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VAULT GUIDE TO THE
Top 25
INVESTMENT
MANAGEMENT
E M P L OY E R S
2009
EDITION
INVESTMENT
MANAGEMENT
TOP
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VAULT GUIDE TO THE
Top 25
INVESTMENT
MANAGEMENT
E M P L OY E R S
2009
EDITION
INVESTMENT
MANAGEMENT
DEREK LOOSVELT
and the staff of Vault
ACKNOWLEDGMENTS
We are extremely grateful to Vaults entire staffespecially Derek Loosvelt,
Stephanie Myers, Laurie Pasiuk, Mary Sotomayor and Marcy Lernerfor all their
help in the editorial, production and marketing processes for this guide. Wed also
like to thank Mary Phillips-Sandy, Jennifer OReilly, Sara Calabro and David
Walsh. In addition, Vault would like to acknowledge the support of our investors,
clients, employees, family and friends. Thank you!
Special thanks to all of the recruiting coordinators and corporate communications
representatives who helped with the book. We appreciate your patience with our
repeated requests and tight deadlines.
The Vault Guide to the Top 25 Investment Management Employers is dedicated
to the professionals who took time out of their busy schedules to complete our
survey.
Table of Contents
A GUIDE TO THIS GUIDE
INTRODUCTION
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THE VAULT 25
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Firm facts
Departments: The firms major divisions.
The Stats: Basic information about the firm, usually information thats
available to the general public. This includes the firms leadership
(generally, the person responsible for day-to-day operations, though it can
include the chairman and relevant department heads), employer type (e.g.,
public, private or subsidiary), ticker symbol and exchange (if public), latest
fiscal year-end revenue and net income (usually only for public companies;
we do have some estimates from third-party sources for private companies,
and in some cases, the firm has confirmed that information), number of
employees and number of offices.
Key Competitors: The firms main business rivals. Size, business lines,
geography and reputation are taken into account when evaluating rivals.
Uppers and Downers: The best and worst things, respectively, about
working at the firm. Uppers and downers are taken from the opinions of
insiders based on our surveys and interviews.
The Buzz: When conducting our prestige survey, we asked respondents to
include comments about the firms they were rating. Survey respondents
were not able to comment on their own firm. We collected a sampling of
these comments in The Buzz. We tried to include quotes that represented
the common outside perceptions of a given firm. The quotes might not
always reflect what insiders say in our surveys and interviews. We think
The Buzz is a way to gauge outside opinion of a company.
Employment Contact: The person (or people) that the firm identifies as its
contact(s) for submitting resumes or employment inquiries. Weve supplied
as much information as possible, including names, titles, mailing addresses,
phone or fax numbers, e-mail addresses and web sites. Because companies
process resumes differently, the amount of information may vary. For
example, some firms ask that all employment-related inquiries be sent to a
central processing office, while other firms mandate that all job applications
be submitted through the company web site.
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The profiles
Most profiles are divided into three sections: The Scoop, Getting Hired and
Our Survey Says; (some profiles have only Scoop and Getting Hired
sections).
The Scoop: The companys history, a description of the business, recent
clients or deals and other significant developments.
Getting Hired: An overview of the companys hiring process, including a
description of campus recruiting procedures, the number of interviews,
questions asked and other tips on getting hired.
Our Survey Says: Quotes from surveys and interviews done with
employees or recent employees at the company. Includes information on
culture, pay, hours, training, diversity, offices, dress code and other
important company insights.
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INTRODUCTION
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support staff and marketers who drum up the business and educate clients about their
investments.
Although asset management firms exist virtually everywhere theres money to invest,
New York and Boston are buy-side centers. The largest firms employ several
hundred professionals to manage total assets upwards of hundreds of billions of
dollars, covering both institutional and individual clients. Smaller shops may employ
three or four professionals to handle $300 million to $800 million in institutional
money. Firms serving high-wealth clients use about the same number of people to
manage slightly less money. Major firms also have roots in Los Angeles, San
Francisco and Chicago. Other cities considered up-and-coming include Baltimore,
Minneapolis, Atlanta, Denver, Dallas, Fort Worth and San Diego.
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investment managers, but the sheer amount can quickly overrun server space,
managers say. Andrew Donohue, director of SECs investment management
division, agreed, saying that reform was an SEC priority.
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industry seems to be largely in the clear on the job front. While investment banking
units have been racking up losses in the past few quarters, investment management
units have been banking profits and increasing managed assets.
BlackRock, one of the largest publicly traded investment management firms in the
industry, has even managed to take aspects of the recent dismal mortgage market and
turn them in its favor. In March 2008, BlackRock, along with fellow investment
company Highfield Capital Management, created a new firm called Private National
Mortgage Acceptance Corporation, designed to acquire and restructure distressed
mortgages. The firm will also be known as PennyMac, and will invest in mortgages
for private investors and work on restructuring loans to prevent defaulting from
borrowers.
Further, in April 2008, BlackRock CEO Laurence Fink said he expects to see a
dramatic consolidation in the investment management business. He thinks the
industry is likely to witness companies battling with low price-to-earnings ratios, or
struggling with asset quality problems who are going to look to embellish their
capital through either sales of their asset management business or contributions of
their asset management business.
As for its own business, BlackRock has done remarkably well recently. The
company pulled in $4.84 billion in revenue in 2007, up from $2.09 billion in 2006.
Net income also shot up, to $995 million from $322.6 million. The first quarter of
2008 was also impressive. Revenue came in at $1.16 billion, up from $898 million
in the first quarter of 2007, and net income was $241 million, up from $195 million.
The firm attributed its positive recent results to its clients seeking out independent
advisory services in the firms large range of investment offerings, which may have
helped differentiate the firm in a down market.
State Street Corporation has also fared well as of late. The investment management
mainstay has seen growth in just about all of its units, and it brought in $530 million
in net income in the first quarter of 2008, up from $314 million in the first quarter of
2007. Revenue was dazzling as well, increasing 52 percent to $2.57 billion (a record)
in the first quarter of 2008. In addition, State Street recently revealed that the
industry could be on an upswing. As of May 2008, State Streets Investor Confidence
Index, a benchmark for investors and investment firms, hit its highest level in seven
months, suggesting that asset management firms that may not have done as well as
theyd liked recently may end up facing a kinder market in the second half of 2008.
The industrys outlook appears to be brighter than it has been for some time, said
index co-creator Ken Froot.
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Big industry player Goldman Sachs also had some happy news in 2007 and the first
quarter of 2008. Its asset management and securities divisions had revenue in 2007
of $7.2 billion, an 11 percent increase for the year. Assets under management,
meanwhile, soared to $868 billion, an increase of nearly $200 billion from the end of
2006. And in the first quarter of 2008, assets under management increased 23 percent
to $1.32 billion. But not all was completely well for the firm in 2008. In May,
Goldman Sachs (along with Barclays Global Investors) lost $400 million when
CalPERS pulled more than $7 billion from its external money managers.
JPMorgan Asset Management has been performing relatively well as of late, too. It
had a strong fourth quarter 2007, as net revenue rose 23 percent and net income
increased 29 percent. It also experienced net inflows of $33 billion during the
quarter. For the first quarter of 2008, though, JPMorgan Asset Management reported
mixed results. Its assets under management were 13 percent higher than they were a
year earlier, and the unit experienced net inflows of $47 billion during the quarter.
But net income fell 16 percent versus the previous years first quarter.
Dumping Bear
In May 2008, more fallout continued regarding Bear Stearns collapse. JPMorgan
Chase CEO Jamie Dimon said that although Bears brokerage arm would be
preserved, big parts of Bear Stearns Asset Management business would likely be
liquidated, probably resulting in an estimated $300 million in second-quarter charges.
(Bear Stearns Asset Management had approximately $16.6 billion in assets under
management around the time its acquisition was announced.) Dimon also announced
in May that JPMorgan had secured positions for about 40 percent of Bears 14,000
employees. But a week after that announcement, it was revealed that hundreds of
JPMorgan investment bankers would be shown the door, in cuts unrelated to the Bear
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deal. At the end of May 2008, the acquisition became official, as Bears shareholders
approved the deal in a meeting that lasted about 10 minutes.
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PRESTIGE
RANKINGS
INVESTMENT
MANAGEMENT
Ranking Methodology
The Vault Guide to the Top 25 Investment Management Employers rates 59 firms with
significant operations in asset management, wealth management or brokerage
services. We chose the 59 firms based on previous Vault surveys that gauged
opinions of industry insiders, as well as on various factual data, including size in
terms of revenue or assets.
The firms we identified were all asked to distribute our online survey to relevant
employees. The survey consisted of questions about life at the firm (or former firm)
and a prestige rating. Participants were asked to rate companies with which they
were familiar on a scale of 1 to 10, with 10 being the most prestigious. They were
not allowed to rate their own employer.
Eight companies agreed to participate: Credit Suisse, Janus Capital, JPMorgan,
Lehman Brothers, Merrill Lynch, PIMCO, UBS and Wachovia/Evergreen
Investments. All surveys were completely anonymous. For those companies that did
not participate, Vault sought contacts at the firm through other proprietary sources.
Those professionals took the same survey as the employees at firms that participated.
All told, 339 investment management professionals filled out Vaults 2008
Investment Management Survey from December 2007 through March 2008. Vault
averaged the prestige scores for each firm and ranked them in order, with the highest
score belonging to our No. 1 firm, Goldman Sachs. New York-based Goldman
topped the rankings for the second year in a row, receiving a score of 8.354, nearly
one full point higher than New York-based BlackRock (7.489), which leaped seven
places from its ranking last year to take the No. 2 spot. BlackRock barely edged out
the No. 3 firm, The Blackstone Group (7.485), which also rose seven places this year.
Rounding out the top five were San Francisco-based Barclays Global Investors
(6.848), which moved up four places to take the No. 4 spot, and Lehman Brothers
(6.804), which fell three spots to No. 5.
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FIRM
SCORE
U.S. HEADQUARTERS/
LARGEST OFFICE
Goldman Sachs
8.354
New York, NY
BlackRock
7.489
New York, NY
7.485
New York, NY
6.848
San Francisco, CA
*Lehman Brothers
6.804
New York, NY
6.802
New York, NY
**PIMCO
6.725
Newport Beach, CA
6.578
New York, NY
6.565
Boston, MA
10
Deutsche Bank
6.509
New York, NY
11
Merrill Lynch
6.464
New York, NY
12
Morgan Stanley
6.462
New York, NY
13
Fidelity Investments
6.398
Boston, MA
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6.315
New York, NY
15
UBS
6.176
New York, NY
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Credit Suisse
6.162
New York, NY
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CalPERS
6.101
Sacramento, CA
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AllianceBernstein
6.065
New York, NY
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6.046
Valley Forge, PA
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6.000
Prospect Heights, IL
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T. Rowe Price
5.872
Baltimore, MD
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GE Asset Management
5.847
Stamford, CT
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5.839
San Mateo, CA
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5.830
Westport CT
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5.782
Atlanta, GA
Franklin Resources
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PROFILES
INVESTMENT
MANAGEMENT
V A U L T
1 Goldman Sachs
PRESTIGE
RANKING
85 Broad Street
New York, NY 10004
Phone: (212) 902-1000
www.gs.com
DIVISIONS
Finance
Global Compliance
Global Investment Research
Human Capital Management
Investment Banking
Investment Management
Legal & Management Controls
Merchant Banking/Private Equity
Operations
Securities
Services
Technology
KEY COMPETITORS
Barclays Global Investors
BlackRock
JPMorgan
Lehman Brothers
Morgan Stanley
UPPERS
Nearly unmatched prestige
DOWNERS
With respect to ethnic diversity, the
firm is improving, but still needs to
work to better to recruit diversity
candidates
EMPLOYMENT CONTACT
THE STATS
www.gs.com/careers
THE BUZZ
The best
Arrogant
Everyone wants to be them
Macho; blood, sweat and tears
Incredibly great track record
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THE SCOOP
New faces
In April 2008, after co-heading IMD with Peter Kraus since September 2007,
Edward Forst became the sole head of the division, following Kraus
retirement from the firm. Forst guides efforts to grow the companys
combined asset management and private wealth platform. Before joining
IMD, Forst served as Goldman Sachs chief administrative officer, a position
he held since February 2004. Prior to that, he served as the chief of staff for
the companys fixed income, currency and commodities division.
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billion, an increase of nearly $200 billion from 2006. The firms total assets
peaked at $1.1 trillion. Altogether, the asset management and securities
branch of Goldmans franchise brought in 16 percent of the total business for
2007.
Goldman also seemed to have little problem in ensuring that its higher-ups
received their fair share of remuneration. Goldman Sachs Chairman and
CEO, Lloyd Blankfein, pulled in total compensation of $68.5 million for
2007, becoming the highest-compensated CEO in the industry. (That figure
included a $27 million bonus and stock options worth approximately $26
million.) In addition, Goldmans co-presidents, Gary Cohn and Jon
Winkelried, each received total compensation of $67.5 million.
Computer-driven disappointment
The sting of the credit crisis was felt slightly earlier in the investment
management branch of Goldman Sachs when its Global Equity Opportunities
(GEO) Fund lost nearly a third of its value in a week during August 2007.
Goldman Sachs and others (including C.V. Starr & Co., Inc., Perry Capital
LLC and Eli Broad) invested $3 billion in GEO, seeing it as an opportunity
to take advantage of a market dislocation. Goldman Sachs said the
investment would give the fund more flexibility to take advantage of the
opportunities we believe exist in current market conditions.
Another fund that had a tough year in 2007 was Goldmans Global Alpha
Fund, which fell from $10 billion in January 2007 to $6.3 billion in
November, a 37 percent drop. The disappointment of the two quantitative
funds was a hard blow for GSAMs bottom linethe computer-driven,
research enhanced funds caused the division to lose 83 percent in
performance-related fees over the year.
Big funds
Despite market volatility in 2007 and the problems of Global Alpha and
Global Equity Opportunities, Goldman was persistent in pursuing the hedge
fund market with a giant fund called Goldman Sachs Investment Partners
(GSIP), which launched on January 1, 2008, with $7 billion in commitments.
The $7 billion set a record for a startup fund.
GSIP is run by Raanan Agus and Kenneth Eberts, Goldman insiders who
were moved onto the project after working at the companys proprietary
equity desk. Agus and Eberts are supported by a staff of 40 traders. GSIP is
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Indian investment
In October 2007, the government of India approved a proposal by Goldman
Sachs to build a 2 billion rupee ($51 million) asset management company in
the country. The company now provides portfolio and asset management
services. Goldman began offering stock-brokering services in January 2008,
following its receipt of a license that allowed it to conduct investment
banking activities in the country.
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GETTING HIRED
Day to day
Visit Goldmans career web site (www.gs.com/careers) to learn about the
firms application process, check out open positions and find recruiting
events. You can even take a quiz on the site to figure out which group within
the company is the right one for you (Are you a fast learner or an early
riser?). If that fails, get a feel for what life at Goldman is really like by
watching videos detailing different employees everyday tasks. The site also
offers information tailored to experienced hires as well as those just
beginning in the industry, such as interns.
As far as interviews go, theres a range of what to expect. One source says
the first round of interviews took place on campus as a two-on-one
interview with two VPs. The interview mainly judged fit, and the
majority of the interview was a walk-through of my resume. The only
technical questions asked were based on my previous experiences that I
included on my resume. However, be prepared to sell yourself as a team
player. The interviewers asked many questions about teamwork, and
wanted to see if I had a good understanding of the company and the
position. The contact adds, Basically they were trying to determine if I did
my homework and really wanted the job.
For the second round of interviews, the firm gives four 30-minute interviews
that are all one-on-ones, and mostly fit and behavioral-based, with limited
technical questions. Overall, Goldman is mostly trying to gauge whether
the candidate will be a good fit personality-wise more than anything else. As
far as questions, you should be prepared to answer these: Can you tell me
about a time you had to make a decision without having all of the facts? and
Have you ever had problems with a team member, and how did you
overcome it?
Be prepared to prove your dedication, too. They want to find out if youre
dedicated to the position and dont merely want to use it as a stepping stone
to something else.
