Hi all, I summered in a BB S&T Program this past year and accepted an offer to work in Cash CDO structuring. I was only able to rotate through the desk for a three week period, and was wondering if anyone could provide insight into how my FT experience will be different from the summer. I did not work excessively long hours at the desk and obviously did not get to follow a deal through completion. I really enjoyed the desk culture, though, and find the CDO product and technology very interesting. Does anyone work on a CDO desk?
Also, any thoughts on the cyclicality of the product? Compensation expectations?
Thanks.
how did you get placed on the CDO desk? I'm pretty interested in synthetic CDO structuring and looking at summer S&T programs right now.
The cash side was included within the S&T Program at my firm. I am not sure how it is structured at other banks. The synthetic side is growing quickly, but was not open for a summer rotation and did not hire from my SA class. However, I did have a lot of exposure to the synthetic guys. Most cash deals are including buckets of synthetics now, so even if you end up in cash, you would have some exposure to syn.
Other than that, I would tell you to talk to recruiters to find out what summer programs CDOs fall under. I don't know enough about other bank's desks to make any useful reccomendations on that end.
what bank? you can pm me if you want
is it hard to lateral into S&T after a one year or two year IB stint? Have always been interested in CDO + CDS structuring / origination
I work on a BB synthetic CDO desk. I would say that that the hours are slightly longer than the average on the trading floor but not too bad and no where near ibanking.
The product is interesting and there is lots of innovation and growth at the moment so if you join a synthetic CDO desk you will be given lots of responsibility quickly. New analysts on our desk are traveling, meeting clients etc. Compensation at the mid to upper levels is excellent.
At the moment synthetic CDOs is a good place to be but there is always a risk things don't last . . .
ten pin ted,
if you don't mind me asking, how did you end up on the synthetics desk?
also, what are the best firms for synthetic CDOs?
I've been on the desk for almost 2 years, prior to that I have worked in portfolio management and private equity - so a somewhat unusual career!
Regarding the synthetic market, as expected the US bulge bracket feature heavily but the European Banks are surprising strong in this area especailly Deutsche, UBS, BNP and Soc Gen. Historically Europe didn't have a big cash bond market versus the US so there was greater market space for the CDS market when it arrived. Alot of the recent innovation in synthetics such as cpdo seems to come from London.
Curious, what's your take on the future of the business?
What would happen if the rates fall? Recession?
And of course, default rates are at all time lows, what if they revert to the mean (mean reversion)?
PS, I will be on the Cash Structuring side of CDO come 2007.
what bank LBO?
Which part of an investment bank packages CDOs? (Originally Posted: 12/31/2013)
Sorry if this is a stupid question, but I can't find it anywhere. We heard about investment banks taking a lot of flak during the crisis for the packaging of loans, mortgages, etc. into CDOs which were then sold to investors, but who actually does this? I know S&T (primarily S) were responsible for doing the actual selling of these CDOs once they were already packaged and ready to go (and maybe the guys over in PWM or Asset Management did some of that too?), but who were the guys who A) bought the individual mortgages off of commercial banks in the first place and B) did the actual packaging/valuation of this debt into the CDOs for the S&T guys to sell?
I ask because I'm going into investment banking (you know, M&A, ECM, DCM, restructuring etc.) but I come from an ignorant family whose first reaction is that I'll be the guy causing the next financial crash. As I understand it, actual investment bankers had pretty much nothing to do with all of that, so I'd love to say "That's a different part of the bank. You're confusing investment banking with _____." Unfortunately, I'm not 100% certain what _____ is.
Securitized Finance or Structured Finance.
jmayhem is correct.
Be careful however, because many banks are structured so that Structured Finance does fall within the Investment Banking umbrella (which includes IBD, ER and S&T). Structured Finance generally sits within S&T (aka Securities). However, it will not be in their investment banking division (M&A, ECM, DCM, Lev Fin, Rx, Industry Groups)
CDO Banking (Originally Posted: 07/22/2006)
This area of fixed seems to be exploding in the past couple of years. Do you think it pays on par with/better than M&A at the junior level?
I was wondering about the pay in the CDO industry as well.
Depends on how your group does. Fixed income at the earlier level makes similar to banking. I can't speak for how much MD's make but I think it's all relative to volume... might make slight less tha M&A. Hours are better too.
Division within a bank is responsible for packaging CDOs? (Originally Posted: 12/12/2012)
Just as the title suggests, I was curious as to which division within a bank is responsible for creating mortgage backed securities and other CDO/derivative products.
I apologize if this is a stupid question. Thanks
Securities.
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