value, creates wealth and makes things happen in the world. The people at Credit Suisse do important, exhilarating, rewarding work, but they are still just people. So if you’re thinking that the high-rise world of global finance is not for you, give us the benefit of the doubt and visit the website. You might feel right at home. www.credit-suisse.com/careers

Thinking New Perspectives. Credit Suisse is an Equal Opportunity Employer and does not discriminate in its employment decisions on the basis of any protected category. To the extent permitted or required by applicable law, a candidate who is offered employment will be subject to a criminal record check and other background checks before the appointment is confirmed. © 2007 CREDIT SUISSE GROUP and/or its affiliates. All rights reserved.

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance

The recruitment process Applications, interviews, assessments and, if you’re lucky, a job Recent graduates who join investment banks are called analysts. If you want one of these jobs you’ll need to show your pedigree during the banks’ multi-hurdle hiring process.

Hurdle 1: the application form According to the graduate research company High Fliers, a large investment bank receives 60 applications for every graduate-level job. That’s 9,000 candidates for the 150 or so places on the average bank’s graduate recruitment scheme. More than 7,500 are eliminated at the online application form stage.

“You need to research the division you want to work in... you cannot overestimate the amount of research you can do”

eFinancialCareers.com Careers in Financial Markets 2007-08

Sally Whitman, Deutsche Bank

8

Academic criteria are the main stumbling block. In an ever more competitive environment, most of the big banks specify that would-be candidates must be on track for a 2.1 and typically have 320 or more UCAS points. If you don’t meet the grade, you won’t get any further than this. Most trainees come from the best universities. However, even if you’re on track for a first, the application form could still trip you up. Esther Oxenbury, head of investment banking graduate recruitment at JPMorgan, says many candidates fall down because of poor spelling or poor punctuation: “It is amazing how many applications come through with mistakes on them, yet our business is all about attention to detail,” she says. A cut-and-paste approach is also perilous. Everyone accepts people make multiple applications, but for heaven’s sake put the right bank’s name on the form. “I once had someone email me explaining how motivated they were to come and work at Morgan Stanley – it did not go down well,” says Jonathan Jones, EMEA head of recruiting at Goldman Sachs All application forms will have questions on your motives, says Vivienne Dykstra of recruitment firm Graduate Solutions. “What they are looking for is evidence that you have done your research and that you have the hunger and drive to thrive at their organisation,” she says.

Competition is tough with 9,000 applicants for each vacancy A 2.1 and 320 UCAS points are the minimum grades preferred Most applicants fall at the first hurdle – the application form

Hurdle 2: the numeracy test Banks increasingly use tests to check candidates’ numeracy. Some also use language tests to establish whether candidates can think logically in English. Numeracy tests typically eliminate another 50% to 60% and are supposed to be academically neutral – they are designed to test your underlying numerical ability, not your knowledge of advanced calculus. They are also supposed to be impossible to prepare for. However, many university careers offices can help when it comes to sorting out advance practice. Test provider SHL also offers sample questions at www.shl.com/shl/uk – click on ‘Practice Tests’ in the top right corner.

Hurdle 3: the first interview By this stage, only around 1,000 of the original 9,000+ applicants will still be in the running. First interviews typically take place on your university campus. There you face junior people from the business area to which you have applied and people from HR. The first round is all about ensuring you’re the right kind of person for the bank. All banks have a list of skills and personal characteristics they try to identify. These are fairly generic and include: team building, communication, pro-activeness, assertiveness and leadership. The key is to try and be yourself. “You are guaranteed to be asked some questions about your drive and motivation. We won’t want people who’ll just answer in parrot fashion. We want people who will really listen to what the interviewer is asking and digest that information,” says JPMorgan’s Oxenbury. It’s also important to come with some questions to ask of the interviewer. “If you have no questions, that would make me wonder how motivated are you,” she adds. “You need to research the division you want to work in, as that is going to be the main focus of your first interview, they will spend a lot of time on that,” agrees Sally Whitman, head of specialist resourcing at Deutsche Bank. “You will need to be able to talk about it. You cannot overestimate the amount of research you can do,” she adds.

Hurdle 4: the second interview By this stage around 320 of the original 9,000 applicants are left. Between half and two-thirds will receive the coveted offer of a full-time place. >

All in a day’s work.

Whether you are interested in a career in investment banking, capital markets, investment management or any of our corporate areas, visit us online at www.lehman.com/ruready.

lehman.com/ruready

Today you affected tomorrow’s financial headlines.

Lehman Brothers is an equal opportunity employer. The Firm and its affiliates do not discriminate in employment because of race, religion or belief, gender, national or ethnic origin, disability, age, citizenship, marital or domestic/civil partnership status, sexual orientation, gender identity or gender expression. ©2007 Lehman Brothers Holdings Inc. All rights reserved. Lehman Brothers International (Europe), authorised and regulated by the Financial Services Authority, is an affiliate of Lehman Brothers Holdings Inc.

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Profile Nathalie Casali Analyst, Natural Resources Advisory Group JPMorgan

The second interview is a series of interviews with senior bankers, which normally take place at the bank’s head office between September and January. Second-round interviews place a greater emphasis on technical aptitude. The interviewers will want to ensure you can function under pressure and have at least a basic understanding of how the business works. To this end, applicants for fixed-income sales roles 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.

Hurdle 5: the assessment centre At some banks, second interviews are replaced or preceded by an assessment centre. Assessment centres involve tests to show how people would perform at work. They typically include another interview, a numeracy test, a group discussion and a presentation. All this lasts a single day, with around 12 candidates. The most challenging part is the group discussion. Six or so candidates are given a problem to solve together. The aim is to assess team-building skills. This is followed by a presentation, which can also sometimes be a sticking point. Candidates are normally asked to analyse some data and use it to present a convincing argument around a particular point. The main failings include not identifying the salient points, presenting a weak argument and changing your views when challenged.

Hurdle 6: the exploding offer Finally, you may have to deal with a final obstacle: the exploding offer – a deadline by which you have to accept an offer before it ‘explodes’, meaning when it is withdrawn. “All students will be given an exploding date by which to make a decision,” says Brian Hood, head of graduate recruitment at Citi. This can be a problem if you have several offers – particularly if you have offers from your second and third choices and are waiting to see if you get an offer from your first choice. The best advice? Tell the top banks on your list and leave the rest in the dark. If a bank knows you have several offers and are in a dilemma about which to choose, it may make allowances for you. In reality, however, very few banking candidates will be this spoilt for choice. A foot in the door is your first objective and a good spellchecker is the first step.

Nathalie graduated from the London School of Economics with a degree in international relations in 2005, joining JPMorgan in August of that year. She now works as an analyst in the bank’s Natural Resources Advisory Group. How did you go about applying to JPMorgan? The first thing I did was go to LSE’s careers office where I did some practice tests and got lots of advice on how to apply. I also went to a campus presentation, which was very helpful. I filled in the online application form and took a numerical test and a couple of weeks later I was invited to a first round of three ‘competency-based’ interviews, during which I was asked about my motivation and skills. I found the numerical tests difficult at first, so it was useful to have practised beforehand. A couple of weeks later I was invited to a ‘Super Saturday’ assessment centre, which started at 7:30am and lasted the whole day. You do a series of different exercises, including a two-hour case study, role play, a group exercise and then two to three individual interviews. What were the interviews like? Both interviews were quite similar. They had numerical tests, each one lasting for about 45 minutes. I found them very difficult and so I was definitely glad I had done some before. They also wanted to know about why I wanted to work in investment banking and for JPMorgan in particular, and about my personality, my character and my ambitions. How did you convince the interviewers to invite you back? You need to demonstrate that you are motivated and have a hunger to learn. Everyone at this level has a good academic record so you need to show them something about you that is different. Also, what can really differentiate you is how much research you have done on the company. Now I interview people myself, and you can really tell when someone has not done enough background reading. They don’t expect you to know everything, but if you can show you are reading the financial press and are able to talk about some of the deals going on it all helps.

Nathalie’s tips Prepare, prepare, prepare. Do some numerical tests beforehand. The hours are long and you will need stamina and endurance. So you need to come across as extremely motivated and ready to sacrifice everything for the job. At the assessment centre, concentrate on being yourself and doing your best. Do not try to overwhelm or dominate. Try to come across as a well-rounded person.

eFinancialCareers.com Careers in Financial Markets 2007-08

Continued from pg. 8

11

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance

Graduate training schemes Programmes vary considerably

If you want to be a graduate trainee in an investment bank, the chances are you have not thought too much beyond the daunting application process. It is also worth your while thinking about the training itself: some banks do it very differently to others. Superficially, a lot of the banks’ training programmes are very similar. Whether you join the programme for CIBC World Markets (which starts in August) or Goldman Sachs (which kicks off in July) you will have to work hard and learn very fast. First, you will be put through a course that teaches fresh graduates investment banking know-how, including such subjects as financial modelling, bond pricing and stock option theory. Then you will be unleashed on to a particular division – the start of a training programme that will typically last for two years.

“You will build up a network of contacts and relationships that will remain with you through your career and stand you in good stead”

eFinancialCareers.com Careers in Financial Markets 2007-08

Richard Moore, UBS

12

So, all similar enough so far. But scratch the surface and banks’ training programmes are not as similar as they may at first seem. The differences tend to be focused on four main areas: • Location: where does the training take place? • Duration: how long does it last? • Delivery: who delivers the training? • Breadth: how much opportunity is there to learn about different areas of banking? It’s worth noting, too, that for most banks the cut-off for applications to their graduate programmes is the end of January. But don’t despair if you miss the deadline, as some (though not many) do stretch their closing dates to the following spring.

Location Where do you want to train? New York? London? Amsterdam? Trinidad and Tobago? Unfortunately, Trinidad and Tobago is not on the list of training destinations, but everywhere else is. For example, Goldman Sachs, Merrill Lynch, Morgan Stanley, Credit Suisse and JPMorgan send some or all of their trainees

Investment banks’ training programmes are not identical Check a programme’s location, duration and breadth of content Choose a programme from a bank that will allow rotations

over to New York to learn banking theory. This is not just the chance to have fun in the Big Apple (although you probably will) while finding out the difference between a ‘put’ and a ‘call’ option, it’s also about meeting your graduate counterparts. “It is an amazing experience, it is a real networking opportunity. You make friends and contacts that you will keep with you for a long time to come,” says Esther Oxenbury, head of investment banking graduate recruitment at JPMorgan, which offers eight weeks of entry-level training in New York. If Amsterdam grabs your imagination, ABN AMRO is the place to go – the bank puts its recruits through six weeks of intensive training at its Amsterdambased Academy of Finance when they join. Most banks also have an element of initial classroom training in London, either pre- or post-overseas training. London is, in any case, where most European graduate trainees come back to after their initial theoretical training is over. “When trainees return, they are then put through the regulatory training that they need from the Financial Services Authority (FSA), but also go into our 12-18 month graduate development programme,” explains Jane Clark, EMEA head of campus recruiting at Merrill Lynch, which runs a six- to eight-week global graduate training programme in New York.

Duration Including classroom and on-the-job training, most graduate programmes last two years. However, time in the classroom varies from just six weeks to as much as four months – the latter mostly in the more complex areas such as IT and private banking. Banks whose trainees spend a long time in the classroom say it’s an advantage, with trainees benefiting from the intensity of the training they receive. Most programmes will be highly tailored to the role you have applied to do, and most big banks will also expect you to be learning continuously through your career, explains Jonathan Jones, Europe, Middle East and Africa (EMEA) head of recruiting at Goldman Sachs. “We have a Goldman Sachs university that delivers training year-round. People are expected to pursue multiple qualifications a year. It is an ongoing commitment,” he says. >

Our Focus Your Future

Standard Chartered Bank – International Graduate Programme Standard Chartered is focused on being the world’s best international bank, by being the right partner to our customers and attracting and developing the best people to work together across our global network. Our International Graduate Programme offers world class development. It celebrates open mindedness, original thought, diversity and ambition – qualities that we look for in future leaders of our organisation. If you are keen to find out more about our exciting graduate opportunities and want to join one of the world’s best international banks please visit our website: www.standardchartered.com/graduates

High Performance Banking www.standardchartered.com

Graduate careers

Profile Ryan Hearity Analyst Dresdner Kleinwort

Delivery The big banks tend to be proud of the fact that they use their own senior bankers to deliver at least some of their training programme to graduates. “You get access to some of the world’s leading experts,” enthuses Goldman Sachs’ Jones. So, if you’re learning, say, how to value equity derivatives, don’t be surprised to find the head of equity derivatives standing in front of you and presenting the models. And if it’s not senior managers then, for something that is clearly an investment in their future, most banks are more than happy to pay top dollar and bring in professional training companies instead.

Breadth You want to work in fixed-income sales? Is that selling high-yield bonds or government debt? You probably don’t know at this stage, which is why it might be a good idea to join a bank that will let you work in different areas. Trying out different parts of a bank is known as rotating. Merrill Lynch, for example, allows interns entering its global markets division two rotations in its debt and equity group during the summer. Morgan Stanley, too, permits trainees in its fixed-income division to do four six-month rotations over a two-year period. Lehman allows trainees in its fixed income and equities division to undertake a few three-week rotations before settling.

Buddies and mentors Finally, ask if the bank you’re thinking of joining has a system of buddies and mentors – most now do. Buddies are recent trainees who answer simple questions. Mentors are more senior people who may become your long-term guru. After all, the banks are investing significant sums of money in you and it is in their interest to offer as much support as they can to get a return on that investment. And don’t forget the future networking and guidance potential of the trainees on your programme, either. “Through the graduate programme you will build up a network of contacts and relationships that will remain with you all the way through your career,” says Richard Moore, EMEA head of campus recruitment at UBS. “As your career progresses, the people around you will hopefully progress with you and you will be able to call on an incisive network of contacts that will stand you in good stead,” he concludes.

Ryan works as a rates sales analyst in capital markets. He joined Dresdner Kleinwort in August last year as a graduate trainee after completing a degree in economics at the London School of Economics in 2005. What does your job entail? I sell European government bonds to institutional investors (asset managers, pension funds, insurers). I sit on a trading floor and spend most of my day on the phone talking to clients and following the markets. As well as speaking to clients daily, I usually go out about twice a week socialising with different clients – dinner, lunch, after work drinks and so on. What was the Dresdner Kleinwort graduate trainee programme like? I applied specifically to this desk; the training programme was essentially a 10-week classroom-based crash course in finance, covering things such as bond maths, options, equities and accounting. After that I had three weeks’ regulatory training to get my FSA exams. There were about 80 of us on the graduate programme altogether, but we were divided into classes of 20. There was also a day’s training in communication and presentation skills where they brought in experts from the RADA drama school. We had to do lots of role play, which was a lot of fun. What did you feel you got out of it? You can only be taught so much in a classroom setting, as a lot of what you learn in this type of role you learn on the job because it happens on the trading floor. My team is very supportive, and I am encouraged to ask questions, but going through the graduate training programme was invaluable because it gave me a chance to learn away from the hectic day-to-day and to ask as many questions as I liked. It was very intensive, and I got to speak to and question a lot of senior people, which was a real opportunity.”.

Ryan’s tips: Have a good idea of why you want to do the job. You don’t have to know everything, but you do need to understand that sales is different to trading and so on. ly Ask as many questions as you can, especial from experts and senior people. Enjoy it! Speak to previous graduates and look at what’s being offered. A programme of one or two weeks, for instance, may not have much depth to it.

eFinancialCareers.com Careers in Financial Markets 2007-08

Continued from pg. 12

15

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance

Internships A vital part of banks’ graduate selection

Investment banking internships comes in various guises. Some banks – such as Goldman Sachs, JPMorgan, Morgan Stanley, Lehman Brothers, Royal Bank of Scotland, Merrill Lynch and Credit Suisse – offer one- to two-week long internships to first-year undergraduate students. Many also offer six- to twelve-month internships for IT students. However, the most important internship occurs in the summer holiday before the final year of your university course. An intensive, 10- to 12-week period of work experience, the typical investment banking summer internship might sound like hard graft. But what exactly is in it for you?

“An internship is definitely a pipeline into full-time hiring. A high percentage of our interns would be expected to get full-time offers”

eFinancialCareers.com Careers in Financial Markets 2007-08

Jane Clark, Merrill Lynch

16

First of all, there’s the pay. It’s much better paid than pulling pints in your local pub or stacking shelves in a supermarket: summer banking internships pay pretty good rates, normally anything from £350 to £450 a week and sometimes as much as £650 a week. Second, there’s the training: interns do many of the same tasks graduate trainees do on a daily basis. Most importantly, for those who are successful, there’s the potential of being offered a full-time job. “Internships are the best way not only to further your investigation of the industry but also to realise your ambitions,” says Richard Moore, Europe, Middle East and Africa (EMEA) head of campus recruitment at UBS. The real beauty of an investment banking internship is the ‘try before you buy’ element, agrees Jonathan Jones, EMEA head of recruiting at Goldman Sachs: “By going on an internship we understand you are not saying you are definitely going to commit your life to this industry, but we do look for a certain level of commitment and evidence of a general interest and an intellectual curiosity about it.” And the conversion rate from internships to full-time positions is pretty impressive, too. At most investment

Banks hire 50% or more of their graduate intake via internships Internships typically take place in your second year of university Banking internships pay very well: up to £650 a week

banks, at least 50% of full-time graduate vacancies are given to applicants who took on an internship during the previous summer. At some banks, the figure is even higher. Bank of America, for instance, estimates that it plans to fill around three-quarters of its 2008 full-time positions with interns from 2007. Similarly, around half of Goldman Sachs’ full-time hires will have done a summer internship the year before, says Jones. About three-quarters of trainees normally get offered a full-time position.

Few are called… Competition for investment banking internships is extremely fierce. There are normally hundreds or even thousands of applicants for each place available. Sally Whitman, head of specialist resourcing at Deutsche Bank, estimates that the bank receives over 6,000 applications for the 190 places on its internship programme. Hardly surprising, as for Deutsche, like in most other banks, the internship programme acts as a feeder into full-time positions. In order to make their selection, banks will generally use a combination of online application tests, multiple interviews and numeracy tests. The selection bar, again, will be set high, with normally the same criteria – an expected 2.1 degree or above – as for permanent entry-level positions and a requirement that you demonstrate the same level of interest in a banking career as full-time graduate hires. If you’re one of the fortunate few to be selected as an intern, rest assured you won’t spend your summer making cups of tea. At most banks, internships begin with a classroom-based introduction to the industry, after which interns are unleashed on their chosen division, where they do real (hard) work. “When we are planning internships we go to great lengths to structure them so that they as closely as possible mirror what real life is like as a full-time analyst rather than someone who’s just on a 10week internship,” says Goldman Sachs’ Jones. Most good internships will be formally structured, with interns sitting down with their managers to create a list of skills and experiences they would like to gain. The nature of work an intern does can range from producing research reports through to helping to improve the efficiency of back-office processes.

Find out more about careers in finance

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Profile Rodney Appiah Analyst Merrill Lynch

Rodney joined Merrill Lynch last year after completing a 10-week internship at the bank in 2005. He read economics at Royal Holloway, University of London, and is currently working as an analyst within Merrill’s European Leveraged Finance division.

For those who miss the boat… The first thing to be said here is, “try, try, try not to.” Investment banking is a fiercely cut-throat industry and simply not being able to get out of bed and get your act together to get your application in on time will generally not go down very well. As Richard Moore, EMEA head of campus recruitment at UBS, puts it: “Do not miss the deadline. It is just too competitive an environment now.” But if – for whatever reason – you haven’t managed to secure an internship, don’t despair, as it need not be the end for your planned career. Most banks are open to receiving applications from students that have not had an intern placement during the summer. “A lot of candidates get hung up on the idea that they have to have done an internship, but it is not always the case. Even if you’ve only done a Saturday job you can demonstrate the skills you have picked up, such as numeric skills, dealing with customers and so on,” advises Esther Oxenbury, head of investment banking graduate recruitment at JPMorgan. However, you will be at a disadvantage without an internship – and not just statistically. Interns, by the fact that they have spent time in the banking environment and will have concrete examples of their achievements, will stand a much better chance of doing well at an interview. As Jane Clark, EMEA head of campus recruiting at Merrill Lynch, puts it: “It is definitely a pipeline into full-time hiring. A high percentage of our interns would be expected to get full-time offers.”

What prompted you to do a banking internship? I was intrigued by the idea of going into banking. It had always been something I wanted to go into, so an internship was a really useful way to find out what it was really like. It gives you hands-on experience. I saw it as a win/win situation because you are getting fantastic experience and also getting a taste of something you might like to do when you finish your degree. Did you intern in the department you are working in now? Yes. It was a rotational programme so I spent two to three weeks in different areas, such as chemicals, corporate finance and so on. You get to try everything out and then you home in on the one or two areas that you like best. How was the internship spent? They try to mimic the reality of what it’s like being an analyst. So I was working very closely with all the different teams. What did you gain from the internship? I learnt that it was a very exciting job, that it was glamorous but there was also a gritty side to it, particularly around the long hours. But it’s a very supportive culture, and it was a lot of fun too. There were a lot of social activities – we even had a cocktail evening on the Merrill Lynch roof, which was fantastic. It was clear that those who enjoyed themselves and demonstrated the most keenness, even when you are working until 1am, were the ones who were more likely to convert the internship into a permanent offer. Some interns used to leave at 6pm and did not take the opportunity to spend time talking to their mentors or senior directors, which I think was a real waste.

Rodney’s tips: Demonstrate a passion for the job, hopefully one that is natural! Try to fit in from the start, try to become part of the furniture of the team. If it gets to the point where you are missed when you are not there, you’re doing well. Enjoy it. Take full advantage of the opportunities on offer and ask as many questions as you can.

eFinancialCareers.com Careers in Financial Markets 2007-08

Even fewer are called back Recruiters agree that converting an internship into a full-time job offer is all about being proactive. “Perform well, show initiative and get involved,” advises Brian Hood, head of graduate recruitment at Citi. “Securing an internship will not automatically result in a full-time offer. We’re looking for people who make the most of the opportunities with which they are presented,” he says. Most banks assess interns’ performance twice during the 12-week period: once in the middle and once at the end. This means that if you happen to do badly during the midway assessment, you still have an opportunity to redeem yourself.

17

Don't leave your

conscience at the door The word is different.

If you thought a career in banking and finance meant putting good intentions aside, look again. At Dresdner Kleinwort, we’re focused on finding those individuals who can take a wider look at business. We’re interested in talented people from a range of backgrounds and degree disciplines. People who are hungry to come up with the solutions that make things work better – for our clients, for their customers, for the world. If you think you can bring more to banking, call us.

Spread the word. www.dresdnerkleinwort.com/graduates

Unexpected viewpoints. Radical thinking. Inspiration.

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance

Mergers and acquisitions The international jet set of investment banking

ortu nitie s

“You get to see deals at all the different stages of their life cycle and deal with a huge variety of clients. It is very client and deadline driven” Jonathan Jones, Goldman Sachs

eFinancialCareers.com Careers in Financial Markets 2007-08

Trends

20

In 2006, European-announced M&A volumes rose 38.3% on 2005 to £35.8 trillion. In the first six months of 2007, European M&A activity rose 57% on the same period of 2006. The UK is the most important country in Europe for M&A activity. It accounted for 32% of all announced European deals in the first quarter of 2007 – more than France and Italy combined. However, announced doesn’t necessarily mean completed, and while the first three months of 2007 saw some impressive deals announced in the UK – such as the £10bn offer by CVC Capital Partners for Sainsbury’s supermarkets – not all those deals came to fruition. How will the rest of 2007 work out? Bankers are said to be upbeat and there are several large UK deals on the cards. Watch for the £7.5bn bid for Reuters, a potential £3.5bn bid for brokerage firm ICAP and a £3bn-plus takeover of EMI Music.

Key players The so-called US ‘bulge-bracket’ banks are generally found towards the top of the M&A league tables issued by Thomson Financial. Morgan Stanley, Citi,

US banks dominate the European M&A scene Be prepared for punishing hours

Goldman Sachs and JPMorgan occupied the top four rankings for total European M&A in 2006. The situation was slightly different in the UK, with Germanbased Deutsche Bank in pole position, followed by Morgan Stanley, Citi, and, in fourth place, Rothschild, a UK-based bank. European announced M&A 2006 Advisor

Value ($bn)

No. of deals

Morgan Stanley

493.1

184

Citi

489.0

198

Goldman Sachs

440.1

164

JPMorgan

435.0

217

Merrill Lynch

404.9

140

Deutsche Bank

377.5

158

UBS

318.3

179

Rothschild

299.1

296

BNP Paribas

295.8

107

Credit Suisse

287.0

156

Lehman Brothers

249.0

97

Source: Thomson Financial

How Mon hot ey Ku Opp dos

Strictly speaking, it is more accurate to talk of MA&D rather than M&A, as M&A covers mergers, acquisitions and disposals. Mergers is where two companies join as equals; acquisitions is where one company buys all or part of another; and disposals is where a business is selling or all part of its operation. Most large investment banks only become involved in the biggest deals – those worth at least $150m (€111.5m). Lower-value transactions, those generally worth $20m to $150m, are typically dealt with by the M&A divisions of accountancy firms. Transactions worth less than $20m will normally be the domain of solicitors and high street banks.