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Long trail
Goldman has a team-oriented culture, and people will go out of their way
to help you, say insiders. However, much is demanded and expected, so
everyone works hard and performs. Another source agrees, adding,
Everyone pulls for each other, and we all demand the same level of
excellence from others as is required from ustop to bottom. This is
perhaps why Goldman has such a long record of success. And contacts say
that there is no reason to believe that Goldmans position as the most
profitable securities firm should change anytime soon.
In addition to the firms outlook, workers are also quite fond of their salaries
and discretionary bonuses, which depend on the performance of the
individual, group and firm. As far as perks go, the firm offers a full set of
benefits, including stock and three weeks of paid vacation, depending on
employee status and/or years of service. Insiders also laud meals for
overtime, transportation home if you work past 9 p.m., discounts at the
theater and cheap gym memberships.
Hoursfor the most partare highly rated by employees as well. One
insider says, Managers look to see that everyone is getting their work done;
they are not counting the hours it takes to get it done, though. Another says
that theres definitely a lot of hoursbut nothing more than what you would
expect. Yet another insider calls his hours sometimes long, but says
theyre great, because they are always manageable, and I always have
control over them. And while the offices arent ultra-luxurious, notes a
source, the building is very nice.
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Devoted to training
The firms training programs, managed by Goldman Sachs University, are
extremely well developed and well executed, notes a source. There are
entire floors devoted to training and also the ongoing education of
employees. Another insider adds that we are required to complete a certain
number of credit hours each year as part of the continuing education effort.
And Goldman doesnt stop with formal training programs. In general, the
firm offers many courses to assist in furthering education in a specific field or
in any aspect of the firm, reports a contact. Also, informal training is
ongoing.
Prioritizing diversity
The firm also gets points for its diversity programs, which are a big priority.
Ive benefited from a lot of the training afforded to women as part of
Goldman Sachs leadership and diversity initiative, says one source.
Another notes that in my experience, Goldman Sachs has done an
exceptional job of recognizing female talent and in retaining it. They are very
eager to hire and promote women. One insider adds, There is a very strong
womens network, and many of the people on my floor who are in leadership
positions are female.
With respect to ethnic diversity, the firm is improving, but still needs to work
to better to recruit diversity candidates. Even so, there is a big focus on
this. An insider comments that Goldman prides itself on its diversity
programs, and diversity is all part of the culture.
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V A U L T
BlackRock
PRESTIGE
RANKING
DEPARTMENTS
Account Management
BlackRock Solutions (Risk
Analytics/Technology)
Global Operations
Portfolio Administration
Portfolio Management
KEY COMPETITORS
Dreyfus
Federated Investors
Legg Mason
State Street
UPPERS
Intelligent people
DOWNERS
Location and commuting
THE STATS
Employer Type: Public Company
Ticker Symbol: BLK (NYSE)
Chairman & CEO: Laurence D. Fink
Revenue: $4.8 billion (FYE 12/07)
Net Income: $995.2 million
No. of Employees: 5,952
EMPLOYMENT CONTACT
See the careers section of
www.blackrock.com
THE BUZZ
The place to be
Macho
Fixed income powerhouse
Clouded by Merrill
Portfolio managers are second to
none
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THE SCOOP
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times and bad times and that the pain of losing money is far greater than
the glory of making money, Fink said in a February 2006 interview with The
New York Times.
At The Blackstone Group, Fink joined Ralph Schlosstein, a former White
House aide during the Carter administration, to construct a new asset
management business. Within three years, Blackstones asset management
division, later dubbed BlackRock, had $9 billion under management from
big-name clients, including Chrysler and GE. When the bond market went
bust two years later, Fink feuded with his fellow Blackstone partners over
strategic moves. He and Schlosstein took the group solo. In 1995, PNC
bought BlackRock for $240 million. By 1999, when assets under
management had reached $165 billion, the firm went public.
New faces
BlackRock co-founder Schlosstein announced in September 2007 that he would
step down as president to pursue other entrepreneurial interests. Schlosstein
agreed to stay on as an advisor at BlackRock through early 2008. News reports
said he planned to start a money management firm focused on alternative
investments. BlackRock appointed Robert Kapito, head of portfolio
management, as Schlossteins successor. Kapito joined BlackRock at its
beginning, and has served in several leadership positions, including co-head of
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fixed income, head of portfolio management and vice chairman. Prior to joining
BlackRock, Kapito served as vice president of First Boston Corp.s mortgage
products group.
In September 2007, BlackRock appointed Michael H. Lewers head of its U.S.
private client business. Most recently, Lewers served as national sales
manager of Nuveen Investments, distributing mutual funds, closed-end funds
and independently managed accounts at large wirehouses, regional brokers
and banks.
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Starting PennyMac
In March 2008, on the heels of the massive number of foreclosures that began
in mid-2007, BlackRock and fellow investment firm Highfield Capital
Management created a new company to acquire and restructure distressed
mortgages. The company, Private National Mortgage Acceptance
Corporation (also known as PennyMac), invests in mortgages for private
investors, trying to restructure loans so borrowers do not default. Former
Countrywide Financial President and COO Stanley Kurland was tapped to
head the new firm.
GETTING HIRED
Look sharp
BlackRock hunts for highly intelligent people from a variety of backgrounds
who are interested in the investment management process and, to put it
succinctly, has a particular interest in candidates particularly interested in the
firm.
Thanks to BlackRocks relatively small size and relatively high level of
prestige, the firm can afford to be choosy when picking candidates. And
BlackRock is not only very selective, says an insider, but due to the
relatively small size of its analyst class compared to other, larger companies,
it is even harder to land a job here. The firm often passes on those that look
like all-stars. I know a number of intelligent hardworking people who
interviewed but were not hired by BlackRock, says one source. Having a
contact can only help your chances. Being referred by an employee greatly
increases your chances of being hired, notes another insider.
The firm is looking for candidates with an interest in investment
management, especially in BlackRocks area of expertise, fixed income.
BlackRock hires people with strong interest in the business who are also
enjoyable to be around, observes one investment management professional.
Another says the firm is looking for very smart people who are committed,
friendly, team-oriented and eager to learn. A fire in the belly is also key.
One source says BlackRock seeks the brightest, most motivated and
hardworking people. Note that the firm is not seeking just business and
finance majors out of college. It is easier to get hired at BlackRock than
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other financial institutions because they hire a broad range of majors, not just
business majors, says a contact.
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firms careers link on its web site. One intern calls the atmosphere at
BlackRock very laid-back compared with other firms and adds that the
work they give interns is interesting, important and non-repetitive.
Like at most Wall Street firms, summer internship programs at BlackRock
serve as a feeder for future full-time employees. My summer internship
experience was challenging and extremely valuable to me, remembers one
former summer intern. I was very impressed by the way the program was
organized. Everyone I worked with was patient and pleasant to work with.
Though the work I did was often tedious and repetitive. The summer
internship at BlackRock was a great experience, says another contact.
Interns are valued, and given broad exposure and involvement in the
business. One intern comments, I learned quite a lot from my first
internship, adding that your work is appreciated and there is a lot of
opportunity to explore other teams and divisions.
One source says, Daily responsibilities will vary for interns, but the majority
will begin with reconciling accounts. Doing well during the summer almost
always leads to a postgraduation offer. A successful internship makes it
significantly easier to obtain a full-time position, notes an insider. Getting
the internship definitely helped me get a full-time position as an analyst,
says another. The summer offers more than sometimes-tedious work
experience (one contact did a lot of Excel work) and a near-guaranteed job
offer. The pay is on par with Wall Street internships, notes a source. One
former summer intern remembers being paid around $900 a week. A
current intern notes that an interns hours are usually 8 to 6, though there are
often times where the workload requires me to stay late.
Robust culture
The firm prides itself on having a strong culture, which may be a holdover
from its smaller days as a mom-and-pop shop. The firm also has very
intelligent, talented people. All in all, BlackRock is a results-driven,
hardworking firm with an unwavering focus on details, says an insider. Still,
it is a relatively new firm by Wall Street standards, notes another, and the
firm is quickly growing in all respects: from clients to new employees. The
people at the firm are among some of the best in their field and many leave
Visit the Vault Finance Career Channel at www.vault.com/finance with
insider firm profiles, message boards, the Vault Finance Job Board and more.
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the big houses to come work at the firm. Indeed, as an asset manager,
BlackRock hires the best. Youth is the dominant factor in BlackRocks
culture. The overwhelming aspect of the BlackRock culture is how young
the firm is, says a source. The average age of a BlackRock employee is 33.
That speaks volumes for the level of movement within the firm for new
analysts. Many of the portfolio managers began their careers at BlackRock
right out of college. According to that source, all that youth has a tangible
effect. Having such a young team of professionals maintains a culture of
meritocracy, says that investment manager. Everyone is accessible to
everyone, else and questions can be asked of whomever.
But while the firm is quickly growing in all respects, from clients to new
employees, which promotes a great learning environment, times can get
tough if you arent able to keep up with the pace of work and knowledge.
The culture here is also vibrant and intense, one source agrees. The
portfolio managers are very interactive, so analysts are always faced with the
challenge of keeping up with senior managers. The youth theme continues.
BlackRock is a very young firm, says an insider. It is a meritocracy and
the rigid corporate structure that one generally associates with a finance firm
rarely applies for BlackRock. Another says, Times can get tough if you
arent able to keep up with the pace of work and knowledge. Many people
opt to leave after two years and move into a more suitable culture, but take
with them the great experience. Another insider calls BlackRock a
meritocracy where hard work and innovation is rewarded.
The firms recent founding shapes the culture. The company is only 15
years old and has grown tremendously, notes a source. Although the
growth has made the culture change, the company fiercely hangs on to the
nice environment it had when it was first created. It is a fast-paced,
challenging environment with a strong caring feeling. BlackRock tries to
keep even its junior employees connected to senior management. Although
BlackRock is no longer considered a small firm, it still maintains its flat
management structure and lack of bureaucracy that was evident from its
genesis in 1988, says a source. Senior management is approachable and
though employees of BlackRock work hard, they play hard too. In fact,
during the quarterly meetings given by CEO Larry Fink, a reminder is made
to all employees to take their vacation timea rare occurrence in other large
financial firms.
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And while long hours may be common, says one source, there are few
outward grievances. Although 10- to 12-hour workdays are common, but
few people ever complain, says another. We like working here.
Not cheapskates
First and foremost, when it comes to money, the company is not absolutely
focused on expense reduction. This is good news when it comes to
compensation. Insiders give BlackRocks salaries high scoresand some say
that they are pulling in Wall Street pay. Analysts start at the industry standard,
which is about $55,000 these days, and should expect a 30 to 50 percent bonus,
reports an insider. While base salary is more standardized with respect to years
and title, the bonus definitely varies by performance. There are other factors
that determine bonus. It depends on the department you are in and the
workload, says a source. People in departments that work the longest hours
are typically compensated for that. Big bonuses offset lower base salaries (at
some levels) and small raises. Salary increases at the firm are small and
disappointing, complains a contact. However, the yearly bonus is usually
generous as compared to other companies.
Another source agrees. Employees at BlackRock generally receive a very
good bonus comparable to other firms, says one BlackRock insider. But
one can look at that as an offset for the average to below-average base salary
relative to the industry. Employees at this firm rely heavily on the year-end
bonus.
Cash isnt the only incentive at BlackRock. The moment you join
BlackRock, you are able to make direct deposits from your paycheck into a
number of mutual funds that the firm manages, says a source. After six
months, you can open a 401(k), and after a year of employment, you become
eligible for the employee stock purchase program. The firm also offers a
special deal for health nuts: a 100 percent pre-tax gym reimbursement at
[New York-area health clubs] if you workout more than 75 times a year.
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firm, covering numerous topics and always open to all who wish to attend.
The commitment to training stems from the firms need to breed highperforming portfolio management stars. BlackRock prides itself on
internally grown talent, observes a contact. All founding members are still
at the firm, and senior managers embrace the idea of constant training. Senior
portfolio managers and other employees frequently make time to answer
questions from even the most junior analysts. One source says, New
analysts attend a two-week training program at the beginning of their tenure.
Afterwards, they have one week of training in their specific group. The
training is comprehensive, but serves as mostly an overview of the different
functions of the firm.
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V A U L T
PRESTIGE
RANKING
KEY COMPETITORS
DEPARTMENTS
UPPERS
THE STATS
Employer Type: Public Company
Ticker Symbol: BX (NYSE)
Chairman & CEO: Stephen A.
Schwarzman
Revenue: $3.05 billion (FYE 12/07)
Net Income: $1.82 billion
No. of Employees: 1,020
No. of Offices: 11
Bain Capital
Carlyle Group
KKR
DOWNERS
Training programs need improvement
Long hours
EMPLOYMENT CONTACT
www.blackstone.com/careers
THE BUZZ
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THE SCOOP
Going public
This traditionally secretive private equity firm sent waves of controversy
through the industry when it announced in March 2007 that it would be going
public. In the debate of whether its preferable for private equity firms to be
public or private, Blackstone set a powerful standard when its IPO debuted in
June 2007 at $31 a share and then quickly rose to $38 a share. Due to the
summers volatility in the market, however, the Blackstone stock soon
dropped, taking an unexpected loss that made investors in the just-debuted
public company uneasy about its future.
Despite its early stumbles, Blackstones IPO was the largest public offering
in the past five years and quickly became the benchmark for other private
equity firms in how to go public. Two weeks after Blackstone stock hit the
market, competitor Kohlberg Kravis Roberts & Company announced that it
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was also going public, followed quickly by the Och-Ziff Capital Management
Group, a $27 billion hedge fund. Though Blackstone wasnt the first private
equity firm to open up its business (Fortress Investment Group went public in
February 2007), the much-hyped debut proved that private equity going
public may just be the wave of the future. (Although Och-Ziff did go public,
as of April 2008, KKR has yet to sell shares to the public.)
Media matters
Additional fuel to the fire of controversy surrounding the debut of
Blackstones IPO was an article that ran in The New York Times in July 2007
accusing the company of using loopholes to avoid paying taxes on the $3.7
billion it raised when it offered shares to the public. Blackstone quickly
struck back with a press release on its company web site that claimed it would
pay $900 million in taxes on the money, and that the Times article was full of
inaccuracies, myths and misrepresentations. The Times article was in part
a reaction to public unease over the tax rates of highly paid executives,
including Blackstone CEO Stephen Schwarzman, who reportedly pocketed a
$400 million salary in 2006.
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The firm has also been busy buying and taking publicly traded firms private.
Private equity constitutes most of the firms businessby 1987, Blackstones
first buyout fund closed with $810 million, the largest first-time fund ever at
the time.
How to be a Hilton
In recent years, Blackstone has been making a reputation for itself as a buyout
firm with an appetite for hotel chains. Its early forays into the hotel business
included buying Extended StayAmerica for $1.9 billion in 2004 and an $800
million buy of Prime Hospitality that same year. Since then, Blackstone has
also bought a number of hotel and resort companies, including Wyndham
International for $3.2 billion, La Quinta for $3.4 billion and Meristar
Hospitality and its 57 hotels for $2.6 billion. Other purchases in 2006 include
Travelport, a travel distribution services firm, for $4.3 billion.
Blackstones biggest hotel deal by far is the $20 billion purchase of Hilton
Hotels Corp. in October 2007, the biggest acquisition of a hotel company in
history. The Blackstone buy meant that the Hilton company would cease
public trading with payouts to shareholders of $47.50 a share. This merger of
titans was accomplished in the wake of a particularly difficult time in the
market with credit deals increasingly difficult to navigate. The deal also
sparked speculation about other major hotel chains being taken private by
private equity firms, most notably Hiltons biggest competitor, Marriott.
