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Morning Coffee: How your life unfolds when you start your career in IBD. Hard graft of top hedge fund manager

Career path investment bank

What comes after the analyst years?

An analyst programme in a global investment banking division (IBD) is supposed to be a passport to anything. After two years working 100 hour weeks and eating takeaway food, you can theoretically break free and apply yourself in all sorts of ways, whether as a clothing or technology entrepreneur or as a private equity associate. Even better, a short phase as a neophyte at a big brand investment bank is supposed to an offer an enduring uplift to lifetime earnings.

But what really happens to your being when you leave university and spend a few years buried in spreadsheets? Sujeet Indap, a now journalist at the Financial Times who joined Merrill Lynch’s San Francisco office in the boom year of 2000, has conducted an admirable piece of analysis on what came next for his Merrill compatriots.

Firstly, there was the desolation of early promise. Having been offered no fewer than three pay rises ($40k to $45k to $50k) before they even arrived in their jobs, the Merrill Lynch analyst class of 2000 found itself victim of the downturn of 2001. – They joined in August; the layoffs began the following in April.

Secondly, there were the expensive graduate qualifications. – 50% of the class went on to get some kind of graduate qualification, mostly MBAs, and mostly from one of seven top schools (Harvard, Wharton, Stanford, Kellogg, University of Chicago, Columbia or INSEAD).

Thirdly, there were the exits from banking. Just because you start your career in an investment bank, that doesn’t mean you’ll be a banker. Indap found that only around 17% of his former colleagues were still in banking, with another 20% each in private equity and hedge funds and the rest scattered across the charitable sector, consulting, healthcare, fashion and elsewhere. Fourthly, there were the exits from Merrill Lynch – only two of his former colleagues had stuck with the bank.

Most interesting though, were the differing career paths of male and female analysts. Those who stuck in banking tended to be male. Those who went to the buy-side tended to be male too. Those who went to not for profits, management consulting and fashion tended to be female. Funny that.

Separately, just because you’re a top hedge fund manager, don’t assume you’ll be taking it easy. In an interview from his London office overlooking Buckingham Palace, CQS founder Michael Hintze tells Financial News he’s in the office at 5.30am every days and often sends 50 emails each weekend.

Meanwhile:

Lloyds has insisted that one third of the names on shortlists for jobs from AVP upwards are women. (WSJ)

Deutsche Bank just fired its head of securitized product trading and its head of securitized product sales after dismissing two junior securitized product professionals for lying to clients. (WSJ) 

It’s not a good time to be a Financial Sponsors banker. (WSJ) 

Tom Hayes’ father: ““I’m horrified, shocked and appalled by a sentence which seems brutal in the extreme and well out of line with other people who have done far more harmful things and harmed people in far more vicious ways than my son ever did.”  (The Times) 

What Jeb Bush did in banking. (WSJ) 

J.P. Morgan’s definitely moving some technology employees to New Jersey from New York. (Bloomberg)

Surging European stock volumes are good news for European banks’ equities teams. (Bloomberg)

Women who are perceived as angry at work are considered to be worth $15k less than if they were placid. This does not apply to angry men. (Fast Company) 

“At a relatively high level in an investment bank I found assessment to be essentially a political rather than a performance based activity.” (Financial Times)

The smell of fish can boost your reasoning skills. (BPS) 

(Photo credit: Alejandro Groenewold)

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