2006 was a good year for M&A; 2007 looks like being even better

Roles and career paths As a rule, the more senior you become in M&A, the more contact you have with clients. As a junior banker, or analyst, you will spend a lot of time working on ‘pitchbooks’ – documents outlining a bank’s ideas for a particular transaction. Analysts in M&A usually conduct basic research for the pitchbook and build the financial models used to price the companies concerned. One notch up from analysts are associates, who oversee analysts’ work and check their models are correct. Further up the scale are vice-presidents, who survey the work of analysts and associates, and often ask for the pitchbook to be partially or completely re-written. Vice-presidents report to directors and managing directors, who ‘own’ the client relationship (i.e. the main point of client contact). It is usual for pitchbooks to come to nothing: clients decide not to go ahead with the suggestions or engage a rival bank. However, when a pitchbook elicits a positive response, the M&A team see the deal through to completion. Live M&A deals are hard work. People involved can work nights and weekends and are at their clients’ beck and call. Once a deal is underway, junior bankers can expect to be very busy assembling the reams of necessary financial information and legal documentation.

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The Macquarie Group is a diversified international provider of specialist investment, advisory and financial services, with over 10,000 employees in 24 countries across Europe, Asia, the Middle East, the Americas, Africa and Australasia. Macquarie has reported 15 successive years of record profits and growth, including the significant expansion of our European activities.

independent thinkers, whose talent and initiative will drive our future growth. In joining Macquarie, you will have the opportunity to be part of a successful team working in a dynamic environment where your contribution is valued from day one. A breadth of graduate opportunities exist in Macquarie’s growing businesses in both Europe and the UAE.

Our success comes from supporting the ideas of our people. We seek motivated,

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Click online to begin your finance future

www.efinancialcareers.co.uk/students

Profile Marian McWilliams Mergers & acquisitions analyst Bank of America

Continued from pg. 20

Marian McWilliams has been an M&A analyst at Bank of America for just over a year. She joined in 2006 after completing a summer internship the previous year. Marian studied economics and politics at Trinity College, Dublin. What does your role involve? My job is to analyse companies’ financials, identify M&A opportunities for them and support them through the entire M&A process. We spend a significant amount of time valuing companies and attempting to identify value-enhancing opportunities, perhaps an acquisition, disposal of a particular business or the formation of a strategic partnership. We then present these ideas to the company and, if they decide to pursue them, act as their advisor throughout the process, providing services ranging from a more detailed valuation to due diligence and launching the formal offer.

2006 was a good year for pay. Graduate trainees working in London M&A teams earned nearly £70k on average. Those two years above them were on six-figure sums. However, it’s worth bearing in mind that what goes up can go down. Bonuses for mid-ranking and junior M&A staff were up around 20% in London in 2006 compared to 2005. In a bad year for M&A they could just as easily fall 20% – or more. M&A salaries (£k) Salary (av) Bonus (av)

Total

Analyst one

36

31

Analyst two

44

48

67 92

Analyst three

49

60

109

Associate one

57

87

144

Associate two

61

107

168

Associate three

67

141

208

1st year vice-president

75

167

242

2nd year vice-president

83

221

304

Source: Fennemore Banks

Level

Skills The M&A sector is very popular with graduate applicants, so banks want clear evidence graduates have thoroughly researched the industry in advance, cautions Richard Moore, EMEA head of campus recruitment at UBS. Within corporate finance and M&A, UBS expects to take around 75 graduates into full-time positions this year: “Candidates need to be resilient, robust and able to adapt to rapidly changing circumstances,” he explains. Jonathan Jones, EMEA head of recruiting at Goldman Sachs, adds: “You’ll need a lot of analytical skills, as a significant element of the role is modelling and valuing companies. A lot of it can be spreadsheet-based modelling, but we do not expect people to be experts the day they walk in the door.” M&A candidates also need to be good negotiators and a second European language is an advantage. If you want to execute an M&A deal and prepare a pitchbook, you’ll need to be analytical and not averse to number crunching, says Jonathan Baines, a headhunter specialising in M&A at Whitehead Mann. To make it to the top you’ll need a different skillset: “You need the communication skills and self-confidence to strike up a genuine relationship with the chairman and chief executive of a FTSE 100 company,” says Baines.

Can you describe a typical day? I am usually at my desk by 9am which is relatively late by City standards. I spend the first 20 minutes checking my voicemail and replying to any overnight emails. By 10am I usually have a pretty clear idea of how my day will pan out – typically internal meetings about projects, valuation work and finalising presentations to clients. After lunch the US wakes up, so the work level intensifies. Normally in the late afternoon there will be a client meeting, after which there will be various follow-up tasks. The challenge – and excitement – of working in M&A is that the work is rarely cleared off your desk just because it’s the end of the day. The M&A process is sometimes full of dramatic twists to which we have to react within tight time constraints. What kind of person do you need to be to excel in this role? To work in M&A you need to extremely hard working and organised, as you are often working on multiple projects at once. As the teams for each deal are different, analysts must manage their time carefully. Quantitative skills are vital but, in my opinion, you don’t need to come from a quantitative background. What is important is that you can learn quickly and are driven to learn independently.

Marian’s tips: An internship gives you the best insight into what life will be like, and allows you access to other areas of the bank. Understand what you will be doing – many City jobs seem glamorous, and you can lose sight of what the job entails. Gather as much information as you can – speak to people in the profession and set clear goals of where you want to be after, say, three years.

eFinancialCareers.com Careers in Financial Markets 2007-08

Pay

23

Opportunity Starts Here ®

Gain responsibility early and often.

“Best Global Bank” —Euromoney 2007

Work with prestigious clients. Seize an unparalleled career opportunity. The fastest growing global corporate and investment bank in the industry awaits you.

bankofamerica.com/careers Certain activities and services provided by the business referred to above are provided by Banc of America Securities LLC, a subsidiary of Bank of America Corporation. Banc of America Securities, member NYSE/NASD/SIPC. Bank of America is an equal opportunity employer. Approved by Banc of America Securities Limited, which is a wholly-owned subsidiary of Bank of America, N.A. and is authorised and regulated in the United Kingdom by the Financial Services Authority. ©2007 Bank of America Corporation.

Our momentum is your advantage Imagine what you could achieve as an analyst at Bank of America, an entrepreneurial organisation that is among the top five most profitable companies in the world. From London to New York to cities across 175 countries, we are leading some of the largest, most complex deals in global corporate and investment banking today. To learn about our competitive edge and what it means for your career, visit bofa.com/careers.

I joined Bank of America in 2005 as a summer analyst in the bank’s London office, where I spent 10 weeks in the Energy and Power team covering clients ranging from Oil and Gas companies right through to Integrated Utilities and Waste Management companies. Having done a degree in Experimental Psychology at the University of Bristol and with little finance experience, the learning curve was near vertical. However, with the excellent training both in the classroom and on the job, the skills and knowledge became second nature. It definitely helped to be in a small team of top class bankers and the support of a large bank. Following my internship, I was fortunate enough to have been offered a full time position for the following summer, which made my final year at University a lot more enjoyable without the stress of having to look for a job in the middle of my final exams. The decision to return to the Energy and Power team was an easy one – I wanted to build on my experience from the internship and continue in an industry where my scientific background would be put to good use.

My typical responsibilities have included: „

„ „

„ „ „

Valuation analysis: comparable company analysis, comparable transactions, discounted cash flow analysis, leveraged buyout analysis Industry research: market analysis, including competitive and demographic trends Company analysis: analysis of key operating metric, financials and review for growth and synergy opportunities Company information: summarising and presenting due diligence information Buyer analysis: Identifying buyers and creating strategic/financial sponsor profiles News: tracking and reviewing key industry news items to bring to the attention of my team I’d describe my experience as ‘incredibly challenging but fantastically rewarding’. I have been involved in a huge variety of projects, based in the UK, US, Continental Europe, Yemen, Kuwait, India and even Equatorial Guinea across the whole spectrum of Energy and Power. The experience has been bewildering both in terms of the volume of new knowledge and the skill sets you learn in such a short period of time.

The five week training programme in New York was simply brilliant. I was Christian Huot taught the principles of corporate What differentiates Bank of America finance very quickly by expert lecturers from other banks on the street is the in the field, as well as getting to know exposure and responsibility you get as a the rest of the worldwide analyst junior analyst. As our teams in Europe tend to be smaller, class in an awesome city. The skills learnt there the depth of interaction and involvement in projects would prove to be invaluable once I joined my team. and level of client interaction become a function of your aptitude, commitment, initiative and responsibility. Since the end of training, the learning curve is as steep as ever and is always evolving, with each It’s a challenging and exciting environment day bringing new challenges demanding new to work in and a unique opportunity to join a skills to overcome them. I have found that the fast moving platform with incredible potential. slogan “there is no typical day in the life of an analyst” to be true, despite my initial scepticism.

Certain activities and services performed by the business referred to above are provided by Banc of America Securities LLC, a subsidiary of Bank of America Corporation. Banc of America Securities LLC, member NYSE/NASD/SIPC. Bank of America is an equal opportunity employer. Approved by Bank of America, N.A., London branch, authorised and regulated by the Financial Services authority (FSA). © 2007

Banking & Financial Markets

Accounting in the City

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Employers

At a glance Capital markets bankers issue shares (ECM) or bonds (DCM)

Capital markets

Capital markets boomed in 2006

Get in on the ground floor

“Clients’ appetites are more complex now, so you need technical and mathematical skill. But you also need good relationship management skills”

eFinancialCareers.com Careers in Financial Markets 2007-08

Richard Moore, UBS

26

Key players If US banks dominate the European M&A league tables, European banks do a little better in the capital markets arena. In 2006, Barclays Capital was the leading advisor on European debt issues by value, followed by Deutsche Bank, with UBS the leading equities issuer. However, US banks followed closed behind, particularly in the equities market, with JPMorgan, Goldman Sachs and Morgan Stanley in second, third and fourth places. Top DCM banks (Europe, Middle East and Africa) 2006 Bank

Bond issues $bn

Barclays Capital

187.7

Deutsche Bank

164.5

Citigroup

149.3

Royal Bank of Scotland

132.6

ABN AMRO

119.6

HSBC

113.0

Source: Dealogic

ortu nitie s

out. In January 2007, a report commissioned by the mayor of New York suggested the city risked losing its status as the world’s leading financial centre – largely due to stringent regulations such as the Sarbanes Oxley Act, which deterred companies from listing on American stock exchanges. By comparison, London’s AIM, in particular, has been accused of being too lenient.

Top ECM banks (Europe, Middle East and Africa) 2006 Bank

Equities issues $bn

UBS

22.8

JPMorgan

21.6

Trends

Goldman Sachs

20.8

Like most areas of investment banking, capital markets experienced a boom in 2006. The amount of equity issued on stock exchanges in Europe, the Middle East and Africa rose 19% compared to 2005, while the amount of debt issued rose 13%. One of the biggest stories of recent years has been the number of companies floating on the Alternative Investment Market, or AIM. AIM is part of the London Stock Exchange (LSE) and its regulatory standards can be easier to satisfy than those of the LSE’s main market. The number of companies listing on AIM doubled from 2003 to 2006. Many came from overseas, particularly from emerging markets such as Russia and China. However, as AIM and other European listings have gone through the roof, US markets such as Nasdaq have lost

Morgan Stanley

20.4

Deutsche

20.4

Roles and career paths If you work in the capital markets division, you could find yourself doing anything from originating (bringing in business), to structuring (assembling complex derivatives products) or syndicating (preparing for the sale of finished products to investors). Origination specialists are usually senior capital markets bankers. It’s a job that involves a lot of travel: originators spend their time meeting clients in an effort to gain insight into their financing needs and persuade them to deliver up their business. By comparison, structurers are distinctly desk-bound. They spend their

>

Source: Dealogic

How Mon hot ey Ku Opp dos

Capital markets are where traded financial products are born. Working on the ‘factory floor’ of the financial markets, these… er… blue collar bankers produce financial products for companies and institutions that want to raise money. The two main products are shares, traded on the equity capital markets (ECM) and bonds, traded on the debt capital markets (DCM). Until the redemption date, the issuers of most bonds pay regular interest to the bondholder. Because these are a fixed-cash sum, bonds are known as fixed-income products. Similarly, the bond markets can be known as the fixed-income (FI) markets. As well as simple equities and bonds, capital markets divisions also issue more complex products (bonds that can be converted into equities at a pre-arranged price) and derivatives. Fixed-income capital markets are much larger than equity capital markets. In 2006, for instance, Dealogic calculated that the value of bonds issued in Europe, the Middle East and Africa was $2.25 trillion, while the value of equities issued in the region in the same period was just $267.5bn.

Top originators can earn around £1m

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OPENING DOORS EARLIER At RBC Capital Markets, we won’t leave you feeling like you’re on a graduate scheme for long. With a distinct emphasis on progressing

AT A G L A N C E

talent fast through the organisation, our graduate training programme

Royal Bank of Canada

takes you through each of our five capital market businesses, ensuring

• US$500 billion in assets • 70,000 staff • One of the highest credit ratings of any financial institution* • Canada’s largest financial institution as measured by market capitalisation and assets

you pick up everything you’ll need to contribute fully to our global successes. It’s not unknown to have ‘Vice-President’ on your door while you’re still in the early stages of your career. Your training will be here in London, the thriving centre of our expanding European business. After just 17 weeks, your training

RBC Capital Markets

programme finishes and you’ll be heading for a challenging, demanding

• One of the world’s top 17 investment banks† • Top 19 global FX banks (Euromoney 2006) • Top 15 global bond underwriter†

and rewarding role in one of the world’s leading international corporate investment banks. You’ll help us serve clients in some 30 countries around the world, and will join an extended family of 70,000 employees in the wider Royal Bank of Canada. Career prospects are excellent and the remuneration is everything you might expect from an organisation of our standing. To find out more or to apply, or if you’re interested in one of our summer internships for undergraduates, please visit www.rbccm.com/careers

• 3,700 staff through 75 offices in 15 countries *Moody’s Aaa, Standard & Poor’s AA †Bloomberg

Profile Catherine Gunn Analyst in global capital markets Morgan Stanley

Continued from pg. 26

Catherine is an analyst on the equities side of the global capital markets division at Morgan Stanley. She joined the bank fulltime last autumn after completing a summer internship in 2005. Catherine studied economics at Cambridge. What does your job involve? Corporate broking is an equity product team that specialises in providing advice to UK corporates. This would include, for example, investor feedback and shareholder analyses, while advice would cover transaction structuring and execution as well as technical advice and help with investor relations.

time creating esoteric financial products that suit a company’s financing needs, as communicated by the originators. It’s up to the people on the syndication desk to prepare the ground for the sale. They calculate the best price range for the products concerned, assess how many people will want to buy them and make sure the correct documents are in place.

What have you been working on today? I’ve been dealing mostly with a presentation for one of our clients, which has involved a lot of researching and number crunching. It’s a shareholder targeting piece so I’m looking at possible areas where the client could look to improve the quality and quantity of investors interested in the stock. I also have to keep one eye on the market in case there are any significant events which we should be informing our clients of. I’ll try and speak to a few of our traders later if it looks like there has been some significant trading activity in any of our clients’ stocks – it’s always good to get a feel for why interest in the stock is heightened.

Pay Top capital markets bankers aren’t paid as much as top derivatives traders, but they still do very, very well. In 2006, average total pay for a managing director originating debt deals for a top investment bank was around £875k, according to headhunter Napier Scott. By comparison, pay for analysts in debt capital markets can be anywhere between £45k and £88k.

Why did you choose to work in capital markets? To be honest, before I did the internship I did not know that much about it. But I found the finance-raising side really interesting. You get to deal with a lot of varied people and have a wide variety of clients, even at a relatively junior level.

Base salary (£k)

Bonus (£k)

Managing director

130

745

Executive director

100

460

Director

80

235

Associate director

60

115

Associate

45

100

Skills Debt and equity capital markets jobs are highly sought after and the increasing complexity of financial products means you will need a strong academic record to get in, advises Richard Moore, EMEA head of campus recruitment at UBS: “The appetite and awareness of clients for financial products is more complex now, so you need to have a good degree of technical and mathematical skill. But you also have to have good relationship management skills,” he explains. Sally Whitman, head of specialist resourcing at Deutsche Bank, says: “You need to look carefully at what it is you want to do. Some areas can be very analytical and there we might look for someone with a PhD. But, for most areas, problem solving skills as well as strong communication are essential.” Julian Bell, a director a headhunter Sheffield Haworth and former director of equity capital markets at Société Générale, agrees: “You’ll need to be deal oriented, to know how markets work and to understand why a deal can or can’t be priced in a certain way,” he says.

What’s good and bad about your job? The best bit is the variety and the fact I am surrounded by people of all different levels. We all sit together so it is great to hear what is going on. The worst? Having to get up early. What skills do you need to thrive in this area? You have to be good at time management because there is always a lot going on at the same time. You also have to have good attention to detail and be able to deal with all sorts of people, including very senior people. You have to be able to communicate with them confidently.

Catherine’s tips: Try and get some hands-on experience, otherwise you’ll never know if it is for you. Speak to people who are already doing it. You need to know what it entails because the hours can be long, and you are going to have to commit to it. Read the newspapers, especially the FT. in You have to be aware of what is going on the markets. Banks will look for someone who’s showing interest and potential.

eFinancialCareers.com Careers in Financial Markets 2007-08

Title

Source: Napier Scott

Pay: Debt Capital Markets – origination, top-tier banks

29

RWE Trading – More than energy What links speculative trading with capital investments, the political climate in the Middle East with emerging economies in Asia, and the temperature in Germany with the time of day in the UK? Simple. Energy Trading

Since competitive energy markets emerged in Europe in the late 1990’s,

No one knows what the markets will really be like in twenty years

RWE Trading has become a driving force behind energy trading.

time. What we can say is that the European power market, a rela-

“The professional calm that pervades results from three underlying

tively young market with fast growth rates, will undoubtedly have a

factors: our people, our successful business model and our market

decisive influence on the integration of the European economies.

positioning.”

Your opportunity – Join RWE Trading and prepare to excel. From

Success in the dynamic and complex energy trading business

day one our unique approach to your development will uncover and

would not be possible without professionals from a wide variety

nurture your true potential. We are seeking talented people within

of disciplines. From risk management procedures to the impact of

every area of our business. If you want to make a difference in the

weather conditions on energy supply and demand, RWE traders

markets of the future, RWE Trading wants to hear from you.

not only deal with commodities such as power, gas, coal and oil, we also actively trade physical and financial derivatives.

Send your CV and covering letter to [email protected]

“You‘re at the centre of everything at RWET” Klaus Dribusch, Trader Short Term Position Management (STPM) – Essen Power Trading United Kingdom

power generation in Europe have caused significant increases in

RWE Trading has been at the forefront of efforts to stimulate

ocean freight rates and coal export prices. RWE Trading is already

liquidity, both through trading outright power and also through an

a significant player in the physical coal and freight trading markets,

active spread trading function, trading the relationship between

the value of these activities is enhanced by our active involvement

power, coal, gas and carbon.

in coal and freight financial derivatives.

Coal Trading

Environmental Trading

RWE Trading is on the fast track to becoming a key player in the

RWE Trading is a strong supporter of the European Emissions

international trading and marketing of coal. In recent years new

Trading Scheme. Trading CO2 allowances is a vital part of hedging

fundamentals have emerged in the coal market. The rapidly rising

commodity risks and has already become a new fundamental of

demand from China and India and the renaissance of coal-fired

our business.

“At RWET the world is your market place” David Matthews, Structurer – London Gas Trading

Analysis

Enormous regulatory changes are creating an open, competitive

Energy markets are influenced by a multitude of drivers that are

gas market. A new and exciting situation is evolving that challen-

often interdependent. The analysis team interprets those vast

ges every gas trader to make full use of the value chain

amounts of data and turns it into useful information. The team analyses fundamental data, performs time series analyses and

Structuring and Valuation

publishes market reports.

The S&V team bridges the gap between the worlds of academia and trading in order to attain higher levels of energy trading busi-

Power Trading Continental Europe

ness excellence. The team delivers cutting-edge financial methods

The power market is on the verge of becoming a truly European

and tools to quantitatively assess and manage all types of energy

market that reaches from Spain to Scandinavia. Power wholesale

commodity prices and energy risks. In order to stay ahead of the

markets have been growing rapidly across Europe; on the German

constantly changing markets, we permanently question the status

market alone, traded volumes are expected to be eight to ten times

quo and develop new methods and products at a high pace.

the actual domestic electricity consumption.

“It’s a dynamic fast moving environment” Sonia McCorquodale, Cruise Desk Head of Biofuels – Swindon Risk management

Oil Trading

Our risk management expertise provides a structural framework that

Trading in oil is a global challenge. Relying on the expertise of its

supports traders and helps us to make the best possible use of market

traders and risk managers, RWE Trading deals in both physical

opportunities. One of RWE Trading‘s key functions is to monitor, analy-

and derivative markets and takes full advantage of the structure

se and balance risks. We are the energy wholesale risk pool and risk

of its business model and group-wide synergies

manager for the RWE Group. We support the management of the generation asset and retail portfolios owned by our sister companies across the RWE Group by taking on and pooling inherent commercial risks arising from movements in the power and fuel markets.

www.rwe.com

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance

Sales, trading and research The multi-millionaire ‘second hand’ market traders

How Mon hot ey Ku Opp dos

ortu nitie s

The aim of the secondary markets is to buy and sell ‘used’ financial products to make a profit – or at least to avoid a loss. This compares to the ‘primary market’, where institutions issue new financial products to raise money. Every day, millions of financial products are traded in the secondary markets. Sales people, traders and researchers advise on and carry out these sales. Traders: these are the people who actually buy and sell. They get up early to be at their desks when the markets open at 8am and spend their day in front of computer screens with hundreds of other traders on the ‘trading floor’. The screens are a window onto the financial markets and show movements in the prices of shares, bonds, commodities and other financial products. At the touch of a button, traders can buy and sell the products they’re tracking.

“You have to have genuine interest and curiosity in the markets, their dynamic and what makes them tick”

eFinancialCareers.com Careers in Financial Markets 2007-08

Jonathan Jones, Goldman Sachs

32

Sales people: sales people work the phones, calling clients – rich individuals, pension funds and institutional investors – from the moment the markets open. They take orders for financial products which they pass on to flow traders, who buy the products. Midway between the sales people and traders exists a hybrid – the ‘sales trader’. Like sales people, they call clients to recommend securities; like traders, they can also trade the securities. Research: researchers, also known as analysts, report on trends in company share prices, industry sectors or the prices of bonds or other assets. Sales people use the information to advise clients on investing in that sector. Researchers spend their time scouring companies’ balance sheets and talking to company directors.

Trends Sales, trading and research people at investment banks are being buffeted by distinctly different trends. In sales, the emphasis is on selling complex derivative ‘solutions’ which have been created specifically to fulfil clients’ needs – rather than simply selling bog-standard equities or bonds. At the same time, banks have begun beefing up with people who can sell products into hedge

Trading is the best paid of the sales, trading and research trio Researchers are struggling to pay their way Top trader reportedly earned £50m in 2006

funds – hedge funds trade more frequently, so there’s more money to be made selling to them! Traders, meanwhile, have been on something of a roll. At Goldman Sachs, traders account for the bulk of revenues – 74% of first-quarter 2007 profits at the bank were derived from trading and principal (private equity style) investments. And banks are now trading a broader range of products – commodities are the latest hot favourite. Researchers have had a harder time. Brokers selling equities must now reveal how much of their commission covers research costs – and buyers don’t always want to pay up. As a result, equity researchers in banks are increasingly forced to justify their existence. Some have opted to join independent research houses instead.

Key players If Goldman is the king of proprietary trading, UBS wears the crown in equities trading and research. In 2007, it won the Thomson Extel Award for panEuropean equity research for the seventh year running; Citi came second and Merrill Lynch came third. What UBS is to equities, Deutsche Bank has traditionally been to European fixed income, but the German bank is increasingly being challenged by newcomers such as Barclays Capital. At the same time, Deutsche has followed Goldman down the trading path – 41% of first quarter 2007 revenues came from trading activities.

Roles and career paths There are two fundamental types of trader: proprietary traders and flow traders. Most traders are flow traders – they buy and sell financial products on behalf of the bank’s clients. Sales people tell flow traders what clients want to buy and sell; flow traders tell sales people whether a particular trade is possible at a particular price. A handful of elite traders – the so-called proprietary traders – trade on behalf of the bank itself. Their aim is to buy low and sell high, an achievement that requires both judgement and luck. Proprietary traders can make stupendous profits – and also stupendous losses. Progression in sales and trading is all about performance. “Following the graduate training programme, promotion is very much based on ability to perform,” says Sally Whitman, head of specialist resourcing at Deutsche Bank.

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Get the latest on internships & grad programmes

www.efinancialcareers.co.uk/students

Profile Andreas Ohlsson Analyst, rates trading Bank of America

Continued from pg. 32

Andreas joined Bank of America’s graduate programme in June last year after completing an MSc in economics and finance at the Stockholm School of Economics. After a six-week introduction course and two weeks of studying for his regulatory exams, he took up his current position on the rates trading desk.

Pay

What does your role involve? Mostly quoting prices to clients, executing trades and managing risk. I also take proprietary positions where I see opportunities in the market. The size of the trades varies a lot depending on the type of product, whether it is a client or proprietary trade and market conditions. A lot of time is also spent finding and analysing information by following the news being published, talking to brokers and so on.

