Will starting out on the sell-side give me broader exposure/more otpionality?

[SwappieMonster]

I am trying to decide between a trading job for a BB, where my primary responsibility would by market-making (although taking prop positions is encouraged), and a prop trading role in a small regional office of a large hedge fund (think Citadel, Fortress, Shaw). Both are good jobs (interesting work, likable colleagues, decent comp) that I can picture myself being really happy in for the next few years, but on balance I'm tilting towards the hf jobs because of the somewhat nicer lifestyle and the (slightly) more exciting work.



I do have a couple of concerns regarding what my career will look like down the road that I would appreciate your insights on. Specifically:

1) It seems to me that I will get broader exposure by being on the sell-side, as I would be able to see institutional flows, interact with a bunch of different buyside firms, chat with colleagues trading different asset classes, go through formal training programs, etc. Is this true, or do you feel I will have just as broad a learning experience on the buy-side?

2) I also feel that I will have more optionality down the road by staying on the sell-side for a couple of years, and then potentially moving to the buy-side (which would, at that point, obviously be a much better-informed choice than it is right now) - whereas if I start out on the buy-side, I'll probably never go back and will simply be moving around between similar funds. Any thoughts on this?



I should add that I'm currently a grad student with virtually zero finance experience, so obviously the learning experience I will get and the option to move around later in my career carry a lot of weight for me.



Thanks for sharing your thoughts!

[JoeC]

What you have is a good problem. If you knew where you're career would end up with ~>0 finance experience that would be some trick.  It will largely depend on you, what you end up really wanting to do, what kind of mentoring you get, and how the firms and businesses you're in perform, and a bit of good fortune never hurts.



You might get broader exposure at a BB or you might get a deeper view into a smaller piece of a bigger business?? At a fund you'll probably have less "formal" training (though both Citadel and Shaw have excelent career development programs - can't speak with any accuracy on Fortress), but you'll most likely have exposure across more aspects of the business you'd be in and perhaps other businesses at the firm (not being at HQ will probably limit this).  If you're at a regional operation for the fund how much of the front to back flow of the business will be where you are located?? What is the firms history of supporting regional operations?



So much rides on your own performance - the mentorship you can get from your manager - how well aligned he/she is with the powers that be back at HQ - how the market climate for the business you'll be in - and a host of variables you won't get answers on until you show up.



Good luck sorting it out - email me if you have other questions

[SwappieMonster]

Thanks for sharing your thoughts, JoeC.



Let me ask a more specific question to all of you: where do people go to after a couple of years as a junior trader with a large, successful hedge fund? Do people ever leave the buyside to become a sellside trader? To get some management role elsewhere in a bank (not necessarily on the trading floor)?



Any additional insights would be appreciated.

[Babs]

I rarely see a trader move from the buy side to the sell side - it is almost always the other way around.  My clients are the large investment banks and I can not recall a search for which they wanted a buy side trader - they want traders who already know the accounts.  As a sell side trader, you will get to know the accounts and can move easily to the buy side if you have a good relationship with those accounts.  I would also say the training would be more formalized at a bank than at a hedge fund, though Joe C is correct about Citadel and Shaw's training programs.