Tales From The Back Office: How To Take No Prisoners And Fight Your Way Into The Front
So it seems the back office vs. front office discussion last week touched quite a few nerves. In addition to some interesting comments, I also received many stories of those who made the jump from back office to investment banking or trading.
I’ll go through 3 here: The Exception That Proves The Rule, The Banker Formerly Known As Quentin Tarantino and The Best Trader Ever.
The Exception That Proves The Rule
One reader who works at a private equity firm wrote in with the following story:
“One of our former interns took a compliance job at Goldman, and a few years later impressed the right person and made the jump to Goldman Sachs investment banking as an Analyst, advanced to Associate, and recently made another switch once again, moving into prop trading.
I’ve never heard of such a story happening before or since, so I think you could call this one “the exception that proves the rule.”
It’s similar to staff attorneys at law firms – theoretically, they can never become Associates and are therefore not eligible for Partner track. However, at a firm one of my partners worked at, a staff attorney actually became an Associate and eventually a Partner!
This was a one-in-a-thousand case, but these 2 stories show that it is possible – in both law and banking.”
Lesson Learned:
1. If you want to move up from the “back office,” regardless of your industry, make sure you impress the right people.
2. Never say “never” even when everyone else says “never.”
3. There’s no one “path” you need to follow – no one really knows what they want to do, no matter how old they are.
The Banker Formerly Known As Quentin Tarantino
This might be my favorite back office to front office story. It concerns none other than Charles Chen, a Wharton student who was born in Taiwan, raised in the US and explored a career in…. film, before making the move to finance. Here’s his bio:
“Following graduation, Charles explored one of his passions – film – by assisting on a Pepsi spec and a documentary featured in the 2006 Tribeca Film Festival. Realizing his preference for cinematic scholarship rather than production, Charles left the independent film scene for Deutsche Bank Securities, where he strengthened his understanding of bulge bracket operations as a Fixed Income Control Specialist.”
I love film too, so I see where he’s coming from. It would have been more amazing if he had worked in Deutsche Bank investment banking rather than in the back/middle office, but on the whole I’m still impressed.
“One year later, seeking more qualitative work, Charles joined Scura, Rise & Partners, a boutique merchant bank focusing on specialty finance, as an Analyst. Charles made an immediate and striking impact on the firm’s transactions in mergers and acquisition, capital raising and private equity, playing lead roles in the arrangement of two distressed real estate funds and the restructuring of a protective equipment maker.”
Aha. Keep this one in mind if you’re working in the back office at a large bank: he left for a boutique so that he could work in the front office.
Being Quentin Tarantino in a former life is cool, but knowing the right people (and going smaller) trumps your background.
“He also developed a taste for small business management by heading the firm’s recruiting and IT initiatives. For his efforts, Charles was rapidly promoted to the Associate position and entrusted with managing a small team of analysts.”
Another one of the virtues of boutiques: if you’re good, you can indeed move up quickly. I’m not sure what “rapidly” means, but I assume less than the standard 3 years.
Lessons Learned:
1. If you’re switching careers, get into finance any way you can;
2. If you want to move from back office to front office, going to a smaller firm is often a good move; and
3. You really can break in from any background, even film-making.
The Best Trader Ever
Our last story of back office to front office success concerns none other than The Best Trader Ever.
Yes, that’s right – Jerome Kerviel of Société Générale.
Yes, that Jerome (for those living under a rock, he was responsible for the biggest trading scandal ever).
Reading through his resume, we come to an astonishing finding: he rose up through the ranks of the back office to become a trader!
You’ll see he starts out in the “Middle Office – Referential Team” from 2000 to 2002 before moving to “Trader Assistant” in 2002-2004; from 2004 until the scandal, he was a real trader.
Note to readers: This is a terrible resume. Never list an objective, never write 2-3 word bullets, and never list “English” and “Microsoft Office” under “Skills.” Those are like listing “Proficient at Breathing Oxygen” under skills (obviously if your resume is not in English, then English is fine to list).
Lessons Learned:
1. You don’t need a good, or even passable, resume to become a trader at Société Générale;
2. It’s much easier to move from a support role to a client-facing role in the world of trading; and
3. Traders who move up from the back office are likely to cause scandals that result in the loss of USD $7.1 billion.
(Kidding on the last one, of course.)
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Tags: Back Office, changing careers, Goldman Sachs, investment banking, Societe Generale, trader, understanding investment banking
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Inquisitor, great read- as is the whole blog. Can you please shed some light on working in Debt Capital Markets in a mid-market bank in London (work content/tasks, hours vs. other I-Banking departments, exit opportunities)? I remember you mentioned in an older post that PE firms aren’t too interested in capital markets experience (and obviously, being mid-market isn’t going to help me either). I’m an undergrad student by the way – not back office.