Title

Salary

Bonus

Managing director

130

930

Executive director

105

730

Director

90

490

Associate director

75

180

Associate

65

85

Skills “You have to be analytical. You have to have genuine interest and curiosity in the markets and how they work; their dynamic and what makes them tick,” says Jonathan Jones, EMEA head of recruiting at Goldman Sachs. “You need also to have a sense of risk and reward, in the commercial sense, and the ability to keep calm under pressure. The hours will normally be reasonably civilised but the deadlines tend to be moment to moment rather than a few days.” To work in research, candidates need excellent interpersonal and communications skills and very strong written and analytical skills. Strong quantitative skills are also important and fluency in a second European language helps, says Veronica Elder, equities graduate recruitment manager, Europe at Credit Suisse. All this holds true in sales trading too but, because it’s a more client-facing role, you also need the ability to build and maintain relationships. “The markets can move fast so you need to be quick thinking, extremely organised, excellent with numbers, be able to work well under pressure and multi-task,” Elder explains. Richard Moore, EMEA head of campus recruitment at UBS, agrees: “Whether your clients are internal or external, you will need to have the ability to build relationships, listen and interpret accurately.”

Source: Napier Scott

2006 pay (£k), credit traders, top-tier banks

Can you describe a typical day? I usually arrive shortly after 6:30am to read up on overnight news and market developments. I then re-evaluate my positions and decide if anything needs to be changed. On a busy day, the rest of the time is spent executing and hedging trades while trying to identify opportunities for proprietary positions. On a slow day I spend a lot of time reading research reports and discussing trade ideas with my colleagues. If the market has been quiet, I usually leave around 5:30pm, but after a busy day there might be a backlog of admin to do. Why did you choose your division, as opposed to, say, corporate finance? I was attracted to the everyday excitement and challenge of the market and the fact that no two days are the same. Decisions must often be made in a matter of seconds but you still always have to be mindful of how they will affect your relations with clients and brokers in the long run. What kind of person do you need to be to excel in this role? You need to be able to think rationally and perform well under pressure. You must also be able to process and analyse information quickly and be confident enough to make fast decisions based on this analysis. Numeric skills and an understanding of the economy as a whole are also important.

Andreas’ tips: Plan your trades and be disciplined. When important data is released, it can get hectic and, if you do not have a well thought through plan, mistakes can easily be made. Never allow yourself to get emotional about a trade. Always base your decisions solely on rational risk/reward calculations. Learn about the markets. Make sure you follow current developments and read business newspapers.

eFinancialCareers.com Careers in Financial Markets 2007-08

Successful proprietary traders are some of the best-paid people working in investment banks. When the 2006 bonuses were paid out, rumour had it that one foreign exchange trader made £50m. In the sales space, derivatives sales roles are the most lucrative – particularly those that involve selling to hedge funds. Pay figures from headhunter Napier Scott suggest that the very top salespeople in the hedge fund space made £1.35m in 2006. Few researchers make those amounts nowadays, by comparison

35

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance FX professionals make a living out of changes in currency prices

Foreign exchange

Underlying factors suggest the dollar is on the way down

A career for world news junkies

ortu nitie s

Roles and career paths

In the world of finance, FX (or foreign exchange) is a hugely important, highly charged area. It is all about predicting the likelihood of one currency falling (depreciating) or rising (appreciating) against another. If a depreciation is deemed likely, the bank will advise its clients to sell and will itself sell that currency and buy one that’s appreciating. To complicate, many products traded on the foreign exchange markets are not actual currencies, but bets on the future direction of foreign exchange price movements, or so-called futures.

Roles in foreign exchange are similar to those in sales, trading and research, except that you will be trading currencies and their derivatives. FX trading jobs are usually split between ‘vanilla’ trading, where products are simple and trades are easy to execute, and more complex ‘exotic’ derivatives trading. As in other product areas, sales jobs in FX are usually divided between different client types, with some sales people specialising in hedge funds, while others may only sell to companies. FX researchers produce reports that are used by sales people to keep clients informed of what’s happening in the FX markets. FX structurers assemble complex exotic derivative products for clients.

Trends If you work in the world of foreign exchange, the big news for some years has been the dollar – when, and by how much, will it decline? But not everyone is pessimistic – there’s a school of thought that the US economy is so productive and innovative that its currency may have become undervalued.

Pay Top foreign exchange traders can make a packet – particularly if they work with derivative products. According to headhunter Napier Scott, managing directors trading exotic foreign exchange options can make more than £1m. But you won’t make as much as this if you work with vanilla products, where the maximum is a mere £700k.

“You should be comfortable with probability concepts and be able to analyse macroeconomic data and events accurately and quickly”

FX exotic options trader – London (top-tier bank) Title

Vincent DeLorenzo, Bank of America

36

Key players If US banks dominate M&A activity, European banks rule the foreign exchange trading roost. In 2006 all but one of the five top players (Citi) originated in Europe. Top FX houses by % market share 2007 Ranking

Market share (%)

1 Deutsche Bank

19.3

2 UBS

14.9

3 Citi

9

4 Royal Bank of Scotland

8.9

5 Barclays Capital

8.8

Bonus (£k)

Managing director

125

900

Executive director

120

650

Director

110

400

Associate director

90

180

Associate

65

65

Skills

Source: Euromoney

eFinancialCareers.com Careers in Financial Markets 2007-08

The other big news is carry trades. These occur when investors borrow money in currencies with low interest rates (e.g. the Japanese yen) and invest in currencies with higher interest rates (e.g. sterling). Because yen are sold on the open market during these trades, it’s argued that the value of the yen has been kept artificially low.

Base pay (£k)

“Successful foreign exchange professionals need to thrive on action, markets and informed risk-taking,” says Vincent DeLorenzo, EMEA head of FX at Bank of America. “You should be comfortable with probability concepts and be able to analyse macroeconomic data and events accurately and quickly,” he adds. A highly maths-focused degree, particularly pure maths, is a must, whether at undergraduate or postgraduate level, agrees Simon Head, executive director of Akamai Financial Markets. “You need to be able to see numbers and be very hot on numerical analysis. But at the same you need to be a very confident, polished and articulate sales person,” he says.

Source: Napier Scott

How Mon hot ey Ku Opp dos

European banks dominate FX trading

Financing Europe’s future European I nvestment Bank • European Investment Bank • European Investment Bank • European Investment Bank • European Investment Bank

The European Investment Bank (EIB), the European Union’s financial institution, based in Luxembourg offers the opportunity to work for Europe in a truly international environment. The Bank’s mission and the diversity of cultures, languages and professional backgrounds of its staff make it a dynamic and exciting place to work. The EIB is seeking to recruit talented, wellqualified professionals, with excellent knowledge of English and/or French and knowledge of other European languages.

Profiles sought: LENDING/CREDIT SPECIALIST To identify lending opportunities in line with set priorities (for lending operations in and outside the E.U.) lead, assess, structure and execute transactions; analyse private and/or public borrower’s performance, financial position, prospects and investment decisions; draft financial reports and recommendations; and follow up key clients/ borrowers. University post-graduate degree in Finance/Economics; 3 years’ relevant professional experience within the banking industry (notably in credit risk analysis and documentation), preferably with international and/or developing countries exposure.

SECTOR ECONOMIST/ENGINEER For further details or to apply, please go to www.eib.org/about/jobs and click on the relevant reference number. The EIB offers attractive terms of employment and remuneration with a wide range of benefits and is an Equal Opportunity Employer. All current vacancies can be found on our website www.eib.org/about/jobs.

To assess the technical, environmental, economic and financial viability of capital investment projects and programmes; prepare sector studies (i.e. Transport: rail/road/ urban/water, Energy, Environment, Industry, or Human Capital) and contribute to the Bank’s strategy; assist in identifying and developing new investment opportunities. Advanced academic qualifications in Engineering/Economics; minimum of 5 years’ professional experience covering the feasibility, design, development and supervision phases of projects. Experience with the preparation of environmental impact studies is also desirable; international exposure including developing countries.

CREDIT RISK OFFICER To provide independent credit opinions on proposed operations and follow the credit quality of a highly diversified corporate and public portfolio in accordance with the Bank’s Credit Risk Policy Guidelines (CRPG). Contribute to the development and implementation of CRPGs procedures to ensure that risks assumed by the Bank are in line with approved policies.

100, Bvd Konrad Adenauer L-2950 Luxembourg 3 (+352) 43 79 1 – 5 (+352) 43 77 04

www.eib.org – U [email protected]

University degree, preferably in Finance or Business related fields at post-graduate level, if possible. Minimum of 5 years’ recognised professional experience in banking, particularly in a credit function. Proficiency in analysing the credit risk of corporate and public entities. Experience with credit risk assessment methodologies and rating agency criteria. Knowledge of risk-pricing techniques would be an advantage.

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance Corporate banks provide banking services to large and SME firms

Corporate banking

Barclays is the biggest corporate bank in Europe

Banking to the big boys

How Mon hot ey Ku Opp dos

ortu nitie s

“Candidates will need to be numerate and analytical, be able to develop trusted relationships and have strong customer outlook” Hannah Field, Barclays Group

eFinancialCareers.com Careers in Financial Markets 2007-08

Trends

38

2006 was a good year for corporate bankers. Low interest rates and low default rates conspired with corporate acquisitions and leveraged buyouts to drive companies’ demand for loans to record levels. In December 2006, the global value of syndicated loans (loans which are made by a group of banks rather than just one) rose to a record £1,690bn – up 8% on the year before. Loans to finance infrastructure projects, such as bridge and road building, rose particularly rapidly. The infrastructure boom continued in 2007, with Barclays Capital, Dresdner Kleinwort, HSBC and RBC Capital Markets clubbing together to issue a £4bn loan to back the takeover by Macquarie of German power utility RWE. As the volume of corporate loans has grown, questions have been raised about the likelihood of defaults on repayments. At the time of writing, this has yet to happen. But there are indications that the market expects an

increase in defaults soon – the market for ‘loan credit default swaps’, which allow investors to trade the risk of a loan defaulting, is growing fast.

Key players When it comes to assets, Barclays is by far the biggest force in Europe, with over €1.5 trillion behind it. And Barclays may be about to become bigger – in April 2007 it launched a takeover bid for ABN AMRO of Holland, which if successful (and not gatecrashed by Royal Bank of Scotland) will see its assets swell to nearly €2.5 trillion. Top European banks by assets Name

Total assets (€bn)

Barclays

1,478

BNP Paribas

1,439

HSBC

1,409

Royal Bank of Scotland

1,293

Crédit Agricole

1,260

Deutsche Bank

1,123

ABN AMRO

984

Société Générale

956

HBOS

877

Banco Santander

800

Source: Thomson Financial

Corporate banking, as its name suggests, is the broad term given to the different banking services that corporate institutions need in order to function. Also known as business or commercial banking, it spans the relatively simple business of issuing loans, to more complex matters such as helping to minimise tax paid by overseas subsidiaries or managing changes in foreign exchange rates. Corporate bankers might also arrange an international payment or put together ‘trade finance’ packages to ensure a company is paid by its foreign customers. In many cases, there’s an overlap between corporate banking and capital markets. Bankers working in capital markets help companies raise money by issuing equities or debt. Corporate bankers typically help clients raise money through loans, but they will bring in their capital markets colleagues if necessary. Increasingly, corporate banking requires an understanding of some of the more complex financing methods.

Loans made to European companies have been rising fast

Roles and career paths If you opt for a career in corporate banking, you may well start as a credit analyst, or selling products to corporate customers. Credit analysts look at companies’ balance sheets and work out whether to issue loans to them. It’s not always seen as the most exciting role, but it gives you the tools of the trade and is a crucial barrier to help stop the bank losing money. From there, you could, for instance, progress to being a relationship manager, lending money to a handful of the bank’s customers. This is where things get interesting: as you progress, you’ll decide whether to lend to customer X or customer Y. It requires an intimate understanding of the company’s strategy and a keen appreciation of the risks of default. Most relationship managers are winers and diners: they spend a lot of time meeting company FDs and CEOs in an effort to win and keep their business. If you don’t fancy the relationship management side of corporate banking, you could always go into risk/credit, product, operations or treasury management. Corporate >

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Creative, flexible and always open to fresh thinking, BNP Paribas is a global investment bank that likes to do things its own way. That's why we give our graduates so much responsibility so early on. We want to hear what our future leaders have to say sooner rather than later, so you'll be doing a real job and making genuine commercial decisions from the outset. You'll also be encouraged to draw inspiration from colleagues across the business as you share your ideas and work in a team to generate new ones. And with a training plan that's bespoke to you, you'll have a true say in how you progress. To learn more about a career with an investment bank that's not like all the rest, go to www.graduates.bnpparibas.co.uk

It’s not business as usual

It’s for putting your ideas on Not getting your feet under

The bank for a changing world

Take our online numerical tests

www.efinancialcareers.co.uk/students

Profile Hugh Biddell Manager Charities and local government team, RBS

Continued from pg. 38

Hugh joined the Royal Bank of Scotland as a graduate trainee in 1981 and moved into the corporate banking division. Since then, he has covered shipping clients, healthcare clients and professional services firms, as well as charities and local government. Hugh originally graduated in English Literature and Language from Liverpool University but also has an MBA from Warwick University plus an ACIB (Associateship of the Chartered Institute of Bankers) award.

banks also have an array of operational positions, including IT and HR. Various banks, including Barclays, Lloyds TSB, Royal Bank of Scotland and HSBC, offer training in corporate banking.

Why corporate banking? You get to meet the decision-makers and owners of large companies and to discuss the strategic drivers of the business. We deal with companies with a turnover of £20m to £1bn.

Pay

What does managing the charities team involve? I lead a team of nine relationship managers who work with charities and local government. Our role is not just about helping our clients to borrow money; we also aim to make them more efficient in terms of the way they manage their money and receive payments. For example, we provided all the credit card payment services for the Comic Relief Red Nose Day. There were around a million transactions to process.

Title

Junior

Intermediate

Senior

Credit analyst Bonus

30-40 0-40

35-50 0-60

40-80 0-70

n/a n/a

40-55 0-60

55-80 0-70

Relationship manager Bonus

Source: Morgan McKinley

Corporate banking salaries (£k) and bonuses (%) 2007

Skills Corporate bankers need to be friendly types with a cool and calculating streak – it’s no good befriending clients and lending them money if they can’t pay it back. Equally, it’s no good being an expert at analysing the risk of clients defaulting if you can’t also build client relationships, unless you want to remain a credit analyst, of course. As a result, banks tend to have relatively generic requirements of their corporate banking trainees. “Regardless of the area, candidates will need to be numerate and analytical, be able to develop trusted relationships and have strong customer outlook. Only after you have spent some time with us can you make an informed decision about which area is most suited to you,” says Hannah Field, head of graduate recruitment and development at Barclays. But you must research well, she advises: “It doesn’t matter if you don’t have an economics degree, but candidates need to make sure they have opinions about the financial services and corporate banking sector before coming to interview.” Stephen Smith, HR director at Lloyds TSB Wholesale and International Banking, adds: “Our senior executives look for the golden combination of exceptional academics, with maths, science and analytical capability being an absolute must, coupled with the ability to build strong, long-lasting client relationships.”

Does charity work differ from normal corporate banking? It’s a bit different because they don’t operate in the commercial sector – charities are governed by boards of trustees, which adds a layer of complexity when you’re working out how much they can afford to borrow. Local authorities have their borrowing limits regulated under a separate act of Parliament. But charities and local government clients still expect fast decisions and excellent service when they want to borrow. The best and worst aspects of corporate banking life? The best thing is seeing people’s businesses succeed and feeling you’ve contributed to making it happen over a period of time. The worst is finding that clients have got into difficulties through a change of circumstances that’s often beyond their control. What about the legendary long lunches? Talking to people, understanding how they operate and what’s important to them is vital. It often helps to do that in a relaxed atmosphere, so lunches are involved. But if you’re going into the real detail of a company’s finances and projections of their business, this is not best achieved over food!

Hugh’s tips: Enjoy what you are doing, because if you don’t, you won’t perform well. Be positive. Go the extra mile – don’t just provide the solution you’ve been asked for, but look at what the business wants to achieve overall.

eFinancialCareers.com Careers in Financial Markets 2007-08

If you become a corporate banker you may not become as impressively rich as an investment banker or trader, but you’ll still do ‘quite well’ and have a life! According to recruitment firm Morgan McKinley, senior relationship managers earned a maximum of around £130k in 2007.

41

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance Fund managers invest money for institutional and retail clients

Fund management A game of patience, profits and pension funds

ortu nitie s

Pay can reach £140k plus bonus for senior fund managers

rising interest rates and inflation help depress bond prices, creating a danger that bond investors will lose money. However, uncertainty surrounding the US economy means equities may also be on the way down.

Key players Europe’s top fund managers include Swiss-based UBS, the UK’s BGI and Allianz of Germany. Some big US fund managers, such as Fidelity Investments or State Street Global, are also active in Europe. Top European fund managers, 2006 Institution

Assets under management ($bn)

UBS AG

2,016

Barclays Global Investors

1,513

Allianz Group

1,493

State Street Global

1,441

Fidelity Investments

1,422

AXA Group

1,260

Capital Group

1,166

Credit Suisse

1,128

Deutsche Bank AG

1,027

Vanguard Group

“Fund management is more about qualitative than quantitative research, making it good for graduates with any sort of degree” Richard Barry, Baillie Gifford

eFinancialCareers.com Careers in Financial Markets 2007-08

Trends

42

2006 was a good year for Europe’s money managers; strong markets saw assets under management rise for the third year running. Headline figures alone disguise the fact that the market is evolving, however. Scratch the surface, and the asset management market starts to look very different to the way it did only a few years ago. One of the biggest issues has been a shift out of traditional investment houses into more specialist funds, such as hedge funds, quantitative funds and emerging markets funds. Between 2003 and 2005, research by the European Social Investment Forum (SIF) found that investment in socially responsible funds increased by 36% to £706bn. Bond funds, however, look set to have a tough time in 2007 as

958

Roles and career paths Working as a fund manager used to involve everything from analysing and investing in products to persuading new clients to put money into the fund. Today, however, fund managers focus on managing money, while other people are employed to do the rest. If you don’t fancy being a fund manager, you could work as a marketer, research analyst or operations expert. Fund management marketers wine and dine potential clients; they also manage relationships with existing clients, meet investment consultants and play a role in developing new products. Analysts working in fund management help steer fund managers in the right direction when it comes to choosing assets to invest in. They scrutinise companies’ results and meet with management to discuss strategy. They then write lengthy reports detailing their conclusions. Operations staff working for fund managers do everything from working in IT to settling and reporting trades, project management and customer services. However, many funds have outsourced the administrative aspects of their operations to global custodians. >

Source: Pensions and Investments

How Mon hot ey Ku Opp dos

Fund managers invest money on behalf of their clients – which include pension funds, institutional investors, insurance companies, unit trusts and others – with a view to making it grow. There are two basic kinds of fund: Passive funds: also called ‘index trackers’. Fund managers select a portfolio of assets whose value will track that of a financial index. A fund that tracks the FTSE 100 index, for example, will aim to follow the value of the UK’s 100 biggest companies. The investment decisions of passive funds are typically made using computers, meaning fund managers working on them have a relatively easy life. Active funds: active fund managers buy and sell financial products in an attempt to outperform the rest of the market. Active fund managers are what most people’s ideas of what fund management is: they invest in products they hope will rise in price, to sell at a profit. Fund managers invest in everything from shares, bonds or real estate to commodities such as oil, wheat or aluminium. Some funds offer fast growth and high risks; others offer slower growth and smaller risks.

Specialist funds are becoming more popular

7/2$34/4(%7)3%

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Profile Anna Sloan Investment manager Baillie Gifford

Continued from pg. 42

Anna joined Baillie Gifford in September 2002 after a summer internship the year before. After spending time on rotation in emerging markets and the European team, she now works in the UK small equities team as an investment manager based in Edinburgh. Anna read chemistry at Cambridge.

Pay

What made you choose a career in fund management? The internship was the thing that did it for me. In those eight weeks I got to see so many different parts of the firm and integrated into the life here. I also like the fact you get to make decisions. You are not just a hamster on a wheel, you feel you are actually doing something meaningful for the client’s funds.

Title

Junior

Intermediate

Senior

Fund manager

38-45

42-85

60-140

Research analyst

30-45

38-80

60-120

Marketing exec

28-34

30-60

50-80

Source: Morgan McKinley

Fund management salaries (£k) 2007

Skills The attributes required for a career in fund management vary according to the role. Laura Everingham, graduate recruitment manager at Fidelity International, says: “Researchers will need an enquiring mind, an avid interest in the stock market and a passion for finding out what makes a good or bad investment.” Richard Barry, HR manager at fund management firm Baillie Gifford, agrees: “Fund management is very different to investment banking; it is more about qualitative rather than quantitative research, making it good for graduates with any sort of degree,” he says. “We look for lateral thinkers and people who are naturally inquisitive. We want really bright people who are going to come up with winning ideas that will work, although you do still have to have some numeracy skills and have a good academic record.” Fund managers need to be able to assimilate large quantities of information and then identify the key points to make investment decisions, stresses Shane Kelly, head of international graduate recruitment at fund management firm BlackRock, formerly Merrill Lynch Investment Managers: “In asset management we generally look for potential – passion, ambition and enthusiasm for our business – rather than specific traits. But good quantitative, numeric and communication skills are a must.”

Can you describe a typical day? I get in between 8:00am and 8:30am and check the company news – I am responsible for all the companies in several different sectors. I will probably then have meetings either directly with a company’s senior management to get a feel for the long-term strategy of the business, or with sell-side analysts. While at my desk, I’ve always got a report on the go on a company, either to recommend buying shares for our clients, or to sell if the investment case has changed. There may also be meetings to discuss reports on stocks covered by others in the team. At 4:30pm we have a daily meeting where you report to the rest of the team on any movements in your sector. I tend to leave around 6pm. What are the best and worst elements of your job? The best is getting exposure to so many different companies and people. I enjoy finding out what makes companies tick. There isn’t really a worst element, although one thing that separates us from others in the financial world is that everything we do is fairly long term – investors are typically looking at three to five years. This means you don’t instantly know if a decision you have made is the correct one or not. It has a longer burn to it. What do you think makes a good fund manager? You have to have the conviction of your beliefs once you have made a decision. You have to be able to assimilate a lot of information and reach a coherent conclusion. You must have the ability to defend your ideas, but also be prepared to accept if you are wrong.

Anna’s tips: Have an inquisitive mind. You need to have a genuine interest in the markets and the strategies of companies. Try to do an internship; it is invaluable in gaining experience. Research the job thoroughly and don’t be afraid to ask lots of questions.

eFinancialCareers.com Careers in Financial Markets 2007-08

Traditional fund managers don’t make quite as much as traders working in investment banks, but they don’t do too badly either. Hedge fund managers can make considerably more than anyone else – but they’re a special case. Fund manager pay is rising. Research by recruitment firm Morgan McKinley suggests top performers in the sector can now earn salaries of £140k, plus a bonus which can be several times higher, depending upon their performance over several years.

45

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance Working for a hedge fund could make you very rich

Hedge funds High risks and high rewards for the lucky few

How Mon hot ey Ku Opp dos

ortu nitie s

Hedge fund managers are the maverick outsiders of the financial services world. Most are highly successful former traders or fund managers who have decided to go it alone. The name ‘hedge fund’ comes from the idea that money managers can hedge their bets to ensure they make money – whether the market goes up or down. What distinguishes a hedge fund from a traditional fund is its willingness to push the boundaries of normal investment techniques to achieve unusually high returns. Most hedge funds follow a particular investment strategy. The most popular strategies are: • Short selling: a short seller borrows stocks that they believe are overvalued and sells them on. When the price (hopefully) falls, they buy the stocks back at a lower price and return them to the lender; • Global macro: global macro funds operate a strategy similar to that used by short sellers. But they focus on global trends rather than movements in particular stocks;

“It’s not necessary to have done an MSc or a PhD in a mathematical subject, but we would generally expect some maths at degree level” Dermot Coleman, Sisu Capital

eFinancialCareers.com Careers in Financial Markets 2007-08

• Event driven: event-driven funds try to profit from one-off events, such as mergers and acquisitions or bankruptcies. For example, if one company decides to buy another, it will usually to pay more than the current market price for the shares.

46

Trends If you want to work in a hedge fund, London – or more particularly, Mayfair – is increasingly the place to be. According to the Financial Times, hedge fund assets are growing at a rate of 63% annually in the UK, and just 13% annually in the US. At the same time, London now plays host to 12 of the largest hedge funds in the world, up from just three in 2002, while New York has seen its share of the biggest funds dwindle from 28 to 18. Wherever they are based, hedge funds are exempt from normal financial services regulation, partly because the minimum investment is high (typically

Few hedge funds employ university leavers After several years of growth the sector may yet implode

$1m) and regulators believe the rich do not need the same protection as investors of average means. Figures from Hedge Fund Research suggest investors put a monumental $127bn (€98bn) into hedge funds in 2006, almost three times more than in 2005. However, even big funds can come unstuck very quickly. Vega Asset Management, formerly one of Europe’s larger funds, saw its assets under management plummet from $10.1bn in 2004 to $2.7bn in 2006, for example. As more and more hedge funds pile into the market, it’s becoming harder for established funds to make good returns. As a result, funds are investing in ever more obscure areas – such as art, wine and Hollywood films. Some funds have also begun to behave like banks and lend money directly to clients .

