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Hi, I've been lurking this thread for a few months but this is my first time posting. I was wondering if anyone had any experience with the difference in middle and back office. I've been reading and it seems like there's some debate as to whether there's a distinction between the two. Does the middle office tend to work closer with people from the front? Is there a notable difference in hours worked/quality of life between BO and MO?
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Oct 2, 2013 05:18
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semicolonsrock posted:Made it to final round for an M&A focused i-bank! Congratulations! Your final rounds are likely to be similar to what you've experienced so far. Changes will likely involve more focus on how you would fit with the firm and how you might interact with potential clients, and less emphasis on purely technical stuff. Especially at an M&A shop, success (i.e. getting deals done) ultimately comes down to how you can sell into relationships far more than being able to do math gym. (This would not be the case for a trading job.) Good Luck!
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Oct 2, 2013 14:10
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bearbackbuyback posted:Hi, I've been lurking this thread for a few months but this is my first time posting. I can give you some examples of each, its hard to make generalizations though: Middle Office: Risk, Compliance, Finance (this is FP&A/Accounting work like you would do if you went to be a financial analyst for any other big company) Back Office: Operations, Technology I work in IBD but I notice ops/tech people tend to work 8ish to 6ish. Compliance I think works similar hours but they'll be expected to review/approve of something we send them from home if we email them at like 8pm. I think finance does its own thing as I've never interacted with them. I've never met someone in risk since I'm not a trader. I think in both MO/BO you'll be doing 40-60 hour weeks and start out making about 65-75k. I think the reason why MO is considered better than BO is because you do more "interesting" or "important" work and have better prospects of moving up the corporate ladder. But this is all conjecture from what I've picked up as an IB analyst so I'd just talk to people in MO/BO if you want real information.
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Oct 3, 2013 02:21
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Operations dude here, I started in BO and currently work in MO. Specifically Derivs MO. I don't think you'll hear any debate about whether or not there's a distinction between the two from anyone actually working in Operations. Some FO people have no idea what happens after a trade is executed, so from their perspective MO/BO are the same -- that's why you may see some debate. You're correct in that MO works more closely with FO. At my company most MO teams are assigned to certain desks and the associated traders, supporting whatever products they are trading. Right now I mostly support the JPY Vanilla Rates desk, so whatever they choose to trade, my team will have to support it. Mostly IRS, basis, xccy, FX, ETD, blah blah blah. The trading mandate for vanilla rates is pretty narrow, but if for whatever reason they ended up trading CDS next month, we'd have to support that. "Support" defined later. One thing we're absolutely not allowed to do in MO is settle trades. The ability to book trades and the ability to settle trades must remain completely separate, i.e. no trader is allowed to look after settlements of their own trades. Likewise, nobody in BO is allowed to amend/book new trades. We call this segregation of duty and everyone takes it VERY seriously. As a result, in MO we're mostly doing trade support, this means a) assuring the trades that are executed are accurately reflected in the risk management system ("trade capture/affirmation"), b) making sure traders aren't doing anything they shouldn't be doing, and c) meeting regulatory requirements (SEFs just went live yesterday for example). Of course there's a lot else: our job is basically everything from the time the trader says "done" to the time we are 100% sure what's in our system is correct. Our BO teams consist of settlements, client onboarding (KYC and such), custody/asset servicing. Then there are some other Operations teams which are neither BO nor MO such as Change, but we'll ignore them since they're not really involved in trade flow and definitely not entry-level. They're more project-based. We don't consider Legal & Compliance, Market Risk, Credit Risk, Finance, Technology, or Accounting to be MO or BO. Yes we're all "support functions" but MO/BO/Operations specifically supports trade flow, while those other departments don't. I personally enjoy MO a crapload more than BO. The work isn't notably more "important" than BO--the modern economy would basically shutdown without Settlements/BO--but it's certainly more interesting. We're more directly exposed to changes in the market and regulatory environment, so things change far more rapidly than they do in BO. If you are eventually looking to go to FO, namely Trading or Sales, MO gives you a far better idea of what to expect vs BO. Hours worked, this is a an extremely difficult question to answer. In my experience the hours you work are influenced by the culture of your company, office location, department, team, and finally your own judgment. Where I am, there's no sitting around waiting for your boss to finish so you can go home. This is true of both BO and MO. When I am done with my job I get out of here. But even within the same team we have different hours because the guy that sits next to me is OCD and has no social life. I work 9am-7pm but he's here until like 10pm daily. Despite the fact that our trading floor is empty by 7pm.