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its latest quarter, contrasted with $1.18 billion in net income it booked for the
same period a year earlier. According to Blackstone, causes for the 89 percent
slide in income included its Financial Guaranty Insurance Co. investment and
compensation costs related to its IPO. For the full year 2007, however, total
revenue rose to $3.05 billion from $2.6 billion in 2006, and net income
increased to $1.82 billion from $1.42 billion. Blackstone attributed the
healthy full-year numbers to growth in three groups: real estate, marketable
alternative asset management and financial advisory. As for the first quarter
of 2008 and beyond, Blackstone Chairman and CEO Stephen Schwarzman
didnt seem optimistic. When announcing the latest results, he agreed with
many industry analysts, saying that difficult market conditions in the U.S.
and Europe [will] continue in 2008.
Acquiring Capital
In early January, 2008, Blackstone announced that it would reuniting with
one of its earliest investmentsGSO Capital Partners, a $10 billion hedge
fund. The move was seen as a relatively stable buy for the company, which
has been shaken up by the credit crisis. Blackstones hedge funds have
remained a steady source of income for the firm, gaining 88 percent in the
third quarter of 2007 in comparison to the previous year. But the motivation
for the acquisition of GSO is more complex than just a promise of increased
income. The hedge fund invests in leveraged finance and may be an essential
source of loans for the troubled private equity firm. Blackstone plans to pay
$930 million in cash and stock for GSO and then buy back about $500 million
of its own stock to cover part of the cost of the acquisition.
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in-depth profile, appearing in The New Yorker magazines February 11, 2008
issue, included Schwarzmans recollections of his meteoric rise from middle
class suburbia to 60 floors above Park Avenue. It also included lesspublicized details, such as Schwartzmans undergraduate major (intensive
culture and behavior), the college subject that perhaps had the most impact on
his future in the investment world (classical music), and the pill hes ingested
every day for the past 15 years.
Years ago, Schwarzman was found to have a rare blood-protein deficiency
that put him at risk of a blood clot or embolism. As a result, he is tested often
and takes a pill each day, which should help him to have a normal life span.
Still, the CEO told The New Yorker, Its a reminder that life is fleeting
Every day should be a good day. People fool themselves that theyll be here
forever. I get a daily wake-up call that thats not true. We have limited time,
and we have to maximize it.
GETTING HIRED
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Once youre asked in for an interview, be prepared to gear up to show the firm
that youre a standout, contacts say. Blackstone is extremely selective,
recruiting only the top candidates from the top schools, says a first-year
analyst. Overall, the caliber of candidates asked to interview is very high.
For associate positions, one source says the firm primarily recruits at
Harvard and Wharton, and occasionally interviews at Stanford or Columbia.
Explains a London-based contact, Essentially all the MBAs hired are from
Harvard.
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questionthe one where youre asked how many degrees there are between
the minute and second hand at a certain time. And, says a source, You better
understand accretion and dilution. The contact adds that, overall, the
questions are more accounting than finance, and Blackstone puts a large
emphasis on cultural fitand its obvious they do this well, because everyone
here has a pretty good time together. This insider also has a word to the very
wise: Those who are too smart and try too hard dont make it.
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that, overall, people respect not only your personal life, but also your
opinion on day-to-day, work-related matters.
It aint easy
Expect the daily grind to be taxing, employees report. Its intense, very
challenging, and requires a lot of stamina and motivation, admits an insider.
Another agrees the firms culture is tough, but says, If you work hard and
have a good attitude, things will be pretty easy for you. He cautions those
with bad attitudes: Those who dont work hard or dont have a good attitude
will be miserable. Choose your department carefully. According to one
banker, M&A is known as one of the better cultures in the firm, real estate
is also supposed to be pretty good and private equity is pretty painful. The
source adds that for the most part, though, the culture isnt as harsh as people
outside the firm think.
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here dress upcuff links, white collar shirts, monogrammed shirts, the
works. Old-school, is how another describes attire around the office.
Blackstone does, though, have casual Fridays in the summer and on the
weekend, people wear whatever.
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improving the programits good and getting better. Another analyst calls
the training program fast and dirtyyoure expected to pick everything up
in the short amount of time in which training is provided. In addition to
extending the analyst training program in 2003, Blackstone implemented an
associate training program. A current analyst opines that because higher
quality candidates are typically recruited, the training program for analysts is
much shorter. He adds, Much of the learning is done on the job.
Just average
For the most part, Blackstone receives middling marks on the diversity front,
although one insider says theres a lot of diversity at Blackstone. He does
admit, though, there are a limited number of women in M&A group. The
contact gives a possible explanation why this is so: We want to hire women,
but its not easy. Every year we try, but either no one bites or we dont find
someone who is adequate. An associate in London says his office has a
number of [Asian] Indians, including one partner, which seems to indicate we
are doing OK with respect to diversity. However, in New York, another
contact says while there are several Asians, theres less than a handful of
any other minorities.
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V A U L T
PRESTIGE
RANKING
45 Fremont St.
San Francisco, CA 94105
Phone: (415) 597-2000
Fax: (415) 597-2171
www.barclaysglobal.com
KEY COMPETITORS
DEPARTMENTS
EMPLOYMENT CONTACT
Active Strategies
Alternatives/Hedge Funds
Capital Markets
Exchange Traded Funds
Index Strategies
Target Date Retirement Funds
Sign in to www.barclaysglobal.com as
a job candidate.
Citi
Goldman Sachs
State Street
THE STATS
Employer Type: Subsidiary of
Barclays PLC
Chairman: Robert E. Diamond Jr.
CEO: Blake R. Grossman
No. of Employees: 3,000+
THE BUZZ
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THE SCOOP
Going Global
Barclays Global Investors lives up to its name. Its truly a global money
manager, with more than $2 trillion in assets under management. It extends
across 45 global bond markets, 20 currency markets and 52 stock markets.
The company also provides investment services, such as securities lending
and portfolio transitions management backed by investment research teams in
San Francisco, London, Sydney and Tokyo. BGI is the No. 1 manager of
indexed assets in the U.S. and globally, according to Pensions & Investments.
And in 2006 and 2007, the San Francisco Business Times named BGI one of
the Best Places to Work in the Bay Area, selecting it from among 400 other
companies in the region.
BGIs risk-controlled method of investing has made it the manager of choice
for more than 2,900 institutional clients, including more than a third of the
worlds 300-largest pension funds and nearly a third of Fortunes Global 500
companies. BGI also benefits from the supportive backing of its parent
company, 300-year old British banking giant Barclays PLC, founded in 1690.
The modern-day Barclays now engages in a wide array of financial services,
including banking, investment banking and wealth management, in addition
to investment management, serving 27 million customers with 127,000
employees in more than 50 countries.
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adopting them. Operating under the brand name iShares, BGI has become the
industry leader in the ETF market, offering more than 350 ETFs around the
world.
In October 2007, the company announced that iShares S&P California
Municipal Bond Fund and the iShares S&P New York Municipal Bond Fund
would start trading on the American Stock Exchange. The funds represent the
first state municipal bond ETFs available to U.S. investors. In September
2007, the firm launched iShares S&P National Municipal Bond Fund. Other
firms, such as Van Eck Securities, PowerShares and State Street Global
Advisors, also recently launched exchange-traded funds that track the
municipal bond market.
No crystal ball
The firm continues to innovate and look for new ways to invest its clients
money. BGI prides itself on its three-decade investment research history,
using big brains from the academic, financial, engineering, mathematics,
physics, operations research and computer science worlds to predict future
investment trends.
A lot of these big brains work in BGIs advanced strategies and research
group, akin to an investment think tank. They use their collective knowledge
of forensic accounting, corporate governance and behavioral finance to
develop investing strategies that exploit opportunities other analysts might
not consider. Together, they are responsible for the signals that inform every
actively managed strategy BGI offers. Underpinning all of BGIs testing and
researching and more testing is the companys investment philosophy of
total performance management, which aims to deliver maximum returns,
while controlling risk at low cost.
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Barclays CEO John Varley said the bank will use the resources it would have
spent on the acquisition to accelerate expansion in emerging markets.
New notes
In October 2007, BGI launched eight new commodity exchange traded notes
(ETNs), covering eight commodities indexes and following subindexes of the
Dow Jones-AIG Commodity Index. Part of the firms iPath line, the ETNs
offer an expense ratio of 75 basis points. In addition to energy and metals,
the new ETNs include livestock, industrial metals, grains and natural gas.
New product
Also in October 2007, BGI announced a fresh investment category for
defined contribution plans. SponsorMatch, a new investment solution
focused on the company match, defines a new category in DC investing and
seeks to address growing concerns about securing post-retirement income and
dealing with longevity risk. BGI designed SponsorMatch to meet the criteria
outlined in the proposed Department of Labor regulations concerning
qualified default investment alternatives, which help plan sponsors meet their
fiduciary responsibilities, while helping participants achieve their retirement
goals.
New faces
Recent hires at BGI include the October 2007 appointment of Michael Crowl
as global general counsel. Crowl came over from Goldman Sachs, where he
worked for 13 years, most recently as managing director and global general
counsel of investment banking. Previously, in March 2007, BGI named
Marie Chandoha head of its U.S. fixed income business. Prior to joining
BGI, Chandoha served as co-head and senior portfolio manager of the
Montgomery Fixed Income Division at Wells Capital Management. Prior to
Wells Capital, she worked as a senior bond strategist at Goldman Sachs and
managing director in the global fixed income research group of Credit Suisse
First Boston.
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V A U L T
5
PRESTIGE
RANKING
Lehman BrothersInvestment
Management Division
DEPARTMENTS
Asset Management
Private Equity
Private Investment Management
THE STATS
Employer Type: Subsidiary of
Lehman Brothers
Chairman & CEO: Richard S. Fuld Jr.
Revenue: $58.9 billion* (FYE
11/07)
Net Income: $4.2 billion*
No. of Employees: 28,556*
No. of Offices: 65*
*Lehman Brothers
KEY COMPETITORS
Goldman Sachs
Merrill Lynch
Morgan Stanley
UPPERS
"Best culture on Wall Street"
Great mentoring
There are nights when I go to bed
so excited for specific meetings
DOWNERS
"Dress code stinks"
I think some of our technology is
out-of-date
The hours are long
EMPLOYMENT CONTACT
www.lehman.com/careers
THE BUZZ
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THE SCOOP
Big players
Despite losses in the credit and subprime debacle, Lehman Brothers is still an
investment banking powerhouse, continuing to hold its own among its
competitors. Part of the reason for this continued success is the strength of its
investment management division, which posted a record $968 million in net
revenue for the first quarter of 2008, a 39 percent increase from the first quarter
in 2007. Assets under management as of March 2008 were $277 billion, down
slightly from $282 billion in November 2007.
Lehman Brothers investment management division consists of three businesses:
private investment management, asset management and private equity. Private
investment management provides investment, wealth advisory, and capital
markets execution services for high-net-worth individuals and businesses. Asset
management deals with Lehmans proprietary asset management products,
which span traditional and alternative classes, and are offered to individuals and
institutions through a variety of distribution channels. The private equity
business covers investments in privately negotiated transactions across a range
of asset classes, serving both institutional and individual investors.
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Southern style
Lehman Brothers roots stretch back to 1850, when Montgomery, Ala.,
brothers Henry, Emmanuel and Mayer Lehman opened a commodities
brokerage and trading firm. Eight years later the trio expanded to a New York
office, and by 1887 Lehman Brothers held a seat on the New York Stock
Exchange. The firm underwrote its first stock offering in 1889.
American Express acquired Lehman Brothers in 1984 (the credit card company
thought it might expand its financial services divisions), but set the firm free only
10 years later. Since its independence in 1994, takeover rumors have
occasionally surfaced, but CEO Richard S. Fuld Jr. has kept Lehman Brothers
strong and running on its own. Today, Lehman Brothers offers global investment
banking services, investment management, fixed income and equities
underwriting, trading and research, M&A advisory, prime services and public
finance. Lehman Brothers employees operate as owners, and for good reason, as
employees own approximately 30 percent of Lehman Brothers stock. These
employees have received a good return on their investment; since going public,
Lehman Brothers stock price has grown at an average rate of 23 percent per year.
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New chief
After the tumultuous summer, Lehman Brothers did a little reorganization of
its top brass. Erin Callan, who previously headed up the firms global hedge
fund coverage, was promoted to chief financial officer. As a result of her
global hedge fund leadership role, Callan has strong relationships with both
Fortress and Blackstone; she was influential in helping both companies
prepare to go public. Callan assumed the CFO position on December 1, 2007.
Global influence
In recent years, Lehman has put a lot of emphasis on overseas markets, and
that paid off with record breaking numbers from international interests. In
2007, non-U.S. revenue represented 50 percent of the firms total revenue for
the year. Lehman continues to expand its global footprint, as evidenced by
the recent opening of offices in Brazil, Russia, Australia, Qatar and Dubai, as
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Accolades
Lehman Brothers isnt just a major player in the market, its also respected
within the financial media, and it has a trophy chest full of awards to prove it.
Lehman Brothers was recently ranked No. 1 in both Equity and Fixed Income
Research in Institutional Investors All-America Research polls for the fifth
consecutive year in 2007. It also tied with Merrill Lynch for the prize of Top
Financial Institution in the same survey. Institutional Investor also ranked the
firm the No. 1 Most Shareholder-Friendly Company in the brokers and asset
management category. In addition, BusinessWeek named Lehman one of the Top
50 Best Performing Companies and one of its Best Places to Launch a Career.
Lehman Brothers was also named the Most Admired Securities Firm by
Fortune.
CEO Richard S. Fuld has picked some major accolades on his own. He was
recently included on Barrons The Worlds Most Respected CEO list, and ranked
No. 2 in the brokers and asset managers category of Institutional Investors 2008
Best CEO survey, behind only Lloyd Blankfein of Goldman Sachs.
Theyre No Bear
In April 2008, Fortune magazine reported that Lehman had largely managed
to withstand the same industry conditions that brought former fellow
investment bank Bear Stearns to its knees. The publication said this was due
to smart planning on Lehmans part, having $19.1 billion more borrowed than
it loaned to others. The firm also had $197 billion in emergency liquidity, in
contrast to Bear Stearns approximate $42 billion (which obviously wasnt
enough to pick it back up again).
GETTING HIRED
High society
Lehman Brothers offers one of the most attractive investment management
programs on Wall Street. But being a member of the elite means the firm
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The race is on
To look for new hires, the firm heads to the top schools across the country,
including Ivy League schools a well as others that the firm has developed
strong relationships with over the years. The screening process is a rather
involved one. A candidate describes attending at least three Lehman-specific
events, including a firmwide presentation, division presentation and day-in-thelife presentation. If the firm likes what they see on your resume, interviews on
campus or over the phone will follow. If you pass the initial round, youll be
called back for a half-day interview at Lehman offices where you go through
an additional four or so interviews, some of which are two-on-one interviews.
Questions youre likely to receive arent particularly thorny ones, however.
The interview process tends to be very informal and conversational.
Possible specific lines of questioning include your examples of leadership
roles and distinctive initiative taking, strengths and weaknesses, stock
pitches, current financial events and examples of when you successfully
worked on a team. Also expect to be asked about your approach to
investing. One insider with a background in finance reports being asked to
analyze an equity security and come back with a buy or sell decision.
According to the firm, interviewers take each candidates background into account
in their assessment approach. For example, while liberal arts majors will certainly
get questions about problem solving, the questions would not relate specifically to
finance. Generally, it looks like the suits are mostly on your side. I didn't feel like
anyone in the process was looking for me to mess up, admits one insider.
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interns take on as much as they possibly can take on, but its overall an
amazing experience where interns are given responsibilities equivalent to
those in full-time positions. I felt I was given a significant amount of
responsibility, and was amazed at how welcoming people were and willing to
explain things to me, says one insider.
Youll be given a taste of lots of different responsibilities, too. A very unique
component of the internship is the ability to rotate through two distinct roles,
explains one insider. Interns rank their choices and typically receive their highranked choices. One former intern who calls the rotational program fantastic
notes, I had the opportunity to rotate through several areas of the firm, which
allowed me to focus on projects ranging from macro research to companyspecific analysis. For your troubles, youll receive the base salary that a firstyear associate [or analyst] gets paid, prorated for the 10 weeks (or eight weeks,
in the case of most analysts) that you work. Associates may also receive a
bonus at the end of the summer along with a special bonus if you accept a fulltime offer within a specified period of time.