Key players Who are some of the biggest boys in the European hedge fund universe? Look no further than the likes of Brevan Howard, with a total of $12.1bn under management; Cheyne Capital with $11.2bn under management; or BlueBay Asset Management, with $9.6bn under management. But while the big hedge funds get all the headlines, there are also plenty of small funds. In 2006, $100bn of London’s hedge fund assets were managed by firms with less than $1bn under management, according to HedgeFund Intelligence.

Roles and career paths Jobs in hedge funds tend to fall into four categories: • Analysis – analysing the companies, markets and financial products a hedge fund invests in; • Sales and marketing – liaising with investors and helping sell the merits of the fund; • Trading – executing the investment strategy and buying and selling financial products according to analysts’ recommendations; • Risk management and back office – settling trades, working out a hedge fund’s risk exposure and making sure everything flows smoothly. In many small funds this is outsourced to ‘prime brokerage’ divisions in investment banks. Most roles are distinct: if you join as a risk manager the chances of graduating to become an analyst are slim. However, it’s not unknown for analysts to become traders. The bad news is that, as a new graduate, you will be lucky

>

When you’re dealing with $1.8

trillion

in assets, instinct isn’t enough. We base our actions on rigorous analysis of data and the expertise of our people. There’s no ‘secret sauce’ at Barclays Global Investors – just a scientifically informed, consistent and rational approach to managing the largest collection of assets in the world*. It’s a friendly, supportive

and balanced workplace, with world-class graduate and internship programmes. A career in the science of investment could be waiting for you. Find out more at

www.bgigraduatecareers.com

*Source: Global Investor, 31.12.06 Barclays Global Investors is authorised and regulated by the Financial Services Authority.

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Profile David Mills Equity analyst Sisu Capital

Continued from pg. 46

As an equity analyst, most of David’s day is taken up generating investment ideas for trades. This involves researching companies about to engage in mergers and acquisitions or restructuring activity and coming up with suggestions on stocks that might rise ahead of a merger. It also involves having discussions with company management, bankers and fellow analysts. David has a BA in economics from Cambridge and an MSc in economics from the London School of Economics.

to walk into a hedge fund. Most are small organisations without the time or resources to train graduates themselves. Instead, they prefer to recruit people with a few years’ experience from investment banks.

How did you come to work for a hedge fund? I took an unusual route into the hedge fund industry. After taking my MSc in economics at LSE, Sisu was looking for a junior analyst, so I applied and got lucky. Most funds recruit analysts with several years’ experience in an investment bank or somewhere similar.

Pay According to a survey by US-based Alpha Magazine, the 25 highest-earning hedge fund managers earned an average of $570m in 2006, up 36% on 2005. More to the point, the top three hedge fund managers each took home more than $1bn. Not everyone earns such sums. A salary survey by Morgan McKinley suggests a lowly junior fund manager can expect a salary of £38k to £45k, plus an unspecified bonus. Hedge fund traders earn the most – after a few years, salaries are £80k plus and bonuses are unlimited.

Why the hedge fund sector? A booming M&A environment and strong equity markets have allowed exceptional returns for many alternative investment strategies. As a result, the hedge fund sector is continuing to receive large capital in-flows, and the importance and influence of hedge funds continues to increase. There are now more jobs and more opportunities to become involved than ever before. You also have more independence than in an investment bank. Here, you are involved in everything from day one. There’s more freedom in terms of the products you can invest in and the positions you can take. And it’s a much flatter hierarchy: there are 25 people in this office and I sit next to two partners.

Junior

Intermediate

Senior

Fund manager

38-45

42-75

65-120

Research analyst

30-45

38-70

60-120

Marketing executive

28-34

30-42

50-65

n/a

45-60

60-80

Hedge fund trader

Skills “For bright, numerate graduates who are strong at financial analysis and spreadsheets, and who have honed their skills in an investment bank, the leap can be made,” says David Howell, managing director of E-M Financial Services. “But you do have to have proved yourself in the investment bank community. If you go to one of the top-tier banks you can use it as a springboard to any number of different options, normally in around two years,” he says. Hedge funds like people who are communicative, innovative and numerate and have a good academic record from a leading university, says John Capaldi, a managing director and head of product development at Financial Risk Management. “Financial markets and hedge funds are dynamic, so adaptability and creativity are key attributes,” he adds. Dermot Coleman, a partner at event-driven hedge fund Sisu Capital, says quantitative skills tend to be paramount. “To work for us, it’s not necessary to have done an MSc or a PhD in a mathematical subject, but we would generally expect some maths at degree level. That could come as much from engineering as economics.”

What’s the most exciting thing you’ve got coming up? Currently, I am active in a number of large and involved M&A situations, which are always very exciting. And the least? That would probably be number-crunching company accounts to create comparable company valuations. What’s been the hardest part for you so far? I’d studied plenty of economics, but not much pure finance or accounting. It was a bit of a struggle to start with: I spent the first month working all hours of the day.

David’s tips: Get an understanding of what different hedge funds do, not just the generalisations written about the industry in the press. Study hard. It’s competitive, and a postgraduate qualification or relevant work experience will help you stand out. Think about joining an investment bank – they have well-structured graduate programmes and act as a feeder into the more specialist hedge fund sector.

eFinancialCareers.com Careers in Financial Markets 2007-08

Title

Source: Morgan McKinley

Hedge fund ex-bonus salaries (£k)

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Employers

At a glance Private equity funds buy stakes in companies to sell for a profit

Private equity A sector to aspire to after a few years’ experience

ortu nitie s

“Raw graduates don’t get into private equity – almost never” Guy Townsend, Walker Hamill

‘Venture capital’ and ‘private equity’ are often used interchangeably. But, strictly speaking, venture capital refers to the provision of funds for new and fastdeveloping businesses, while private equity is more usually associated with MBOs and MBIs.

eFinancialCareers.com Careers in Financial Markets 2007-08

Trends

50

Private equity is big business. Research by the magazine Private Equity International suggests the industry globally has raised $551bn in capital over the past five years – with the biggest funds such as Carlyle Group, Kohlberg Kravis Roberts (KKR) and Goldman Sachs Principal Investments each raising more than $30bn each. And it’s getting even bigger. 2005 was out-gunned by 2006, as the value of all European private equity deals rose another 40% to €178bn, according to data provider Initiative Europe. At the same time, deals are getting bigger and funds are getting larger. In 2006, the value of the average European buyout was €136m, up from €117m in 2005. And in April 2007, Goldman Sachs Principal Investments revealed it had raised the largest buyout fund ever – $20bn. The good times look set to continue, with private equity participating in some headline deals in 2007, such as US giant KKR’s $450m investment in the Boots chain.

Partners make millions, but only when funds close

However, success brought some unwanted attention, with bosses heavily criticised in the UK for paying too little tax and for taking a short-term approach to their investments in order to enrich themselves. The credit crunch has also created uncertainty for the private equity industry, with many banks unable to sell on the loans they made to clients to help finance deals.

Key players Major US funds such as Carlyle, KKR, Goldman Sachs Principal Investments (part of the bank) and Blackstone increasingly dominate the private equity industry in Europe. However, funds with European roots such as Apax Partners and Permira also made it onto the top ten in 2006. Top 10 investors in European private equity deals, 2006 Investor

Value (£m)

Kohlberg Kravis Roberts

25,027

The Blackstone Group

19,159

Alpinvest

14,510

Apax Partners

11,907

Permira Advisers

11,721

Providence Equity Partners

11,117

Carlyle Group

8,697

Hellman & Friedman

7,329

Goldman Sachs Capital Partners

5,966

Thomas Lee Partners

5,950

Roles and career paths People who work in private equity benefit from the kind of job security most investment bankers can only dream of. But don’t count on finding a job easily – the industry hires very few juniors and none straight from university. There are two main entry points to private equity or venture capital. First, two to three years after university, having spent time in strategy consulting, investment banking (in other words M&A or leveraged finance), or accountancy (deal-based disciplines only). Second, within two to three years of graduating with an MBA and having spent time in one of the industries mentioned above. Occasionally there is a later entry point, when a fund needs a senior expert, for example an experienced industrialist to help shape the portfolio companies, or a specialist leveraged financier to help structure the best debt packages at the investment stage.

Source: Initiative Europe

How Mon hot ey Ku Opp dos

Private equity and venture funds exist to help raise money for companies by offering cash in return for an ownership stake. As a result, they become co-owners or even sole owners of the companies in which they invest. In an ideal situation, they invest in an underperforming company, turn it around and sell their stake at a profit some years later. However, they also occasionally engage in the unpopular practice of asset stripping, or breaking a company up and selling its assets to make a profit. The money invested by private equity funds is frequently used for management buy-outs (MBOs) where a company, or a division of a company, is bought by its managers. Alternatively, it may be used for a management buy-in (MBI), where managers from outside take over a company.

Few take students straight from university

Profile Simon Holden Investment manager Candover

Pay Private equity is a long game, but very lucrative. The most senior people make most of their money out of carried interest – or ‘carry’. This is equivalent to around 25% of the profits above a specified rate and can be very lucrative – particularly on very large funds, where a handful of partners and principals could easily share $200m every six years or so when funds are closed. Pay at junior levels is, predictably, less generous, but still not to be sniffed at. A junior (analyst) can expect to make a salary of £45k to £55k, plus a 40% to 80% bonus.

Skills To work in private equity, you’ll need to be an academic and professional wunderkind; ideally in the top 10% to 15% of your peers. And don’t think you’ll be able to walk-in fresh from graduation. “Raw graduates don’t get into private equity, almost never. After university you need to spend time in accountancy, M&A, strategy consulting or leveraged finance, probably around two to three years. Then you can try to interview for private equity,” says Walker Hamill’s Guy Townsend. Private equity firms look for people who are highly analytical, commercial, team players, confident, outgoing – and a foreign language never goes amiss. Most junior hires come from investment banking or strategy consulting and former bankers need experience in one of three areas: corporate finance and mergers and acquisitions; financial sponsors (dealing with private equity firms); or leveraged finance (funding involving a higher proportion of debt than usual).

Why private equity? I studied manufacturing engineering at Cambridge University, and always believed that I had some entrepreneurial skills. It made me wonder where I’d get money from if I ever had the ‘big idea’, which led me in a roundabout way to the private equity sector. Private equity is basically venture capital scaled up massively to a level where we can buy and sell 100% of a company’s share capital with a view to growing the business. What distinguished you from other candidates? I think it would be a good track record with branded consultancies, financial experience and qualifications (Securities Institute diploma), decent Excel skills, a genuine interest to learn new things and, hopefully, above-average interpersonal skills. What have you worked on recently? I completed two deals during 2006: UPC Norway, a tripleplay cable company based in Oslo (subsequently rebranded to GET) for €450m; and EurotaxGlass’s for €485m. I have a quasi-board role in both companies, and Candover developed business plans for both businesses, which requires structural and operational change over three years, resulting in a close relationship with executive management. I’ve also spent time on new deal origination, working on a range of investment ideas including premium spirits, sailing clothing, funeral homes and market research. What’s the worst aspect of your job? Tight timescales. Doing a deal is hugely rewarding, but you have to be prepared to discard your personal life for a few weeks. That’s never easy if you’re letting people down at the last minute.

Simon’s tips: There are great jobs in private equity, but you need to know what you’re applying for and what differentiates the funds. Your application needs to show that you’ve got the requisite skills and knowledge, as interviews are inevitably technical. Learn where funds are in their investment cycle, what sector(s) they do deals in and what their recruitment requirements might look like in the next few years.

eFinancialCareers.com Careers in Financial Markets 2007-08

Venture capital funds typically hire people from hightech industries, finance-related or consulting jobs. Entry-level staff are typically number crunchers who scrutinise the accounts of companies in which a fund is thinking of investing. On the next rung are principals, who appraise whether a deal is worth pursuing and, if it is, do anything from arranging legal documentation to negotiating the right price. Originators are usually a fund’s partners who find new companies to invest in. They oversee the deals and make the most money if an investment is sold at a profit.

Simon has been with Candover, a private equity fund that has invested more than €25bn in the past two decades, for three and a half years. After graduating from Cambridge University with a BA and MEng in manufacturing engineering, he joined a strategy consultancy that advised private equity funds. After four and a half years, he decided to apply to most leading funds directly, and registered with specialist private equity executive search companies. He got offers from two funds. Candover was the obvious choice.

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At a glance Investment consultants help pension funds invest money

Investment consulting A kind of ‘Which? Guide to fund managers’

ortu nitie s

Trends Driven by an ageing population and the need to make good corporate pensions funds, demand for investment consultants’ services is rising. Consultants’ appetite for staff is rising too – Watson Wyatt alone increased headcount 40% between 2004 and 2006. At the same time, however, investment consultants are coming under pressure from investment banks, which have set up their own lucrative pensions advisory units – and are poaching consultants’ staff.

“Anyone regarding investment consultants as quiet, dispassionate backroom professionals is quite mistaken” Mark Powley, Aon Consulting

eFinancialCareers.com Careers in Financial Markets 2007-08

Key players

52

The European investment consulting market is dominated by two key firms – Mercer and Watson Wyatt, which together account for around 50% of the market. Each is part of a larger network of consulting groups, which advise on everything from staff benefits to computer systems. Alongside these market leaders are numerous smaller firms – Aon Consulting, Hymans Robertson and Hewitt Associates, for example.

Roles and career paths Jobs usually fall into one of two main categories: 1) Asset allocation: asset allocation specialists advise clients on whether to invest in equities, bonds, private equity funds or alternative asset classes. It is a complex role using mathematical models to analyse such factors as interest rate changes, as well as the timing of the pension fund’s liabilities and the likely risks and returns. 2) Fund selection: fund selection specialists spend a lot of time analysing fund managers and questioning their

It helps to be good at maths

investment strategy. Days are spent scrutinising pension funds and reporting on their strengths and weaknesses; most firms rank fund managers by their likely future success. There are also roles for relationship specialists, who are the true consultants and are usually more senior. Most large investment consultants take on a few graduates: Mercer, Watson Wyatt and Aon offer structured graduate programmes, with Watson Wyatt hiring some 25 this year for its UK investment practice. Once hired, you will typically study for a professional qualification, either as an actuary or as a chartered financial analyst (CFA). Actuaries work more on asset allocation, while CFA candidates work in fund selection.

Pay As investment banks compete for staff, investment consultants are being forced to make their roles more lucrative. In 2006, pay in the sector rose around 8%. Average pay for student actuaries is now £30.5k. Median actuarial salaries 2007 Job title

Pay (£k)

Chief actuary

156

Senior function head

137

Function head

108

Department manager

89

Section manager

66

Section leader

56

Senior actuary

48

Actuary

43

Student actuary

31

Skills “Being able to cope with studying and working simultaneously is important, as is displaying evidence of skills associated with consulting, such as communication, project management and team working. However, equally key is having a genuine interest in investment markets and conditions,” says Jo Kleanthous of Mercer’s graduate recruiting team. “Effective communication of often complex concepts and subjects in a simple and well-reasoned manner is vital to being a successful consultant. Anyone regarding investment consultants as quiet, dispassionate backroom professionals is quite mistaken,” says Mark Powley, a senior investment consultant at Aon Consulting.

Source: Remuneration Economics

How Mon hot ey Ku Opp dos

Investment consultants advise pension fund trustees on what to do with their money. They help trustees decide which mix of assets to invest in and with which fund management firms. They try to predict fund managers’ future performance from how they performed in the past.

Mercer and Watson Wyatt dominate

At a glance Many jobs are admin-driven compared to other areas

Global custody Keeping the paperwork for other people’s assets

recruitment firm Morgan McKinley, says graduates typically move into these more interesting positions after a few years and can be fast-tracked into these roles. Few global custodians offer graduate training programmes, so it’s worth sending in your CV speculatively.

Trends

Pay

Global custody is big business and is growing fast. In 2006 the top ten custodians held over £36 trillion in assets – up 40% on 2005. But the industry is consolidating – for example, 2006 saw the merger of Bank of New York and Mellon Global. Custodians are also pushing into new areas, notably servicing hedge funds. To save money, some have shifted UK operations out of London to regional cities.

Global custodians are paid fairly modestly – six figures are rare. But according to Morgan McKinley, pay for some junior custody jobs has risen by around 20% in recent years. A junior sales and business development professional can expect a salary of £30k to £35k, plus a small bonus. The best-paid people working in custody are relationship managers and product development specialists.

“Once people have a grounding in settlements or corporate actions, they will be equipped with the skills to allow an internal move within custody” Emily Ayre, Morgan McKinley

Top banks by global custody assets 2006 Bank

£bn

JPMorgan

7,012

Bank of New York*

6,558

State Street**

6,003

Citi Global Transaction Services

5,246

HSBC Securities Services

2,306

Mellon Group***

2,305

BNP Paribas Securities Services

2,251

Key players

Northern Trust

1,766

JPMorgan had the most global custody assets by value in 2006. However, the top slot is now occupied by the merged Bank of New York and Mellon.

Société Générale Securities Services

1,501

Caceis Investor Services

1,178

*Pre-Mellon merger **Pre-IFS merger ***Pre-Bank of New York merger

Roles and career paths

Skills

Much of the work is administrative and repetitive, but the role of custodian has widened to a range of other services. These include income collection (for example collecting dividends from clients’ investments), performance measurement (calculating the returns clients’ investments have made over time), trade support (ensuring trades are settled properly) and proxy voting on behalf of clients at shareholder meetings. Custodians specialise in a particular area, so what you do will depend on where you work. Custodians also offer more client-focused and technical jobs. Relationship managers, for example, work with clients to reassure them that their assets are safely maintained. Emily Ayre, a custody specialist at

Emily Ayre at Morgan McKinley says people going into areas such as settlements and corporate actions may not need a degree: “They will, however, need to be organised, process-driven and able to work under pressure. Once people have gained a grounding in settlements or corporate actions, they will be equipped with the skills to allow a move to other areas within operations or an internal move within custody,” she adds. Scott Dickinson, global relationship manager, BNP Paribas Securities Services, says people going into relationship management need two to five years’ operations or client services experience in the financial sector. “Candidates should be able to demonstrate strong communication, planning and selling skills,” he adds.

eFinancialCareers.com Careers in Financial Markets 2007-08

ortu nitie s

It can be easier to land a job in this sector

Source: FT Mandate Research

How Mon hot ey Ku Opp dos

Global custodians once had large filing systems for their core work – storing certificates of share ownership for their clients. Today, these certificates are stored electronically, making custody much less spaceintensive. Custodians levy a fee (typically up to 0.08%) of the assets they’re managing.

Relationship managers earn the most

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At a glance Jobs are increasing as the number of rich people rises

Wealth management

The Swiss banks, UBS and Credit Suisse, lead the field

Combining diplomacy with product knowledge

ortu nitie s

“We want all-rounders... we look for the Freddie Flintoffs of graduates”

Key players In strict private banking terms, Swiss companies such as UBS and Credit Suisse are the world’s leading bankers to the very rich. However, in broader ‘wealth management’ terms, which includes private client broking, the big US brokerage houses such as Citi and Merrill Lynch are heavy hitters too. Leading global wealth managers 2006 Rank

Bank

Assets under management ($bn)

1

UBS

1,319

2

Citi

1,310

3

Merrill Lynch

1,100

4

Credit Suisse

559

5

Morgan Stanley

374

6

HSBC

348

7

JPMorgan

313

8

Wachovia

309

9

Bank of America

228

10

Deutsche Bank

199

eFinancialCareers.com Careers in Financial Markets 2007-08

Andrew Butler-Cassar, Williams de Broe

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Trends

Roles and career paths

Private banking is a growth business. The number of rich people in the world just keeps on growing: at the last count in mid-2006, there were 2.8m ‘high net worth’ individuals (people with more than £500k in financial assets living in Europe), and their numbers were rising at a rate of 5% per year. Private banks have cashed in on customer demand. A study by Scorpio Partership, a consultancy working in the sector, found assets under management rose 18% in 2006, to over £4.3 trillion worldwide. As the industry grows, its profile is changing. Whereas in the past, private banks would turn their noses up at anyone with less than £10m in liquid assets, they are increasingly courting the £1m club and below. Kleinwort Benson, for example, will open its doors to people with a mere £500k to invest. The new focus on the merely wealthy as opposed to the mind-bogglingly rich is creating demand for a new breed of private banker, and for plenty of them. “If you’re looking after someone with £10m, you’ll still need to be a very civilised cosmopolitan type who speaks 10 languages and has great table manners,” says one recruiter. “But if you’re looking after someone who has £500k, you’ll just need to be affable.”

If you work as a private banker, you can expect to perform one of three broad categories of job: investing money for existing clients, building relationships or managing back-office functions. People working on the investment side of private banking either invest their clients’ money themselves or offer their clients detailed advice to help them invest their own money. They are typically product specialists, who are expert in a particular asset class, including fixed income, equity, structured products of any kind or investments in the private equity and hedge fund sectors. People working on the relationship side are sales people. This can involve a lot of travelling and close contact with interesting, unusual and demanding people. When a relationship private banker has established a client’s needs, investment specialists are brought in to put a more detailed solution together. Banks such as Coutts (now part of Royal Bank of Scotland), Goldman Sachs, HSBC and UBS all run graduate schemes for private bankers. If you don’t find a place on a graduate training scheme, then it is possible to move into private banking with a background in corporate finance or, more particularly, >

Source: Scorpio Partnership

How Mon hot ey Ku Opp dos

As their name suggests, private wealth managers help very rich people to manage their money. They fall into two categories: • Private bankers, who help clients invest their money wisely and avoid any risks that might reduce the value of their assets. They also offer tax and pensions advice, help clients develop a strategy for charitable giving and advise them on bequeathing their wealth. • Private client brokers, who assist their clients to buy and sell financial products, particularly equities or stocks. They also advise on the best products to invest in. Private banks typically look for clients with at least $1m (£503k) to invest, but many deal only with clients whose financial assets (so not their houses or yachts) are worth more than $30m.

Senior wealth managers can expect to make around £250k

Think about who you are, about where you really want to go, about what you want to do with your life. You are about to choose a career. Don’t do it lightly.

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Lazard is a premier financial services firm committed to excellence, independence, intellectual rigour, integrity and creativity for our clients on a global scale. Lazard is a global firm, with a team of over 2,000 individuals operating across 16 countries. We solve complex financial challenges for a client base that includes corporations, partnerships, institutions, governments and high-net-worth individuals. We are an independent firm, free of the conflicts that can arise at other financial institutions, and we maintain long-standing relationships with business leaders and decision makers around the world. Our intellectual capital is our strongest asset. The superior intellect, enterprise, and commitment to excellence of our team guide everything we do. We are recruiting summer interns and full-time analysts to start in 2008. You will possess a passion for business and a genuine interest in investment banking, along with well-developed interpersonal skills and a sense of individualism and identity. A strong academic track record is a must. Most importantly, we want individuals with the commitment and flair to succeed within our organisation. Apply online today at www.lazard.com/apply

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Profile Mark Evans Family business and philanthropy Coutts & Co

Continued from pg. 54

As head of family business and philanthropy at Coutts & Co, Mark advises private clients on matters such as managing succession and effective giving to charity. He also runs various education and networking events, and helps design new products and services. Mark studied Arabic and Hebrew at Exeter University.

fund management. There are two types of private client broker: those working on discretionary mandates, in which wealthy clients state their general investment strategy and the broker buys and sells the products they think appropriate; and those working on advisory mandates, in which the broker advises the client what to invest in, but needs their permission before making a move. Junior brokers are more likely to work on advisory mandates. However, making the first move can be challenging, with few brokerage firms offering graduate training courses.

What makes a great private banker? Someone who can develop a trusted relationship with clients. You need to be able to listen, empathise, ask the right questions, anticipate issues and understand the specific needs of the client to deliver the right solutions. Is it all about lunching with rich clients in Monte Carlo? Lunch is sometimes involved but Coutts has first class dining rooms, so there’s no need to go all the way to Monte Carlo! It’s all part of getting to know clients personally. What does a typical week involve? One minute I am helping a client to set-up a charitable foundation; the next, considering different charitable projects to support in India – and the next, I am making a presentation at a charity conference on raising funds from high net worth individuals. At the same time, I might also be talking to a family business owner about setting up a family council, appointing a nonexecutive director or raising liquidity from the company and resolving a family conflict. When I am not doing all that, and in between running various roundtable discussions on philanthropy and family business matters, I am managing the Coutts Prize for Family Business – the industry’s Oscars.

Pay Like investment bankers, private bankers are paid a combination of a base salary and a bonus – but not quite as big. According to Morgan McKinley, salaries for managers in private banking roles (typically with around eight years’ experience) start at around £80k; total pay is around three times that.

Title Junior Intermediate Senior Manager

Pay (£k) n/a 45-60 55-100 80+

Source: Morgan McKinley

Private banking salaries

What’s the most interesting thing about your job? Bringing private clients, professional advisers, social entrepeneurs and charities together to make the world a better place. And which part could you life without? Anything to do with administration and paperwork.

