Investment Banks Destroyed - by Anton Kreil @Instutrade
1. hedge funds
1.1. trader @ hedge funds
1.1.1. what they do
1.1.1.1. protect client's capital
1.1.1.1.1. make money in rising and falling markets
1.1.1.2. managing porfolios
1.1.1.2.1. traders are also known as portfolio managers (PMs)
1.1.1.2.2. positive selection portfolio only
1.1.1.3. trade their own money + investors money
1.2. structure
1.2.1. ustilise private investors (Clients) capital
1.2.2. important info
1.2.2.1. typically hold hedged (balanced) and diverse long/short portfolios
1.2.3. setup
1.2.3.1. management company
1.2.3.1.1. onshore
1.2.3.1.2. fees
1.2.3.2. fund
1.2.3.2.1. offshore
1.2.3.2.2. holds clients money
1.3. what traders get paid (as of 2014)
1.3.1. Junior Portfolio Analyst (contractor)
1.3.1.1. basic salary $160K
1.3.1.2. no bonus
1.3.1.2.1. no stock
1.3.1.2.2. can invest in the strategy
1.3.1.3. 1-2 years
1.3.2. Junior Portfolio Manager
1.3.2.1. basic salary $300K
1.3.2.2. bonus $400K
1.3.2.2.1. small amount of stock in the HF structure
1.3.2.2.2. 25% of the bonus reinvested in the strategy
1.3.2.3. 3-5 years
1.3.3. Senior Portfolio Manager / Managing Director
1.3.3.1. basic salary $800K
1.3.3.2. bonus $3.5M
1.3.3.2.1. stock in the HF structure
1.3.3.2.2. 50% of the bonus reinvested in the strategy
1.3.3.3. 3-5 years
1.3.4. Principals
1.3.4.1. limited by assets under management
2. trading and portfolio management industry landscape - vast majority of professional traders work @
2.1. investment banks
2.2. hedge funds
2.3. others
2.3.1. Pension Funds (long only)
2.3.2. Private Equity (non publicly traded assets)
2.3.3. Inter Dealer Brokers (institutional brokers)
2.3.4. Retail Brokers
2.3.5. Retail Banks
3. check out my website http://www.tradingbreakdown.com @TradeBreakdown
4. Institute of Trading and Portfolio Management - University Tour 2013 Filmed at University College London (UCL) November 2013 Institute Education www.instutrade.com/education/
5. investment banks
5.1. clients are
5.1.1. blue clip companies - mid to large size
5.1.2. pension finds
5.1.3. hedge funds
5.1.4. family offices
5.1.5. private equity companies
5.1.6. high net worth individuals - sophisticated investors
5.1.7. retail banks
5.1.8. investment banks have financial interest in their clients as well
5.2. structure
5.2.1. primary market
5.2.1.1. where debt and equity is issued
5.2.1.2. clients raise money in debt & equity markets
5.2.2. secondary market
5.2.2.1. where assets (debt, equity) are traded after being made publicly available
5.2.2.2. debt, equity traded by the traders
5.2.2.3. setup
5.2.2.3.1. cost center / profit centrer = 4/1
5.2.2.3.2. typical equities division
5.2.2.4. trader @ investment bank
5.2.2.4.1. what they do
5.2.2.4.2. remuneration
5.2.3. ustilise public shareholders capital
5.3. what traders get paid (as of 2014)
5.3.1. Fiancial Analyst (contractor)
5.3.1.1. basic salary $65K
5.3.1.2. bonus $8K-$16K
5.3.1.2.1. no stock
5.3.1.3. 2-3 years, 20% make the cut
5.3.2. Assosiate (fulltime)
5.3.2.1. basic salary $130K
5.3.2.2. bonus $80K-$160K
5.3.2.2.1. 15% stock
5.3.2.3. 3-5 years
5.3.3. Vice President / Executive Director
5.3.3.1. basic salary $300K
5.3.3.2. bonus $200K
5.3.3.2.1. 20% stock
5.3.3.3. 3-5+ years
5.3.3.3.1. most spend all their careers ate this level
5.3.4. Junior Managing Director
5.3.4.1. basic salary $475K
5.3.4.2. bonus $320K
5.3.4.2.1. 25% stock
5.3.5. Senior Managing Director / Partner
5.3.5.1. basic salary $800K
5.3.5.2. bonus $1.6M
5.3.5.2.1. 35% stock