JPMorgan Spring Insight Week Review

Hi guys,

I have devised this post so people can get an idea of what JPMorgan (JPM) is like as an Investment Bank (IB) and how the divisions there are structured in order to help people when they apply for internships of grad jobs. Please don’t take what I say as gospel truth as I am working from a limited set of notes and I might not have everything here right. I may also have missed a few chunks where I obviously wasn’t listening! Also please bear in mind that things in this post refer to JPM, therefore it won’t necessarily be the same for every other IB.

What is Spring Week?

This is a fantastic chance to see the company and to get an idea of the business areas that make up the company. Many people base job decisions and form opinions of banks from meeting a couple of employees at interviews and from 3rd party sources. There is no substitute for actually meeting the employees there and asking them about the company and their roles. It is open to 1st years or 2nd years on a four year course (me). The next one will be 2007 but I strongly recommend anyone interested in IB to apply next year if they are eligible.

I spent a week listening to presentations and doing group exercises with the aim of finding out as much as possible about JPM and to see if a career at JPM is really for me. One of the best things about the week was being able to meet like minded people and speak to some real characters that were on the course, plus the fact that they put me up in the Marriot Hotel for a week!

So what areas are there at JPM and what does each involve?

Main area: Investment Banking Division (IBD)
Sub areas: Mergers and Acquisitions (M&A), Equity Capital Markets (ECM), Debt Capital Markets (DCM), Global Credit Risk Management (GCRM)

M&A

Described as ‘hell’ and like being ‘an insomniac’s friend’ by the people I spoke to! M&A is all about advising clients on deals and being able to come up with new and novel ideas for clients. The workload is pretty harsh in the first couple of years with a 60 hr week being fairly common. This one wasn’t for me.

Internship places (all figures based on 2006): Around 8

ECM

Also a lot of hard work and late nights. You provide clients with access to funding by tapping equity markets. Met a really nice VP from this area who was certainly someone you would like to have for a boss. Didn’t really have that much information given about this area.

Internship places: Around 7

DCM

Like ECM, but raising funds from debt markets.

Internship places: Around 7

GCRM

This is assessing the credit risk to JPM of using their money on deals/funding/trading should someone decide not to pay of loans default or markets nosedive. The bank needs to have a firm idea of its risks and be operating well within its risk profile.

Internship places: Around 5

Note: The IBD division offer all year round internships of which there are around 60, including Summer Interns.

Main Area: Credit and Rate Markets (Most commonly known elsewhere as Fixed Income, Currency and Commodities – FICC)
Sub areas: Research, Structuring, Sales + Marketing, Trading

Research

Analysing companies and/or markets to either generate ideas for traders and sales people to sell to clients or to encourage clients to put transactions through JPM. The environment is quite quiet and hours are more regular at maybe 9am-7pm. There is a lot of work building up models and keeping them updated with new information.

Internship places: Around 4

Structuring

Involves devising new financial products to sell to clients or to help clients achieve a certain financial aim. JPM have been particularly successful in this area after having introduced Credit Derivatives. There was an interesting article on them in the FT magazine last week. This area can be a bit more intense with numbers and maths. Hours are still tough. Met a cool structurer who fully admitted to listening to his iPod while doing his daily work.

Internship places: Around 3

Sales + Marketing

There is actually a difference between sales and marketing people so make sure you know for when you might speak to one! Marketers may not necessarily have huge capabilities in finance, but help to make products more attractive to clients. Sales people tap a vast network of clients and advise them of the ‘JPM view’ and hence what they think they should be buying and selling in order to generate transaction fees. Hours generally are with the markets and are a lot more regular.

Internship places: Around 8

Trading

Trading is not always what it seems – risking the bank’s own money to try and make a profit. Proprietary trading is risking the bank’s money but the majority of trading activities will be making trades on behalf of a client and dealing with the risks associated. Hours are with the market – typically 7am-5pm.

Internship places: Around 7

Main area: Equities
Sub areas: Cash Equities, Equity Derivatives, Equity Research

This area is a bit more complicated as there are all the above roles, i.e. Sales + Marketing, Structuring etc, but they are found in most areas. Cash equities means dealing with single shares. Derivatives is about working with products that have exposure to the underlying market and perform a specific function for clients. Equity Derivatives requires quite advanced maths as typically most people have Maths Doctorates. Equity research involves analysing companies and putting out research to be sold to clients.

Internship places for whole area: Around 20

Asset Management:

Generally a slower paced environment that involves all of the aforementioned areas in order to perform a fiduciary role for clients’ money. The area is almost a microcosm of the whole bank, barring the IBD division. Unfortunately no Internships are offered in this division.

Main area: Operations, Finance & Business Management
Sub areas: None specifically, although roles can be incredibly diverse

Operations

Described as the ‘engine’ of the bank that is vital for its smooth operation. A real shame that people see this role as ‘back office’ and not as interesting as most projects can be rewarding and sometimes more important that the client facing roles. Operations is so large that there is no typical role. Projects are mostly completed within each division of the bank. An example would be implementing a system to ensure all transactions were accurately settled on time. Hours are less than other areas but when work is busy hours can stretch to 8am-8pm.