Skills

Mark’s tips: Surf as many private bank websites as you can. Try to get a summer internship at a private bank. g Think about whether you prefer managin with ling dea clients, designing products or systems. If you want to be good at your job, it is important you enjoy it.

eFinancialCareers.com Careers in Financial Markets 2007-08

It’s no good going into private banking if you have a taste for gossip or celebrity intrigue. Private bankers stress discretion and an understanding of client confidentiality as key attributes in this sector, argues Sam Anderson, HR business partner, UK wealth management at RBS. “You don’t necessarily need to have a finance-related degree but a background in law or accountancy can sometimes help. But you do need good relationship management skills. We don’t just want people who are product pushers, we look for people who can provide unsurpassed client service,” she explains. Languages are also increasingly sought after and attention to detail and an understanding of companies and what will make them successful also helps. “We want all-rounders who are good at dealing with people at all levels, from industry leaders to lottery winners. We look for the Freddie Flintoffs of graduates,” says Andrew ButlerCassar, executive director at Williams de Broe.

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At a glance: Operations staff work to ensure transactions run smoothly

Operations

Pay for operations staff is lower than for client-facing staff

The unsung heroes of investment banking

ortu nitie s

“You have to be able to solve problems but also be very clientorientated. It is all about the quality of the experience for the client”

eFinancialCareers.com Careers in Financial Markets 2007-08

Richard Moore, UBS

58

At its centre is the core function of clearing and settling trades. Clearing trades involves looking at the records made by other banks’ traders when they buy and sell shares or other financial products and checking that they match the records kept by people from whom or to whom the shares were bought or sold (the counterparties). People who work in settlements ‘settle’ trades – or ensure that stocks or shares bought and sold by the bank’s traders are exchanged for the correct amount of money. ‘Settlements’ covers everything from preparing the documentation required for a sale, to making sure the bank has been paid for all the shares it has sold and bought.

Trends The operations division may not make money for investment banks, but as a cost centre it certainly has the potential to erode their profitability. Banks are acutely aware of this and are doing their best to ensure their back offices run as efficiently as possible. This isn’t always good news for the people who work at the lower-skilled end of the operational continuum. Roles such as transaction processing are being shifted to lowcost countries such as India. Goldman Sachs is said by

the Financial Times to employ 1,200 people in Bangalore, for example, while in April 2007 Citi announced plans to shift 9,500 roles to cheaper locations such as India and Poland. At the same time, however, there’s a need for more strategically-oriented staff who can help automate as many processes as possible. Where once trades were settled with reams of paper, they are now settled electronically through facilities such as Euroclear and Clearsteam, which hold securities electronically and transfer them from one owner to another. In this context, one of the biggest challenges for operations divisions is finding a way of automating the settlement of complex derivatives trades, many of which are still settled manually.

Key players It’s harder to quantify ‘key players’ in operations than in other sectors – all banks have operations divisions and success isn’t just down to the number of people who work in them and the number of trades they process. However, research company Z/Yen does its best to rank operations departments on the basis of client satisfaction and core processing abilities. On these measures, ABN AMRO and Morgan Stanley were the key players for equities and fixed income respectively in 2006. Overall operations performance 2006 Equities products

Fixed income products

1. ABN AMRO

1. Morgan Stanley

2. Liquidnet

2. ABN AMRO

3. UBS

3. JPMorgan

Roles and career paths Electronic systems have vastly increased the speed with which simple trades are processed. One example was the introduction of electronic trading on the London Stock Exchange in 1986, when it replaced floor trading as part of a series of measures known as the ‘Big Bang’ that made the City of London more competitive. But derivative trades are often too complex to be settled electronically and tasks are still done manually: trades are often confirmed by fax, for example. The large number of documents required for derivatives transactions creates roles for documentation specialists. Whether you work with derivatives or not, most operations

Source: Z/Yen Ltd.

How Mon hot ey Ku Opp dos

Go to any campus banking presentation and very quickly you’ll come across the words ‘back office’ and ‘front office’. When people talk about the back office, they’re talking about operations. Unlike the traders, sales people, capital markets and corporate financiers of the front office, people working in operations don’t liaise with customers to generate revenues and profits for the bank. Instead, the division is a support function – operations professionals support people in the front office to make sure everything works smoothly and the bank gets paid. The business of operations covers everything from IT to human resources, accounting (finance) and risk management. Its functions are so broad that operations specialists typically specialise in only one of these areas.

Banks are offshoring some operations roles to India

Profile Ronak Patel Analyst, global portfolio trading support Lehman Brothers

Ronak joined Lehman Brothers’ graduate training programme last autumn after completing a computer science management degree at Warwick University. He now works in a team of two within the equities mid-office region of the bank’s global portfolio trading support.

jobs also have a strategic element – banks use operations staff to analyse ways of making processes more efficient and project managers implement their suggestions; the more senior you become, the more likely is that you will be assigned to this kind of strategic or project management role.

What does your role involve? It is all about handling the bookings and confirmations for portfolio equity trades and sorting out any discrepancies or difficulties. As soon as it leaves the desk and the front office, we take it under our wing. We are the centre point after the trade leaves the floor. What prompted you to go into operations? All the way through school and university, numbers have always been the thing I have been strong on, so it was a logical step. I was also attracted to the problem-solving aspect of it. We are encouraged constantly to look at ways of improving how we work, to automate things more.

Title

Salary (£k)

Bonus %

Trade support

28-38

10-20

Settlements

26-38

10-20

Business analyst/projects

28-40

10-20

Skills Operations employees need to be attentive to detail, have good organisational and time management skills and be creative. Hiring has been buoyant in operations during 2007 and there is strong demand for people with the right skills and attitude, particularly business analysts and project managers, says Martin Killeen, manager of Morgan McKinley’s banking operations division: “We have seen a continued increase in demand for individuals to work within prime brokerage as more banks take on new business and break into this lucrative market,” he adds. Operations is a pivotal role, says Richard Moore, EMEA head of campus recruitment at UBS. “The trade is only done when operations has validated, cleared and executed it. There is a convergence of skills – you have to be able to solve problems but also be very client-orientated. It is all about the quality of the experience for the client in that execution,” he says. Operations people need to be able to demonstrate they have good interpersonal and communication skills, work coherently and effectively within a team, manage their time well and have good attention to detail.

Source: Morgan McKinley

Salary and bonus, junior operations staff, 2007

What does a typical day for you involve? I get in at 7:30am and will check my emails from New York or Tokyo, and make sure everything has been properly booked out from yesterday. I’ll then move on to the Asian bookings. You have to keep on top of the bookings during the day. You tend to get a lot of queries from London, New York and elsewhere, so it can get very busy. It is very reactive; there are new problems to solve every day, but if the front desk is quiet, then we can have a quiet day too. Solving endless problems each day – isn’t it frustrating? No. It means every day is completely different, it is very dynamic. But it also means we are often under a lot of pressure from the traders and sales managers, as we are the first point of contact for them. You need to be able to handle it and you need to be good at dealing with people, something that is not often associated with operations.

Ronak’s tips: Try and look at how the role fits into the whole scheme of things, how it affects things downstream and how you might be able to improve the flow. Don’t be afraid to ask questions. No one expects you to be able to do the job straight away, and that’s the only way you are ever going to learn. Try to get some work experience or get on a graduate training scheme. Even if it’s just temping in an office, sell things like how you’ve dealt with customer complaints or handled yourself on the phone.

eFinancialCareers.com Careers in Financial Markets 2007-08

Pay If you work in operations, you won’t get the gargantuan bonuses of the front office. On the other hand, you’ll probably leave before 8pm most nights. According to recruitment firm Morgan McKinley, the best-paid operations staff help settle the complex derivative trades mentioned above. It says the average salary for a senior trade support professional was £60k to £90k in 2007, plus a 40% to 80% bonus.

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Employers

At a glance Risk increasingly involves traded derivatives products

Risk management The professionals who stop bankers acting too rashly

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Voice of caution or spoilsport? Risk managers act as a restraining influence on a bank’s risky activities. They ensure a bank is not over-exposed to plummeting stock markets, or stop huge loans being made to companies on the verge of bankruptcy. They also ensure business continues as normal in the event of operational problems, such as computer system failure or disasters such as a hurricane or terrorist attack. The risks faced by financial institutions come in several forms, including: • Market risk: the risk that a whole group of traded financial products (for example stocks, bonds or commodities) falls in value simultaneously because of outside events, such as rising oil prices or terrorist bombs. Also known as ‘systemic risk’.

“We look for people who can identify the problem from the confusion, model it and then improve the decision-making around it” Julian Shaw, Permal Investment Management

eFinancialCareers.com Careers in Financial Markets 2007-08

• Credit risk: the risk that a particular company or an individual will default on their obligation to repay their debts. • Operational risk: the risk that something might go wrong in the day-to-day running of the bank – from computer failures and floods to employee fraud. • Reputational risk: the risk that something will happen to damage a bank’s name, such as a high-profile court case against it or damage by association with a client who has done something wrong; it is sometimes considered a sub-sector of operational risk.

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Trends Risk has become increasingly complicated thanks to an explosion in the use of credit derivative products – in the first half of 2006, the value of credit default swaps outstanding globally rose 50% to £13 trillion. Using derivative products such as credit default swaps (CDS), banks are able to quantify the risk that a client might default on a loan by selling it on – buyers purchase the right to receive repayments on the loan, but if the borrower defaults, the CDS holder will itself have to pay the amount outstanding back to the lender.

Some banks now offer riskspecific graduate training Risk professionals working near the trading floor earn the most

Growth in the use of credit derivatives has led to claims that global financial markets are now less susceptible to risks such as the implosion of a major hedge fund. But sceptics say the system remains as precarious as ever and that many of the buyers of credit derivative products don’t understand the riskiness of their purchases. Following the failure of Amaranth, a US hedge fund which lost $6.5bn on bad bets on natural gas prices in 2006, the system seemed to bear up. But with several banks said to be nursing large losses, it also showed the need to properly assess the risk of doing business with some trading partners.

Roles and career paths Market risk specialists use mathematical ‘value at risk’ models to work out the maximum amount of money the bank would lose in the case of an extreme event, or chain of events, within a particular timeframe. They also work closely with traders to calculate the risk associated with specific trading transactions and typically sit on, or close to, the trading floor. Credit risk specialists scrutinise company balance sheets and meet company directors in order to determine the organisation’s financial health. As well as looking at a company’s profit and loss accounts, they analyse how a particular transaction affects the company’s solvency. Operational risk experts review the likelihood of particularly risky events taking place and formulate plans in case they do. If you work in operational risk, you could find yourself doing anything from ensuring the computer backup systems work properly to conducting post-mortems on how well the bank dealt with disastrous events in the past. Reputational risk specialists endeavour to manage a bank’s image. Few banks employ reputational risk specialists per se: the role is typically dealt with by the public relations department, the human resources department and/or the legal team. If you want to follow a career in risk management, it’s a good idea to join a bank’s graduate training scheme. At some banks, risk training is covered by the IT or operations department. Deutsche Bank, Dresdner Kleinwort and UBS are among the banks that offer risk-specific training to graduates.

Profile Jo Farries Graduate trainee Dresdner Kleinwort

Jo is currently on the risk management graduate trainee programme at Dresdner Kleinwort. She has recently completed her first six-month rotation in the credit risk control team in London, and is now working in the local risk control team in Sao Paulo. She graduated with a BSc in natural sciences (mathematics and physics) from the University of Durham.

Pay

What does credit risk control involve? Our concern lies with the ability of the counterparties we are trading with and the issuers of the securities we are dealing in to pay their obligations when they fall due. The main function of the credit risk control team is to monitor and report our credit risk exposures. Aside from our daily tasks, we work on several smaller projects, many of which are to improve the functionality of our current risk systems.

Title

Salary (£k)

Bonus %

Credit risk

32-45

20

Market risk

35-50

40

Operational risk

32-40

20

Quantitative finance

45-60

60

Skills You’ll need strong mathematical skills and a cool head, according to Sally Whitman, head of specialist resourcing at Deutsche Bank. “You’ll need to be able to come to conclusions under pressure quickly and accurately,” she says. Above-average common sense and strong communication skills are other key attributes, agrees Julian Shaw, head of risk management and quantitative research at Permal Investment Management. “You need to have good applied maths skills and an understanding of differential equations as well as financial modelling skills. But it’s not just about solving the problem. We look for people who can identify the problem from the confusion which surrounds the business decision, model it and then improve the decision-making around it,” he adds. Adrian Marples, risk management specialist at recruitment firm Sheffield Howarth, says market risk specialists often have a first-class degree in physics or an MA in mathematics. By comparison, he says: “Credit risk people need to be inquisitive and able to extract information from clients about their strategy and financial position.” “If you are looking to start a career within a more technical area, market risk could be the choice. Generally, banks will be looking for strong academics (2.1 or above) followed by a BSc and MSc in a numerate subject,” adds Craig McNicol, a consultant on the risk management desk at recruiter Joslin Rowe.

Source: Morgan McKinley

Junior risk manager pay and bonuses 2007

How does your work in local risk control differ? In contrast to the London office, where each team will focus on specific areas and tasks in managing and controlling the bank’s risk, the small size of the Sao Paulo office means we work as one team covering all areas of risk relevant to our location. I can find myself working on credit risk, market risk, operational risk and liquidity risk, all in the space of one day. What skills do you view as necessary for working in risk? When starting out, it is important to be flexible, enthusiastic and keen to learn. The particular skill set necessary will depend very much on the area of risk you are working in, but you will need to be highly numerate, analytical, and have good communication skills. Is there much international exposure in risk? Risk is a global function and, as such, it is not unusual for me to be communicating with teams from around the world, including Frankfurt, New York and Tokyo, on a daily basis.

Jo’s tips: Use your university holidays constructively, and try to gain some relevant work experience. This will allow you to gain a better idea of what a career in banking . will be like and whether it is right for you Don’t worry if you don’t have a maths or finance-based degree. Although you do need strong numeric skills, all degree subjects are accepted. Talk to any contacts you have that are already working in the industry to learn more about what the various areas involve.

eFinancialCareers.com Careers in Financial Markets 2007-08

Pay for risk professionals rises in relation to their proximity to the trading floor and their involvement with complex derivative products. According recruitment firm Morgan McKinley, a junior risk professional working on a quantitative finance (read complex derivatives) team can command over 60% more than his or her counterpart in basic credit risk.

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Employers

At a glance Compliance is becoming more important as regulations increase

Compliance Banking’s equivalent of the health and safety brigade

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If you want to work in compliance, you’ll need sound judgement and a respect for rules and regulations. Compliance professionals interpret the rules set by state regulators and ensure banks operate within them. As well as interpreting the complicated and ever-changing external rules that these regulators lay down, the compliance function creates a system of internal rules to apply the regulations. It then communicates those to employees and makes sure they abide by them. The compliance function is usually split into teams. These include money laundering specialists, training specialists, monitoring specialists and advisory and product specialists.

Trends Compliance departments already carry a big stick and, thanks to new regulations and a series of scandals, the stick is getting bigger.

“We need people with the confidence to stand up to people in the business and remind them of their duties. This can be difficult”

eFinancialCareers.com Careers in Financial Markets 2007-08

David Kemp, ABN AMRO

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First, the regulations: in 2007 the word is ‘MiFID’, or the Markets in Financial Instruments Directive. This is a complex piece of legislation designed to create a single European financial market, due for implementation in November 2007. However, an April 2007 poll by Handysoft, a business software group, suggested only four out of 10 firms would be ready in time. When it comes to scandals, one of the big issues of the day is insider trading. In March 2007, the Financial Services Authority (FSA) said there was evidence of insider trading in nearly a quarter of company takeovers. Anti-money laundering is also a hot topic, with banks and asset managers hiring specialists to ensure clients aren’t up to anything untoward. Striking the right balance between regulation and laissez-faire is tricky. In the US, legislation in 2002 known as Sarbanes-Oxley tightened many compliance rules. Many bankers believe that New York’s financial services industry suffered as a result, while the City benefited from the perception that its regulatory regime is less onerous.

Some banks offer compliancefocused graduate training Compliance pros who sit near the trading floor earn the most

Roles and career paths Jobs in compliance vary, depending on the area in which you work. If you opt for money laundering, you’ll spend your time on the look out for suspicious transactions. Money laundering teams check the identity of the parties involved and ensure the money came from a known and reasonable source. When the circumstances seem suspicious, money laundering officers report their doubts to the National Criminal Intelligence Service (NCIS). The job of compliance training specialists seems tame by comparison. Training teams preach the compliance message to the bank’s employees. They create and present courses explaining what the rules and regulations are and why bankers need to respect them. Monitoring specialists check that employees are behaving themselves. Traditionally the realm of junior staff, this role has seen much of its remit taken over by computers. As the head of compliance at one European bank points out: “Our staff send and receive about three billion messages every day. They could never be monitored by humans, but they are monitored by intelligent computer programmes that can spot unusual activities, such as dormant trading accounts that suddenly resurrect themselves.” If monitoring is the least exciting category of compliance, working as a compliance advisor is the most exciting and usually pays the most. Compliance advisors interpret and apply the intentions of the regulator. An increasing number are product specialists who are situated on or near the trading floor. They tell traders whether or not a particular trade can go ahead and suggest alternatives that will be satisfactory to the client. Some, but not all, are ex-traders. Compliance-specific graduate training schemes used to be rare, as were entry-level jobs. But banks such as Barclays Capital, Goldman Sachs and UBS now offer compliance training and more are likely to follow. If you don’t get on to a bank’s compliance training course, there are a few other options. One is to train with the FSA, which hires around 40 graduates a year for its two-year training programme. Another is to work for the compliance consulting arm of a Big Four accountancy firm. Alternatively, you could take a further degree: for example, London Metropolitan University offers an MSc in financial regulation and compliance management.

Find out more about careers in finance

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Profile Stephen Morse Global head of compliance Barclays Capital

Stephen joined Barclays Capital as global head of compliance three years ago. He previously worked for Credit Suisse in New York in a global compliance role and at Bankers Trust and JPMorgan. Originally qualifiying with an LLB (Hons) from Leicester University, Stephen moved into compliance in 1987, when the profession was just getting established and banks used lawyers and accountants to get compliance advice.

Pay The best-paid compliance professionals are those who sit near the trading floors and advise on the issues associated with trading particular financial products. Salaries in this area rose 25% between 2006 and 2007. Hedge funds are also notoriously generous to their compliance staff, with compliance pay in the hedge fund sector rising 30-40% in the past two years alone. A compliance officer with one to two years’ experience can now earn between £35k and £45k in salary working in a hedge fund, plus a bonus of somewhere around £14k.

What makes a good compliance professional? A strong understanding of a firm’s business, products and strategy; a strong understanding of market regulations; and strong communication and decision-making skills. You also need to be able to think on your feet – the regulatory environment is continuously changing, and what’s right one day might not be right the next. Compliance is for people who like following rules. Right? Wrong. Compliance increasingly requires significant judgement. We often operate in a grey area in which things are rarely simply right or wrong. It’s up to the compliance professional to decide.

Experience (yrs)

Salary (£k)

Senior compliance manager

5-8

45-95

Junior compliance manager

3-6

40-70

Senior compliance assistant

2-3.5

45-95

Compliance assistant

1-2.5

26-42

0-1

20-32

Compliance administrator

Skills In the past 12 months competition has increased dramatically. This means you’ll have to work harder to stand out from the pack. You can enhance your CV by studying with organisations such as the Securities and Investment Institute, where you can get a diploma in investment compliance. Another certificate is the Investment Management Certificate. “The most important thing when you are at interview is how to really show your true potential. Having confidence without arrogance and a determination to succeed will be vital. You will also need to demonstrate a willingness to undertake the mundane tasks as you gain your experience,” explains Zoë Breadman, managing consultant, compliance, at recruiter IMS Selection. You’ll need to be intelligent, methodical and not afraid to speak your mind, David Kemp at ABN AMRO points out: “We need people with the confidence to stand up to people in the business and remind them of their duties. This can be difficult. For example, when an investigation is being conducted, compliance staff might sit in judgement of people on the next desk.” At the FSA, Jessica Adams on its recruitment team suggests that, while graduates from any degree discipline are welcome to apply, you will need a 2.1 or above.

How have things changed since your career began? These days compliance is more centred on reputation management and the rights and wrongs of particular transactions. We see an increasing number of sales people and traders moving into compliance. Firms such as Barclays Capital have begun training compliance professionals in-house, as there’s no ready supply of people with the right experience. What’s the biggest challenge for the compliance function? Consistently striking the right balance between being commercially oriented and risk and control focused.

Stephen’s tips: Develop a broad knowledge of the business areas – compliance functions cover all . aspects of the investment banking business Familiarise yourself with business ethics – compliance is increasingly a question of reputational as opposed to regulatory risk. Read up on the legal and regulatory t environment – there are plenty of specialis publications such as Compliance Reporter, Compliance Monitor and Complinet.com.

eFinancialCareers.com Careers in Financial Markets 2007-08

Role

Source: Robert Walters

Investment banking compliance salaries 2007

Surely rules are rules? Regulations aren’t always clear. Plus, we typically have to comply with rules in different countries and sectors at once. There’s often potential for significant deliberation about the best course of action. And even if we do conform with regulations, there’s always reputational risk to consider – we can follow the rules, but still do wrong in the eyes of clients and the public.

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Data providers and rating agencies

At a glance Rating agencies assess how likely companies are to pay their debts

Heroes or villains, depending on what they report

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Rating agencies assign credit ratings to organisations and governments after calculating the likelihood of them defaulting on their traded debt products (companies issuing debt products pay the agencies for the privilege). Ratings are issued in a coded form, making it easier to make comparisons between one organisation and another. So a company rated AAA is adjudged almost 100% likely to pay on time; If a company is rated C, the risk of not being paid on time is high. Different rating agencies use slightly varying codes for their ratings. On the whole, however, bonds ranked BAA, BBB or above are considered ‘investment grade’, meaning investors are likely to get their money back.

“Another language will make you an attractive proposition. We are particularly looking for people with Arabic and Russian” Maren Josefs, Standard & Poor’s

eFinancialCareers.com Careers in Financial Markets 2007-08

Anything ranked below this is known as ‘speculative grade’, where repayment is less certain. While rating agencies help banks and their clients by calculating the likelihood of a default, data providers, such as Reuters, Thomson Financial (which are now merging to become Thomson-Reuters) and Bloomberg provide real-time information on the changing prices of financial products. They also offer a wealth of other data, including news analysis and information on company accounts.

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Employers

Data providers offer live data to traders and salespeople There are only a few key players in each sector

in charges paid by bond issuers, they are not always as impartial as they might be. For their part, the agencies point to their codes of transparency that they claim address these criticisms. This hasn’t stopped rating agencies piling into another growing area – the analysis of the operational risk of hedge funds. More and more hedge funds have begun issuing bonds, which offer a more stable source of financing than money from banks and individuals. Data providers operate in a different and very competitive universe, providing banks’ traders with data faster, more cheaply and on ever-fancier screens. In May 2007 the world of financial information providers underwent a seismic shift when Thomson Financial put in a bid of around £9bn for Reuters. If Thomson’s bid succeeds, the new company will be called Thomson-Reuters.

Key players The financial information world has long been dominated by Bloomberg, which accounts for around 33% of the market. But if ‘Thomson-Reuters’ becomes a reality, a new behemoth will challenge for the top position – the combined companies are expected to have a 34% share. Similar to the financial information market, the rating agency sector also hosts three key players, but there are no signs of consolidation. Standard & Poor’s and Moody’s vie for first and second places and account for around 80% of the total of market; Fitch comes in third. Behind them are a number of other operators, such as Egan-Jones Ratings, which are miniscule by comparison.

Trends

Roles and career paths

As the number of financial products to be rated expands to include not just company bonds, but derivative products based on those bonds, rating agencies are being kept increasingly busy. Moody’s, for example, made £456m from analysing and rating the structured finance sector in 2006 – more than 40% of its income. But while business may be growing, rating agencies are under fire. This is particularly the case in the US, where they failed to predict problems in the sub-prime mortgage market. Many of these were re-packaged and sold in the form of structured ‘mortgage-backed bonds’, which were given favourable ratings, only subsequently to default or see their rating downgraded. Critics claim that because rating agencies receive most of their money

If you work for a rating agency, you’re likely to start as a research assistant, helping an analyst. Analysts typically specialise in particular product types. Not all rating agencies have graduate recruitment schemes. Moody’s offers internships to students and recruits graduates on an ad hoc basis. Fitch takes around eight graduates a year in the UK into a twoyear rotational programme, where trainees rotate between corporate finance, structured finance and financial institutions. S&P recruits on an ad hoc basis. Roles at information providers are more varied and cover everything from data analysis to technology, journalism and business development. Reuters, for instance, runs a European graduate training scheme that runs for around

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new ideas welcomed here

At Fitch Ratings, we appreciate original thinking. Innovation and initiative are valued and rewarded. The work is dynamic and challenging. The culture inspires professional growth and an entrepreneurial spirit. Fitch is an international rating agency built on local expertise. Our ratings and products are market-leading, our teams award-winning. We are commited to the concepts of objectivity and independence of opinion, as well as integrity and transparency. IF YOU ARE A RECENT GRADUATE with a strong analytical background and solid communication skills, Fitch Ratings can provide you with unique training opportunities and a chance to gain experience in the world’s credit markets.

To learn more about careers at Fitch Ratings, visit fitchgraduatesuk.com Application deadline is 31 January 2008.

Profile Maren Josefs Associate director Standard & Poor’s

two years, with the potential to try varying roles and work in different offices globally.