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Oct 3, 2013 06:45
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bearbackbuyback posted:Hi, I've been lurking this thread for a few months but this is my first time posting. As has been said, Risk is a MO function where 1) many analysts will often move to the FO, sometimes after as little as one year and 2) pay is largely the same as banking. Seriously, top-ranked first year Risk analysts made $130k at my bank, which was only $5k less than top bucket for IBD--and they only work about 12-13 hours a day. They get to attend (some) client meetings, do a fair bit of modeling, and are generally fairly involved members of debt / equity deal teams. They go through the same training program as banking analysts but don't need licensing.
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Oct 3, 2013 16:45
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tolerabletariff posted:As has been said, Risk is a MO function where 1) many analysts will often move to the FO, sometimes after as little as one year and 2) pay is largely the same as banking. Seriously, top-ranked first year Risk analysts made $130k at my bank, which was only $5k less than top bucket for IBD--and they only work about 12-13 hours a day. They get to attend (some) client meetings, do a fair bit of modeling, and are generally fairly involved members of debt / equity deal teams. They go through the same training program as banking analysts but don't need licensing. gently caress, top bucket here. I'm getting paid below market, this can't stand
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Oct 3, 2013 16:52
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Aren't we all?
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Oct 3, 2013 17:35
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tolerabletariff posted:Aren't we all? It is all about relative pay, You can be making a silly amount of money in absolute terms, but if that A-hole down the hall who does crap work but knows how to politic that fact away gets a 10% bigger bonus there will be all sorts of righteous indignation.... Serious first world problems.
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Oct 3, 2013 17:45
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J4Gently posted:It is all about relative pay, I'd say hours wise I had it pretty good in banker terms. I feel bad for the kid in M&A that got crushed all year round for middle bucket
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Oct 3, 2013 19:07
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semicolonsrock posted:Made it to final round for an M&A focused i-bank! I work as an MD at an M&A focused bank...pure tech though, but I'll tell you what we'd be thinking at that stage: - Can I spend time on the road with this guy without being annoyed (ie, cultural fit) - M&A is pretty balance sheet focused...so accounting wise I'd expect associates and up to be pretty strong on things like deferred revenue, taxes, rev rec in general, debt structures and things like that. Definitely a clean understanding of how the three primary financial statements work together. - For verticals we focus on (we are just tech) I'd expect them to be able to speak intelligently about the business models of some of the major players - maybe pick a big private company and ask them how they'd value it. - Then some case study stuff if you haven't gotten it already (which is kind of like bullet 3 above)... That's all I can think of offhand...but good luck. I am really partial to M&A in terms of it just being a fundamentally interesting business...hope it goes well.
