SERVING THE QUANTITATIVE FINANCE COMMUNITY

StraightOuttaBO
Topic Author
Posts: 9
Joined: October 24th, 2009, 10:18 pm

### Escape from the risk management ghetto

Last edited by StraightOuttaBO on October 25th, 2009, 11:00 pm, edited 1 time in total.

KackToodles
Posts: 4100
Joined: August 28th, 2005, 10:46 pm

### Escape from the risk management ghetto

tough luck, man, you are in a shit hole. The best thing that can happen to you is to get laid off with a 1 year severance pay package. That would give you a chance for a fresh start and one year to look for a new job. Since you already have your phd, the best you can hope for now is to jump out of the BO monkey suit into either a phd program or an MBA program, and then interview for entry level associate positions at Goldman out of school.

brotherbear1220
Posts: 116
Joined: July 12th, 2006, 9:43 pm

### Escape from the risk management ghetto

MatthewM
Posts: 416
Joined: December 17th, 2007, 12:49 pm

### Escape from the risk management ghetto

Do MFEs generally start at an analyst level?

brotherbear1220
Posts: 116
Joined: July 12th, 2006, 9:43 pm

### Escape from the risk management ghetto

I guess it's possible for MFEs to start as associates, but I wouldn't expect to start as an associate if you don't have any work experience.It all depends on work experience, really. You might try to apply to associate roles if you have done something applicable. Remember that MBAs who come in as associates already have (at least) 2 years of work experience, so if you're doing your MFE after already doing an analyst program somewhere, then apply for associate roles. If you're doing an MFE right after college, you might try applying to the full-time associate programmes at major banks, but I reckon that will result in a lower hit rate at those banks.

KackToodles
Posts: 4100
Joined: August 28th, 2005, 10:46 pm

### Escape from the risk management ghetto

gofer, so, like, how many times did you spat into the coffee of a trader you didn't like?

StraightOuttaBO
Topic Author
Posts: 9
Joined: October 24th, 2009, 10:18 pm

### Escape from the risk management ghetto

brotherbear, thanks a lot for your comment. I also think an MBA would be a waste of time and money; I have the feeling that it would only help if I had some good experience going in to begin with. At any rate, I'll definitely try to pull on my connections and see what happens.If I had the opportunity to move into, say, risk analytics, would I be in a better position? It's decidedly more quant-y, but at the same time I'd be digging myself even deeper into back office (that group don't even sit on the trading floor).

drews26
Posts: 116
Joined: April 22nd, 2003, 4:15 pm

### Escape from the risk management ghetto

Completely agree with brotherbear1220 on almost every single point. As I mentioned in other threads I personally know several people who moved from market risk to the desk (during good times 2005  pre-summer 2007, dont know anybody from anywhere who moved post 2007). You basically have 2 choices either to gamble, go for top-5 MBA and try to get into Associates S&T programs afterwards (theres a huge opportunity cost associated with it and tuition is about $130-150k, so overall it can easily set you back by$500k). The 2nd is to network internally with the head of the desk. If you send out some VAR/exposure limit reports to 20-30 people and the head of the desk contacts you directly and asks some questions thats your time to shine . Alternatively if somebody hits reply all button, you also shine as much as you can since few senior trading desk people will probably be on the list as well and may notice your reply. I think only the head of the desk or somebody on the desk very senior can help you, since junior traders (VP-level) will treat you as a competitor. I doubt that hanging out in bars or stake-houses where traders hang out or talking to traders in any social situation (as opposed to work-related one) will be of any help, but you may try that as well, it cant hurt.Finally a lot depends on the bank. In my previous bank Risk sat on the trading floor not far from the trading desk, in my current bank Market Risk sits on the different floor (at the back of the back office). Of course its better to be on the floor, since at least some traders will know your face and say hi in the elevator (or not ).Theres one more way I know. I know a guy who did very IT-focused quant work in major bank, he left to go to a little more client focused role in another (not top-notch bank) fixing VBA macros for the desk but also interacting with clients a little  no trading though. That was back in 2005 when things were good. Somehow he managed to get on the prop desk in that 2nd tier bank (right now most of the banks have closed their prop desks, maybe except for equities and energy, but you can always go to the major buy-side firm). Anyways, this guy been on a buy-side (prop desk) daily interacted with all the major sell-side broker-dealers and developed work relationships with them, and one day convinced a top-notch desk in the very top bank to take him. Keep in mind that major broker-dealers take their clients for dinners pretty often, the people who usually come are mostly sales, but its good to know them as well. Sometimes one or two traders may drop by too (to get a free lobster and talk BS).Headhunters are completely useless in trying to switch from risk to the desk, since theyll only try to place you in jobs similar to what you did already. Thats because relationship with a client is (understandably) the most important thing for them and they may be afraid to send your resume to the front office junior opening, because the client may not find your background appropriate which will reflect negatively on them (that's the explanation theyll give to you anyway as to why they can't send you to front office openings). The truth is that HHs just dont have any junior desk jobs just because they get filled either trough Analyst/Associate programs (I would guess 80% of the openings) or internally (other 20%)
Last edited by drews26 on October 26th, 2009, 11:00 pm, edited 1 time in total.