Pay Ratings agencies have traditionally paid a lot less than investment banks, particularly when it comes to bonuses. But as more and more of their staff leave for the structured finance desks of banks, they have been trying to make amends. Bruce Wheelan, a consultant at recruitment firm Anderson’s, says bonuses in the sector were previously capped at 35% of salary, but this has recently risen to 50%, with senior staff even getting 70%. At the same time, he says, salaries have risen 10-15%. According to Wheelan, a credit ratings analyst can now expect to earn a base salary of £45k to £65k plus a bonus of up to 40%. ITjobswatch says the average salary for an IT specialist with Bloomberg knowledge is currently somewhere between £52k and £56k.

Skills Graduates with good quantitative skills will always be in demand, says Maren Josefs, associate director at Standard & Poor’s (see her profile on the right), particularly as data providers and rating agencies are fishing from the same relatively tight pool of talent. “Another language will also make you an attractive proposition. We are particularly looking for people with Arabic and Russian, as they are growing markets for us. Beyond that, you need to be a good communicator with solid analytical skills, be opinionated and be able to speak with authority to senior executives.” Lynne Smith, vice-president of HR for Europe, the Middle East and Africa at Moody’s, also stresses communication skills: “As well as a solid academic background and sound analytical ability, we want graduates who are strong communicators capable of listening to others, as well as formulating and articulating their own opinions.” Reuters looks for different attributes across its business areas, but also specifies communication skills as mandatory. Anne Bowerman, global head of learning and development at the company, says graduates entering its business programme need to be fluent in at least three European languages: “Applicants to Reuters’ journalism division need to be able to express complex issues simply, work unpredictable hours and be willing to accept international postings,” she says.

Maren joined the insurance practice division of Standard & Poor’s three years ago from the capital markets team at risk management consultancy Aon. She is a graduate in European business administration from the European Business School in London and has an MSc in finance from London Business School. Why the switch to a career in credit ratings? At Aon, I was structuring and pricing catastrophe bonds, which help insurers transfer the insurance risk of natural catastrophes such as earthquakes and hurricanes to the capital markets. It was interesting but mostly technical, and I didn’t have as much access to clients. At Standard & Poor’s I have regular access to senior company management, I’m dealing at a much more strategic level, and have access to the ‘big picture’ side of things. What does your current job involve? A lot of preparation goes into issuing a rating – I meet with senior executives at client companies, and talk through the structure of their proposed credit products. When I’ve analysed the transaction and reached a decision about which rating to suggest, I’ll write a paper that is reviewed by our voting committee before the rating is allocated. I also spend a lot of time talking to investors about ratings we’ve already issued and the rationale behind them. What’s the most challenging aspect of your role? Issuing a rating isn’t just a question of knowing about the company in question – you also need to know about the market, so you can never do too much research. When a client is downgraded, it can also have big implications for their business and they can become confrontational. It’s difficult to deal with but we’re trained to handle these situations. What kind of person makes a good ratings analyst? You need to be opinionated, analytical and to enjoy interacting with people at all levels. You also need to be independent and able to get things done autonomously.

Maren’s tips: Get a good financial foundation before applying – my MSc in finance was an excellent preparation for dealing with the complex financial products that underpin ratings. Try to build practical experience in the area in which you’d like to work first – my previous experience at Aon enabled me to understand the market I’d be rating. Language skills are highly valued – an analyst working in the London office can cover companies headquartered in Europe and the Middle East, for example.

eFinancialCareers.com Careers in Financial Markets 2007-08

Continued from pg. 64

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Employers

At a glance The industry is divided into insurers, reinsurers and brokers

Insurance

40% of general insurance relates to motor vehicle claims

Offers stable careers and less competition for jobs

ortu nitie s

“We are looking for people that are passionate about insurance and want to learn; we very much look for future potential”

eFinancialCareers.com Careers in Financial Markets 2007-08

UK insurers are also vexed by problems attracting staff. In 2005, the CII commissioned Cass Business School to conduct a study into students’ attitudes to insurance careers: 90% said they wouldn’t go into the industry. Since then, insurance has gone all-out to make itself appear alluring to university leavers. “Insurance just hasn’t been seen as sexy,” says Alex Thompson, a spokeswoman for the ABI. “It’s seen as men in grey suits doing paperwork.” You can see insurers’ new image at www.insurancecareers.cii.co.uk. It seems to be working – the site had 30,000 hits in the first six months.

Key players

Debbie Crew, Allianz

68

(back in 2005), the UK’s general insurance industry (not counting the huge life insurance and pensions sector) faced a total £20.6bn in claims, of which nearly 40% related to motor vehicles. While events such as 2007’s severe flooding in England may make the headlines, insurers are equally likely to be kept awake by trends in motor vehicle vandalism.

The insurance industry can be split into three sectors: • Insurers: the companies that provide the insurance packages. • Reinsurers: companies that insure the insurers. • Brokers: companies that sell packages on behalf of insurers. Whether you work for an insurer, a reinsurer or a broker, a career in the City will put you at the more exciting end of the insurance spectrum. The London insurance market centres on international projects and big commercial clients and provides cover to a diverse range of risks – from North Sea oil platforms to celebrities insuring their body parts. What this means is that you could be designing anything from a risk management and insurance programme for a big international company such as British Airways right down to working with small start-ups and entrepreneurs.

Trends Thanks to global warming and international terrorism, we live in risky times. But while the insurance industry has good reason to be concerned about potential claims arising from another September 11th or Hurricane Katrina, most of its business is a lot lower key. The last time the Association of British Insurers (ABI) counted

Think of the London insurance market and the first name that springs to mind is likely to be Lloyd’s. But Lloyd’s isn’t an insurance company – it’s a market made up of member companies, specialising in property and catastrophe insurance. By comparison, most of the UK’s biggest insurers operate in the huge area of life insurance and pensions – Aviva International is the top provider of life and pensions products in Europe. Top UK insurance companies 2005 (£m) Ranking

Insurance company

1

Aviva International

Premium income 3,858

2

Royal and Sun Alliance

3,150

3

XL Re

2,748

4

Axa Insurance

2,373

5

Zurich UK (Br)

2,349

6

Norwich Union

1,886

7

BUPA Insurance

1,725

8

Transatlantic Reinsurance

1,497

9

Direct Line

1,328

10

Allianz Cornhill

1,305

Roles and career paths Apart from the usual operations functions such as human resources, finance and information technology, insurance offers a number of specialist careers.

Source: Insurance Pocket Book 2007

How Mon hot ey Ku Opp dos

Think of insurance and the first thing that may spring to mind is waiting on hold for a quote for insuring your car or your holiday. But the insurance industry is about far more than just car insurance or hanging on at call centres. Insurance is big business. In 2005, according to the most recent figures available from insurer Swiss Re, global insurance premiums were worth more than $3.4 trillion (£1.7 trillion), with the UK worth £166.7bn, according to the UK Chartered Insurance Institute (CII). This is hardly surprising, given that – alongside personal insurance for cars, homes and holidays – insurance companies cover commercial risks on everything from industrial buildings to power stations and ocean liners.

Insurers are doing their best to increase graduate applications

Click online to begin your finance future

www.efinancialcareers.co.uk/students

Profile Thomas Needham Account developer Allianz

Thomas is a key account developer at Allianz. He studied business economics at Liverpool University before joining the company’s corporate management scheme in September 2003.

Skills “We are looking for people that are passionate about insurance and want to learn; we very much look for future potential,” says Debbie Crew of Allianz. Among the practical skills required are numeracy, ‘emotional agility’, drive and ambition. “To be successful in this industry, you must have the capability to handle lots of information, analyse the data and make accurate decisions from it. You most also be prepared to focus on achieving professional qualifications, normally outside your working hours,” Crew adds. “We are looking for graduates with a 2.2 degree (2.1 for actuarial programme) or above who have excellent interpersonal skills, leadership potential and high levels of energy and drive,” says Jasbir Sennitt, Axa UK graduate resourcing manager.

What attracted you to a career in insurance? I was interested in a career in financial services, and the insurance sector stood out. I was impressed by its scale and variety. It also seemed to be an area that had been overlooked by many university students. The concept of taking risks for a living is an exciting prospect, and that’s what insurers do every day – taking educated risks about what to insure and at what price. What do you think makes a successful insurance graduate? There’s been a greater ‘specificity’ within the insurance sector, meaning that insurers, brokers and even re-insurers in many cases are looking for more specific skill sets. Insurers are increasingly looking for people with financial skills and another skill, such as e-marketing or statistics. Therefore don’t be put off by a job title, look at the job description and what it involves and match it against your skills (and, importantly, against whether you’d enjoy doing it). If you’ve done a joint honours degree, great; if not, look at the relevant modules you’ve done and sell these to any potential employer.

Thomas’ tips The quality of the person matters more than the degree subject. People in this industry have degrees in everything from history and geography to maths and economics. Do your research about which company you want to join. Many companies have excellent graduate schemes, although the company brand name may not be as high as its profile. There is a variety of roles in the insurance industry. Find a scheme that gives you the chance to experience and consider them all.

eFinancialCareers.com Careers in Financial Markets 2007-08

These specialist careers include underwriting, broking, actuarial roles and risk assessment. Underwriting is the job most typically associated with the insurance industry. These are the people who look at risks and price them for insurance purposes. So, if you’re a driver with a history of crashes it will be the job of an underwriter to charge you more for your car insurance. Like the broking companies they work for, it’s the job of individual insurance brokers to sell insurance to clients. Actuaries analyse the financial consequences of risks the insurance company is taking and ask questions such as whether the company has enough reserves to cover future payouts. Risk managers work with the insurers’ clients to help make payouts less likely. In the past it was common to specialise in one of the above areas, but industry insiders says it’s becoming easier to move between roles. In particular, companies such as Allianz and Axa run trainee programmes in which you will be given exposure to various roles. Allianz runs seven different graduate training schemes, taking on around 30 graduates a year, with about 10 going into the management programme, says graduate development manager Debbie Crew. Axa, meanwhile, runs three graduate programmes: an actuarial training programme that takes on between six and eight graduates, a leadership programme with places for about 23 graduates and an IT programme for 20 graduates.

What does an account developer do? I help manage relationships with our affinity partners. These are brand names such as Dixons, the Telegraph and Royal British Legions, with whom we work to provide insurance products under their brands. My role is about attracting new partners, retaining existing partners and ensuring that their agreement with us is profitable. I’ve had four placements with the company. As a graduate trainee I’ve spent time in commercial lines underwriting (working out the risks and premiums attached to insuring commercial property and fleets), time in the change department of the claims division and in the engineering insurance division.

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Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance No sign of let-up in the pace of growth

Accounting City careers

Accountants are now expected to show commercial acumen

Talented, ambitious finance professionals will go far

ortu nitie s

“Candidates need to be hard-working but smart with it and have an ability to work with people at all levels” Andrew Garratt, Fidelity International

that do everything from trading financial products to helping companies execute M&A deals. The best-paid accounting jobs are in investment banks, but retail banks and insurance companies also need accounting talent.

eFinancialCareers.com Careers in Financial Markets 2007-08

Trends

70

“There’s never been a better time to consider a career within banking or financial services while studying towards a professional accountancy qualification” says Sarah Williams, associate director at recruiters FSS. “The pace at which these already buoyant markets are developing means that demand is exceptionally strong – and is likely to continue to be so.” Demand is so high that many banks – while not compromising on the calibre of person they take on – are more prepared to be flexible when considering candidates’ backgrounds: “Employers now realise the importance of employing candidates from practices other than the Big Four,” says Tanya Sharma, an investment banking consultant with Joslin Rowe. “They’re not as concerned if the people they take on have no financial services audit experience.” Accountants have evolved from number-crunchers to business advisers, says Steve Carter, managing director of Nigel Lynn. “What the financial institutions look

for today are finance professionals who are highly proficient technically – but who can demonstrate a broader range of wider commercial skills.”

Key players If you want to work for a bank, there’s no shortage of employers around. The world’s largest financial institution, according to US magazine Fortune, is US-based Citi, followed by Fortis, the Benelux-based insurance group, France’s Crédit Agricole and London-based HSBC. These giant institutions all have investment banking arms. But they also have retail banking networks, through which they take deposits from consumers. ‘Pure’ investment banks, such as Goldman Sachs, Morgan Stanley and Merrill Lynch, are small by comparison. World’s leading banks by revenues 2006 Rank

(2005 rank)

Bank

1

(1)

Citi

Revenues (£bn) 66.1

2

(2)

Fortis

56.7

3

(7)

Crédit Agricole

55.9

4

(3)

HSBC Holdings

47.1

5

(4)

BNP Paribas

43.2

Roles and career paths At fund managers and hedge funds, accountancy roles are typically for ‘fund’ accountants who provide ongoing reports on the value of the fund’s assets and liabilities, check that all funds received are properly accounted for and help prepare for end-of-year reports and submissions to the Inland Revenue. But in investment banks, accountants are more diverse. In the front office, accountants are hired into corporate finance, raising money for companies involved in M&A deals, or into equity research, advising on the future of companies’ share prices. Accountants working in the front office are typically ACA-qualified. For more information on these roles, see page 72. In the back and middle offices, accountants occupy a number of roles: Product controllers work with traders to monitor and restrict the risks the bank is exposed to. Like traders, they specialise in a particular class of financial product. Management accountants provide information on the state of the bank itself. This enables managers

Source: Fortune, Global 500

How Mon hot ey Ku Opp dos

If you want to be an accountant in an investment bank, there are two main entry routes. You can join straight from university or you can gain an accountancy qualification elsewhere and then move to an investment bank. Accounting roles in the City are not for the faint-hearted. The work is well-paid but fast-paced. Expect to work long hours in a highly-charged environment. There are several varieties of financial services firm to choose from. The most important are fund management firms, which invest money for pension funds, insurance companies and individual investors; hedge funds, which invest money for private investors using complicated trading strategies; and investment banks, which are financial services power houses

Increasingly tight regulatory framework governs their work

Take our online numerical tests

www.efinancialcareers.co.uk/students

Profile Heather Larkins Financial analyst M&G Investments

A qualified ACCA, Heather Larkins works in the finance team which accounts for the performance of the fund management business units within M&G. She prepares budgets and cost forecasts and carries out variance analyses to understand why costs may be higher or lower than expected – and ultimately to help management make key business decisions.

to formulate strategy based on knowledge of risks and budgetary constraints. Financial reporters produce monthly and year-end accounts and meet the reporting needs of the Financial Services Authority (FSA). Technical accounting specialists help banks ensure they meet the needs of regulators, such as the FSA, and adhere to requirements such as International Financial Reporting Standards (IFRS).

Describe the route to your current job I joined M&G after graduating (in mathematics) in a fund accounting role, preparing financial statements for the various unit trusts, OEICs (open-ended investment companies) and investment trusts managed by the company. I chose to study ACCA as I felt it was a flexible qualification that would allow me to keep my options open. After four years I moved to my current position – I wanted a new challenge and was keen to take on more of a management accounting role – something more forward-looking. What made you decide to go into financial services? Although I was interested in finance, I knew I didn’t want to work in an accountancy practice – the investment sector seemed more exciting. M&G had a good reputation in fund management and as an employer – they were willing to pay for me to gain a professional qualification.

Pay Money is what induces many accountants to switch to banking. Basic salaries are up to 40% higher than in private practice and there can be substantial bonuses on top. The best-paid jobs are for product controllers working with derivatives. According to Joslin Rowe, product controllers (who are currently most in demand) with between two and five years’ post-qualification experience (pqe) can earn a basic of up to £68k plus a 50% bonus.

How did you get your job? I applied via a recruitment agency. They told me their client was looking for someone with a good academic background but who also had the right personality – team fit is important, as everyone has to be willing to pitch in when the pressure’s on. I had to be able to demonstrate good communication skills, as the job involves liaising with heads of departments.

Basic pay (£k)

Bonus (%)

Financial controller

70-100

20-100

Product control director

90-110

20-100

Product control mgr (5 yrs+ pqe)

55-68

0-50

Project manager

70-95

0-100

Regulatory reporting accountant (just qualified)

45-50

10-20

Skills All-round skills are called for, says Andrew Garratt of Fidelity International: “Attention to detail, an understanding of the big picture, calmness under pressure are required,” he says. “They need to be hard-working but smart with it – and have an ability to work with people at all levels and gain respect from the management team.” Recruits must also be able to meet the demands of a complex environment. Regulatory demands have changed accountancy, says Steve Carter of Nigel Lynn: “With Sarbanes-Oxley and Basel II impacting on how companies organise their financial reporting, as well as how they assess risk, individuals must have with a clear understanding of these developments and how they impact on the business’s infrastructure.”

Source: Joslin Rowe

Job title

What skills are needed to do well? Numeracy is absolutely critical. You’re required not just to produce reports but also to question and interpret them for others – including people who are not necessarily schooled in finance. Attention to detail is paramount, as you have to be able to identify errors in income forecasts or spot where invoices have been calculated incorrectly. And the ability to work to tight deadlines is critical.

Heather’s tips: Do your research before interviews, so you have some understanding of how the company you’re applying to makes money. Remember the end user – the job isn’t just about churning out numbers: people rely on the information you produce to help them make important spending decisions. Spreadsheets will figure in a large proportion of your workload – if you don’t like Excel, this job probably isn’t for you.

eFinancialCareers.com Careers in Financial Markets 2007-08

Accountancy salaries in financial services 2007

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Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance Personality and team fit are critical for progression

Front-office careers

Be prepared for pressure and stress

Dynamic types enjoy a host of possibilities

If you’re planning to gain an ACA qualification after leaving university but can’t face a lifetime of jokes about boring accountants, then think banking. Investment banks employ ACA-qualified staff in plenty of nonaccountancy guises – the most popular of which are situated in the thick of it – in the front office.

“You need to be able to deal with the cut and thrust of the environment and stand on your own two feet” Hugh Shields, Barclays Capital

“Moving to the front office is not for the timid,” says James Lloyd-Townshend of recruitment firm Hays Accountancy & Finance. “You need to be fairly robust; the working environment can be highly pressurised and a cool head is needed at all times. People who’ve worked closely with the front-office team in a mainstream accounting role are more likely to have their potential identified and be offered opportunities.” These opportunities could involve working in roles with greater interaction with the banks’ clients – and the potential to earn vast sums of money.

eFinancialCareers.com Careers in Financial Markets 2007-08

Corporate finance/M&A

72

Corporate financiers and M&A bankers are two sides of the same coin. Corporate financiers working for investment banks advise client companies (corporates) on how to raise money, often to finance acquisitions. M&A bankers advise the banks’ clients on which companies they should acquire and how to fund their acquisitions. As such, corporate financiers and M&A bankers are often one and the same person. “Like most front-office positions, you need to be able to deal with the cut and thrust of the environment and stand on your own two feet,” says Hugh Shields of Barclays Capital. “You need gravitas and commercial acumen.” Sophie Spencer, banking consultant at recruiters Witan Jardine, says: “Ideally, accountants who move into corporate finance should already have some kind of exposure to work such as due diligence or company valuations in their current firm – or even been part of a team which has helped a client to list on the AIM. But most importantly, they must have a genuine desire

Private equity is a destination of choice

to move into corporate finance and be able to articulate this. They’ll be up against people who read the financial press, know what the big deals are and can talk knowledgably about them – demonstrating a long-term interest, not just a fleeting desire.”

Equity research Equity researchers scrutinise companies’ accounts and contemplate their strategic direction before pronouncing whether their shares are likely to rise or fall. James Heath, managing director of Greenwich Partners, which specialises in moving newly qualified accountants into front-office jobs in banks, says strong analytical skills are required: “You have to enjoy research projects, as well as writing up the results of your work,” he says. “But you also need to have the confidence and presence to back up your findings and recommendations in a client-facing capacity. Qualified accountants can make good equity researchers if they can complement their technical ability with the right personality.”

Other banking options If you don’t fancy making your career in corporate finance or equity research, you could opt for equity capital markets, which involves helping companies to raise money by selling their shares on the financial markets. Or how about going into corporate broking, where you will be helping companies manage their share price? Or perhaps trading? Keeley Quinlan, finance recruiter at UBS, says that visibility in the front office can provide the perfect opportunity for accountants to shine – and be plucked from a mainstream accounting role into a more glamorous position: “There’s always the chance that if they impress the people they’re speaking to, they’ll be given the opportunity to switch across.” However, one City recruiter suggests it may be wise for newly-qualified accountants with client-facing aspirations to play their cards close to their chest: “Line managers won’t want to take on and train up someone who clearly wants to shoot off to the front office as soon as possible,” he cautions. “Not only does that represent a potential wasted investment of time and resources, it may also imply that the candidate considers the straight accounting role inferior – a stopgap, or a stepping stone to something more rewarding.”

Profile Giles Derry Director Dunedin

An ACA who trained with Arthur Andersen’s financial markets practice, Giles Derry initiates investment opportunities at Dunedin, named in 2007 as the BVCA/Real Deals’ private equity firm of the year. He specialises in the financial services and leisure sectors. He has a degree in natural sciences from Durham University.

Not for everyone But don’t imagine that the front office is for everyone. “Front-office positions are sometimes seen as the holy grail by accountants in banking,” says Jenny Steedman of Poolia. “But these days, there are many support roles that carry kudos in banking, as accountants enjoy a high profile within the business and play key roles in helping to enhance value for shareholders.” While many of the traders and others in front-office positions have come via the sales route, your accountancy qualifications may have a positive impact on your eligibility for admission: “There are several accountants in the City’s relationship manager community,” says James Pritchard of Lloyds TSB. “Their qualifications are well-received, especially as client contact is often with corporate treasurers, who may be accountants themselves.” Finally, it’s also worth asking yourself whether you’re prepared to commit to working long hours. It may not pay as well or be as exciting, but a life in financial control or auditing will at least mean your weekends are your own.

How did you get into private equity? I found auditing too retrospective; my interest lies in what drives business forward. I tried to get in directly from audit but employers wanted relevant experience. I moved into my firm’s corporate finance arm, and from there into private equity. What do you like about the work? Your relationship with management teams is ongoing, not transitory. Corporate financiers collect their fee and their job is done – but in private equity, that’s just the beginning. You own the business and have to help steer its management, from acquisition through development over three or four years – always adding value – to profitable realisation of your investment. What do you enjoy most? Watching management teams mature and cope with some of the difficult challenges and dynamics that arise is hugely rewarding. Also, most private equity firms are relatively small, with collegiate management styles – big decisions get made and actioned quickly, which is fantastic. What does the work involve? There’s no such thing as a typical day. I could be discussing pricing strategies, hiring a sales director, finding more money to buy other businesses, working on legal documents or helping with tax structuring. I get bored if I’m doing the same thing for too long – I love the variety. What skills are essential in order to excel? You’re dealing with people from all walks of life and business backgrounds, many of whom are excellent – you can’t think you know it all. You have to be able to identify what will translate into value creation, which means understanding and maximising cashflow, as well as looking at long-term strategic development.

Giles’ tips: The best route to private equity is via transaction services or due diligence; lead advisory or corporate finance; or insolvency or corporate restructuring. Personality is key – have the wrong approach and you won’t get on. The right people can acquire the skills. Don’t assume you know it all – you’ll rely on existing teams for their experience and market knowledge.

eFinancialCareers.com Careers in Financial Markets 2007-08

Private equity Another possibility is a job in private equity. Private equity funds are the kings of the capitalist system. With hundreds of millions, and often billions, of pounds to invest, they specialise in buying out large established companies, improving them and selling them on. Giles Derry, director at Dunedin, says: “A lot of the role is sales-focused. As well as meeting company management teams to size up a potential investment, you also have to convince that team that you’d be a good partner for them. You have to give them a degree of comfort that you can help them deliver their business plan and grow their organisation significantly.” Guy Townsend, joint managing director at Walker Hamill, believes personality is critical to succeeding in private equity: “Many qualified accountants tick certain key boxes – having the technical know-how to understand the industries in which they invest and analyse each opportunity, as well as the transaction skills to complete deals. But it’s the ability to build strong networks internally and externally and get on with different management teams – generating immediate empathy and rapport – that differentiates the best candidates.”

73

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance Banks are spending large sums upgrading trading systems

Information technology

Several banks hire graduates as technology trainees

Technologists help banks do big business

How Mon hot ey Ku Opp dos

ortu nitie s

Banks use computers for just about everything – from communicating with staff and storing information on clients to running complex models to price financial products. They are known for having some of the world’s cutting-edge computer systems, especially for the trading floor, where financial products and commodities are bought and sold electronically.

Trends Banks are big spenders when it comes to IT systems. According to an estimate by Celent, a research company, financial institutions’ global IT spending stood at a huge $318bn in 2006, up 8% on 2005.

“We don’t hire people whose ability is purely technical but who have limited interpersonal skills”

eFinancialCareers.com Careers in Financial Markets 2007-08

Derek Walker, Barclays Capital

74

Banks have been spending big money on IT because the effectiveness of systems used to trade everything from simple (‘vanilla’) equities to exotic derivatives is an increasingly important source of competitive advantage. At the same time, computers play an ever more important role in the trading process itself via algorithmic trading models, which automatically place trades based on parameters set by mathematicians. It’s not all good news for technologists in investment banks, however. Along with increased spending on core systems, the other big trend of recent years has been to shift many programming and non-core IT roles to lowercost locations, both out of London to other regions of the UK and also further afield. JPMorgan has been adding to the number of programmers it employs in Glasgow, for example, while Citi has been transferring programmers to Belfast. Both banks – and most other banks – are also offshoring IT roles to India.