A good report
When it comes to compensation, the firm receives mostly high praise from
insiders. Sources say the firm offers a solid compensation package thats
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in line with the industry, though some contacts have heard that some firms
paid their associates out of business school better than Lehman. Perks get
an even better reception. The firm offers the standard array of benefits, along
with a few that are slightly out of the ordinary, including a 24-hour nurse
line, education program for parents and on-site lactation facilities.
As for time spent in the office, weekly hours usually number around 50 or
60, though 70 or 80 per week isnt unheard of. We work very hard, but
in an efficient and flexible manner, says one insider. Another admits, I
constantly work at home or at work, but on my own time and schedule. The
number of hours you work varies significantly by the group, say insiders, but
as long as were able to complete our work in a timely manner, its not
important to show your face in the office. Face time expectations aside, the
work can still be grueling. One source says, Though I didnt mind the long
hours that I spent at the firm early in my career, Ive been less satisfied with
the fact that my hours have not improved since I began working for the firm.
Giving respect
Management seems to have reasonable expectations when it comes to their
employees. Managers seem to appreciate hard work and will recognize
superior achievement. Theyre incredibly respectful and extremely effective
in managing their relationships with other colleagues. One insider happily
notes, My direct manager makes a huge effort to check in with all of the
analysts to see how our workload is and if were working on things that interest
us. And if not, hell ask what wed like to work on that would interest us more.
He also gives us feedback on how were doing that is incredibly honest, and
thanks us for our hard work. Another contact notes that from the beginning,
my boss has treated me, and my ideas, with the same respect he accords a
veteran employee. And if you need to talk one-on-one with a supervisor, dont
fret. Its a flat organization with access to senior management at every level.
Rarely informal
The dress code is formal always with casual Fridays only in the summer
and before a holiday. Although the code is fairly strict, sources claim they
dont mind. I didn't think I would like the code at first, but I really like being
business formal because the line of whats appropriate to wear is very clear,
says one insider. Although its not everyones cup of tea (the dress code
stinks, one contact says succinctly), the suit-and-tie culture for Mondaythrough-Thursday doesnt seem to bother most.
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Office space seems to be the only drawback that most respondents can agree
on. Offices and technology can definitely be upgraded; average is the first
word that comes to mind, says one insider. Another notes that while offices
vary since we are all in very different buildings, the office I am in is not
very fancy, and the resources arent very nice. One insider says
diplomatically that our offices are comfortable but not luxurious, so while
workers have everything [they] need, Lehman is conscious of its costs and
does not spend money needlessly.
Youll be prepared
One thing the company doesnt scrimp on, though, is its fabulous training
programs. The seven-week investment management training program is well
organized, a very good initiation into the Lehman organization and allows
for personal attention if necessary. In addition, the program is run by a
dedicated team that is outstanding and helps make sure all associates and
analysts are happy. Lehman also offers ongoing training in different topics
that managers always encourage you to attend. And the firms informal training
is incredible. When I first joined my group, reports one insider, "my
manager used to sit down with all of the analysts every two weeks for an hour
to review any topic that was unfamiliar to us. Another adds, After meetings,
often the senior people will ask us if we understood everything and offer to walk
us through difficult concepts.
No homogeneity here
Sources mostly report being very impressed by Lehmans diversity efforts.
The firm offers many networks, including a women's network where you can
participate in a mentoring program or attend different events. I find it
empowering to be at a place where there are so many senior-level women who
also have families, adds one insider. Another calls Lehman a wonderful place
to work for all people. In terms of formal programs, the firm has a diversity
recruiting committee as well as networks for minorities and gays and lesbians.
One source says senior managements dedication to the work we do on the
diversity committee is a broader reflection of the firms commitment to diversity,
in terms of individuals backgrounds and interests.
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Asset
6 JPMorgan
Management
PRESTIGE
RANKING
DEPARTMENTS
Investment Management
Asset Allocation Client Advisory
Compensation & Benefit
Strategies Currency Equity
Fixed Income Funds
Management Hedge Funds
Liquidity Private Equity Real
Estate Retirement Plan Services
Strategic Investment Advisory
Group
Wealth Management
Private Banking Private Client
Services
THE STATS
Employer Type: Division of JPMorgan
Head of JPMorgan Asset Management:
Jes Stanley
Head of Investment Management
Americas: Eve Guernsey
Head of Investment Management
International: Clive Brown
Head of Wealth Management: Mary
Erdoes
AM Net Revenue: $8.6 billion (FYE
12/07)
AM Net Income: $2 billion
No. of Employees: 14,000+ (Asset
Management)
No. of Offices: 50+
KEY COMPETITORS
Credit Suisse
Goldman Sachs
Merrill Lynch
Morgan Stanley
UPPERS
Diversity is a focus
Lots of mobility and resources
On-the-job training is unrivaled
DOWNERS
THE BUZZ
"Tops"
"Probably past its prime, but still
intense"
"Outstanding private bank"
"Nothing exemplary"
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EMPLOYMENT CONTACT
jpmorgan.com/careers
THE SCOOP
Rescuing Bear
In March 2008, after news surfaced that New York-based Bear Stearns was
facing a cash shortage in the midst of the industrywide credit crisis, the firms
clients withdrew approximately $17 billion in two days, sending what was
already a financial institution on very shaky ground into proverbial
earthquake mode. As a result, JPMorgan stepped in on March 16th,
announcing that it would be purchasing Bear for $236 million in stockor
just $2 a share, 97 percent less than Bears market value just one week earlier.
(The backlash from Bear shareholders at such a measly per share offer
resulted in JPMorgan raising its bid one week later to $10 per share.) To help
finance the deal, the Federal Reserve agreed to provide JPMorgan with a $30
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billion credit line, which, according to The Wall Street Journal, was believed
to be the largest Fed advance on record to a single company.
The news of Bears end meant ominous things for financial markets (and
beyond), and the U.S. Federal Reserve immediately cut lending rates for
banks in an effort to try to stabilize the wildly fluctuating markets.
Meanwhile, in a statement, JPMorgan CEO Jamie Dimon assured Bear
Stearns clients and counterparties that they should feel secure that
JPMorgan is guaranteeing Bear Stearns counterparty risk.
In April 2008, JPMorgan also added some security to more than 100
undergraduate and grad-school students. After it was announced that about
half of the recent job offers made by Bear Stearns would be rescinded,
JPMorgan assured summer interns affected by the announcement that they
will be offered 10 weeks of pay if they work for a certain nonprofit
organization and will get an early chance to apply for fall positions.
Meanwhile, the firm said that graduates denied full-time jobs will keep their
signing and relocation bonuses, and will have access to career services. The
cuts came mostly in areas where there was overlap with JPMorgan, such as
M&A, equity underwriting and corporate finance. Offers in investment
management and other areas such as commodities, merchant banking and
prime brokerage (Bears jewel) were said to be unaffected.
In May 2008, more fallout continued regarding Bear Stearns collapse.
Dimon said that although Bears brokerage arm would be preserved, big
parts of Bear Stearns Asset Management business would likely be
liquidated, resulting in an estimated $300 million in second quarter charges.
(Bear Stearns Asset Management had approximately $16.6 billion in assets
under management around the time its acquisition was announced.) Dimon
also announced in May that JPMorgan had secured positions available for
about 40 percent of Bears 14,000 employees. At the end May, the
acquisition of Bear became official, as Bear Stearns shareholders approved
the deal in a brief meeting presided over by the firms chairman, James
Cayne.
Making of a giant
JPMorgans roots go back to 1838, when American George Peabody opened
a London merchant bank. Chase Manhattans history can be traced back to
1799, when Chase's first predecessor company, The Manhattan Company,
was chartered to supply water to New York City. The merger between the
two, valued at approximately $38.6 billion, was completed on the first day of
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by the numbers. Net revenue in the unit rose 23 percent to $2.4 billion, while
net income increases 29 percent to $27 million. The unit experienced net
inflows of $33 billion during the quarter. At the end of the year, it had $1.2
trillion in assets under management, up 18 percent versus the end of 2006.
GETTING HIRED
Lots of competition
JPMorgan is looking for many candidates who are eager and have strong
analytical skills. The firm has the luxury of selecting from very competitive
candidates. One insider says, We receive a few thousand resumes from
nontarget schools and each of our 12 target schools. In order to maintain a
certain culture, the firm makes offers to only the best candidates. To make it
in, a candidate should add value, work hard, and be smart and driven to
succeed. Another recalls, The application process seemed relatively
straightforward as an undergrad, but as a member of a university recruiting team,
I can see that the percentage of applicants we accept is quite small.
The firm looks to all the big schools, including Penn, Georgetown, Cornell
and NYU. Other schools on the JPMorgans hit list include Morehouse,
MIT, Northwestern, University of Texas, Yale and Columbia. Still, JPMorgan
accepts resumes from all schools. A source says, Depending on the
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business line, the firm partners with schools that have preferred status.
These universities are visited. It can be pretty hard to get an interview if
you dont come in through an intern class. A source offers a tip: Youre not
likely to get a response by applying on the web site, so your best bet is to
network and find someone on the inside who can pass along your resume.
Opportunities abound
JPMorgan Investment Management insiders speak of a friendly, down-toearth culture that is challenging and not about face time. One insider says,
The culture is the main reason I love working here. It is one based around
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teamwork. People are extremely smart, but also have great personalities. A
contact says, I have made many close friends here and literally sing on my way
to work because I am so happy! Coming in as an analyst, expect to work as
hard as possible, but it is not uncommon to have just as much fun as you did
in college. At this competitive, results-orientated firm, there is an
appropriate balance between hard work and a desire for well-roundedness.
The culture is more relaxed than investment banks and many other asset
management firms. There is a strong emphasis on taking initiative, and on
asking questions about current and new projects. According to one source,
The general consensus is that this is the best line of business to work for at
JPMorgan Chase. People take our role of fiduciaries seriously, and I think we
all generally believe in what were doing for our clients.
Solid performers are recognized and rewarded appropriately. It is extremely
comforting to work within a meritocracy, says a contact. Mobility within the
firm is heavily stressed. One source says, In my five-plus year experience,
JPMorgan has enabled me to experience five different roles. Personally and
professionally, these moves keep me interested, challenged and loyal to the
firm. Another bonus is that employees have the opportunity to interact with
executives from Fortune 500 companies on a regular basis. Overall, JPMorgan
Investment Management is big on fostering learning and individual growth.
However, the security and diversity of experiences that comes from working
within a huge firm also comes with some degree of bureaucracy. One contact
says, While working at a large firm provides flexibility in changing roles, it also
can mean there is more rigidity in defining ones role since there are more
structures in place.
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go home. The vast majority of managers are more concerned with the
quality and volume of output than with the quantity of hours spent in the
office. Overall, sources say hours are nothing to complain about, allowing
the freedom to leave early one day if needed, as long as the work is still
completed. Weekends are rare, and hours tend to fly by because
everyone is working hard to be productive.
Open arms
Managers at JPMorgan Investment Management get high marks. Sources speak
of direct and consistent access to senior managers. The firm has incredibly
open MDs who are willing to invest time in junior analysts. In this opendoor environment, you will have opportunities on a daily basis to interact with
all levels of employees, up through the management level. Managers have high
standards, though. According to one source, If you are eager to learn, willing
to work hard and dont make silly mistakes, you will have a great relationship
with your manager. Though, some bad management experiences have caused
people to leave the firm.
Invaluable training
The training at JPMorgan is not only strong at the beginning of your career but
consistent throughout. Insiders say its a great place to learn. The firm has an
analyst-training program for new recruits and an associate training program prior
to promotion to VP. There are also continual opportunities to attend training
sessions and presentations to learn about the different product areas in the firm.
Sources say the analyst program, which is two weeks in New York and two weeks
in London, is an invaluable experience. And on-the-job training is unrivaled.
One contact points out, Unless you come in through the formal analyst program,
there isnt a ton of opportunity for really good trainingsomething more than a
brown bag lunch or Excel class. But JPMorgan does provide funding for the
CFA exam and study materials, and allows study days.
Run-of-the-mill aesthetic
Respondents say they could do with some fancier digs. Insiders say offices
are average and Spartan. The offices do foster communication since we
have cubicles, which are all glass, but there isnt a lot of privacy. In New
York, there is a good location in Midtown Manhattan, on Park Avenue near
Grand Central.
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In terms of dress code, its business casual, and formal if meeting with
clients. Suits are only necessary when you are meeting with clients, but
dress is still expected to be business appropriate. One contact says, Slacks
and a dress shirt are our uniform. Suits are required only when you have
client contact or a formal meeting.
Focused on diversity
At JPMorgan, diversity is certainly an issue of focus. The head of the firm
places real importance on diversity issues and is taking action. One source
points out, Diverse talent is continually hired but more needs to be done to
retain the talent.
Specifically with regard to women, there is strong representation in senior
roles and a flexible attitude toward working mothers. Through the Investment
Management Americas Womens Network, the firm holds monthly meetings,
seminars and special events. Women have the opportunity to network with
each other, and to connect with relevant JPMorgan resources. The firm also a
forum to help JPMorgan employees succeed in balancing family and career that
recently won several awards for its attention to womens needs in the workplace.
To support ethnic minorities, JPMorgan has relationships and active
involvement with the Sponsors for Educational Opportunity program and the
UNCF Foundation. The firm also has a black leadership forum that promotes
black leadership at all levels. For gays and lesbians, JPMorgan sponsors Out
for Undergraduates, a forum to better connect with gay and lesbian individuals.
Also, the firms PRIDE network supports workplace fairness and inclusion for
lesbian, gay, bisexual and transgender employees. According to one contact,
Gays and lesbians seem to fit in quite well.
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V A U L T
7
PRESTIGE
RANKING
DEPARTMENTS
Account Management
Business Management
Portfolio Management
Product Management
THE STATS
Employer Type: Subsidiary of Allianz
Global Investors of America
Co-Managing Directors & Co-CEOs:
William S. Thompson Jr. &
Mohamed El-Erian
No. of Employees: 1,000+
No. of Offices: 9
KEY COMPETITORS
BlackRock
Bridgewater Associates
Fidelity
Goldman Sachs
Legg Mason
UPPERS
Very competitive salaries and
bonuses
Stimulating and rewarding work
Very collaborative environment
DOWNERS
Work can be overwhelming
Too much focus on external talent
You are always required to be on
EMPLOYMENT CONTACT
See career information section of
www.pimco.com
THE BUZZ
Bond kings
Massive
Excellent macro research team
Some good funds
Fixed income powerhouse
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Newport Beach, Calif., the company also has offices in New York, Hong
Kong, London, Munich, Singapore, Sydney, Tokyo and Toronto.
Bond king
As big as PIMCO has become, the company name is not nearly as recognized
as that of company founder and chief investment officer Bill Gross. As
manager of the countrys largest bond fund and anointed by Fortune as the
bond king, Gross is arguably the best-known bond expert in the world.
With a Warren Buffet-like status in the fixed-income world, Gross
commentsor even mere rumors of what hes buying or sellingcan send
stocks soaring or plummeting. In July 2006, Motley Fool said Gross is
simply the best bond-fund manager in the business. And in May 2007,
Investment Advisor Magazine called him one of the most influential people
on Wall Street. Also in 2007, Gross and his PIMCO team were named FixedIncome Manager of the Year by Morningstar for the third time in 10 years.
Why the hype? According to Motley Fool, Gross, a former professional
blackjack player, knows how to make a gamble pay off. More specifically,
Gross closely watches macroeconomic factors in his investing. The literature
for [PIMCO] Total Return calls it a top-down process, whereby Gross and his
team develop a three- to five-year outlook for the global economy and interest
rates. Everything is considered: currency movements, the yield curve, the credit
markets, and so on. Its a complex job, and Gross does it better than anyone else.
His approach is so good, in fact, that from 2002 through 2006, Total Return had
beaten the Vanguard 500 Index 4.61 percent to 2.38 percent a year.