I’m also curious about NY vs. London working environments in investment banks if you have any thoughts on the topic. Thanks in advance.
London is a bit more laid back since it’s Europe, obviously hours are still not great but on the whole you probably work less.
DCM is mostly about writing memos for financing and modeling of deals. Hours probably better than other IBD especially these days. Most likely exit is to PE since you work with debt so much.
lol. love the Jerome stuff.
Nick Leeson came from the back as far as I remember.
These two guys axed a few hopes to move from back to front.
Good blog, keep on writing.
This is a really interesting article. I am a little confused on how people break into the analyst role. I assumed that if you didn’t land one of those roles your first or second year out of undergrad, then your next shot to get into Ibanking was to get recruited as an associate after you’ve got an MBA. Does it work differently?
Generally that’s correct but some people do manage to break in from other professions.
Didn’t Lewis Ranieri also move from back office to front office?
Hmm maybe? don’t recall offhand
very interesting site indeed! I have a short question: Having joined the firm as an analyst in the asset-management division; whats the best way (strategy) to move to the investment banking division, M&A?
The Constraints: a) joined 4 months ago. b) leaving in 6 months time, meaning in June 2009, for a masters in finance.
It’s really hard to do in that short a timespan. You need to get a “champion” on the other side in IBD to pitch you to the team and make a case for you – so you need to have a really good relationship with someone senior there who can pull you over.
I am just following up my question with another scenario. So suppose I stick to the analyst position for the next 6 months and then go for my Masters in Finance (tulane, Freeman School) , does that make my chances any better at getting into IBD?
Not really, Masters degrees in general don’t help too much.
hmmm.. but evidently all the b-schools that are offering MFin programs seem to be suggesting that this what their program is aiming to provide. what’s the other option,short of an MBA (b/c I only got 4 month exp, 10 by June ‘09).
There’s a big difference between an MBA program at a business school and just a Master’s program… and trust me, banks only care about the MBA, you will not enter at a higher level or anything with only a Master’s degree. It’s just like the CFA, lots of people think it actually helps you but its not useful at all for banking/PE, only for portfolio management.
I enjoyed reading all the articles you wrote. All the information is valuable, but I still have some questions regarding people in other fields breaking into investment banking. Hope you can give some thoughts.
1. As an insurance agent, what is the difficulty of breaking into banking, assuming getting an MBA degree is a real option? When recruiters look at the work experience, will they consider selling insurance products part of the financial transaction type of work? And what more can I do to increase my chances? I am also going to pass the series 7 & 66.
2. If I choose to work as an accountant, and get into the more transaction- oriented area of work, is it considered more related to banking than as an insurance agent? Assuming it will also involve getting an MBA degree at a target school, is an accountant considered more qualified than some other backgrounds, other than the real banking jobs?
1. Difficult, MBA is your best option but selling insurance products is fairly far away from finance/banking. I would try to get some type of informal experience at a local financial firm doing analysis/quantitative work prior to business school.
2. Yes, but it’s still decently far away from what bankers actually do. Going to get an MBA at a target school to become an accountant is kind of a waste though, if you do that it’s only worth it to go for banking positions.
Thanks for your opinion! If I take the accountant route, I am really going to go for banking positions after getting a MBA degree. Just because it’d be hard to get finance jobs in the first place, I try to get into some related fields before business school.
I’m currently trying to figure out a way into I-banking from a Tax Accountant role at a hedge fund. I have an under-grad in finance, but then went back to school and became CPA eligible. Then, I interned in tax at a public firm for six months and then moved full-time to work with a high wealth family in dealing with private equity and hedge funds. Since then, I have moved on to a rather large and reputable hedge fund and have my CPA (not that it helps with I-banking). The whole time I’ve spent in tax was really just trying to get me back into the finance side of things (I currently hate tax with a passion but it has been a great learning expirience). What is the best course of action and most likely way for me to break into an I-bank role??
Cold-calling / tons of networking… depends how long you’ve been out, though, if it has been several years then business school may be better.
I’ve been out of school 2 years… I’m concerned about getting an MBA and then ending up right back on the back office and accounting side again…
If you get a top MBA that won’t happen… you’re not going to go from HBS to trade settlement, I don’t even think they would recruit for that type of job at top business schools
Nick Leeson rose up from the back office as well so maybe point number three has some merit after all.