At a certain point in your sell-side career, you start to wonder whether the grass is greener on the buy side or in the financial technology space.
A former senior investment banker now running a fintech company, Lawrence Calcano is well-qualified to speak to that issue. He is the CEO of iCapital Network, a fintech platform that provides due diligence on, and enables investments in, hedge funds and private equity firms.
After starting out his career at Morgan Stanley, Calcano rose to become a partner and co-head of the global technology banking group in the IBD at Goldman Sachs, where he worked for 17 years.
Here’s his advice for bankers considering a jump to fintech.
The transition from working at a financial services organization to fintech isn’t easy to navigate, but your skill set and experience that you acquired working at a bank will translate.
“Given that we’re dealing with large RIAs [registered investment advisors], custodians, broker-dealers, private banks and family offices, it’s very important to bring people in with a strong understanding of the financial services industry, whether that’s experience working at a Goldman, Morgan Stanley, Credit Suisse or BlackRock,” Calcano says.
“We need to understand how our clients think, and people who have grown up in the financial services marketplace have an understanding of the issues and challenges our clients are trying to address,” he says.
“A lot of times people think fintech is about coming up with a new whiz-bang type of capability, but the reality is that to be a successful fintech company, you have to have innovative technology, a high level of reliability, a service-oriented culture, a deep understanding of your clients’ issues and apply cutting-edge tech to solve those issues.”
You’ll be able to leverage your banking contacts after making the leap to fintech. Because of the reach and client base of Goldman, many of Calcano’s former colleagues and clients are working in PE, hedge funds, the venture-capital space and fintech.
“That presented an opportunity to reconnect with old colleagues and help them with their various pursuits,” Calcano says. “I grew up in investment banking, worked my way up to MD and co-headed the technology banking group at Goldman, working on IPOs, M&A deals and principal investments.
“That background has been helpful,” he says. “Whether bankers or technologists, we’re looking for people not just with a set of skills but also the right philosophical approach to why we’re here and what we’re trying to accomplish.”
For its technology teams, iCapital looks for people with a very specific set of tech skills who can design and code, while other parts of the company need investment professionals who can evaluate PE and hedge funds’ performance. Client-facing roles require a different set of skills.
“What ties all of it together is talent, intelligence, commitment, effort and a desire to produce something that helps our client succeed,” Calcano says. “If someone came in and they were the best coder or due-diligence professional in the world but they don’t like to work with others or aren’t hard working, there’s no place for them, because they end up being more divisive than inclusive and don’t help the firm’s success.”
Even if you trade a bank for a fintech firm where you don’t have to wear a tie, you’ll still have to put in long hours. In fact, Calcano has tried to model iCapital on his former bank in some ways.
“The firm looks for people who are highly committed and willing to put in the hours, with a strong desire to collaborate in a team context and a very hard work ethic,” Calcano says. “Fintech is not complicated to understand, but it just takes hard work to get the job done.
“I want to recreate the Goldman culture of collaboration and create an environment where people can respectfully debate issues and come to a decision about sourcing products for our clients that will help them achieve their objectives,” he says. “Anything that’s worth doing requires a significant commitment, whether you want to be an investment banker, private equity professional or work in fintech at a growth company."
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