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StraightOuttaBO
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Escape from the risk management ghetto

October 28th, 2009, 1:27 am

Yeah, do risk managers in a hedge fund even do anything?!drews, some excellent advice, thank you.
 
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cryptic26
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Escape from the risk management ghetto

October 28th, 2009, 2:39 am

QuoteOriginally posted by: drews26QuoteOriginally 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.It depends what kind of hedge fund you are working with. Places like Millenium partners - if you are in the IRD risk then you are seriously doing some work to peg your risk beyond VaR. This is something that traders look at themselves before placing bets. The risk manager is not necessarily a powerful position but neither is modeling in general. However the value added could be anywhere from nothing to extremely significant. The fact that risk management was overlooked is one of the main reasons that we are talking about the current mess.
 
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mit
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Escape from the risk management ghetto

October 28th, 2009, 7:18 am

is trading so much better?
 
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Padawan
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Escape from the risk management ghetto

October 28th, 2009, 7:56 am

QuoteOriginally posted by: mitis trading so much better?Better than risk? Well, it pays better and gives more perks...
 
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cryptic26
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Escape from the risk management ghetto

October 28th, 2009, 1:13 pm

Join a sell side firm building risk analytics such as riskmetrics, Barra, etc etc. Far more interesting research and no yelling/screaming of traders. QuoteOriginally posted by: StraightOuttaBOI recently graduated with an MFE from a good school and now I work in market risk at a big bank. The job is mostly reporting and position monitoring and babysitting the risk systems. Most of my time is spent dealing with mundane operational issues and telling IT guys to fix random glitches (e.g. curves somehow didn't get linked causing VaR to blow up, wrong instrument type, trade booked in wrong account, etc. etc.)I’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.Now that I’m not eligible to apply for the fresh-out-of-school S&T programs, I already have a master’s, and I have the indelible stamp of “Back/middle office monkey” on my resume, is there any way to work my way into trading? I’m young (early twenties) and wouldn’t mind being a trading desk coffee bitch.I have heard fables of market risk guys and even product controllers somehow clawing their way onto the desk. But then again, I have heard many more stories of people staying in risk for years in the hopes of a such a move, and ending up stuck there. Would you recommend someone like myself to keep plugging away for a couple years and try to get onto the desk, or should I try to find a FO job elsewhere? Is that even possible for me anymore (e.g. is one year in BO/MO just as bad as five years)? What sort of roles should I target? I’m much better at C++ and programming in general than your average back office monkey, but my maths isn’t PhD level. I'm also very interested in structuring roles (isn't everyone?)Thanks for any responses, and especially hoping to hear from Dominic on this one.(P.S. to any fresh undergrads w/ no work experience contemplating an MFE: Don't do it unless you're OK with the idea of being me in a year).
 
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ERider
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Escape from the risk management ghetto

August 7th, 2010, 12:07 pm

Are there any happy risk management professionals out there?I ask because my career seems to be heading down this path and I'd love to hear the perspective of someone who loves being in RM. I've considered the downsides (and have read them in this thread): lower pay than trading, less glamourous than front office, potential to be 'stuck' in back office, basically a spreadsheet reporting gig, boring?...But what about the upside? Quantifying risks for the firm, good technical challenges each day, decent/stable pay?I enjoy building software systems, and taking reams of data and summarizing it into something useful. I have an opportunity to build a risk system from scratch at the firm I'm at. I think building the system would be fun, but my concern is that once its built - then what? Am I in maintenance mode? Its almost like what does Luke Skywalker do after Vader is dead.Insight from a happy Risk Manager would be great. To me the setup sounds fun but the ongoing sounds boring.
 
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capafan2
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Escape from the risk management ghetto

August 7th, 2010, 2:34 pm

Last edited by capafan2 on August 6th, 2010, 10:00 pm, edited 1 time in total.
 
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KackToodles
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Escape from the risk management ghetto

August 7th, 2010, 6:09 pm

how much does risk analytics pay? about 30% of front office?
 
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ArthurDent
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Escape from the risk management ghetto

August 7th, 2010, 9:19 pm

QuoteOriginally posted by: ERiderBut what about the upside? Quantifying risks for the firm, good technical challenges each day, decent/stable pay?None, if you remain in risk forever. In any half decent firm that has not gone belly up in the crisis, traders are required to manage their books' risk. What is left for the people with "risk mgmt" titles is the accounting and book keeping aspects.
Last edited by ArthurDent on August 6th, 2010, 10:00 pm, edited 1 time in total.
 