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Oct 3, 2013 19:38
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zmcnulty posted:Operations dude here, I started in BO and currently work in MO. Specifically Derivs MO. I don't think you'll hear any debate about whether or not there's a distinction between the two from anyone actually working in Operations. Some FO people have no idea what happens after a trade is executed, so from their perspective MO/BO are the same -- that's why you may see some debate. This is awesome, thanks for all the info! It sounds like I should look into MO; it certainly sounds a bit more interesting than standard BO. Basically I'm interested in ops but if possible would like to put myself in a position where I could perhaps improve my chances to move into FO if I decided it was feasible and I like the business well enough. By the way, zmcnulty, I notice that you said you work with JPY, so I presume you work in Japan? Did you start there or did you move from somewhere else? Also does anyone have experience with other non-US offices? I'm from the US but I'm not really chained here and I'm interested in other places... especially because I might in the future be interested in moving into FO if possible, I'm wondering if going someplace else might be useful. I read a lot about how it's virtually impossible to move from MO/BO into FO but everything I read seems to be written from the viewpoint of NY/Wall Street and I can't help but wonder if the MO/BO -> FO barrier is thinner elsewhere. It sounds like the barrier is pretty largely based on prestige and culture more than straight ability/potential per se. tolerabletariff posted:As has been said, Risk is a MO function where 1) many analysts will often move to the FO, sometimes after as little as one year and 2) pay is largely the same as banking. Seriously, top-ranked first year Risk analysts made $130k at my bank, which was only $5k less than top bucket for IBD--and they only work about 12-13 hours a day. They get to attend (some) client meetings, do a fair bit of modeling, and are generally fairly involved members of debt / equity deal teams. They go through the same training program as banking analysts but don't need licensing. Are these risk people hired from the beginning to do risk, or is this an office in ops? $130K is well above the $65-75K that swingline noted for MO/BO in his post, and I'm wondering if there's that much variation among ops teams. It would certainly be nice to get on the higher end of those numbers if it's ultimately the same workload.
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Oct 4, 2013 00:18
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Well, that $130k is base ($70k) and bonus ($60k), much how it works for us. They're hired specifically to do Risk, which has a three-year Analyst program similar to IBD's two-year program. They are from largely the same schools as IBD hires, maybe a few more... Also notable in that its a heavily female department, at least 50% women which is of course a sharp contrast to the rest of banking. I don't know if they're neatly classified into MO and BO, since those mostly apply to trading-aligned positions. I guess the Market risk people would be MO but the Credit risk teams supporting IBD, I don't know how they would fit into that classification. I think the Risk groups aren't necessarily considered part of the "support" hierarchy with Ops, Finance, Audit, etc. tolerabletariff fucked around with this message at 14:06 on Oct 4, 2013 |
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Oct 4, 2013 13:59
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Trip report: the interview went pretty OK. Big issue was that they don't believe I'm interested in M + A. Tried to convince them otherwise, but we will see. Also, I don't get why so much mental math needs to be involved in these interviews. It's literally just stuff like 234x23 or whatever. This doesn't seem like a particularly relevant skillset w/r/t working in a bank. Also I realized I forgot about the "bonus" section of salaries on Glassdoor -- holy poo poo why would any 1st year analyst deserve ~$160k?
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Oct 5, 2013 02:17
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semicolonsrock posted:Trip report: the interview went pretty OK. Big issue was that they don't believe I'm interested in M + A. Tried to convince them otherwise, but we will see. Also, I don't get why so much mental math needs to be involved in these interviews. It's literally just stuff like 234x23 or whatever. This doesn't seem like a particularly relevant skillset w/r/t working in a bank. Banking.txt crazypeltast52 fucked around with this message at 05:21 on Mar 8, 2016 |
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Oct 5, 2013 05:33
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semicolonsrock posted:Also I realized I forgot about the "bonus" section of salaries on Glassdoor -- holy poo poo why would any 1st year analyst deserve ~$160k? They make you earn it. This is why you have to love this poo poo more than your family and friends.
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Oct 7, 2013 14:31
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bam thwok posted:They make you earn it. This is why you have to love this poo poo more than your family and friends. The sad thing is that I'm applying to other jobs with almost the same hours (80-90 hour work weeks) with 1/3 the pay. WTF world.
