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Rank the Banks - S&T watch

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    (Original post by Prince of Zamunda)
    Just what I heard. Intrigued to hear other opinions though. Source was one 2nd year analyst and one 1st year associate and someone on TSR told me pretty much the same thing.
    Didn't say that recruiting was geared towards them, but that they did get more offers than the JPM 3rd year analysts did. Taking this last year into context though, "more offers" could've been in single digits as there obviously wasn't much activity going on anyway as rboogie pointed out.

    I'd take this info with a grain of salt. JPM has had a monster year and have been poached mercilessly by Barcap and Citi. MS IBD analysts are always solid, and they receive impeccable training, but on the markets side, MS and GS for that matter struggle. It's a matter of what job you're looking for and whether you'll be happy, rather than as much what you will derive out of said position. All of these firms are solid and provide excellent training - fit, in this case, matters most.
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    (Original post by Kinetic87)
    Well done for reading WSO.... agree that in IBD when exit opps are quite important overall bank prestige is way more important.

    However I think for S&T this is less the case. I was not implying bank prestige is not important. I think anyone receiving an offer from a GS trading desk would seriously consider the offer.... even if they had a prop trading offer from the likes of rbs/ubs...

    Anyone with half a monkey brain would take a prop desk at a lower tier bank than say a cash equities flow desk at a top BB.
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    If people are still clamouring to go to PE shops, then they are making silly decisions. PE died 2 years ago and an M&A can only do so much at a hedge fund - and I think it's better to poach someone from the markets side to work at said hedge fund - certainly more opportunities there than in M&A. M&A itself is also not doing well either.
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    I guess it depends on the type of hedge fund. Various type of strategies would suit an M&A banker more than a markets analyst
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    special sits L/S equities funds often take M&A bankers or special sits ER guys. Some sals roles in HFs take bankers, but typically markets guys are the ones who move across.
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    That's very true, and it also depends heavily on your personal preferences. ie. are you a risk averse person (relatively) or not. If a person is, then probably flow might suit them better, and that too at a BB, nothing like it. But for those who want to climb fast and get financial responsibility asap, prop even at a lesser firm gives you the opportunity. If you can prove that you're good (which is easier in prop than flow), you can move places - back to a BB, or to a top HF etc.
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    (Original post by Barzini)
    I placed ubs in tier 3 because they closed big parts of their commodities business. downsizing has affected their volumes obviously, and hence profitability.

    And Nimiza, working in the prop commods business, I can say that classifying in such a way is very misleading. Barcap is definitely tier 1 for commodities. Equal to, if not better than goldman in many areas. Having been at GS commods, I know they have massive prop books which makes a lot of money (because investment is so high!), and their flow is decent. Barcap is more flow oriented and does exceptionally well in the area.

    You've missed out on some big players that I've mentioned.
    I'm basing it on physical traded, which to me represents a strong business. A lot of firms offer the whole range of derivs and structured products. Not a lot trade physical in a real way.
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    Really depends on which assets.
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    (Original post by Nimiza)
    I'm basing it on physical traded, which to me represents a strong business. A lot of firms offer the whole range of derivs and structured products. Not a lot trade physical in a real way.
    If you are talking physical oil, coal, power and gas + LNG you've gotta consider CS and their Glencore Alliance along with MSCG, GS (J.Aron + Constellation London), ML Entergy Koch, Barcap, RBS Sempra, Deutsche, Macquarie Cook and to a certain extent BNPP. JPM's physical business is quite small, so is Citi (apart from Phibro), and most other banks'. Banks in the physical energy business have typically tied up with energy firms. SG is expanding their commods business massively now, will become a big player in the near future.
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    (Original post by Kinetic87)
    Commodities as an asset class lends itself more to prop trading than most other areas within a bank... be it GS, MS or Barcap...

    Am keen to know more about CS's link up with Glencore? haven't heard about it before...
    Out of all prop desks, commodities is the "easiest" to get onto . Try get onto a credit, rates, equity derivs etc prop desk straight outta uni - gonna be nearly impossible. Commodities as an asset class as you said is more prop oriented, and strucuturing with commods isnt the easiest. The sector also stills retains a different, non-bank culture in most places, and still has bit of the "apprentice" culture, where junior guys are allowed into the firm to grow into a role. Not that there are many such positions available, but it's possible. For example, in 08 summer GS had one grad job available on the Power & Gas desk which is 80% prop. Metals recruits now and then. MS had one grad job in Agro trading, which tends to be less prop, but still significant.

    If you want to look at the big guys in the physical business, add Glencore, Vitol, Gunvor for Energy and Cargill and Sucden for Agro.

    Glencore Alliance allows CS to have access to Glencore info, provide flow customers with commodities structured products, and prop trade all with knowledge of physical movements in supply and demand from glencore. They share 50% of their profits with Glencore, which shares no downside.
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    Sounds like a good deal for Glencore and Credit Suisse, especially because Glencore must have so much valuable info on flows... hard to get an edge in a market without a big presence in the first place...

    You're right about having a non-bank culture, also especially for energy there is such a huge legacy Enron contingent scattered all over the city...
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    very true about the Enron legacy.

    Also add trafigura to the list of physical players. I heard they are running a grad scheme this year, though not FO?
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    I would add: Historically, GS and MS have been the biggest players in commods. GS, MS specifically in oil and related fuel produtcs. They were making healthy profits long before other banks considered commods sexy enough.
    Barcap, is a solid overall 3rd now, with some desks better then GS,MS. I've spent a considerable time with them. Their commods business was built from metals and then expanded into other areas, i.e. paper/physical oil, power/gas,carbon and others.
    There a good number of ex Enron teams at Barcap and other BB banks. Enron was bad, but lots of talented people to be found everywhere. Check out John Arnold and Centaurus.
    ML is much better then GS/MS for Power/Gas mainly coz of its EKT.
    RBS Sempra, a bit related to ML. They've got a joint venture or agreement with Sempra Trading.
    Recently, Deutsche and JPM getting serious too. CS is following too, but still behind.

    SocGen, is tied up with gaselys, joint venture with GDF and SocGen, so very strong in gas and elec. Gaselys is pretty big physical player.

    In terms of recruiting, i think more and more students are starting to find commods interesting. Over the years, I've certainly seen an increase in graduate intakes. Not so sure, whether prop commods is the easiest to get into.
    Typically, the FO headcounts for grads in commods is less then other businesses, given the size.
    Secondly, mostly engineers or mathematicians manage to get into grad schemes. On my ex desk, mostly mathematicians from Cambridge.
    I think UBS has lost the plot. The number of times they've gone on and off commodities is ridiculous.
    Also, trading commods is very different to trading financial assets like bonds, fx,... There's a bigger emphasis on fundamental analysis and supply/demand factors. Most markets are relatively new and historical price data is pretty crap.
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    Just to clarify, i stated that commodities prop is probably the easiest PROP desk to get onto. Not that getting onto a prop desk is easy.

    Agree with all the other points, good summary.

    UBS lost the plot ages ago, when they decided to get rid of their commods business.
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    student_london, do you work in commodities at the moment?
 
 
 
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