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mrmister
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Escape from the risk management ghetto

August 7th, 2010, 11:56 pm

I know a friend who has a senior position managing risk in an energy shop. He is well compensated (cost-adjusted earnings are comparable to NYC) and is happy with his role. Shops which are into trading in the physical markets value risk a lot more. But then, you need some special skills concerning physical energy markets to get a job and be happy. The positions also seem to be very stable. Another advantage is that there are not so many people trying for the same jobs. Skills wise, you would know a lot about the business if you are interested. One downside is that you would be working out of smaller cities. Another downside is that the shops which participate in physical energy markets do not do speculative trading but merely use derivatives for hedging. Naturally, there is a smaller amount of money to be distributed as bonus. QuoteOriginally posted by: ERiderAre there any happy risk management professionals out there?I ask because my career seems to be heading down this path and I'd love to hear the perspective of someone who loves being in RM. I've considered the downsides (and have read them in this thread): lower pay than trading, less glamourous than front office, potential to be 'stuck' in back office, basically a spreadsheet reporting gig, boring?...But what about the upside? Quantifying risks for the firm, good technical challenges each day, decent/stable pay?I enjoy building software systems, and taking reams of data and summarizing it into something useful. I have an opportunity to build a risk system from scratch at the firm I'm at. I think building the system would be fun, but my concern is that once its built - then what? Am I in maintenance mode? Its almost like what does Luke Skywalker do after Vader is dead.Insight from a happy Risk Manager would be great. To me the setup sounds fun but the ongoing sounds boring.
 
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GiusCo
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Escape from the risk management ghetto

August 8th, 2010, 12:40 am

FO positions and trading are seen here as the best jobs. I'm sure you experts may answer one simple question (I'm a noob so please excuse me).You may have a profit 29 days out of 30 and nevertheless lose your shirt on the 30th because of tilt, bad day, boredom, incorrect bankroll management or simply because you are blown up in the minefield of the unknown. How many traders out of 100 manage to have a profit in a consistent manner? 1? 5? 10? What happens to the losers from a career point of view? Demoted to BO? Fired? Prosecuted?
Last edited by GiusCo on August 7th, 2010, 10:00 pm, edited 1 time in total.
 
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KackToodles
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Escape from the risk management ghetto

August 8th, 2010, 12:49 am

QuoteOriginally posted by: GiusCoWhat happens to the losers from a career point of view? Demoted to BO? Fired? Prosecuted? they start their own shops and boast that they "have survived a large draw down." Everyone believes the setback has made them more wise and savvy and call them "seasoned pros". Many banks want to hire them to get advice about how to avoid the next disaster.
Last edited by KackToodles on August 7th, 2010, 10:00 pm, edited 1 time in total.
 
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mrmister
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Escape from the risk management ghetto

August 8th, 2010, 1:03 am

Quote Demoted to BO? Fired? Prosecuted?Does not happen. Front office people are rarely thrown in to back office as they can find a job in the front office of a competing firm. You can get fired for a lot lesser than losing your shirt.
 
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ThinkDifferent
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Joined: March 14th, 2007, 1:09 pm

Escape from the risk management ghetto

August 8th, 2010, 8:27 am

QuoteOriginally posted by: KackToodleshow much does risk analytics pay? about 30% of front office? LOL clueless, as usual.
 
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twofish
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Joined: February 18th, 2005, 6:51 pm

Escape from the risk management ghetto

August 9th, 2010, 2:34 am

QuoteOriginally posted by: GiusCoFO positions and trading are seen here as the best jobs. I'm sure you experts may answer one simple question (I'm a noob so please excuse me).I have no clue why. If you are reading this group, there is an 90% chance you are going to be a code monkey. You can be a FO code monkey or a BO code monkey, and the former set of jobs are not necessarily better than the latter set.A lot depends on what you want to do. If you a geek that is interested in geeky things. There are a lot of FO jobs where you are just filling in spreadsheets and a lot of BO jobs in which you are playing with really cool toys.The other thing is that the pay differential between a FO code monkey and a BO code monkey isn't that huge.
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