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Oct 7, 2013 20:09
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bearbackbuyback posted:This is awesome, thanks for all the info! It sounds like I should look into MO; it certainly sounds a bit more interesting than standard BO. Basically I'm interested in ops but if possible would like to put myself in a position where I could perhaps improve my chances to move into FO if I decided it was feasible and I like the business well enough. MO usually isn't an entry-level role, most people coming here have at least a couple years experience elsewhere, ordinarily other Operations teams. If you're coming right out of school you'll probably apply to Operations as a department, not a specific team. That said if you know the difference between BO and MO you already know a lot more than most new grad applicants. As for moving to FO, it really just depends. It's happened a lot recently in my particular team, we lost 2 people to Trading and 1 to Sales in the past 3 months. Then again this is Tokyo fixed income, presumably not as competitive as Wall Street equities (as you suspect). At the very least MO will provide you with exposure to curves, risk bucketing, pnl, etc., so there's that. Personally trading doesn't really interest me, at least not as a job in an investment bank. Best case scenario you'll probably need ~4 years total: 2 years BO, 2 years MO, then hope a position opens on the desk you want. Yes, I'm in Tokyo. I started here. The more flexible you are about location the better chances -- we've been telling every new graduate interviewing in Tokyo that a condition of hire is they spend their first few years in Singapore. bearbackbuyback posted:Are these risk people hired from the beginning to do risk, or is this an office in ops? $130K is well above the $65-75K that swingline noted for MO/BO in his post, and I'm wondering if there's that much variation among ops teams. It would certainly be nice to get on the higher end of those numbers if it's ultimately the same workload. tolerabletariff posted:Well, that $130k is base ($70k) and bonus ($60k), much how it works for us. They're hired specifically to do Risk, which has a three-year Analyst program similar to IBD's two-year program. They are from largely the same schools as IBD hires, maybe a few more... Also notable in that its a heavily female department, at least 50% women which is of course a sharp contrast to the rest of banking. We work closely with both Market Risk Control (MRC) and Credit Risk Control (CRC) but they aren't Middle Office or Operations functions at my firm. So I can't really speak to them. People that work in risk-oriented roles in Operations deal with operational risk, regulatory risk, or trading risk. Comp is a shot in the dark, but I'd still expect $60-70k first year. For Ops, getting a bonus really isn't anything you should rely on.
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Oct 8, 2013 06:29
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How did you come to start work in Tokyo? I can understand moving there later in your career, but it must be tough to start out there.
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Oct 8, 2013 16:26
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So what's the general feeling from you smart banking people about the debt ceiling? Is the dow going to start dropping 1,000 points a day to scare Boehner into allowing a vote? Is there going to be worldwide economic collapse in a week?
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Oct 8, 2013 22:46
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Amphion posted:So what's the general feeling from you smart banking people about the debt ceiling? Is the dow going to start dropping 1,000 points a day to scare Boehner into allowing a vote? Is there going to be worldwide economic collapse in a week? Most people seem to think that republicans will take it down to the wire again hoping to gain any concessions they can. The reason why markets aren't swinging 4%/day like they did in 2011 is because this time people have already been pricing this uncertainty in. Also a lot of people see 2011 in hindsight as a generational equity buying opportunity so you have a lot more support on the downside of people trying to call the bottom this time around. Markets have been volatile but not nearly as bad as 2011 and on fairly muted volume which demonstrates a lack of conviction. Is this consensus view correct? Who knows. Plenty of smart buy-side firms are positioned on both sides of this view. I'm a banker I don't get paid to think I get paid to sell. Mechanically, the true debt ceiling is actually after October 17th - that's just when they can't issue new notes. They'll actually run out of money later in October. It is unclear how the treasury would prioritize payments if they do run out - most people think debt servicing would come first. The government shutdown is more of a show than a real economic threat as people will get paid retroactively and only ~800,000 people are even furloughed. Also, like last time, there is speculation that the treasury could get creative: http://www.bloomberg.com/news/2013-10-02/mint-the-premium-bonds-.html The real worry is long-term that our entitlement spending is on an unsustainable path especially in the face of what most people agree is a ~2% long term GDP growth rate compared to ~2.5% in the past. Edit: to answer your "what if" question - yes, the treasury defaulting would indeed quite literally blow up the world financial system. Treasury securities are the grease of world's financial system - everything is linked to them - collateral, corporate yields, money market funds, mortgage rates, cost of capital analysis. The reason why we survived 2008 with only a terrible recession and lovely recovery as opposed to a 1930s-esque depression is because the government was able to throw an immense amount of money at the problem through fiscal and monetary policy. A US government default would be an even worse shock to the global financial system than AIG/Lehman/Fannie et all and this time we wouldn't have the safety net of government counter-cyclical action. Swingline fucked around with this message at 02:59 on Oct 9, 2013 |