Roles and career paths Jobs in the IT departments of investment banks tend to fall into one of four categories: development, business analysis, project management and technical support. If you become a developer, you could be responsible for writing the programmes that help the bank do everything from pricing and booking trades to calculating risk. The

Non-essential IT roles are being shifted to India

main programming languages used by banks are usually C++, Java and Microsoft’s .NET. While developers write the programmes banks use, business analysts look at the way technology is used in the bank and analyse opportunities for making it work better. They help identify the potential for making changes to a bank’s technology systems. Once big changes have got underway, responsibility for managing them often passes to project managers who plan, structure and fulfil IT projects, or liaise with third-party providers. Technical support staff, meanwhile, require good technical skills and the thickest of skins to handle not only the technology problems, but the temper tantrums of irate traders. It’s a role that carries a lot of responsibility – a computer problem on a trading floor lasting a few minutes could cost the bank millions of dollars. It’s up to the technical support staff to identify and resolve any glitches as soon as possible. IT staff in investment banks also usually specialise in the IT requirements of a particular business area. While many IT staff work on the trading floor, others are based in private banking, fund management and operations, or deal with core infrastructure requirements. “While there seems to be an almost endless supply of IT ‘foot-soldiers’ in the City, there’s a definite shortage of people who really make things happen,” says Satnam Brar, managing director of specialist ERP recruiter Maximus. “The major banks and their integrators are all focusing on individuals who’re not just good technicians. Many current systems have grown organically and now need fundamental change. That has to be undertaken by people who don’t just understand the system, but also the business behind it. Finding that duality of expertise is not easy.”

Pay IT is not the place to be if you want to earn a multi-million pound remuneration package. However, IT salaries in investment banking are solid, with the possibility of earning bonuses of up to 20%. “Graduates start on as much as £35k, depending on their background and technical knowledge,” says Louise Clarke, head of IT recruitment at consultants Robert Walters. “Bonus potential depends on the area they go into and the length of their graduate programmes, which

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Profile Gurdev Sihre IS implementation team M&G

A computer science graduate from Birmingham University, Gurdev joined M&G in 2006. His role involves helping the implementation team, where his main objective is to coordinate and successfully implement tightly correlated projects into the business, working with project managers and acting as point of contact for technical service and change management teams. He also solely manages a number of smaller projects.

can be three to 18 months. The sooner you can get into a core business environment, the sooner your bonus potential will increase.”

How did you get your current job? I’d been personally trading in shares since college. Computer science was my forte, so this job allowed me to combine those interests. Although I don’t do any coding, I still need the knowledge gained from my degree, as I have to identify and mitigate risks; having a technical understanding helps me pre-empt them and build them into project plans.

Program manager C# developer

Basic salary (£k) 80-120 40-80

C++ developer

40-80

Application support analyst

40-60

Business analyst

70-120

Project manager

70-120

Source: Hays City

Job title

Skills Technical skills are obviously important: “Most IT graduate schemes in the City won’t hire without academic experience of software,” says Robert Walters’ Louise Clarke. “They want evidence of good computer skills already, although they’ll also take people on with strong science, engineering or maths degrees.” But technical ability is not enough. ‘Soft’ skills are also necessary: “People need to demonstrate good written and oral communication, as well as presentation,” says Derek Walker, head of campus recruitment at Barclays Capital. “We don’t hire people whose ability is purely technical but who have limited interpersonal skills. We need them to be technically smart but also able to talk to people throughout the business in a down-to-earth way.” “A key asset is to be able to explain technology to the business in terminology they will understand,” agrees Laura Everingham, graduate recruitment manager at investment company Fidelity International. Project managers need to be able to multitask and work on several things at once, according to Matt O’Hare of recruitment consultants Hays City: “As project manager, you’re the central coordinator – controlling the budget, looking after all the stakeholders, smoothing the continuity of each project and ensuring they hit key milestones.” This often involves working alongside and overseeing more than one set of people, according to Gurdev Sihre of M&G: “You need to be a team player, understand where everyone is coming from,” he says. “Project managers initially work with a team of analysts, then the developers and testers, then the users. Each has different priorities, but they’re all valid.”

Why do you like financial services? I love the pace. Things change quickly; you need to stay up to date with what’s happening, especially regulatory issues. I also like seeing how financial markets interact with and influence the rest of the economy. To play a part in all that is fantastic. What do you like about project management? It’s all about seeing things through from start to finish. I’m involved in the initial project brief, and I’m still there when it materialises as a real-life working application that reduces the effort required by people or processes, or saves us money. That’s really rewarding. What skills are needed to do well? Communication is critical. You’re dealing with projects involving significant sums of money. Everything must be watertight – from the written reports, through the way you walk people through the roll-out stages of a project, to setting criteria for post-implementation, end-user sign-off testing.

Gurdev’s tips: Think about the role you want – it’s such a vast arena and there are so many paths – support, development, testing and project management are just a few. Know what each potential employer does and how it fits in with the rest of the financial sector – and understand how the FSA works, as it will impact on much of your work. Network with as many people as possible – get out and about, stay enthusiastic and take on as much as you can. But don’t forget, you also have to have a social life.

eFinancialCareers.com Careers in Financial Markets 2007-08

Basic salaries IT in financial services 2007

75

Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

At a glance Banks value experience from outside financial services

IT careers Technology opens more doors than you’d think

So you want to work in IT in investment banking. Where do you start? Which route will your career take? What are the possibilities for the future?

Starting out The easiest and most direct way to work in investment banking IT is to find a bank that will take you on as a graduate trainee. Banks such as JPMorgan, Deutsche Bank, Goldman Sachs and Barclays Capital recruit hundreds of graduates into their technology divisions each year.

“Graduates are a key pipeline for future technology leaders or technology experts” Laura Everingham, Fidelity International

The advantage of joining a bank directly from university is that you will be trained in the application of technology in financial services and gain a solid understanding of financial products. Not everyone who aspires to working in banking technology will achieve a position as a graduate trainee, however. Banking is notoriously competitive, with around 60 applications for every position. Although IT is less competitive than other areas, it remains heavily oversubscribed. The good news is that if you do not immediately land a technology position, there are several other routes into the industry for technologists. These include blue-chip companies, particularly multinationals in the telecoms sector, software houses and consultants

eFinancialCareers.com Careers in Financial Markets 2007-08

Getting in

76

“A good starting point is to join one of the software vendors whose products are used to trade instruments within the banking sector,” says Lee Chapman, director of IT Financial Recruitment. “These companies will be looking for exceptional academic backgrounds and have a preference for scientific degrees, such as computer science.” You’ll be able to move into banking if you have spent two or three years training at the likes of IBM, Oracle or Microsoft. Financial software providers such as Murex and Beauchamp Financial Technology also take on graduates, with Beauchamp employing around 30 a year.

Rotational programmes give you the chance to find your niche No room for ‘anoraks’ – business awareness is critical

Many major banks seek good IT graduates at the ‘second jobber’ stage from companies outside financial services, according to Louise Clarke of recruiters Robert Walters: “Sectors such as telecoms, defence and artificial intelligence are classic breeding grounds for candidates,” she says. “The banks actively search from there, as people are likely to have been trained in the raw basics but without the pre-moulding they might have if they’d started out in another bank.” Matt O’Hare of Hays City says that, while standards have in no way dropped, employers are less likely to dismiss a candidate simply because they have no previous banking experience: “We’ve seen graduates from pharmaceuticals companies and even the public sector cross over successfully into banks,” he says. “If similar technology has been rolled out in two organisations, then people may well have the ability to support the same volume and usage in another big company.”

Roles and career paths Once you’ve got your foot in the door at an investment bank, opportunities are plentiful. You could work on technology for the trading floor or build the technology that underpins mathematical models used to price financial derivative products. Or simply manage a project to update payroll systems. There are two broad routes available to technologists who work in investment banks: technical and managerial. With the managerial route, you’ll start out as a programmer or business analyst, working on a particular system. From there, you’ll move on to managing a small team of similar analysts or programmers, becoming a program team leader with responsibility for a particular area of a technology program and, ultimately, a project manager with responsibility for an entire project. Many organisations like to give their trainees a taste of what’s on offer throughout the IT function, with a view to identifying potential skills, as well as allowing recruits the chance to find out what it is that they really enjoy. “Graduates are a key pipeline for future technology leaders or technology experts within our organisation,” says Laura Everingham, graduate recruitment manager at investment company Fidelity International. “Where you want to specialise will depend on you and your strengths. As we have a rotational graduate scheme, project management skills are essential. These could

Profile Simon Pascoe Software developer Barclays Capital

After graduating last year from Imperial College with a Masters in mathematics, Simon joined Barclays Capital in an IT development role for the front office.

Where next? From a career in investment banking IT, you may find it possible to move into a role in banking operations, according to Lee Chapman of IT Financial Recruitment: “For candidates wishing to ultimately work within the business itself, there are roles available within operations which will involve acting as an interface between IT, operations and the business,” he says. “These will require you to support the management of credit and risk, often including major elements of IT infrastructure. These roles will make you far more visible within the business, which in itself opens up further opportunities for those who excel.” Technologists are also increasingly valued in the trading arena, says Chapman: “Strong front-end developers should consider a move to a role within the sales environment – this is where you’re likely to pick up exposure to the latest and most advanced electronic trading systems.” The one thing you can’t count on if you work as a technologist is moving into the front office in a purely client-facing role as a trader or salesperson. Indeed, if you join the bank with this intention, you won’t get very far. “In IT, it’s rare to cross over into a solely revenuegenerating role,” says Andrew Keene, director of banking technology recruiter Thomson Keene. “Quantitative analysts might become traders – and some of those may come from an IT background – but they’ve probably always been working in the front office. Developers of web-enabled products, such as those that support credit derivatives, may move into relationship manager-type roles, working alongside their sales colleagues and explaining the technology aspect of products to clients. It’s pretty exceptional though.”

How did you get your current job? I worked here on a summer internship in 2004, after which I was offered a place on the graduate programme. Although in-depth technical knowledge wasn’t required, I had to explain at interview how I’d go about analysing and solving various scenarios. Why do you like financial services? I knew that banking would involve maths-related work, which I like. And as I’d always played around with computers to come up with new ways of applying different ideas, this job combined both interests. I could have applied to software houses but that wouldn’t give me the close contact with end users that I enjoy in an in-house team. Our clients are internal, so we get to see and speak to them virtually every day. What do you like about your role? When you’re presented with new work or something to fix, you’re able to investigate different ideas and try out and learn new technologies. From there, you progress to the project plan, move forward on that and send the software out into the system. Traders on the desk are always encouraging, and will happily come back with good feedback, which is rewarding. What skills are needed to do well? We’re extremely busy and have to be responsive to the desk. Good communication skills are essential, as the work involves analysing each problem and bouncing ideas off technical experts.

Simon’s tips: Find out where your job would sit – that helps you match your own skills to the job’s requirements and demonstrates good preparation – a key skill when planning a new software project. Some knowledge of financial services is needed: what various products and services are and how they fit within the context of the business. You need to be able to cope with more than one thing at once – there will always be high demands on your time, and constant prioritising will be necessary.

eFinancialCareers.com Careers in Financial Markets 2007-08

have been displayed during a team project at university or a final-year assignment – alternatively, you could have led a team to raise money for charity or embarked on a round-the-world trip.” One way of staying in close contact with technology is to become a systems architect. They make decisions about combining the individual programs to make a coherent whole and need an understanding of the entire system. Another way is to work on cutting-edge technologies such as those used to price derivative products. This path is open only to the very best technologists, however.

Can you describe what you do at the bank? I work in a development team supporting one of the trading desks. We act as the middle man between the people who do the pricing mathematics and the traders; we write the software used to price and book trades.

77

Banking & Financial Markets

Employers

Baillie Gifford

Bank of America

Company snapshot ABN AMRO is a prominent international bank, with a history going back to 1824. We’re ranked 8th in Europe and 13th in the world based on total assets, and have over 4,500 branches in 53 countries, a staff of over 107,000 full-time equivalents and total assets of €1,054.6bn (as at 31 March 2007). Our strong corporate culture is based on integrity, teamwork, respect and professionalism, which enable us to make more possible for our clients and our people alike. We believe it’s a unique culture in the financial sector. It’s a culture where people who are open to new ideas, who aren’t afraid to voice their opinions and who are prepared to listen to other people’s views will thrive. For more information see our employer profile on www.efinancialcareers.com

Company snapshot Baillie Gifford is one of the leading privately owned investment management firms in the UK, and currently has over £50bn under management or advice. It is also one of the fastest growing firms in the sector, helped by an impressive investment performance record, an exclusive focus on investment management and an effective partnership scheme. The culture is one where individuals can flourish while benefiting from the support of a strong team-based structure. We are looking for applicants with or expecting a 1st or 2.1 degree in any discipline. We also welcome applications from those seeking an early change in their professional career and from PhD students.

Company snapshot Bank of America serves clients in 175 countries and has relationships with 79% of the Global Fortune 500. The bank’s international growth strategy is to build a profitable universal bank with global markets as a core competency. Bank of America targets European clients with strong US interests and issuer and investor clients with whom the bank already has a strong relationship in the US. The company’s Global Corporate and Investment Banking group (GCIB) provides innovative services in M&A, equity and debt capital raising, lending, trading, risk management, treasury management and research.

Apply via: www.graduate.abnamro.com Please see our website for deadlines in other regions as these will vary by location.

eFinancialCareers.com Careers in Financial Markets 2007-08

IT in Finance

ABN AMRO

Graduate programme info Approx. no. of graduate hires in 2007-08: 150 worldwide. Divisions offering vacancies: Mergers and Acquisitions, Equity or Fixed Income Capital Markets, Structured Finance, Trading, Sales and Research, Derivatives, Risk Management, Asset Management and Technology. Typical duration of graduate programme: 12 to 18 months, depending on programme, with six weeks of intensive training at our exclusive academy in Amsterdam. Application deadline: 2008 London graduate development programme: 4 November 2007.

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Accounting in the City

Internship programme info Approx. no. of intern hires in 2007-08: 100 worldwide. Divisions offering vacancies: As above. Typical duration of internship programme: 10 to 12 weeks during the summer. Application deadline: 2008 London summer internship programme: 27 January 2008. Apply via: www.graduate.abnamro.com Please see our website for deadlines in other regions as these will vary by location.

Graduate programme info Approx. no. of graduate hires in 2007-08: 10. Divisions offering vacancies: Investment management departments. Typical duration of graduate programme: 3-year training programme. Application deadline: 30 November 2007. Apply via: www.bailliegifford.com

Internship programme info Approx. no. of intern hires in 2007-08: 7. Divisions offering vacancies: Investment management departments. Typical duration of internship programme: 8 weeks in July and August. Application deadline: 31 January 2008. Apply via: www.bailliegifford.com

Graduate programme info Approx. no. of graduate hires in 2007-08: 120. Divisions offering vacancies: Global Investment Banking, Global & Capital Markets, Risk, Treasury Services, Technology & Middle Office. Typical duration of graduate programme: 2-3 years depending on line of business. Application deadline: Global Corporate & Investment Banking: 14 November 2007. Global Technology & Operations: 2 December 2007. Apply via: www.bankofamerica.com/careers

Internship programme info Approx. no. of intern hires in 2007-08: 120. Divisions offering vacancies: Global Investment Banking, Global & Capital Markets, Risk, Treasury Services, Technology & Middle Office. Typical duration of internship programme: 10 weeks. Application deadline: 16 January 2008. Apply via: www.bankofamerica.com/careers

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www.efinancialcareers.com/students The Financial Job Marketplace

Banking & Financial Markets

Employers

Barclays Global Investors

Bloomberg

Company snapshot Barclays Capital is the investment banking division of Barclays Bank PLC, which has an AA long-term credit rating and a balance sheet of over £996bn (€1.4 trillion). With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with solutions to their financing and risk management needs. Barclays Capital has offices in 26 countries, employs over 13,200 people and has the reach and distribution power to meet the needs of issuers and investors worldwide.

Company snapshot Barclays Global Investors (BGI) is one of the world’s largest asset managers and a leading global provider of investment management products and services. From inventing the world’s first index fund in 1971 and the first quantitative active strategy in 1978, we have pioneered change and led investment innovation. Today we manage more than $1.86 trillion (£950 billion) worth of assets for over 2,900 clients throughout the world. We’ve developed a unique approach to equity and fixed income asset management, combining quantitative scientific analysis with human ingenuity to become creators and inventors in our field.

Company snapshot Bloomberg is the leading provider of realtime financial news, data and analysis. Leading corporations, news organisations, financial professionals and individuals in over 127 countries rely on Bloomberg. Available 24 hours a day, to more than 250,000 financial professionals worldwide, the ‘Bloomberg Professional’ service seamlessly integrates data, news, analytics, multimedia reports and trading capabilities into a single sophisticated platform. We have many areas in which you can shine. You can work for our core business, the Bloomberg Professional service, or the teams of our media products. We offer opportunities in finance, sales, IT, programming, project management, news and summer internships.

Apply via: www.barclayscapital.com/campusrecruitment

eFinancialCareers.com Careers in Financial Markets 2007-08

IT in Finance

Barclays Capital

Graduate programme info Approx. no. of graduate hires in 2007-08: 600 globally, 300 in London. Divisions offering vacancies: Compliance, Corporate Communications, Corporate Real Estate Services, Finance, Global Financial Risk Management, Global Marketing, Human Resources, Information Risk Management, Investment Banking and Debt Capital Markets, Legal, Operations, Operational Risk Management, Quantitative Analytics, Research, Sales, Strategy and Planning, Structuring, Technology & Trading. Typical duration of graduate programme: N/A. Application deadline: Please see website for details.

80

Accounting in the City

Internship programme info Approx. no. of intern hires in 2007-08: 600 globally, 300 in London. Divisions offering vacancies: Compliance, Corporate Communications, Corporate Real Estate Services, Finance, Global Financial Risk Management, Global Marketing, Human Resources, Information Risk Management, Investment Banking and Debt Capital Markets, Legal, Operations, Operational Risk Management, Quantitative Analytics, Research, Sales, Strategy and Planning, Structuring, Technology & Trading. Typical duration of internship programme: 10-week internship. Application deadline: The deadline to apply for summer internships is 31 January 2008, although it is advisable to apply early. Apply via: www.barclayscapital.com/campusrecruitment

Graduate programme info Approx. no. of graduate hires in 2007-08: 65. Divisions offering vacancies: Active Equities, Indexed Equities, Fixed Income (active/indexed), Business Development, Technology. Typical duration of graduate programme: 18 months. Application deadline: 14th October 2007. Apply via: www.bgigraduatecareers.com

Internship programme info Approx. no. of intern hires in 2007-08: 40. Divisions offering vacancies: Active Equities, Indexed Equities, Fixed Income (active/indexed), Business Development, Technology. Typical duration of internship programme: 12 weeks. Application deadline: January 2008. Please see website. Apply via: www.bgigraduatecareers.com

Visit careers.bloomberg.com

Graduate programme info Approx. no. of graduate hires in 2007-08: 400+ in the UK. Divisions offering vacancies: Financial Sales, Data Analysis, Software Development, Information Technology, Project Management, News. Typical duration of graduate programme: Graduates join as permanent employees with real responsibility from the start. Application deadline: Recruitment is ongoing with no application deadlines. Apply via: careers.bloomberg.com

Internship programme info Approx. no. of intern hires in 2007-08: 120 in the UK. Divisions offering vacancies: Financial Sales, Data Analysis, Software Development, Information Technology, Project Management, Marketing, Accounts, HR and News. Typical duration of internship programme: 10 weeks. Application deadline: Internship applications close at the end of February 2008. Apply via: careers.bloomberg.com

BNP Paribas

Citi

Credit Suisse

Company snapshot BNP Paribas is a global leader in banking and financial services, ranking amongst the world’s top 15 banks by market capitalisation and total assets. Our corporate and investment banking division is one of our core businesses – with over 14,000 people and a presence in 85 countries across five continents. At BNP Paribas, we like to do things our own way. We don’t offer standard three-month rotations for graduates. You will come in to a real job from day one, which means a more intense experience, earlier responsibility and greater opportunity to develop.

Company snapshot Citi is the most complete financial partner to corporations, financial institutions, institutional investors and governments in the world. As a global leader in banking, capital markets, and transaction services, with a presence in many countries dating back more than 100 years, our Markets and Banking division enables clients to achieve their strategic financial objectives by providing them with cutting-edge ideas, best-in-class products and solutions, and unparalleled access to capital and liquidity.

Company snapshot Credit Suisse provides investment banking, private banking and asset management services to clients across the world. Active in 50 countries and employing 45,000 people, this bank is a true pioneer in global finance. In 2006, Credit Suisse celebrated its 150th anniversary and launched an integrated banking platform delivering comprehensive financial solutions across a diverse global client base. There are exceptional opportunities for further growth in new product areas and emerging markets; there are equally exceptional opportunities for the people who can deliver that growth. Credit Suisse offers intellectual challenges, high rewards and global development potential for individuals who share an enthusiasm for business-critical innovation.

Apply via: https://www.citi.gtios.com

Apply via: www.graduates.bnpparibas.co.uk

Internship programme info Approx. no. of intern hires in 2007-08: Varies by programme. Divisions offering vacancies: As per above. Typical duration of internship programme: Summer: 8-12 weeks. Long term: 4-11 months. Application deadline: See website for detail. Apply via: www.graduates.bnpparibas.co.uk

Internship programme info Approx. no. of intern hires in 2007-08: 250. Divisions offering vacancies: Investment Banking, Corporate Banking, Sales and Trading, Capital Markets, Global Transaction Services, Investment Research, Technology, Operations and HR. Typical duration of internship programme: 10 weeks. Application deadline: Summer programme 20 January 2008. Apply via: https://www.citi.gtios.com

Graduate programme info Approx no. of graduate hires in 2007-08: 200 graduates. Divisions offering vacancies: Asset Management, Investment Banking, Fixed Income, Equities, Finance, Private Banking, Information Technology and other support functions. Typical duration of graduate programme: Dependent on programme. Application deadline: 2008 London graduate development programme: 4 November, 2007. Full-time opportunities: 23 November, 2007. For other deadlines, please see our website. Apply via: www.credit-suisse.com/careers

Internship programme info Approx no. of intern hires in 2007-08: 245 summer interns. Divisions offering vacancies: Asset management, investment banking, fixed income, equities, finance, private banking, shared services & information technology. Typical duration of internship programme: Dependent on programme. Application deadline: Please see our website for specific dates Apply via: www.credit-suisse.com/careers

eFinancialCareers.com Careers in Financial Markets 2007-08

Graduate programme info Approx. no. of graduate hires in 2007-08: 500 global vacancies. Divisions offering vacancies: We have global opportunities in Fixed Income, Equity Derivatives, Coverage, Corporate Finance, Technology, ECEP, Structured Finance and Functions. Typical duration of graduate programme: Minimum 1 year. Application deadline: See website for details.

Graduate programme info Approx. no. of graduate hires in 2007-08: 250. Divisions offering vacancies: Investment Banking, Corporate Banking, Sales and Trading, Capital Markets, Global Transaction Services, Investment Research, Technology, Operations and HR. Typical duration of graduate programme: Varies by area, see www.careers.citigroup. com for more details. Application deadline: Full time programme: 4 November 2007.

81

Banking & Financial Markets

Employers

Dresdner Kleinwort

European Investment Bank

Company snapshot Deutsche Bank has been a global player for more than 135 years, from financing the building of the Baghdad railway in the 19th century to being the first German bank to list on the NYSE in 2001. Today it is a financial services provider, top executor of M&A deals, Europe’s number one fund manager and the global leader in securities trading. At Deutsche Bank ‘A Passion to Perform’ is more than just a claim – it’s the way it does business, attracting the brightest talent to deliver an unmatched franchise. It is committed to being the best financial services provider in the world. Its breadth of experience, leading-edge capabilities and financial strength create value for all its stakeholders: clients, investors, employees, and society as a whole.

Company snapshot Dresdner Kleinwort is the investment banking division of Dresdner Bank AG and a member of the Allianz Group, one of the world’s leading financial services providers. With headquarters in London and Frankfurt and an international network of offices, Dresdner Kleinwort provides a wide range of investment bank products and services to European and international clients through its Global Banking and Capital Markets business lines.

Company snapshot The European Investment Bank was created by the Treaty of Rome in 1958 as the longterm lending bank of the European Union. The task of the bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU member states. The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU policies. The EIB, based in Luxembourg, offers the opportunity to work for Europe in a truly international environment. The bank offers professional and managerial jobs at different levels, covering a wide range of professions. These positions require a university degree and an adequate level of relevant experience.

Apply via: www.db.com/careers

eFinancialCareers.com Careers in Financial Markets 2007-08

IT in Finance

Deutsche Bank

Graduate programme info Approx. no. of graduate hires in 2007-08: Over 250 graduates in the City of London. Divisions offering vacancies: Asset Management, Finance, Global Banking, Global Markets, Human Resources, Legal, Risk & Capital, Operations, Private Wealth Management, and Technology. Typical duration of graduate programme: 18 months. Application deadline: Analyst programme deadline: 1 November 2007.

