Is it possible to move from prop to IB based on PnL ?

Discussion in 'Prop Firms' started by GekkoToBe, Jun 13, 2011.

  1. Has anyone did this or known someone who has?

    The reason I'm asking, is if your ultimate goal is to start your own Fund, having come from the trading desk of a Goldman, MS, JPM, UBS, or Deutsche, does give you more "pedigree" (which makes it a whole lot easier to raise assets) than having come from a prop firm.

    Or do those top IBs only hire based on university degrees?

    How easy is it to move across from a prop firm to a top IB ?

  2. Sure it's possible, but those firms are winding down or spinning off their desks as required by regulations.

    Probably not much point in trying that now.

    If you've already got a couple year track record at a reputable shop and a small team behind you raising capital may be easier than you think.

    Pedigree matters less if you've already proven yourself to be a responsible & reliable risk taker over a number of years.
  3. Thanks for your response.

    What would you consider to be a "reputable" shop ?
  4. LeeD


    A culture that dominates in many large (and some smaller) companies is the hiring managers don't trust themselves to make a decision based just on an interview. SO, they are searching for "signals" that the person is good enough If the applicant has a degree with honors from a leading unversity and/or has worked for a leading company in the inductry, they think the person is bright enough... and if the things didn't work out they can always shift responsibility by showing all the hired person's credentials.

    Another factor is leading banks tend to pay substantial premium over other industries (except, perhaps, oil production). So, if they choose to, say, only hire people who graduated from top 5 schools, they usually can get away with it.

    There are without doubt people who moved form prop to banks. An article a few years ago featured a person who traded commodity futures from home for a few years and became a "star" trader at Goldman Sachs. A former CEO of HSBC started his career in the bank's mail room.

    If your degree is not from a leading unversity, many places won't mind. If you don't have a degree at all or if the grades are low, it may pose a bigger problem.

    Doing MBA at a top school is a good way into IB. If you have exceptionally high GMAT score many MBA courses may overlook lack of leadership record or low grades during earlier studies.

    Another thing to consider is trading positions in banks tend to require higher P&L figures than most prop firms. Lots of traders at prop shops consider themselves successful with yearly P&L in low hundreds of thousands. If yearly P&L doesn't reach $5mln-$10mln (depending on the bank) a trader will be considered a waste of space in an IB. Consider the scalability of what you are doing when going for an interview.

    The good thing is a number of top banks are more interested in hiring bright people as opposed to those with a specific track record or narrow qualification. So, getting an interview is no small part of the process.
  5. The hedge fund route is much easier.

    Hedgies are often more likely to take a small risk with you than an IB. In addition to be vastly more open to clever ideas and tactics than any IB.

    good luck, surf
  6. Yes. Banks care about your ability to earn profits for them. One way to demonstrate that is through educational history and another is through performance history. Either way, if you can prove yourself, you'll get a shot somewhere.
  7. You'd think performance history would more clearly prove your ability to "earn profits" as opposed to educational history.

    And yeh I agree with Surf, probably better to move from prop to hedge fund than from prop to an IB, especially now that all the IBs are spinning off their prop desks.

    Which prop firms would be considered "reputable" ?
  8. bone

    bone ET Sponsor

    Agree, prop to HF I know for a fact is doable.

    Also agree that IB desks are in a state of flux, and besides they would certainly poach from a HF but more unlikely from a traditional prop firm. There are some prop firms that operate like a HF and give performing traders a great deal of leverage - Ronin Capital or DRW here in Chicago come to mind.