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Oct 9, 2013 02:52
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Teddles posted:How did you come to start work in Tokyo? I can understand moving there later in your career, but it must be tough to start out there. Maybe better answered in the Japan megathread but basically I did study abroad/studied Japanese, so I had 2 years experience living here and spoke business-level before coming. Applied at a crapload of companies, Japanese and foreign, finance and non-finance (majored in Supply Chain Management @ SCarolina), and ended up with 3 offers. This seemed like the best of the 3, especially compensation; Japanese companies start new grads at $30k per year tops. This disparity was actually highlighted a few years back when the ex-Lehman grads joined Nomura. zmcnulty fucked around with this message at 05:57 on Oct 9, 2013 |
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Oct 9, 2013 05:53
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Swingline posted:Most people seem to think that republicans will take it down to the wire again hoping to gain any concessions they can. The reason why markets aren't swinging 4%/day like they did in 2011 is because this time people have already been pricing this uncertainty in. Also a lot of people see 2011 in hindsight as a generational equity buying opportunity so you have a lot more support on the downside of people trying to call the bottom this time around. Markets have been volatile but not nearly as bad as 2011 and on fairly muted volume which demonstrates a lack of conviction. Is this consensus view correct? Who knows. Plenty of smart buy-side firms are positioned on both sides of this view. I'm a banker I don't get paid to think I get paid to sell. What they could do is issue IOU's which California has done a few times after 2008 when they did not have the money to pay their bills. It is a technical default and messy situation but since nobody paid attention to it nobody called it a default. In an odd turn of events, which likely ended the default, businesses started paying their taxes in IOU's rather than send cash to Sacramento. A black market developed for IOU's because capitalism. evilwaldo fucked around with this message at 06:09 on Oct 9, 2013 |
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Oct 9, 2013 06:04
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zmcnulty posted:MO usually isn't an entry-level role, most people coming here have at least a couple years experience elsewhere, ordinarily other Operations teams. If you're coming right out of school you'll probably apply to Operations as a department, not a specific team. That said if you know the difference between BO and MO you already know a lot more than most new grad applicants. Thanks again for all the info, this is a great help.
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Oct 9, 2013 08:37
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zmcnulty posted:Maybe better answered in the Japan megathread but basically I did study abroad/studied Japanese, so I had 2 years experience living here and spoke business-level before coming. Applied at a crapload of companies, Japanese and foreign, finance and non-finance (majored in Supply Chain Management @ SCarolina), and ended up with 3 offers. This seemed like the best of the 3, especially compensation; Japanese companies start new grads at $30k per year tops. This disparity was actually highlighted a few years back when the ex-Lehman grads joined Nomura. Yowza, that's low for IB. I'm guessing the hours are more or less the same though.
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Oct 9, 2013 10:30
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I don't know about Japanese firms but the international banks pay their Tokyo guys around the same level as London... think the $30k referred to Japanese coprorates and not Nomura.
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Oct 10, 2013 10:06
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Class of 2014 FT coming in. Anyone else going to be starting in NYC next summer?
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Oct 13, 2013 22:52
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shensterz posted:Class of 2014 FT coming in. Anyone else going to be starting in NYC next summer? Looks likely! I would say we should meet up but I've been told what the hours are so lol.
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Oct 13, 2013 23:22
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Any insight on being a research analyst at a BDC? Is credit experience a must? Bonuses? Exit Opps?
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Oct 16, 2013 03:42
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Cross posting this from another thread: This is just a nebulous idea in my head, but I thought I'd ask around to see if it could go anywhere. I'm a mechanical/embedded controls engineer who works on mathematical modeling of physical systems, primarily to test control algorithm and software (usually for stuff like motor control) in simulation before porting it to the real word. I spend a lot of time coding and working in simulation software like MATLAB/Simulink, and my embedded + mechanical background helps a lot in understanding the mechano-electrical systems I'm working with so I can design control applications for them. I was wondering whether my skillset was transferrable to working in quantitative finance. For stuff like market modeling and predictive simulation/flash trading/creation of financial instruments etc. Is this feasible for someone with my background? I'm not sure where to start; I know next to nothing about the field and I'd appreciate any books or resources I could look up to start doing research about quant finance programming and modeling, to see if I could eventually move into it. Or just where to start reading up on working in finance and financial instruments in general.