Internship places: Around 20

Finance & Business Management

Basically the accountants to the bank ensuring money is where it should be and things are running to budget. I can empathise with people who say this is a boring area (the guys presenting to us looked stiff as cardboard and were thoroughly disinterested).

Internship places: Around 10

Main area: Technology

All about sorting out the IT systems so people can do their jobs easily, quickly and efficiently. Work revolves around completing projects in loads of areas of the bank. If you enjoy IT, problem solving and think you might have an interest in finance in the future this could really be for you.

Internship places: Around 10

So what is it like at JPM?

I have been to interviews at Goldman Sachs and Morgan Stanley. While I can’t give you a complete view of them, I would say that compared to them, JPM is a much less ego driven place to work. I felt I could relate to lots of the new grads and I never once met someone who was too busy or too self-important to answer my questions. JPM is an American bank, but has a very European feel with around 50% of new recruits in London being from Europe. Like in most top IB’s, the people are dedicated and are 1st class at what they do. While teamwork is a phrase very much overused by some IB’s, JPM gets top marks for making people feel valued and welcome. I would stress camaraderie as being a real positive for the bank. JPM is a large bank and as such has almost every conceivable division. This means the banks has the capability and balance sheet to undertake most things for clients. I think this is great for getting a really good start in your career.

JPM is one of only three banks to offer introductory training in New York. As part of this, grads are shipped off and live together while studying. This is amazing for developing relationships and contacts to serve you throughout your career.

Hope this is of use to people. If anyone has any specific questions about JPM or Spring Week then please feel free to PM me.

James

Reply 1

President_Ben

Comments:

General note: internships places will vary year on year due to business demand. The 'hours' quoted are generally light.

60 hour week in M&A? That's seriously light.

M&A revolves around the business and finance involving the takeover of one company to another. It may also include spin-offs, disposals etc... advising a client how to change their business structure by identifying synergies and cost savings.

Capital markets: equity - IPOs and secondary offerings. Also, buybacks. Debt - issues.

Credit risk - typically middle office. Pays like middle office anyway.

FICC is a Goldman term. Pretty much exclusively. The new trend is to merge your FI and equity areas into a consolidated division to better meet client demands.

Ops is the back office. It pays like the back office too. Few move to the front from here.

Like almost any bank, the London office will largely have UK people working in it. American, European or whatever.

Reply 2

John5000

So JP Morgan doesn't really offer too many internships then?

Reply 3

President_Ben

John5000

So JP Morgan doesn't really offer too many internships then?

I'd expect a bank the size of JP to offer about 130 to 150. The above suggests around 110.

Reply 4

WantA*

Thats what I thought. Can't you expect a 90 to 100 hour week in M&A?

Also, is M&A front office? Does it pay the most?

Reply 5

President_Ben

M&A is front office. In the early years, it tends to pay the most. But a star trader will earn way more than anyone.

100 hours is more like it. 90 is a pretty good week :wink:

Reply 6

WantA*

President_Ben

M&A is front office. In the early years, it tends to pay the most. But a star trader will earn way more than anyone.

100 hours is more like it. 90 is a pretty good week :wink:

Star Trader? Please explain, im new to all these terms!

Reply 7

President_Ben

WantA*

Star Trader? Please explain, im new to all these terms!

Star trader = really really good one who makes the banks hundreds of millions (and therefore earns tens of million in bonus)

M&A pay is decided in a more tricky way. When a deal is done, a percentage of deal value is paid as a fee between all the banks running the deal (typically, it's 3 or 4 banks these days). That fee is then split finely among all the people involved. Your pay is directly correlated to the number of bums you kiss basically.

Reply 8

WantA*

President_Ben

Thanks. There seems to be more money in trading these days, most of the people I know in finance are in trading, and last time I checked are doing very well.

So, different banks could be involved in the same deal?

Reply 9

President_Ben

Trading earns money when you're good. You get fired if you're not. Higher variation but at the peak, more money.

And usually, multiple banks are involved in the same deal. It helps the client establish know if the bank is trying to pull a fast one. Competition brings out the best you know :wink:

Reply 10

ElWilson

What is the competition for trading jobs? What is the second highest paying (potential/withstanding) IB job?

Reply 11

Red Dragon

ElWilson

What is the competition for trading jobs?

Very high. The problem with trading is that you could end up being crap at it, therefore not earning that much and risking your job. The bank tries to eliminate this as much as possible by employing the best people, so the chance of getting a job when you arent the best is difficult, as you will most likely cost the bank money, and be out of a job.

ElWilson

What is the second highest paying (potential/withstanding) IB job?

If you are taking Trading as the highest paying, then Sales and M&A would come a close second. This really does all depend on the individual and the company. Starting off, they would all typically pay the same basic, its the bonuses which provide you with the big bucks.