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Solid foundation
Many businesses try to give back to the community, but not all of them can
say they have their own foundation to do so. The PIMCO Foundation helps
organizations in Orange County, Calif., to better the quality of life in the
community. The foundation offers grants to an organization annually, and its
very specific about whom its trying to helpminorities, senior citizens and
organizations that help the disabled or promote womens health take center
stage here. Theres an interest in drug and alcohol prevention for school
children and helping abused children as well. Its PIMCOs way of helping
people in need to lead more rewarding and responsible lives.
GETTING HIRED
Wanted: brains
Both full-time and summer positions require two or three rounds of interviews,
during which candidates may meet with six to eight or even 10 to 15 different
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interviewers. At the MBA level, the interview process typically begins with a
one-on-one on-campus interview. From there, select candidates are invited back
for a second round, which consists of anywhere from six to eight interviews with
some of the most senior investment professionals at the firm. After that, an even
smaller group of candidates are invited back for a third round, which typically
includes three to five additional interviews. Throughout the interview process,
PIMCO challenges candidates to problem-solve across fixed income and
macroeconomics topics, says one insider. The undergraduate interview process
is substantially similar.
Especially in the second round, sources say, its important to be ready for
questions about macroeconomics, the global economy and fixed income.
Interviewers will also be on the lookout for evidence of leadership, teamwork
and general fit with PIMCO and the position. Some respondents report being
tested on knowledge of Excel and fielding basic fixed income questions, like
how you would design a portfolio and your views on where interest rates and
economic growth are heading in the near and long-term. One last word of
advice: candidates should be able to discuss the markets intelligently, and prove
their ability to learn quickly and integrate that knowledge into discussions.
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The heat is on
There are two themes that flow through the firm culture, explains a source. The
first is meritocracy. I have seen people quickly advance through various ranks of
the firm because they were willing to put in long hours and come up with new
ideas that helped the company. The second theme is that this is a family business.
The founding partners are still active in the firm and all levels of staff work well
together. Indeed, insiders say PIMCO fosters a very professional, collegial and
fair work environment where employees feel proud to be affiliated with the
firm. And despite having 10 offices worldwide, PIMCO strives to maintain a
relatively flat organizational structure. We want people who are ready to speak
up when they have a better idea, regardless of title or tenure, adds a contact.
If theres one other thing for which PIMCO is known, its intensity. As one
source puts it, Initially, with so much information to learn, its like drinking from
a fire hose. Besides being a hardworking and committed culture, PIMCO is
an academic environment in some ways. The intense atmosphere is what
makes PIMCO such a great and challenging place to work, but it can also get
stressful and exhausting. Dont be fooled by the Newport Beach address, either.
Keep in mind that even though the company is based in California, the culture is
not laid-back, a longtime insider says. Everyone works hard and we are always
professional. The scenery is just nicer than Wall Street.
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events, when business casual is allowed, one insider notes. PIMCO offices get
high marks for their desirable locations. The New York office has an amazing
view of Central Park, and the Newport Beach office overlooks the ocean, notes
one source. The offices are located in pretty much the best possible places in both
of these cities.
Very interactive
PIMCOs flat and open culture encourages great respect between
managers and subordinates. One contact says, The senior-level managers at
the firm are people we all look up to and enjoy working with. Explains
another, If a manager ever loses his cool with a subordinate, one of two
things happen: the manager either recognizes what he has done and
apologizes, or the manager is reprimanded.
Because we all work very closely together, employees get opportunities for
lots of interaction with senior managers, who are extremely high caliber and
have a lot of respect for all investment professionals at the firm. My skill
level is constantly evaluated, and I often have a chance to ask how things are
going, a source says. PIMCO has some of the best managers and mentors
in the industry, declares another. And since people tend to stick around for
many years, relationships have time to grow.
Unsurprisingly, PIMCO takes a very academic approach to training. Fulltime hires for all offices participate in a five-week full-time investment
fundamentals training in Newport Beach when they first begin, an insider
explains. This is supplemented with periodic sessions during their first six
months. On an ongoing basis, PIMCO hosts lectures by economists, policymakers and sector specialists, and all investment professionals are encouraged to
attend. Professors and market strategists also drop by to share their expertise
with PIMCO employees. Summer interns undergo a modified version of fulltime training with a one-week session in Newport Beach.
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V A U L T
PRESTIGE
RANKING
DEPARTMENTS
KEY COMPETITORS
Carlyle Group
Citadel Investment
E*TRADE FINANCIAL
Fidelity
Fortress Investment Group
Merrill Lynch
Brokerage
Investment Advisory
UPPERS
THE STATS
DOWNERS
Very selectivetough to get in
Work can get demanding
EMPLOYMENT CONTACT
See recruiting at www.deshaw.com
THE BUZZ
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The first time D. E. Shaw partnered with an investment bank was in 1997
its collaborator was Bank of America. The agreement was that D. E. Shaw
would return capital to most of its early investors in favor of a structured
credit facility of nearly $2 billion from Bank of America. In return Bank of
Americas corporate clients had access to D. E. Shaws computational and
quantitative expertise. However, while doing due diligence for the proposed
1998 merger between Bank of America and Nationsbank, Bank of America
Chief Executive Officer David Coulter said his firm had no hedge fund
exposure. When the Russian government defaulted on its debt in August
1998, causing chaos on the worlds financial markets, D. E. Shaw suffered
significant losses in its fixed income trading and turned to Bank of America.
The bank cut a $372 million check to D. E. Shaw and allegedly hid the loss
so as not to derail the Nationsbank merger. Coulter lost his job and Bank of
Americas new management severed its alliance with D. E. Shaw.
With its latest alliance with Lehman Brothers, D. E. Shaw has proved that it
pays little heed to the old adage once bitten, twice shy. Lehmans 20 percent
acquisition followed a rash of incidents of investment banks buying hedge
funds, including Citigroups acquisition of Old Lane Partners, and Morgan
Stanley buying funds such as Lansdowne Partners and the Avenue Capital
Group. Lehman also has stakes in a number of other hedge funds, including
GLG Partners, Marble Bar Asset Management, Ospraie Management and the
Spinnaker Capital Group.
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GETTING HIRED
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9
PRESTIGE
RANKING
75 State Street
Boston, MA 02109
Phone: (617) 951-5000
www.wellington.com
BUSINESSES
Active Asset Allocation
Asset Management
Currency, Commodities & Real
Assets
Equity
Fixed Income
Independent Research
Investment Management
Quantitative Research
Risk Management
KEY COMPETITORS
Barclays Global Investors
BlackRock
Morgan Stanley
UPPERS
The best [benefit] package I have
ever heard of
DOWNERS
Not too many women in very high
positions
EMPLOYMENT CONTACT
www.wellington.com/Careers
THE STATS
Employer Type: Private Company
President & CEO: Perry M.
Traquina
No. of Employees: 1,800+
No. of Offices: 10
THE BUZZ
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In the Vanguard
Called by some as the brains behind the funds, Wellington picks stocks and
other investments for famous mutual funds like Vanguard, ING, John
Hancock and Hartford. The worlds largest sub-advisor of mutual fund
portfolios, Wellington is responsible for 15 Vanguard fundsthats more than
$100 billion in assets.
Thanks to its own purchasing power, Wellington has quietly become a
shareholder to be reckoned with in some of Americas biggest companies.
For example, Wellington was the majority shareholder in the natural foods
chain Wild Oats Markets (before it was acquired by rival Whole Foods) and
is the biggest investor in the Hain Food Group (which includes well-known
natural brands like Celestial Seasonings, Arrowhead Mills, Yves Veggie
Cuisine and Bearitos). In August 2006, it doubled its holdings of medical
equipment giant Boston Scientific, reaching a 5.3 percent stake in the
company. In total, according to the firm, its ownership stakes include two
million securities in 75 countries around the world.
Oily situation
It would seem that its a good thing that Wellington Management is a large
stockholder in one of the most fiscally successful companies in the country
until one discovers that the company is a controversial political figure.
Wellington is Halliburtons second-largest shareholder, with more than 23
million shares of its stock. Though the partnership hasnt exactly caused a
nationwide outrage, there are a small number of web sites (such as
halliburtonwatch.org) and organizations that protest any companys
involvement with Dick Cheneys former empire as an ethical response to the
windfall profit that Halliburton received through contracts in Iraq.
Divine funds
Though some may not be happy with their association with Halliburton, not
too many can find moral objections to one of Wellingtons more saintly funds,
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V A U L T
10
PRESTIGE
RANKING
DEPARTMENTS
Deutsche Asset Management
DWS Investments
DWS Scudder
Private & Business Clients
Private Wealth Management
RREEF
THE STATS
Employer Type: Business unit of
Deutsche Bank
Chairman, Deutsche Bank: Josef
Ackermann
Global Head, Deutsche Asset
Management: Kevin Parker
Global Head, Private Wealth
Management: Pierre De Weck
Revenue: 30.7 billion* (FYE 12/07)
Net Income*: 6.5 billion
No. of Employees: 77,920*
No. of Offices: 1,868*
*Deutsche Bank
KEY COMPETITORS
Citi
Dresdner Bank
UBS
UPPERS
Laid-back, collegial,
professional atmosphere
DOWNERS
Mixed reviews on diversity
EMPLOYMENT CONTACT
THE BUZZ
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A world player
Deutsche Banks private clients and asset management group, or PCAM,
comprises two divisions: asset and wealth management services, and private
and business client services. Its asset management services include
traditional asset management and alternative investments, the latter
encompassing absolute-return strategies and specialist real estate asset
management. Its client base includes retail clients and institutional investors
such as pension funds.
With approximately 555 billion in assets under management as of December
2007, the asset management group at Deutsche Bank is one of the largest
asset managers in the world. Its coverage and service has won it a place
among the best-performing mutual fund companies in Germany for 13
consecutive years, according to Standard & Poors.
The banks private wealth management division caters to high-net-worth
individuals and families. It offers traditional and alternative investments, risk
management strategies, lending, wealth transfer planning and philanthropic
advisory, among others services. In 2007, the private wealth management
unit increased assets by 13 billion, ending the year with 194 billion.
Overall, Deutsche Bank has 78,275 employees from 130 countries that offer
financial services in 76 nations through 1,588 global facilities. The asset
management division professionals are spread out through Asia, Europe and
the Americas. These employees are housed in 17 offices worldwide in the
most active hubs of finance and industry in the world including Zurich,
London, New York and Dubai. The company believes that the world is
simply one global market and integrates that into its core philosophy by
representing all the different regions of the world. More than half of the
banks employees are located outside of its home base in Germany.
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and sovereign and multinational organizations. The firms third unit, the
corporate investments arm, manages industrial shareholdings, other holdings
and bank-occupied real estate assets, private equity and venture capital activities.
A complex history
In 1870, a private banker named Adelbert Delbruck and a politician named
Ludwig Bamberger open Deutsche Bank in Berlin as a specialist bank for
foreign trade. By 1876, it had become the largest bank in Germany and, by
1880, investments were scattered across the globe, including in North and
South America, Eastern Asia and Turkey. Before the turn of the century, the
German giant had invested in projects like the Northern Pacific Railroad in
the U.S. and the Baghdad Railway.
After World War II, Deutsche Bank closed its offices in Soviet-occupied areas and
was scattered into 10 regional offices while western Germany was under
occupation. By 1957, the bank had regained its footing as a unified Deutsche Bank
AG with headquarters in Frankfurt am Main. By 1986, the firm made its first
major bank acquisition outside of Germany with the purchase of Banca dAmerica
e dItalia. Other acquisitions included the Morgan Grenfell Group (1989), the U.S.
Bankers Trust (1999), the U.S. asset manager Scudder Investments (2002), the
Swiss private bank Rued Blass & Cie (2003) and the Russian investment bank
United Financial Group (2006). Meanwhile in 2001, shares of the bank were also
traded for the first time on the New York Stock Exchange.
No European immunity
Though Deutsche Bank does hold the advantage of being located across the
ocean from the debt debacle, it wasnt able to completely avoid the fallout
from the U.S. subprime and credit crisis. In fall 2007, it reported a writedown of 1.5 billion ($2.1 billion) on structured credit products and securities
backed by residential mortgages. Though no one likes to take a $2 billion hit,
relative to the potential losses that it could have incurred, the losses looked
almost rosyespecially when coupled with third quarter net profit, which
exceeded 1.4 billion ($2 billion), a number that was more or less on point
with its profit targets for the year.
Chief Executive Officer Josef Ackerman said at a banking conference in
London in October 2007 that the reason for the relatively stable numbers was
the success of the asset management and private and corporate client
divisions, which offset the losses relating to volatility in the credit market.
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Measuring risk
In 2007, Deutsche Bank debuted a new global equities risk platform, a tool which
will allow the firm to measure risk on a global basis. The platform will allow
Deutsche portfolio managers to link their portfolios to the risk model at the click
of a button. Managers hope that the increased access to data and the ability to
quickly assess situations for their potential risk will help to avoid situations where
unnecessary losses are accrued. Deutsche Bank Global Head of Portfolio
Engineering and Analytics Paul Spence said, A more sophisticated understanding
of risk greatly strengthens our investment process. On the one hand, the new
system helps us to identify and avoid unintended risk, both in individual portfolios
and at a global level. Just as important, it will help us to use risk much more
effectively across our equity strategies to generate alpha for our clients.
Business heating up
If the worlds climate is going to change precipitously in the next 50 to 100 years,
we might as well help our clients take advantage of the investment opportunities it
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affords them. Thats Deutsche Banks attitude toward global warming, which it
has announced publicly by way of its climate change investment strategy manager,
Nic Huber. In a press conference in Korea in September 2007, Huber (who works
for the asset management unit) said that companies and investors will prosper if
they take steps to help mitigate global climate change. He added that its important
to keep the role of corporate responsibility in mind in trying to support companies
that are working hard to reduce their carbon footprint.
High marks
Deutsche Banks real estate investment department picked up two awards in
industry surveys in the past two years. In June 2007, it was named the No. 1
Global Manager in Real Estate and Infrastructure by the Watson Wyatt/Global
Alternatives Survey. The previous year, Institutional Investor gave the unit
similar accolades, naming it No. 1 in Real Estate, Europe. The Asian media has
also recognized Deutsche as a big player. HangKyung Business, a magazine
affiliated with the Korea Economic Daily, gave Deutsche the award for Best
Fixed Income Management Company in March 2007.
Qatar oasis
In November 2007, Deutsche Bank officially set up shop in the Qatar
Financial Center, offering investment banking and private wealth
management services to the wealthy Middle Eastern country. The plan to
expand into Qatar had been in the works since January 2007 when authorities
there granted Deutsche Bank license to operate in their nation. Deutsche is
no stranger to the Middle East, as it also has offices in the Dubai International
Financial Center as well as branches in Saudi Arabia. The company hopes to
become even more active in the Middle East and North Africa by growing its
securities offices in Cairo, Bahrain, Abu Dhabi and Algeria.
The office in Qatar will be headed by Mounir Husseini, who will serve as
chief country officer and general manager in Doha. Qatars economy is fed
on its resources: it has one of the worlds largest gas reserves.
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Carbon credits
Deutsche Bank cleared the way for streamlined carbon trades in early 2008
when it announced that it was initiating a custody, clearing and settlement
service for carbon credits. The service, which will be based on the
infrastructure of the Depositary and Clearing Centre in London (which
provides services for London Money Market instruments), will cover carbon
credit instruments issued under both the EU Emissions Trading Scheme and
the Clean Development Mechanism set up during the Kyoto Protocol. It will
manage the often complex world of carbon trading by removing the
operational responsibility for the settlement process from traders, and
creating a platform for different currencies and markets.
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No matter what the line of questioning, interviewers also make sure theres time
for you to answer questions at the end, so be sure to do a lot of homework
beforehand. One contact notes, An important takeaway from the interviews
was to be prepared to explain anything on your resume that pertains to finance,
because you will get quizzed on it. Another contact who had an interview with
an alum on campus said his interviewer was surprisingly straightforward
throughout the process and much more friendly than I had expected.
If youre intent on interning, insiders say its definitely a great place to do so,
especially since, according to one sources estimation, about 80 percent of
interns receive full-time offers. There are a few things to keep in mind, however.