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Oct 26, 2013 10:40
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Absolutely, Not for traditional investment banking, but those are the skills quantitative traders use. High frequency trading is all done with programs built by people who have serious math and simulation skills.
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Oct 27, 2013 15:20
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Hi, I have a quick question for this thread. As a thought experiment; I arrange a situation wherein Person A creates a Buy Order for 12 bars of copper. I then collect the capital that Person A was willing to pay to buy those 12 bars of copper and put it into an escrow account that I control. This escrow account is earning some small % of interest from me on it's contents as long as it's there, but we don't care about that. What I want to know is, if I take the contents of that escrow account and use it to purchase something, say a bond that pays interest to me, everything is cool so long as there is money to give to Person B when Person B suddenly decides to sell Person A his 12 bars of copper, right?
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Oct 28, 2013 13:44
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What do you Wall Street dudes think about Ray Dalio's 30 minute movie about How the Economy Works? http://dealbook.nytimes.com/2013/10/21/economic-theory-via-youtube-and-cartoon/?_r=0 deleveraging
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Oct 28, 2013 21:56
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Mandalay posted:What do you Wall Street dudes think about Ray Dalio's 30 minute movie about How the Economy Works? It's a good primer, and very approachable, if somewhat oversimplified. That said, Sorkin seems to think this is groundbreaking or revolutionary material, either The Stuff They Haven't Been Teaching You In School or What Wall Street Money Managers Don't Want You To Know. In reality, while a basic Econ 101 class might be dedicated to traditionalist theories, I would guess most college programs' second-semester coursework will cover the majoritty of these empirical observations and the models applied to them.
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Oct 30, 2013 05:26
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Thoogsby posted:I have literally never met anyone in finance whose motivation wasn't money. There's a myriad of reasons why you should think twice before entering this field but the trope that financial motivation is a cancer to this business is tired. It's the sole reason it exists. Some people just like finance. Is this so hard to accept?
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Nov 7, 2013 15:45
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Can anyone give any input on institutional investment consulting? Day-to-day, exit ops, hows it look on business school applicatoins, etc. I'd be an analyst on the manager research side. Thank you.
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Nov 7, 2013 19:14
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What type of investment? Equity, Real Estate, Company Acquisition etc..
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Nov 7, 2013 19:20
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J4Gently posted:What type of investment? Sorry, they handle pensions, 401ks, endowments, foundations, taft-hartley trusts, etc. Set up the plans and handle the asset allocation decisions and due diligence on investment managers that they outsource the actual investing to. I'd be in the traditional group, but would also support the alternative groups when needed. I'd rather be at one of the managers they outsource to, but you take what you can get.
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Nov 7, 2013 19:34
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lizardking posted:Sorry, they handle pensions, 401ks, endowments, foundations, taft-hartley trusts, etc. Set up the plans and handle the asset allocation decisions and due diligence on investment managers that they outsource the actual investing to. I'd be in the traditional group, but would also support the alternative groups when needed. I'd rather be at one of the managers they outsource to, but you take what you can get. Getting a good base in analysis is the typical path. Those skills are expected and useful. I'm not sure about the transition (I don't know anyone who took that particular path) between the consulting side and the adviser side, but I can see a clear way to sell that type of knowledge. Most of the RFP's for public or endowment investment dollars go through a consultant so understanding that side of the process, what they are looking for how they analyse potential investments would be valuable for the advisers competing for those dollars. Raising money is what private equity firms do and need to do all the time so if you can help with that you will be a valuable person in the company.
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Nov 7, 2013 20:31
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Might be a long shot but I have a resume drop deadline tonight for an SA position...anybody in the industry willing to proofread? Thanks!
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Nov 16, 2013 03:42
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Anyone know of recruiting firms that focus on private equity?
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Nov 19, 2013 13:06
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