repoman
Posts: 123
Joined: February 10th, 2009, 12:53 am

### Escape from the risk management ghetto

QuoteOriginally posted by: StraightOuttaBOI recently graduated with an MFE from a good school and now I work in market risk at a big bank. ...Given that half my class is unemployed and the other half work in similarly shitty jobsNo offense, but this does not sound like a very good school.I understand you don't find the work interesting or challenging, but would you be willing to tell us what your 1st year compensation is/was?

chaoticrambler
Posts: 60
Joined: September 29th, 2009, 7:56 pm

### Escape from the risk management ghetto

QuoteOriginally posted by: StraightOuttaBOId like to move into trading, but entry-level risk monkey to trader is a long shot, if not an impossible one. As to why I settled for a job in risk to begin with, well, the job market was/is absolute shit and at the time I considered myself lucky. Given that half my class is unemployed and the other half work in similarly shitty jobs, I suppose I shouldnt be complaining too much, but I feel all that stochastic calculus and derivative pricing theory is wasted.Wouldn't a quant (like someone who develops models , does back testing etc) apply those concepts more than a trader ? Why aren't you looking for quant positions first rather than going for trading ? I am a little unsure of all the various terminologies associated with various positions so maybe it is a stupid question.
Last edited by chaoticrambler on October 26th, 2009, 11:00 pm, edited 1 time in total.

twofish
Posts: 4944
Joined: February 18th, 2005, 6:51 pm

### Escape from the risk management ghetto

QuoteOriginally posted by: chaoticramblerQuoteOriginally posted by: StraightOuttaBO I feel all that stochastic calculus and derivative pricing theory is wasted.Wouldn't a quant (like someone who develops models , does back testing etc) apply those concepts more than a trader ?Not really. Stochastic calculus and derivatives pricing theory were really big topics a few years ago. They aren't that terribly useful for the problems that people are interested in right now.
Last edited by twofish on October 26th, 2009, 11:00 pm, edited 1 time in total.

repoman
Posts: 123
Joined: February 10th, 2009, 12:53 am

### Escape from the risk management ghetto

QuoteOriginally posted by: twofishQuoteOriginally posted by: chaoticramblerQuoteOriginally posted by: StraightOuttaBO I feel all that stochastic calculus and derivative pricing theory is wasted.Wouldn't a quant (like someone who develops models , does back testing etc) apply those concepts more than a trader ?Not really. Stochastic calculus and derivatives pricing theory were really big topics a few years ago. They aren't that terribly useful for the problems that people are interested in right now.Are you joking? I assure you that there are people interested in applying recent results in stochastic calculus.

riskguru
Posts: 79
Joined: August 11th, 2004, 4:24 pm

### Escape from the risk management ghetto

It seems to me that part of the problem is that you are doing risk at a large bank where responsibilities are very partitioned/siloed, making it hard to plan for career growth. If you think you know risk/quant/trading go try to work for a hedge fund. Most will not have the patience to train you but if you add value it will be recognized. If you can't get in maybe that says something re: skill set/experience.

twofish
Posts: 4944
Joined: February 18th, 2005, 6:51 pm

### Escape from the risk management ghetto

QuoteOriginally posted by: repomanAre you joking? I assure you that there are people interested in applying recent results in stochastic calculus.There's probably someone working on something dealing with stochastic calculus, but I'm seeing nowhere near the interest that there was a few years ago.

drews26
Posts: 116
Joined: April 22nd, 2003, 4:15 pm

### Escape from the risk management ghetto

QuoteOriginally posted by: riskguruIt seems to me that part of the problem is that you are doing risk at a large bank where responsibilities are very partitioned/siloed, making it hard to plan for career growth. If you think you know risk/quant/trading go try to work for a hedge fund. Most will not have the patience to train you but if you add value it will be recognized. If you can't get in maybe that says something re: skill set/experience.Does anybody have a firsthand experience with risk management jobs in a hedge fund? Im sure those roles exist only in big HFs/FoFs. In a big bank theres market risk, credit risk and a few other groups dealing with risk. How different/similar HF risk management roles are compared to those in banks? I mean can CRO or whoever else force traders/PMs to exit positions if VaR or any risk exposure breaches the limit? Does Risk have any real power in HFs? One very senior Risk guy in a major bank once told me that the only purpose of having risk managers in a HF is to tell investors that they have a risk management group but Risk people have no real power. This guy worked in a bank his whole career but, as I said, is very senior (just below CRO), but Im not sure whether what he said is actually true.
Last edited by drews26 on October 27th, 2009, 11:00 pm, edited 1 time in total.