82

Accounting in the City

Internship programme info Approx. no. of intern hires in 2007-08: Over 200 positions in the City of London. Divisions offering vacancies: Asset Management, Finance, Global Banking, Global Markets, Human Resources, Legal, Risk & Capital, Operations, Private Wealth Management and Technology. Typical duration of internship programme: 9-10 weeks. Application deadline: For Global Banking, Global Markets, Asset Management and PWM: 15 January 2008 For Finance, Group Technology & Operations, Human Resources, Risk, Legal and Capital: 15 February 2008. Apply via: www.db.com/careers

Graduate programme info Approx. no. of graduate hires in 2007-08: 100. Divisions offering vacancies: Global Banking, Capital markets – Sales, Research, Trading and Structuring, Risk Management and Information Technology. Typical duration of graduate programme: 8-week training programme. Application deadline: Graduate deadline: 8 November 2007. Apply via: www.dresdnerkleinwort.com/graduates

Internship programme info Approx. no. of intern hires in 2007-08: 100. Divisions offering vacancies: Global Banking, Capital Markets – Sales, Research, Trading and Structuring, Risk Management and Information Technology. Typical duration of internship programme: 10 weeks: 1 week’s training followed by a 9-week internship. Application deadline: Summer internship deadline: 8 February 2008. Apply via: www.dresdnerkleinwort.com/graduates

Graduate programme info The EIB offers a limited number of internships for university graduates with less than one year of professional experience who wish to acquire an understanding of the work of the bank. The internships normally last between one and five months, and they cannot be extended beyond the maximum length of five months. Most are based at the EIB’s headquarters in Luxembourg. Apply via: www.eib.org/about/jobs

Fidelity International

Fitch Ratings

HSBC

Company snapshot Fidelity* is an investment management company managing more than $280.7bn for millions of private and institutional investors around the world. Through combining a global reach with a local focus, we have become the UK’s largest mutual fund manager and the European leader in pan-European equities. The independence we enjoy as a privately owned company enables us to concentrate on developing innovative products and providing the highest levels of customer service.

Company snapshot Fitch Ratings is a leading global rating agency committed to providing the world’s credit markets with accurate, timely and prospective credit opinions. Built on a foundation of organic growth and strategic acquisitions, Fitch Ratings has grown rapidly during the past decade gaining market presence throughout the world and across all fixed income markets. Fitch Ratings is dual-headquartered in New York and London, operating offices and joint ventures in more than 50 locations and covering entities in more than 90 countries. Fitch Ratings is a majority owned subsidiary of Fimalac, S.A., an international business support services group headquartered in Paris, France.

Company snapshot HSBC provides a comprehensive range of financial services to over 125 million customers worldwide. HSBC’s Corporate, Investment Banking and Markets (CIBM) is an emerging markets-led and financing focused business that provides tailored financial solutions to major government, corporate and institutional clients worldwide. Managed as a global business, CIBM’s dedicated offices around the globe serve the subsidiaries and offices of our clients in more than 60 countries and territories.

Graduate programme info Approx. no. of graduate hires in 2007-08: 28. Divisions offering vacancies: Accounting & Finance, Investment, Operations, Risk Management & Compliance, Sales & Marketing (European Rotation Programme) and Systems. Typical duration of graduate programme: Varies by business area, typically two and a half years. Application deadline: 1 December 2007 for investment, 31 December 2007 for all other programmes. Apply via: www.fidelityrecruitment.com

Internship programme info Approx. no. of intern hires in 2007-08: 6. Divisions offering vacancies: Accounting & Finance, MultiManager and Sales & Marketing (European Rotation Programme). Typical duration of internship programme: Summer internships of 10 weeks. Application deadline: 31 January 2008. Apply via: www.fidelityrecruitment.com

Graduate programme info Approx. no. of graduate hires in 2007-08: 25. Divisions offering vacancies: Structured Finance, Corporates, Financial Institutions. Typical duration of graduate programme: 18-24 months, depending on the programme. Application deadline: To be confirmed for 2008.

Graduate programme info Approx. no. of graduate hires in 2007-08: 150 globally. Divisions offering vacancies: Corporate Banking, Global Markets, Global Capital Markets, Investment Banking, Infrastructure (Global Markets Operations, Finance, Compliance and Credit Risk Management), Research, HSBC Investments, HSBC Amanah, Private Banking. Typical duration of graduate programme: Varies depending on business area. Application deadline: End of November 2007. Apply via: hsbcnet.com/ibcareers

Apply via: www.fitchgraduatesuk.com

Internship programme info Approx. no. of intern hires in 2007-08: 20. Divisions offering vacancies: Across the business. Typical duration of internship programme: Typical duration is 3 months. Ranges from 2 to 6 months. Application deadline: Rolling applications. Apply via: www.fitchgraduatesuk.com

Internship programme info Approx. no. of intern hires in 2007-08: 70. Divisions offering vacancies: Corporate Banking, Global Markets, Global Capital Markets, Investment Banking, Infrastructure (Global Markets Operations, Finance, Compliance and Credit Risk Management), Research, HSBC Investments, HSBC Amanah, Private Banking. Typical duration of internship programme: 10 weeks. Application deadline: End of February 2008. Apply via: hsbcnet.com/ibcareers

eFinancialCareers.com Careers in Financial Markets 2007-08

*Fidelity means Fidelity International Limited (FIL), established in Bermuda, and its subsidiary companies. Assets and resources as at 30.03.07 are those of FIL. Source IMA based on institutional and retail funds under management as at April 2007.

83

Banking & Financial Markets

Employers

Lehman Brothers

Macquarie

Company snapshot Lazard is a premier financial services firm committed to excellence, independence, intellectual rigour, integrity and creativity for our clients on a global scale. Lazard is a global firm, with a team of over 2,000 individuals operating across 16 countries. We solve complex financial challenges for a client base that includes corporations, partnerships, institutions, governments and high-net-worth individuals. We are an independent firm, free of the conflicts that can arise at other financial institutions, and we maintain long-standing relationships with business leaders and decision makers around the world.

Company snapshot Experience Lehman Brothers. Make an impact. Engage your passion. Realise your potential. An innovator in global finance, Lehman Brothers serves the financial needs of corporations, governments and municipalities, institutional clients, and high-net-worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in capital markets (including equity and fixed income sales, trading and research), investment banking, and investment management (including private investment management, asset management and private equity). The firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world.

Company snapshot The Macquarie Group is a diversified international provider of specialist investment, advisory and financial services, with over 10,000 employees in 24 countries across Europe, Asia, the Middle East, the Americas, Africa and Australasia. Macquarie has reported successive years of record growth and profits for the past 15 years and has seen its presence in the European market increase significantly. Our success comes from supporting the ideas of our people. We seek motivated, independent thinkers, whose talent and initiative will drive our future growth. In joining Macquarie, you will have the opportunity to be part of a successful team working in a fast-paced and dynamic environment where your contribution is valued from day one. Graduate opportunities exist within the Investment Banking Group (Corporate Finance Advisory and Banking Funds) the Treasury & Commodities Group, the Financial Operations Division, the Risk Management Group, the Equity Markets Group and our Information Technology Division in both Europe and the UAE.

Apply via: www.lazard.com/apply

Internship programme info Approx. no. of intern hires in 2007-08: 25. Divisions offering vacancies: M&A advisory, Financing (ECM & DCM advisory) and Restructuring. Typical duration of internship programme: 7 weeks. Application deadline: Interns & 1-year placement: 1 February 2008. Apply via: www.lazard.com/apply

eFinancialCareers.com Careers in Financial Markets 2007-08

IT in Finance

Lazard

Graduate programme info Approx. no. of graduate hires in 2007-08: 15. Divisions offering vacancies: M&A advisory, Financing (ECM & DCM advisory) and Restructuring. Typical duration of graduate programme: 3 months’ training. Application deadline: Analysts: 16 November 2007.

84

Accounting in the City

Graduate programme info Approx. no. of graduate hires in 2007-08: 300. Divisions offering vacancies: Investment Banking Division, Capital Markets Division (Equities, Fixed Income & Prime Services), Investment Management Division, Private Equity, Corporate Divisions (including IT, Operations specialist programmes and a Corporate rotational programme). Typical duration of graduate programme: 2-3 years. Application deadline: Deadlines vary. Check with your careers service or graduate recruiting contact. Apply via: www.lehman.com/careers

Internship programme info Approx. no. of intern hires in 2007-08: 300. Divisions offering vacancies: Investment Banking Division, Capital Markets Division (Equities, Fixed Income & Prime Services), Investment Management Division, Private Equity, Corporate Division (Corporate Advisory, IT, Finance, Operations, Risk Management). Typical duration of internship programme: 10-12 weeks for internships. 6-12 months for industrial placements. Application deadline: Deadlines vary. Check with your careers service or graduate recruiting contact. Apply via: www.lehman.com/careers

To apply please visit our website: www.macquarie.com/eu

Graduate programme info Approx. no. of graduate hires in 2007-08: 85. Divisions offering vacancies: Investment Banking Group, Treasury & Commodities Group, Equity Markets Group, Information Services Division, Financial Operations Division and Risk Management Group. Typical duration of graduate programme: Permanent. Application deadline: 5 November 2007. Apply via: www.macquarie.com/eu

Internship programme info Approx. no. of intern hires in 2007-08: 50. Divisions offering vacancies: Investment Banking Group. Typical duration of internship programme: 10 weeks. Application deadline: 11 January 2008. Apply via: www.macquarie.com/eu

Merrill Lynch

Morgan Stanley

RBC Capital Markets

Company snapshot Merrill Lynch is a leading wealth management, capital markets and advisory company, with offices on six continents and client assets of more than $1.6 trillion. The company is a global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to clients. Through its two core businesses – Global Markets & Investment Banking and Global Private Client – Merrill Lynch provides a range of services for individuals, small and mid-size businesses, corporations, institutions and governments. Merrill Lynch owns just under half of BlackRock, one of the world’s largest publicly traded investment management companies.

Company snapshot Morgan Stanley is one of the world’s largest diversified financial services companies, with a reputation for excellence in advice and execution on a global scale. The firm serves institutional and individual investors and investment banking clients, including corporations, governments and other entities around the world. We offer new ideas and effective execution, creating opportunities and insightful solutions to complex financial problems. Our 45,000 employees across 31 countries provide underwriting, sales, trading and research for almost every financial instrument, as well as merger and acquisition advice, privatisation and financial restructuring, foreign exchange, commodities, and real estate finance.

Company snapshot Every investment bank can promise challenge and responsibility to its graduates. The question is, how long might you have to wait for those doors of opportunity to open? With RBC Capital Markets, they’ll open very quickly. That’s precisely because we’re not the world’s biggest investment bank. We’re ranked in the global top 17, which means we’re big enough to be a serious player in the financial markets, yet small enough to offer our people really early responsibility. There are no waiting rooms, no hiding places. If you’re good enough, we’ll trust your ability to dig deep and deliver the goods.

Graduate programme info Approx. no. of graduate hires in 2007-08: 250. Divisions offering vacancies: Investment Banking, Global Markets, Research, Technology, HR and Global Private Client. Typical duration of graduate programme: 2 years. Application deadline: Full-time programme: November.

Graduate programme info Approx. no. of graduate hires in 2007-08: 250. Divisions offering vacancies: Investment Banking, Sales & Trading, Investment Management, Credit Risk Management, Technology and Finance & Operations. Typical duration of graduate programme: 2-3 years. Application deadline: 11 November 2007.

Internship programme info Approx. no. of intern hires in 2007-08: 200. Divisions offering vacancies: Investment Banking, Global Markets, Research, Technology, HR and Global Private Client. Typical duration of internship programme: 9 weeks. Application deadline: Summer programme: December. Apply via: www.ml.com/careers/europe

Apply via: www.morganstanley.com/careers/recruiting

Internship programme info Approx. no. of intern hires in 2007-08: 150. Divisions offering vacancies: Investment Banking, Sales & Trading, Investment Management, Private Wealth Management, Technology and Finance & Operations. Typical duration of internship programme: 10 weeks. Application deadline: 31 December 2007. Apply via: www.morganstanley.com/careers/recruiting

Apply via: www.rbccm.com/careers

Internship programme info Approx. no. of intern hires in 2007-08: 20. Divisions offering vacancies: Capital Markets (Front Office, Middle Office and Operations), Investment Banking, Global Financial Institutions, Global Wealth Management & IT. Typical duration of internship programme: 8-10 weeks. Application deadline: 8 February 2008. Apply via: www.rbccm.com/careers

eFinancialCareers.com Careers in Financial Markets 2007-08

Apply via: www.ml.com/careers/europe

Graduate programme info Approx. no. of graduate hires in 2007-08: 10-12 Divisions offering vacancies: We also take a small number of graduates into the middle office. Typical duration of graduate programme: Unique 17-week programme (rotating across fixed income sales & trading, debt capital markets, structuring, foreign exchange, commodities & infrastructure finance). Skills required: Minimum 2.1 or equivalent degree. Genuine interest in finance with a strong desire to progress quickly. Additional languages an advantage but by no means a prerequisite to applying. Application deadline: 23 November 2007.

85

Banking & Financial Markets

Employers

Rothschild

RWE Trading

Company snapshot The Royal Bank of Scotland is the third largest bank in Europe and the tenth largest in the world by market capitalisation. With over 150,000 employees, we now serve more than 36 million customers globally. We continue to grow rapidly. Global Banking & Markets is a leading banking partner to the world’s corporations and financial and governmental institutions, providing an extensive range of debt financing, risk management and investment services. UK Corporate Banking is the UK’s number one corporate bank. Together, we have relationships with 95% of the FTSE 100 and 80% of the Fortune 100.

Company snapshot Rothschild is a top-tier international investment bank with offices in cities in over 30 countries, including London, Paris, Frankfurt, Milan, New York, Toronto, Hong Kong, Singapore, Sydney and Beijing. We have over 2,000 employees worldwide. We provide objective relationship-based advice and services to our clients worldwide and work with them to achieve their strategic and financial goals. Rothschild’s principal activities are Investment Banking (M&A, Debt Advisory and Equity Capital Markets, the latter of which is conducted through our joint venture with ABN AMRO), Corporate Banking and Private Banking.

Company snapshot We are a leading player in the European energy markets. As an asset-backed energy trading company RWE Trading has a keen understanding of the forces driving the markets. At RWE Trading we trade not only the typical energy commodities gas, oil, coal and power both UK and continental, but also a range of financial derivatives. We are also a major player in the emerging environmental markets. RWE Trading runs trading floors in London and Swindon in the UK, as well as Essen in Germany. We combine all the skills and expertise of any major investment bank, with the excitement of working within the energy markets.

Graduate programme info Approx. no. of graduate hires in 2007-08: 30. Divisions offering vacancies: Investment Banking (M&A, Debt Advisory and Equity Capital Markets) and Corporate Banking. Typical duration of graduate programme: Graduates complete a four-month training programme, which includes formal classroom training as well as rotations through our principal divisions. Application deadline: Graduate programme: 5 November 2007.

Graduate programme info Approx. no. of graduate hires in 2007-08: We typically look to recruit six graduates per year, though we will always have positions for talented individuals. Divisions offering vacancies: We offer our talent the opportunity to experience several different areas of our business: Risk, Front Office, S&V – or specialise in just one or two. Typical duration of graduate programme: Our Talent Pool scheme typically lasts for 18 months. Application deadline: We are always recruiting and are keen to receive CVs all year round.

Apply via: www.rbs.com/gbmgraduates www.rbs.com/ukcbgraduates

eFinancialCareers.com Careers in Financial Markets 2007-08

IT in Finance

Royal Bank of Scotland

Graduate programme info Approx. no. of graduate hires in 2007-08: 375. Divisions offering vacancies: Global Banking & Markets – Debt Markets, Treasury & Investor Products, Asset and Portfolio Management, Sector Corporate Finance, Corporates, Financial Institutions, Risk, Finance, Specialised Lending Services, Technology, Operations. UK Corporate Banking – Corporate Banking; Commercial Banking; Domestic Banking Services; International Banking Services; Lombard; RBS Invoice Finance; Chief Administrative Office; Corporate and Institutional Banking; Corporate and Structured Finance. Typical duration of graduate programme: 12 months. Application deadline: Please refer to our websites.

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Accounting in the City

Internship programme info Approx. no. of intern hires in 2007-08: 240 worldwide. Divisions offering vacancies: Global Banking & Markets. UK Corporate Banking. Typical duration of internship programme: UK: Easter Insight Programme (2 weeks). Worldwide: Summer Internship Programme (10 weeks), 10-20 Internships (6-12 months). Application deadline: Please refer to our websites. Apply via: www.rbs.com/gbmgraduates www.rbs.com/ukcbgraduates

Apply via: www.rothschild.com

Internship programme info Approx. no. of intern hires in 2007-08: Summer interns: approximately 30. Long-term interns: various. Divisions offering vacancies: In the UK, we offer a summer internship programme in our Investment Banking and Corporate Banking divisions. We also take long-term interns into our Investment Banking division. Typical duration of internship programme: Our summer internship programme lasts for 10 weeks from early July to early September. Our long-term internship posts run for periods of between three and six months. Application deadline: Summer internship programme: 7 January 2008. Long-term internship programme: ongoing. Apply via: www.rothschild.com

Apply via: [email protected]

Placement programme info Approx. no. of placement hires in 2007-08: 8-12 (UK only). Divisions offering vacancies: Risk, Analysis, Change Management, IS, Short Term Position Management, et al. Typical duration of placement programme: 12 months. Application deadline: Jan-Feb 2008. Apply via: [email protected]

Standard Chartered Bank

Tradition Financial Services Ltd.

UBS

Company snapshot At Standard Chartered we have an ambitious vision supported by dynamic values. We’re one of the world’s most international banks leading the way in Asia, Africa and the Middle East. We are at home in a variety of cultures and offer the best of all worlds by combining our international expertise with local insights. We are looking to attract highly ambitious, intelligent, creative and achievement-orientated graduates who want to broaden their horizons and have a desire to build an extraordinary career in banking.

Company snapshot Founded in 1985, Tradition Financial Services (TFS) is a market leader in the brokering of financial and non-financial products. With offices worldwide, the company covers currency options, equity derivatives, freight, precious metals, energy, property derivatives and pulp & paper markets. TFS Energy brokers a full spectrum of OTC energy and energy-related physical and derivative products – including electricity, natural gas, crude oil and refined products, coal, environmental products and weather derivatives – and exchangetraded futures and options. TFS is a subsidiary of Compagnie Financière Tradition (CFT), one of the world’s top three interdealer brokers in financial and commodity-related products.

Company snapshot UBS is one of the world’s leading financial firms, serving a discerning international client base. Its business, global in scale, is focused on growth. As an integrated firm, UBS creates added value for clients by drawing on the combined resources and expertise of all its businesses. UBS is the leading global wealth manager, a top tier investment banking and securities firm and one of the largest global asset managers. In Switzerland, UBS is the market leader in retail and commercial banking.

Apply via: www.standardchartered.com/graduates

Internship programme info Approx. no. of intern hires in 2007-08: 60 globally. Divisions offering vacancies: Wholesale Banking, Consumer Banking, Finance, Human Resources, Group Technology, Operations, Legal & Compliance and Assurance and Corporate Real Estate Services. Typical duration of internship programme: 10 weeks. Application deadline: Internship deadline: March 2008. Apply via: www.standardchartered.com/graduates.

Graduate programme info Approx. no. of graduate hires in 2007-08: No fixed number, but average is 4 per year in London. Divisions offering vacancies: This could be in any of our London departments: Equities, Energy or Currencies, depending on positions available. Typical duration of graduate programme: The broker training programmes are usually 6 to 8 weeks. Application deadline: Please refer to our website www.tfsbrokers.com and our adverts on www.students.efinancialcareers.co.uk around April / May. Apply via: www.tfsbrokers.com and www.efinancialcareers.com

Internship programme info Approx. no. of intern hires in 2007-08: Ad hoc. Divisions offering vacancies: Ad hoc. Typical duration of internship programme: Variable. Application deadline: N/A. Apply via: www.tfsbrokers.com

Graduate programme info Approx. no. of graduate hires in 2007-08: 500+ across Europe. Divisions offering vacancies: All. Typical duration of graduate programme: 18-24 months, depending on the programme. Application deadline: London: 4 November. Please check our website for details. Zurich: year-round; no deadline. Apply via: www.ubs.com/graduates

Internship programme info Approx. no. of intern hires in 2007-08: 500+ across Europe. Divisions offering vacancies: All. Typical duration of internship programme: London: 10 weeks (placements up to 12 months). Zurich: 3-6 month placements. Application deadline: London: 27 January 2008. Zurich: year-round; no deadline. Apply via:www.ubs.com/graduates

eFinancialCareers.com Careers in Financial Markets 2007-08

Graduate programme info Approx. no. of graduate hires in 2007-08: 370 globally. Divisions offering vacancies: Wholesale Banking, Consumer Banking, Finance, Human Resources, Group Technology, Operations, Legal & Compliance and Assurance and Corporate Real Estate Services. Typical duration of graduate programme: 2 years. Application deadline: International graduate programme: February 2008.

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Banking & Financial Markets

Accounting in the City

IT in Finance

Employers

For more information, here is a selection of our partner sites:

www.creditmag.com About this site: Credit magazine online. Typical/target audience: Senior execs in pension funds, mutual funds, insurance companies, banks, brokerages and hedge funds specialising in credit. Product offering: Latest thinking in corporate bonds; market sentiment; how developments affect your peers, your competitors and your own institution. Topics include: Analysis and comment on key issues, developments and trends. Sectors covered: Corporate bonds, derivatives, structured credit and leveraged finance. Countries/languages covered: Published in English but with global coverage including UK, Asia, Europe, North and South America. Most known for: News, moves, opinion. Best bit for students: News, product reviews and searchable on-line archive.

eFinancialCareers.com Careers in Financial Markets 2007-08

www.risk.net

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About this site: Latest issue and archive to 2002; Risk training courses & conferences. Key figures: 11,500 copies printed monthly. Typical/target audience: Investment and asset management; hedge and pension funds; banks; governments; supranationals; consultants; insurance; accountants; lawyers; software vendors; recruiters. Product offering: Features, technical papers, columnists, profiles, guest articles, guides and handbooks, special reports. Countries/languages covered: English, Italian Spanish, German, French, Japanese, Chinese and Korean. Sectors covered: Derivatives; risk manage-ment; Basel II, insurance; hedge funds; structured products; commodities; pensions; CDOs; IAS 39; corporates. Most known for: Monthly magazine for risk management and derivatives industry. Best bit for students: Wide coverage.

www.hedgefundsreview.com About this site: Monthly print publication, daily email newsletters and online bulletins. Key figures: Readership of 10,000. Typical/target audience: Investors, fund managers and service providers. Product offering: News, opinion and analysis; fund managers’ views; strategy reviews; performance analysis; fund closures, litigation and mandates; trading tips, academic papers and special domicile supplements; news and five-year archive. Sectors covered: Hedge fund management, investing in hedge funds. Countries/languages covered: Distribution: 60% Europe, 30% North America, 10% Asia-Pacific/rest of the world. Most known for: Objective analysis in a market full of subjective publications. Best bit for students: Views from actual hedge fund managers – find out what it’s really like rather than reading the theory.

www.structuredproductsonline.com About this site: Structured Products online. Key figures: 8,000 unique visitors a month. Typical/target audience: Wholesale market for derivatives-based products. Product offering: Covers the market for guaranteed equity products, structured notes, index products, alternative investments and funds of funds; equity, fixed income. News, features, regulatory data, comment and profiles. Analysis of new deals and coverage of regulatory and tax changes. Structured Products Extra daily news alert. Sectors covered: Finance, alternative investments, derivatives, capital guarantees. Countries/languages covered: Published in English; coverage includes UK, Europe, North and South America and Asia. Most known for: News, product reviews and 11 global events Best bit for students: News, product reviews and searchable on-line archive.

www.opriskandcompliance.com About this site: Online and monthly in print. Key figures: Readership c. 8,000 monthly. Typical/target audience: Heads of operational risk and compliance, chief risk officers, heads of IT and those responsible for operational risk or compliance strategies. Product offering: Information on regulation changes and initiatives, including Basel II, Sarbanes-Oxley, and MiFID; news on operational risk and compliance software and consulting services; coverage of money laundering, financial crime, business continuity, corporate governance, and other hot topics; monthly surveys on various topics; in-depth features on new regulations; articles by prominent industry experts. Countries/languages covered: Global distribution, published in English. Most known for: Providing up-to-date information on important regulation, implementation and technology issues.

www.watersonline.com About this site: Controlled circulation monthly magazine; updated weekly online. Key figures: 10,263 qualified subscribers. Typical/target audience: Chief information officers, analysts, chief technology officers, market data executives. Product offering: Feature led articles on technological issues facing the buy- and sell-sides. Monthly & weekly news alerts, breakfast briefings. American Financial Technology Awards host Annual rankings survey. Sectors covered: Exchanges, software/ hardware/market data vendors, Buy-side: institutional investors, pension funds, insurance companies, hedge funds, funds of funds, investment trusts, energy firms. Sell-side: securities firms, broker/dealer, investment, merchant banks. Countries/languages covered: USA, UK and parts of Europe and Asia.

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What do you want to accomplish? An impressive title, or something more? Last year one of our colleagues helped broker a deal that helped an African country reduce its debt portfolio through payment restructuring — only six months after graduation. Call us when you’re ready to make your mark. - Investment Banking - Corporate Banking - Capital Markets - Sales & Trading - Global Transaction Services - Technology - Human Resources - Operations

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