Make sure you find someone at the VP level or above who is willing to go to bat
for you when offer time comes around. And if you do, youll probably be pleased
with the resultsif you have someone with pull on your side, youre golden.
Variety show
Deutsche Bank is pleasantly laid-back, has excellent professionalism and
is probably one of the most laid-back and collegial [of the big banks] youll
find. Its a place that offers an excellent mix of people where employees
work hard toward creating a fun, relaxed work environment. There are
benefits to working for a small division within a global-oriented network
such as Deutsche Bank. The company offers the possibility of meeting and
learning from people of different cultural and national backgrounds. Others
enjoy the companys contemporary culture. There are quite a few people in
their early 30s in managing director positions, says a source. In the past,
many of those were hires from rival banks, though now there are many who
have been promoted from within. Sources also call the firm aggressive
and enterprising, and some claim Deutsche Bank can be highly political
and demanding, which isnt surprising, given its size.
As a result of the relative high growth of the firm relative to other bulge bracket
shops, Deutsche insiders profess that its more interesting to be part of a
growing firm. Senior management is accessible and works side-by-side with
more junior staff. In short, one respondent lauds its scrappy culture. Another
states that management is excited about building the business, and there are
no jerks allowed.
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Although the culture makes the firm a generally great place to work, the
hours can be long. The working hours at Deutsche Bank are no different
from any other leading bank, says a source. This is the finance industry and
employees are handsomely rewarded for it. Even if you work late its not
that terrible when you enjoy your group, insiders report. And standard
perks apply, too, to help make the job more bearablepaid dinner and
black cars when working late. Just keep in mind that if its quality of life
and a 9-to-5 work schedule youre after, then this is definitely not for you.
No guarantees
As far as compensation goes, the bank is fairly competitive in most business
areas and geographies. Just remember that bonuses are never guaranteed and
are based on both bank and personal performance, so dont assume that you will
get something extra just for turning up. One insider adds that bonuses are
usually below the rest of the Street. Also, a source says that networking is key,
so if you want to progress, you are on your own with very little support from
management. This simply means that employees have to be smart and take
ownership of their career progression. But its not all upstream paddling
management definitely appreciates your efforts and contributions.
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11
PRESTIGE
RANKING
DEPARTMENTS
Advisory Corporate & Investment
Service Distribution Global Bank
Investments & Insurance Solutions
Marketing Private Banking &
Investment Retirement Trust
Company
KEY COMPETITORS
Citi
Credit Suisse
Goldman Sachs
JPMorgan
Lehman Brothers
Morgan Stanley
UPPERS
Amazing, intelligent people
Opportunities for internal mobility
Great brand name
DOWNERS
THE STATS
Employer Type: Business unit of
Merrill Lynch
Chairman & CEO, Merrill Lynch:
John A. Thain
Vice Chairman & President, Global
Wealth Management: Robert J.
McCann
Net Revenue: $11.25 billion* (FYE
12/07)
Net Income*: -$8.64 billion
No. of Employees: 63,000*
No. of Offices: 900*
*Merrill Lynch
EMPLOYMENT CONTACT
ml.com/careers
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THE SCOOP
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Aside from GWM, Merrill Lynch also provides investment banking services
through its prestigious global markets and investment banking group, and
investment management services primarily through BlackRock, in which
Merrill has a 49.8 percent ownership stake, along with a 45 percent voting
stake. The $9.8 billion merger took place in October 2006, when Merrill
Lynch Investment Managers combined with BlackRock, creating one of the
largest money managers in the world. The deal led to a structural change in
the company.
Bullish beginnings
The history of Merrill Lynch goes back to 1914, when Charles Merrill formed
an eponymous underwriting firm. One year later, Merrill took on Edmund
Lynch as his partner and the firm was renamed Merrill, Lynch & Co.
Following the market crash in 1929, Merrill decided to focus on investment
banking and sold off its retail operations to brokerage firm E.A. Pierce. A
decade later, Merrill recaptured the retail business when Merrill, Lynch & Co.
merged with E.A. Pierce. Several years later, in 1971, Merrill Lynch became
the second Big Board member to go public and first to have its shares listed
on the New York Stock Exchange (the first to go public was Donaldson,
Lufkin & Jenrette, now a part of Credit Suisse). Later in 1971, the company
unleashed its Merrill Lynch is bullish on America ad campaign. In the mid1990s, the company dropped its bull campaign, but reintroduced the iconic
image to its ads in 2003.
So long, Stan
Perhaps the biggest news at Merrill Lynch in late 2007 was the ouster of its
chairman and CEO, Stan ONeal. Rumors of his demise began in October
2007, when Merrill reported a third quarter loss of $2.3 billion and an
additional $8.4 billion charge linked to failed credit and other mortgagerelated investments. It was the biggest quarterly loss in Merrills 93-year
history.
After Merrills board announced that ONeal would retire, the firm quickly
appointed Alberto Cribiore, a Merrill board member and founder of the Brera
Capital private equity firm, as interim nonexecutive chairman. Cribiore led a
brief search for ONeals replacement, settling on New York Stock Exchange
Chief John Thain in November 2007. (Interestingly enough, Thain had also
been considered a front-runner for the chief executive position at Citigroup,
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which was left open when Charles Prince was forced to step down because of
that banks losses.)
Win Smith Jr., a former chairman of Merrill Lynch International and son of
one of the firms first executives, called Thain a very good candidate for the
future. Smith added, He has a great background, did a good job stepping
into the NYSE when it had troubled times, and comes out of a firm that has
a very strong culture. He can help bring the pride back.
Indeed, Thain is widely seen as one of Wall Streets best and brightest. He
began his career at Goldman Sachs, rising from a bond trader position to chief
operating officer. At the New York Stock Exchange, he took over when
former head Richard Grasso was fired amidst controversy over his salary.
Thain managed to restore confidence within the NYSE board, helped the
Exchange go public and led the acquisition of Euronext, creating the worlds
first trans-Atlantic stock exchange.
Thain rebuilds
Thain had his work cut out for him at the troubled Merrill Lynch, however.
Bad news included the last earnings reports of 2007: Merrill posted a $9.83
billion fourth quarter loss. This figure reflected $16.7 billion of write-downs
on leveraged loans and mortgage-related investments, and far exceeded
analysts expectations. For the full year 2007, Merrills net loss was $7.8
billion, a far cry from its net income of $7.5 billion in 2006.
Thain tried to make the best of the news, saying that while the results were
unacceptable, Merrill still had the capital base now that we need to go
forward. He also told The New York Times that Merrills investment
banking, equity capital markets and global wealth management businesses
did really, really well in 2007, achieving record results for the year. He
added that contrary to speculation, Merrill had no plans to sell its major stakes
in BlackRock or Bloomberg L.P.
Still, Thain admitted he had some rebuilding work to do, and criticized the
fixed income group for its heavy losses. Thain took several steps to improve
Merrills risk management protocol, hiring Nelson Chai as the new chief
financial officer. He also tapped Noel B. Donohoe to co-head the risk
department with Edmond N. Moriarty. Another new procedure is a weekly
risk meeting, at which Thain discusses risk issues with all business heads.
Finally, in early 2008, Thain indicated that there would be some general
layoffs during the year but said they are not going to be significant.
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created position of president of Merrill Lynch Middle East & North Africa.
Noujaim, who was born to Lebanese parents in Kuwait and later moved to
Brooklyn, N.Y., was also named global head of sovereign wealth funds
(government-owned investment funds). Noujaim will work out of Dubai and
New York.
Eugene steps in
In February 2008, the former president of Freddie Mac, Eugene McQuade,
took over as president and vice chairman of the Merrills banking group,
which primarily provides loans and mortgages to the firms clients.
McQuade, who resigned from Freddie Mac in September 2007 after turning
down an offer to become the firms CEO, replaced McIntyre Mack
Gardner, who stepped down in January 2008 shortly after Merrills former
CEO, Stan ONeal, resigned. McQuade has also previously worked for Bank
of America and FleetBoston Financial. Hell oversee Merrill Lynch Bank
USA and Merrill Lynch Bank & Trust Co., reporting to Robert McCann,
president of the firms global wealth management unit.
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GETTING HIRED
Lets chat
Merrills very structured recruiting process is described as organized and
thorough, combining HR interviews as well as business management
interaction. One campus hire began with an initial campus interview that
covered very general behavioral questions. Next came an on-site interview
with three managers from the business unit. This second round focused on
some behavioral questions, others specific to previous jobs, reasons for
choosing Merrill and reasons for choosing a particular location. Another
analyst fielded questions pertaining to education, prior applicable
experience, interests and preferences.
Across the board, interviewers show a preference for behavioral questions.
Study your resume before showing up, advises an insider. The interview
is more like a conversation than a barrage of questions being thrown at you.
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Friendly in comparison
Merrills culture is collaborative, collegial and relatively friendly
compared to its competitors. Insiders also say Merrill has some healthy
internal competitition. People here expect you to do your best and compete
with your peers to be successful, says a source, but ultimately, they want to
help you succeed. Sources note that the firm is a meritocracy where
those who work hard will be noticed and rewarded. And since
responsibilities are handed out pretty quickly, even lower-level staff have
opportunities to prove themselves. Ive found that Merrills culture places
an emphasis on cultivating talent within the firm with the hopes of retaining
that talent well into the future, adds an insider.
Although the environment is open and team-oriented, one source says the
bank is slow to change and occasionally too fond of the status quo. And
because of our massive advisory force, day in and day out you are reminded
that they are the ones who drive the business. One insider calls the culture
within the global wealth management group very inconsistent. When they
speak about the strength of having a retail brokerage force of 16,000 what
they are really saying is we have 16,000 or so small businesses that all operate
under the Merrill Lynch Global Wealth Management umbrella. If you are in
a nonproduction role, the culture is very rigidly top down, with little
encouragement for creative folks.
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sources saying they average 50 or 60 hours a week, usually less. Better still,
Merrills policies are very accommodating and flexible. Merrill Lynch
does an excellent job with supplying employees with programs to work from
home, a source says. I am able to spend the average 45 to 50 hours a week
in the office and put in the rest of my time from home. Merrill Lynch is
very sensitive to the needs of individual employees, another insider says.
One analyst who is able to keep his hours to 40 a week says this is mostly
because I have a long commute, and my boss understands that.
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is formal, but we dont wear jackets all of the time. Hopewell is casual
always, except for client contact.
Merrills New York offices are relatively ugly, insiders say, and the walls
on some floors could definitely use a coat of paint. In Jersey City,
respondents lament the fact that there are not many amenitiesno real
kitchen area; its not presentable for clients, and there are no break rooms.
However, depending on location, other sources note that the firm offers
many amenities on site such as doctors, nurses, dentists and dry cleaning.
In the Hopewell location, the dcor is described as new and modern. And
sources in several locations also praise the good office equipment and
brand-new technology, and say that employees enjoy leeway to decorate
their offices or cubicles.
Improving diversity
Although Merrill still needs some work on its diversity, respondents praise
the firms efforts. I believe that Merrill does a great job with diversity
candidates and has continued to promote this throughout the firm with
various conferences, management sessions and diversity inclusion awards,
one source says. Another associate points out that there are many women
and ethnic minorities in every department. One such woman adds, Given
the global nature of the business, I find that the diversification efforts and
initiatives are sincere, and well supported both financially and socially by the
firm. The firm is also well regarded by GLBT employees, who cite
Merrills top rating in Human Rights Campaigns equality index. As one
source puts it, Anyone is welcome. Generally, gays and lesbians seem
comfortable enough to not hide their orientation.
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V A U L T
12
PRESTIGE
RANKING
1585 Broadway
New York, NY 10036
Phone: (212) 761-4000
Fax: (212) 762-0575
www.morganstanley.com
UPPERS
Good management
Friendly culture
DOWNERS
DEPARTMENTS*
Global Wealth Management
Institutional Securities
Investment Management
EMPLOYMENT CONTACT
THE STATS
Employer Type: Division of Morgan
Stanley
Chairman & CEO, Morgan Stanley:
John J. Mack
Net Revenue: $5.49 billion* (FYE
11/07)
Income: $1.47 billion* (FYE 11/07)
No. of Employees: 57,845*
No. of Offices: 600*
*Morgan Stanley
www.morganstanley.com/about/career
s/index.html
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THE SCOOP
An American in London
In 1854, American Junius J. Morgan joined a London banking business. His
son, J. Pierpont Morgan, decided to follow in his fathers footsteps back
homeand as one of Americas most powerful financiers, Pierpont Morgans
name became synonymous with wealth and commerce in the countrys early
industrial years. He was instrumental in the construction of a national
railroad system and built General Electric and U.S. Steel. Pierpont Morgan
was succeeded by his son J.P. Morgan, who formed J.P. Morgan & Co. In
1935, Henry Morgan and Harold Stanley left J.P. Morgan & Co. to form
Morgan Stanley in New York, with offices on Wall Street. Morgan Stanley
continued to grow, managing some of the biggest IPOs and bond issues of the
1940s and 1950s.
Morgan Stanley expanded its banking business to include asset management
in 1975, when it debuted asset management services for institutional clients.
The firm opened a private wealth management department two years later, in
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1977, and went public in 1986. This was the same year the Discover card was
launched by Sears, Roebuck (the product of a merger between Sears,
Roebuck and Dean Witter Reynolds).
Dean Witter Discover separated from Sears, Roebuck in 1993, and Morgan
Stanley purchased the venerable Van Kampen mutual fund family in 1996.
The following year Morgan Stanley Group Inc. and Dean Witter, Discover &
Co. merged, creating a global powerhouse and a leader in worldwide asset
management, securities and credit services.
Credit losses
The exuberance of a healthy market came to a screeching halt for many of the
big investment banks in 2007, with losses in the credit crunch dampening the
enthusiasm of those who thought the party might never end. Morgan
Stanleys third quarter 2007 earnings reflected the realities of these losses,
with profits dropping to $1.54 billion, a 17 percent versus the firms 2006
third quarter earnings. The driving factor in Morgan Stanleys losses was a
write-down of $940 million in leveraged loans but they also reported $480
million in losses on its quantitative equity funds.
There was a silver lining in the numbers: the performance of the brokerage
and asset management division. Brokerage reported profit increases of 9
percent while asset management posted an impressive increase of 62 percent.
Revenue from commissions also increased from $880 billion to $1.3 billion.
At the time the third quarter earnings were reported, Chief Financial Officer
David Sidwell said that the losses would not deter Morgan Stanley going
forward, stating that Risk is crucial to our survival.
Risk Takers
Earlier in 2007, Morgan Stanley proved that this attitude toward risk indeed
reflects the ethos of the company by appointing Brian Magnus co-head of its
private equitys European business in August. The move came at a time when
the market was highly unstable and some felt that choosing to go forward
with the fund was an unwise choice. Lazard had recently closed its private
equity business in Europe, apparently unconvinced it had a future there. But
at the time of his appointment , Magnus was confident that Morgan Stanleys
decision reflected a forward thinking philosophy that bucked expectations by
refusing to give in to the current panic of the moment. (Morgan Stanleys
private equity funds are housed under its investment management division.)
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Emerging opportunities
Like most of its competitors, Morgan Stanley has made the move to further
its investments in the burgeoning field of emerging markets to offset domestic
losses from the credit and subprime fallout. In April 2007, the firms
investment management division expanded its interests in the emerging
markets in a somewhat unique way, announcing it would be launching an
emerging markets domestic debt fund. The fund is distinctive in the fact that
its the first of its kind to invest in the sovereign debt of countries in the
currency of the issuer. As a result, this closed-end fund gives investors in the
global wealth management division a chance to diversify their portfolio in a
way they may not previously been able to. The fund, which is weighted
heavily toward Brazil and Turkey, trades on the New York Stock Exchange
under the symbol EDD.
Confidence in Asia
Morgan Stanley showed that it has no doubts about private equity in the Asian
market by announcing in October 2007 that it would launch a third AsiaPacific Fund with impressive financing of $1.5 billion. The private equity
fund is backed by banks, insurance companies, corporate pension plans, highnet-worth individuals, large institutions and sovereign wealth funds. Chin
Chou, CEO for Morgan Stanleys Asian private equity division, said in a press
release that the fund will venture into new territory for in the Pacific,
including Japan, India and Australia. This launch marked Morgan Stanleys
increasing desire to move forward from domestic problems and expand into
the world in order to capitalize on global opportunities.
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Changes afoot
In November 2007, Morgan Stanley CEO John Mack made some
management changes in the wake of the billions in losses tied to subprime
loan trading. The most notable (and surprising) departure was that of copresident Zoe Cruz, who had overseen Morgan Stanleys trading and risk
operations. Cruz was widely seen as Macks most likely successor in the
CEOs office, and earlier Mack had insisted that she would not be fired
because of the large trading loss. He changed his mind about Cruz as the
bank faced additional multibillion-dollar write-downs, the largest losses in
Morgan Stanleys history.
On December 1, 2007, Walid Chammah and James Gorman were installed as
new co-presidents of the firm. Chammah, who had been serving as global
head of investment banking and CEO of Morgan Stanleys international
operations, now oversees the institutional securities division. Gorman, who
had been chief operating officer of the global wealth management group,
oversees wealth management and asset management.
At the same time, Mack created a new office of the chairman, installing
Robert Scully as its head. Scullys task is to build relationships with key
clients, especially global sovereign investors. Michael Mitch Petrick, head
of Morgan Stanley Principal Investments, was appointed to oversee the firms
trading business and serve as co-head of institutional securities sales and
trading.
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in the closing of its mortgage lending unit, Advantage Home Loans, but will
also result in 1,000 job cuts in operations, technology, asset management and
other units in the U.S. and in England. Unfortunately, this wasnt the first
wave of layoffs due to the subprime crisis. In 2007, the firm cut
approximately 900 jobs.
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Theyre pros
The culture at Morgan is professional yet friendly, and the firm is a good
company to work for thats considered to be very prestigious. Though,
sources say it also can be extremely political at times. This may be because
theres a rigid hierarchy, and sometimes opportunities for advancement are
slim and require more than just dealing with HR. Others say to expect
everything when it comes to life at Morgan Stanley. Like many investment
banks, we go through really good periods and really bad, admits one insider.
Though, looking on the bright side, hours are fairly normal (even though
most employees arrive early and remain long after the market closes).
Benefits, too, are pretty stable. Theres a 401(k) with an employer match,
along with tuition reimbursement and medical, dental, vision and life
insurance. Flexible hours and a team/family environment are also part
of the deal.
The business dress code is fairly flexibleon most days, you can go
without a suit jacket. On Fridays, its more casual dress, but this in no way
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Becoming inclusive
Diversity within the firm seems to depend largely on the group you happen to
be in. Diversity is improving within the firm, say insiders, but theres still
a lot to be desired. The stereotypical Morgan Stanley employee is a white
male in his 40s or 50s who enjoys playing golf on the golf course, one
insider opines, and if you dont fit this demographic, it can be difficult to get
people to trust you with their money. Other respondents, however, insist that
Morgan Stanleys diversity is very good.
As for the firms future, while the banking industry in general is going
through a rough time due to the economy, Morgan Stanley mostly has a
positive outlook and is trying to resolve some of its issues with cost-cutting
measures. Plus, even though the industry has changed a lot, the firm is
constantly moving forward and is doing well in terms of earnings.
Generally, the firm is very solid and excellent at what it does, remaining
a major competitor in the financial industry.
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V A U L T
13
Fidelity Investments
PRESTIGE
RANKING
82 Devonshire Street
Boston, MA 02109
Phone: (617) 563-7000
Fax: (617) 476-6150
www.fidelity.com
KEY COMPETITORS
DEPARTMENTS
UPPERS
THE STATS
Employer Type: Private Company
Chairman & CEO: Edward C.
Johnson III
No. of Employees: 46,400
BlackRock
Charles Schwab
The Vanguard Group
DOWNERS
Culture can be corporatea lot of
HR rules around promotions and
raises
EMPLOYMENT CONTACT
See the careers section of
www.fidelity.com
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THE SCOOP
A family affair
Fidelity is rooted in a deep family history that stretches back from its
founding in 1930 to today. In 1943, Edward Johnson II became the president
and director of the Fidelity Fund back in 1943 and ever since the Johnsons
have kept the business a family affair. In 1957, Johnsons son Edward Jr.
(Ned) started working for his dad as a research assistant. Through the
years, he quietly climbed the ranks to become president of FMR in 1972. He
was named chairman and CEO of the company in 1977.
Today there is much speculation that the next chairman and CEO of Fidelity will
also be a Johnson family member, although not one named Edward. Abigail
Johnson, the daughter of Edward Johnson III, has performed impressively
during her time at the company since her first job as an analyst in 1988. Abigail,
at 45 years old, is currently the 16th-richest American as a result of her familys
fortunes in the financial business. In 2001, Fidelity named her president of the
mutual fund division, and in September 2007, her role was again expanded to
lead a new division of Fidelity called personal and workplace investing, which
will combine retirement services and personal investing units.
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Whether or not Abigail succeeds her father as chairman and CEO, the
Johnsons will always have a strong hold over the company. Both Abigail and
Ned Johnson hold at least 10 percent of the voting shares of FMR, and the
family as a whole controls about 49 percent of the total voting shares. FMR
employees hold the remaining 51 percent.
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The program, called Wealth Central, streamlines multiple systems that the
company currently uses into one central structure, which advisers can use for
portfolio management, customer relationship management, financial
planning and custodial-transaction applications. In a press release, John
Callahan, president of Fidelity Institutional Wealth Services, said that the $50
buy was the single largest investment we have ever made in the independentadviser business. Integrating all its technology into one system means that
Fidelity will have to be extra cautious against glitches like Linsco in
September 2007, when a technical error stopped advisors from being to
access accounts for three straight days.
Limited liability
Rising costs lately have been a factor in Fidelitys market troubles. In 2006,
its revenue was 11 percent lower than the previous year and the companys
management has blamed that on higher operating expenses. In November
2007, it was announced that Fidelity would be laying off 200 employees in a
move thought to be a reflection of President Rodger Lawsons comments that
it would have to cut costs to win business against some very tough rivals in
an unforgiving marketplace.
In another move to cut costs, Fidelity recently filed with the SEC to change
its companys status to a limited liability company, or an LLC. Analysts
speculated that the change was an attempt to curb taxes by passing on
earnings to owners, who then pay individual rates and possibly will be able
to avoid paying federal taxes. Company spokesperson Anne Crowley denied
that the switch was for taxes purposes, calling it a purely technical move.
But some think that Fidelity may be preparing in advance to go public, and
the adjusted status is a move to switch its tax status before it does so in order
to reap similar benefits to hedge fund and private equity companies like
Blackstone, which dodged corporate taxes when it went public in June 2007.
Settling up
In March 2008, Fidelity agreed to pay $8 million to settle a three-year-old
SEC investigation into the acceptance of gifts, gratuities and business
entertainment. The investigation was focused on Fidelity and 13 of its
employees. According to Fidelity, None of the individuals cited by the SEC
remain on the trading desk and most of them are no longer with the firm.
The firm also noted in a press release that since the investigation began, in
2005, it has taken a number of remedial actions to back up its commitment
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that these types of activities shall not recur, including disciplining the
individuals involved.
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Another insider who admits that people are friendly, for the most part, and
everyones on a first name basis, also says, I dont believe the managers do
enough to help employees advance within the company. As for treatment by
managers, the contact says, It could be better, but its not bad. But another
insider disagrees, stressing the great mentors and management at Fidelity.
The firms diversity with respect to women and minorities also receive high
marks from insiders. I find the employees to be very diverse, admits one
contact. Fidelity also offers equitable treatment for gays and lesbian
employees, providing benefits for domestic partners.
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V A U L T
14
PRESTIGE
RANKING
30 Rockefeller Plaza
58th Floor
New York, NY 10112-6300
Phone: (212) 632-6000
www.lazardnet.com
DEPARTMENTS
Alternative Investments
Capital Advisory
Institutional & Third Party Sales &
Marketing
Investment Management
Legal & Compliance
Operations & Finance
KEY COMPETITORS
Fidelity
Goldman Sachs
Legg Mason
Merrill Lynch
Morgan Stanley
Neuberger Berman
UBS
EMPLOYMENT CONTACT
See careers at www.lazard.com
THE STATS
Employer Type: Indirect subsidiary
of Lazard Ltd.
Chairman & CEO, Lazard: Bruce
Wasserstein
CEO, Lazard Asset Management:
Ashish Bhutani
Revenue (Lazard Asset Management):
$717.3 million (FYE 12/07)
No. of Employees: 735 (approx.)
THE BUZZ
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Global advisors
Lazard Asset Management, an indirect subsidiary of the public financial
services giant Lazard Ltd., offers equity, fixed income and alternative
investment services to institutional, financial intermediary and private clients
around the world. Lazards asset management group is subdivided into
Lazard Asset Management (LAM), which encompasses most of its assets, and
the Lazard Freres Gestion and Fonds Partenaires-Gestion, based solely out of
Paris. As of the end of 2007, total assets under management for both
subdivisions were $141.4 billion (for institutions as well as individual
clients). LAM has approximately 735 employees, including 221 investment
professionals and 91 research analysts, and operates out of nine countries.
Lazard Asset Management is headquartered in New York and has additional
U.S. offices in Boston, Chicago, Minneapolis, San Francisco and San Diego.
For over 30 years, LAM has advised many institutions, including
endowments, foundations, corporations, Taft-Hartley plans and public funds.
The private client group is a distinct part of Lazard Asset Management,
working with high-net-worth clients with assets ranging from $5 million to
more than of $200 million. LAM might be a clients sole investment advisor,
responsible for all of the clients assets, or it might manage a portion of the
clients assets. LAMs financial institutions group focuses on the needs of
financial professionals. The group focuses on partnering with intermediaries
and equipping them with investment solutions, marketing materials and
timely information, assisting their sales efforts and fee-based consulting
business. LAMs intermediaries include brokers, financial planners and
insurance representatives.
LAM spreads its assets over a number of different investments, but the
majority of its funds are in equities. As of December 31, 2007, 88 percent of
Lazards assets under management were invested in equities, 9 percent in
fixed income, and 3 percent in alternative investments. Its assets are heavily
weighted towards the global/international markets.
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to San Francisco the following year, expanding into banking and foreign
exchange services. In 1852, the firm opened offices in Paris, and in 1870, it
broke ground in London. The firms U.S. business moved from San
Francisco to New York in 1880. The firm became a publicly listed company
on the New York Stock Exchange on May 10, 2005.
From its beginning, Lazard had always counted asset management as an
essential part of its business, but it wasnt until May 1970 that Lazard Asset
Management, encompassing Lazard Ltd.s U.S. investment management
services, was formally established and registered with the SEC as an
investment adviser; previously, in 1953, Lazard Ltds U.K. investment
management activities had similarly been incorporated. The U.S. and U.K.
investment management firms united in 1997, creating a single entity. By this
time, offices had been already opened in Japan and Australia. Since then, the
firm has continued to expand its global reach, opening additional offices in
Germany, Italy and Korea.
Parental expansion
During 2007, Lazard Ltd. entered the second year of its five-year strategic
plan by building a platform for future growth, announcing investments,
strategic alliances and acquisitions. To that end, the firm announced plans to
acquire 50 percent of MBA Banco de Inversiones, extending its reach across
Central and South America. It also signed a cooperation agreement with
Raiffeisen Investment, the M&A advisory business of Austrias largest
banking group, strengthening its footprint across Russia, Central and Eastern
Europe. In July 2007, Lazard acquired Carnegie, Wylie & Company, an
Australian independent financial advisory firm. The financial details of the
deal were undisclosed, but the top brass at Lazard were pleased at the
expansion. At the time, Lazard President Charles Ward told Reuters, Weve
been in Australia, but we havent been a huge factor. This is an opportunity
to be a lot bigger in one of the major markets for M&A activity. Operating
under the moniker Lazard Carnegie Wylie, the firm now has offices in
Melbourne, Sydney and Brisbane.
Lazard also added investment bank Goldsmith Agio Helms to its empire in
order to expand its reach for U.S. midsized private companies. The August
2007 acquisition gave Lazard access to U.S. markets such as Minneapolis,
Los Angeles and Chicago, and allowed the company to boost its domestic
financial advisory business. Lazard also opened two new offices in Boston
in September 2007 as well as one in Zurich, which will expand the European
arm of the financial advisory business.
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Business is booming
Times are good for Lazard Ltd. proving that even in a bear market, theres
still money to be made. It was largely shielded from the losses in the
subprime market in 2007 due to its prudent and cautious strategy of steering
clear of mortgage-backed securities and leveraged buyouts. Overall, its yearend numbers were impressive, with an annual net income of $322.7 million,
reflecting a 37 percent increase over previous years numbers. Operating
revenue also shot up to $2.01 billion, an increase of 28 percent from the year
before. This boost was largely buoyed by the success of the financial
advisory division, which soared to a record $1.24 billion in revenue for the
year.
LAM also had a record year and fourth quarter, booking best-ever operating
revenue of $717.3 million for the year and $231.2 million for the quarter,
representing a 31 percent and 32 percent increase, respectively. Management
fees for both periods also set records. LAM recorded $595.7 million in
management fees for the year and $165.4 million in fees for the 2007 fourth
quarter.
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GETTING HIRED
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V A U L T
15 UBS
PRESTIGE
RANKING
UPPERS
Management is supportive and
accessible
The ability to be involved in major
projects
Exclusive access to cultural events
in NYC
SUBSIDIARIES*
Corporate Center
Global Asset Management
Global Wealth Management &
Business Banking
Investment Bank
*UBS AG
DOWNERS
THE STATS
EMPLOYMENT CONTACT
THE BUZZ
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PaineWebber was the fourth-largest private client brokerage firm in the U.S.
UBS Financial Services offers a full range of proprietary and nonproprietary
offerings, giving clients access to a wide array of investments. Through
corporate employee financial services, UBS Financial Services provides
stock option and other related services to U.S. corporations and their
executives. It also functions as a link to brokerage, investment banking and
asset management services offered by UBSs other business units.
Alpine roots
The international banking behemoth known as UBS AG got its start in 1872
with the creation of the Basel Bank Corporation, which then renamed to
Swiss Bank Corporation (SBC) in 1897. SBC expanded across Europe and
spent the 1990s buying up other banks in order to grow its business. It
purchased the securities business of S.G. Warburg Group, a London-based
bank. The new entity, SBC Warburg, moved into the American banking
business with the acquisition of Dillon, Read & Co., a New York bank. In
1998, SBC merged with Union Bank of Switzerland (UBS), a Swiss bank that
was created by the 1912 merger of Toggenburger Bank and Bank in
Winterthur. The SBC/UBS merged bank was named UBS AG.
Dumping Dillon
Nearly two years after the creation of Dillon Read Capital Management
(DRCM), UBS announced plans to close the poorly performing alternative
investment management business after 2007s first quarter net profit proved
disappointing. The alternative investment management business, whose
failure analysts attributed to the declining U.S. mortgage market, suffered
losses of $124 million and took blame for a 7 percent net-income loss in the
companys first quarter of 2007. UBSs investment banking division took
over all the portfolios from Dillon Read, which one analyst in an interview
with Bloomberg called an embarrassment.
The area that gave us some trouble was the subprime space, John Costas,
who headed the fund, told Bloomberg in May 2007. Some of the 250 DRCM
employees were sent packing, but a number of them were offered jobs in
UBSs investment banking division, overseeing the former DRCM accounts.
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A hopeful sign
While most divisions performed poorly during the third quarter, wealth
management reported record profits. Net profit for global wealth
management was an impressive $2 billion for the third quarter, and U.S.
wealth management contributed $155 million to that total, an increase of
more than 300 percent versus the same period the year before.
Vive la France
UBS announced plans in October 2007 to acquire Caisse Centrale de
Reescompte Group, a French wealth and asset manager with 190 employees
and 17 billion of invested assets. The deal set UBS back 387 million when
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it closed in the first quarter of 2008. In a news release, John Fraser, chairman
and CEO of UBS Global Asset Management, said the combined entity
strengthened the presence of UBS in France and underlines its strong
commitment to the European market.
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Over in India, however, UBS did not fare as well. Having been given an inprinciple approval in 2007, the Reserve Bank of India delayed approval of a
banking license for UBS, pending an investigation by Indias Enforcement
Directorate. Earlier, in December 2007, UBS had attempted to buy Standard
Chartereds mutual funds business in India, but that deal fell apart when UBS
failed to obtain necessary regulatory approvals. Indias Enforcement
Directorate advised the Indian government to delay permissions for UBS
while it investigated an alleged money laundering case. In late February
2008, though, the Reserve Bank of India announced that the application had
been granted.
Heart palpitations
On February 14, 2008, UBS had an anti-Valentine for its shareholders: the
bank confirmed its pre-announced losses for the fourth quarter and full year
2007, and they were as bad as expected. UBS AG took a fourth quarter loss
of CHF 12.541 billion and a full-year loss of CHF 4.384 billion. This was the
largest fourth quarter loss by any bank. It was also the first annual net loss in
the banks history.
In its earnings announcement, UBS shed more light on its financial situation.
As of December 31, 2007, UBS had lowered its subprime exposure to
approximately $27.6 billion, but officials admitted the firm still held $26.6
billion of exposure to Alt A mortgages. Though Alt A mortgages didnt grab
headlines the way subprimes did, they are still high risk and potentially
costly. UBS also delved into the details of its approximately CHF 18.4 billion
write-downs for 2007. As it turned out, only $10.8 billion was linked to
subprime investments. At least $2 billion was attributed to Alt A mortgages,
and just under $1 million involved credit protection for investing in
collateralized debt obligations (CDOs).
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Big setbacks
In May 2008, UBS announced two big blows: a first quarter loss of $10.9
billion and another 5,500 job cuts. UBS said the most current wave of
layoffs, which came on the heels of 1,500 cuts it announced in 2007, will
involve all levels within the company, and mostly affect its U.S. and U.K.
business units. UBS also noted will be shuttering the U.S. arm of its
municipal bond business and selling $15 billion in distressed mortgage assets
to investment management company BlackRock. However, CEO Marcel
Rohner said the firm will also continue to rebuild its investment banking
business and even add staff to some of its units throughout 2008.
GETTING HIRED
A different take
UBS Financial Services seems to have a very different hiring process than
most other firms in the sense that it looks for a wide range of personalities,
backgrounds and education. Insiders say UBS is selective, as it hires less
than 1 percent of the applicants who submit resumes (although sources also
note that the selectivity of the firm varies depending on the position).
Candidates have a wide variety of positions to choose from on the career
candidates link on UBSs web site. Jobs are available within products and
services, market strategy and development, client advisory, human resources
and education, information technology, legal, compliance, CFO and
operations. And those from divergent educational backgrounds can take heart
that theyll all have a shot. Although there are initial GPA requirements
(you have to keep above a 3.0 to get hired at the firm), it doesnt seem like
which school you graduated from is part of the criteria to get hired.
Going global
The firm engages in specifically targeted recruiting when it comes to its UBS
Global Asset Management division. To get into the group, insiders
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Expect it all
A series of interviews involving direct questions such as how long do you
see yourself in this position? might not be part of the standard industry
experience, but it just goes to show that anything goes during the interview
process at UBS. At the very least, you can expect several rounds of
interviews. First rounds generally weed out anyone who is not a fit for the
firm, notes one source. Another describes a phone interview followed by an
in-office interview Super Day where several candidates and I went to dinner
with our hosts, and the next morning we each had three interviews. During
the process, expect the occasional oddity to be thrown in, too. One candidate
explains that questions ranged from talking about my background to
problem-solving inquiries such as How many hair salons are in the U.S.?
Dont sweat the experience quite yet, though. Interviews arent always nervewrackingly intense. One insider says, Interviews were conversational, and
behavioral- and character-based. She adds that there were no trick
questions. Another contact even goes so far as to term the interview as a
pleasant experience.
Get acquainted
Summer internships with the firm generally receive favorable reviews.
Although internships are a good opportunity to get acclimated with the
firms culture, some insiders note that positions vary, and the value of the
experience can be dependent on which department and manager you are
placed with. Keep your nose to the grindstone and you may just be rewarded
in the long run. If you get a good review in the internship, you will most
likely get an offer, reports one contact. Just be sure not to count your job
offers before they hatch. One respondent notes that it was easier to get hired
after completing the internship, but I wouldnt say much easier. We still had
to interview and have a certain GPA.
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Team effort
UBS cultivates a great corporate culture full of very diverse people. Its
also team-oriented, logical and encouraging, sources say. But there is
still work to be done, as some people in the firm are much more political than
entrepreneurial, and are worrying more about their own careers than
achieving the best result. Some, though, call the firm formal, very
professional and rigid, and note that there is always a lot of work and not
enough people to do it. And while its laid-back at times, there are a lot
of different workplace cultures since it is so big. Generally, though, all
employees are genuinely glad to meet you and interested in the development
of every employee. And collaboration is taken to heartpeople are
generally very willing to help others out, and it is a friendly environment.
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Cant complain
While benefits vary substantially from location to location, health care,
401(k) and substantial gym discounts are all part of the standard package.
And a dinner allowance, late-night car service and child care are all common
perks as well. There are even a few not-so-common perks. The firm offers
fantastic cultural benefits like admission into virtually any museum for
free and reduced-price concert tickets.
When it comes to salary, however, sources seem to agree that more
competitive compensation is needed. One insider says, I think they should
show more appreciation when people deliver their projects in and do a great
job, adding that the firm should show this recognition with money and
more praise. Other contacts note that compensation should be more aligned
with top firms in the industry, and that the firm should pay to attract and
retain talent. Another simply says that compensation needs to be revisited
to ensure that higher performers are being paid accordingly.
Trained up
The firm does an excellent job of training, respondents say. And the
training is spread out across different sectors. They offer a decent amount
of training in various expertise areas, notes one insider. The firms graduate
training program, for example, provides over a month of training and
development at the beginning, focusing on soft skills such as leadership and
communications. Generally, managers are expected to develop their
people. Plus, the firm will also pay for certain advanced certifications and
degrees. In addition, employees are actively encouraged to take place in
on-site training sessions, and theres more-than-adequate training for
licensing exams. Still, others add that training is way longer than it needs
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to be, sometimes too long and not useful and the facilitators arent that
greatyou feel like youre being treated like youre in second grade.
Continuing to diversify
When it comes to diversity in the workplace, the firm receives fairly high
praise. I have no problem being a woman at my company, says one
respondent, who adds, We have a good amount of men in the womens
organization. Another notes that we have many women in senior
management positions and an All Bar None network for networking in the
firm. The firm tries to keep the balance throughout the ranks, too. There
is a fairly equal portion of men to women in the workplace, even as you reach
higher in the organization. Still, one insider says the firm has a ways to go
in terms of diversity with women, adding that random inappropriate
comments are made to women. Another contact agrees with the assessment,
saying, Its not one big sexual harassment incident that is causing problems,
its the multitude of small comments about my female colleagues physical
appearances and the issues of having to work with females. Another adds,
And having co-workers say things like but I dont mean you really doesnt
help.
As for ethnic diversity within the firm, there are there are a lot of diversity
initiatives, and UBS hosts a number of diversity-focused events. Insiders
say that UBS is committed to diversity and able to define diversity as
more than skin colorit also defines it as diversity of thought. The firm
actively recruits minorities and arranges mentorships, and this openmindedness extends to the treatment of gays and lesbians. One insider notes
that they do not judge on this matter whatsoever. Another adds that there
are policies in place giving health care to any domestic partner, in addition to
well-publicized gay and lesbian meetings and networking events.
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V A U L T
16
PRESTIGE
RANKING
11 Madison Avenue
New York, NY 10010
Phone: (212) 325-2000
Fax: (212) 538-3395
www.credit-suisse.com/us/en
KEY COMPETITORS
THE STATS
UPPERS
Access to world-class
professionals
Lateral mobility
Global perspective with local
presence
Citi
Deutsche Bank
UBS
DOWNERS
Not enough technology
Need to remove barriers between
departments
Some resistance to change
EMPLOYMENT CONTACT
See the careers section of
www.credit-suisse.com/careers
THE BUZZ
Extremely competitive
Lack of focus
Solid products
Conceited
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In 1978, First Boston and Credit Suisse joined hands for the first time when
First Boston stepped in as Credit Suisses London-based investment banking
partner after the Swiss banks former partner, White Weld & Co. was bought
by Merrill Lynch.
Ten years later, Credit Suisse acquired a 44 percent stake in First Boston and
the U.S. companys name was changed to Credit Suisse First Boston while
the parent company renamed itself Credit Suisse Holdings. In 1990, Credit
Suisse acquired a controlling stake in First Boston after it failed to redeem the
money it had lent for the leveraged buyout of the Ohio Mattress Company,
which makes Sealy brand mattresses. In 1997, Credit Suisse took full
possession of First Boston, after which Credit Suisse Holdings became the
Credit Suisse Group and First Boston was rebranded as Credit Suisse First
Boston.
International efforts
Amid the rebranding and business deals, Credit Suisse has been busy making
plans as one, integrated global bank. With the completion of its restructuring
efforts in early 2006, the asset management business said it aims to grow its
capabilities in traditional and alternative asset management internationally.
In its traditional asset management business, Credit Suisse is looking to
expand its European distribution, increase its global product offerings,
improve the profitability of its U.S. franchise and to streamline its Asian
presence. In terms of its alternative investments offerings, Credit Suisse is
building on its diverse funds, while narrowing its focus on international
emerging markets, especially in Asia, that display strong secular growth.
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Worldwide funds
Credit Suisse has been busy lately expanding into emerging markets. It
launched several indexes, demonstrating its interest in pursuing opportunities
in these markets. The Emerging Market Corporate Bond index, which was
launched in October 2007, focuses on Latin America, Eastern Europe and
Asia, and joins the banks Latin American Corporate Index and Asian Bond
Index as indicators of the companys growing activity in less developed
countries.
In July 2007, Credit Suisse was granted a merchant banking license that
enables it to do business in India. Like so many of their competitors, Credit
Suisse sees India as a reservoir of untapped opportunity that is likely to yield
high financial gains. The license will give Credit Suisse key access for
providing onshore securities underwriting and corporate financial services.
The banking company is more optimistic on India than most. For 2007, it
forecasted that the Indian economy would grow by 10 percent, which was
slightly higher than the market consensus of 8 percent. The Credit Suisse
team in India is headed by V. Anantharaman who has been working for the
company since October 2006.
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quarter revenue decline of 13 percent (down to $8.5 billion). Net income for
2007 came in at $7.7 billion, down 25 percent from 2006. Its investment
management division also reported a $224.2 million pre-tax loss for the
fourth quarter (which the bank blamed on the $702.5 million in securities
write-downs it had taken in 2007).
However, analysts admitted that Credit Suisse was one of the few banks to
have escaped severe subprime damages in 2007, and in many ways, its
balance sheet reflected that. Net revenue for 2007 for the firm increased to 6
percent to $37.2 billion. According to Credit Suisses investment bank head
Paul Calello, part of its escape from the jaws of financial disaster may have
had to do with the fact that it found several eager investors to undertake some
of its loans.
But that escape didnt last long, as Credit Suisse reported a net loss of $2.1
billion for the first quarter of 2008, a 23 percent decrease from the previous
years first quarter. Net revenue also looked grim, coming in at $2.9 billion,
a 72 percent decline. Despite the fact that it wrote down $5.3 billion in bad
investments, the gloomy numbers still surprised some analysts, many of
whom had placed their predictions about three times higher. The firms
investment banking business had a particularly tough quarter, reporting a pretax loss of $3.4 billion. Prior to these results, the firm seemed to have largely
avoided the subprime crisis plaguing its competitors, but this quarter brought
in extreme conditions, said Credit Suisse CEO Brady Dougan in a March
2008 statement.
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corporate culture that allows for significant professional growth and a sense
of accomplishment.
Since 2006, Credit Suisse has operated under a One Bank system thats
designed to bring different divisions closer together. Its a good idea, sources
say, and has led to better cross-divisional relationships. But some work
still needs to be done in terms of creating a unified firmwide culture. On an
individual office level, most people are open and willing to work with you.
People are accessible to answer questions and give some perspective on the
business, agrees another source, but notes that the New York office is quite
competitive, as many of the top producers are there.
One of the biggest complaints about life at Credit Suisse is the fact that staff
are always asked to do more with less. Some say theres a lack of new
technology and resources that could help make the work more automated
and more efficient. Another source says there is a corporate tendency to
stick with the tried-and-true, explaining, You have to be very aggressive
when going after clients that are nontraditional or outside the scope of what
people are used to.
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For the most part, Credit Suisse employees are simply encouraged to do what
it takes to get the job done. You put in the hours it takes to make the calls,
send the letters and get the clients in the door, says one manager. While
you spend a lot of time in the office for calls and prep, you also have to get
out of the office to network and bring people in. That can mean the
occasional need to work late nights and under deadlines.
Credit Suisses compensation is nothing to get excited about, insiders warn.
Overall, the firm gets average marks for salaries, with some calling them
low and others rating them slightly above average.
Look sharp
According to the firm, Diversity is critical to Credit Suisses success in the global
marketplace. It breeds innovation. Respondents point to the banks industry
recognition for its efforts to diversify; these include acknowledgements from
Working Mother magazine, the Stonewall Workplace Equality Index and Toigo, a
U.S.-based organization that provides mentoring and support for ethnic minorities
enrolled in business schools.
When it comes to dress, sources advise new hires to suit up. The New York
office is business formal every day, an insider says. The regional offices may
be different. (Not Boston, though, says a Massachusetts-based sourcethat
office is also formal always.) Fridays can be somewhat less formal, but still
a notch above casual. As far as the offices themselves, insiders say theyre
fine, with all the amenities you would expect. Sources in some locations
complain theres not enough office space to go around, but one New Yorker
reports being very comfortable in our headquarters on Madison Avenue.
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V A U L T
17
CalPERS
PRESTIGE
RANKING
KEY COMPETITORS
DEPARTMENTS
UPPER
Fidelity
Principal Financial
TIAA-CREF
DOWNER
Low pay
EMPLOYMENT CONTACT
See the careers section of
www.calpers.ca.gov
THE STATS
Employer Type: Government-owned
President: Rob Feckner
Revenue: $3.1 billion (FYE 12/06)
No. of Employees: 2,154
THE BUZZ
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THE SCOOP
Relaxing retirement
For more than 75 years, CalPERS has been allowing California retirees to
kick back and soak up the sun in peace, confident that their funds are in the
hands of some of the shrewdest money managers in the country. As the
largest public pension systems in the U.S., CalPERS (short for California
Public Employees Retirement System) manages pension and health benefits
for approximately 1.5 million California public employees, retirees and their
families. These members are split nearly evenly between state employees (31
percent), school employees (37 percent) and local public agency employees
(32 percent).
CalPERS has more than its fair share of cash to invest, with over $250 billion
in funds, and since 1985, CalPERSs total capital increased more than tenfold.
In 2007, CalPERS generated $40.8 billion in its investment portfolio, as
assets continued to grow by leaps and bounds. Today, its funds are invested
mostly in equities (about $161 billion), and as of September 2007, they also
consisted of $20 billion in real estate and $62.9 billion in fixed income
securities. The stream of incoming funds also remains constant. In 2007, the
firm added $3.3 billion in employee contributions and $6.6 billion in
employer contributions for the year.
California dreamin
CalPERS was founded in 1932 under California state law to provide
retirement benefits for state employees. By 1939, CalPERSs pensioners
grew to include school employees. In 1962, CalPERS also began offering
health benefits for state employees and for public agency and school
employees since 1967. Then, in 1995, the pension system also began offering
long-term care insurance on a not-for-profit basis. By 2001, CalPERS had
grown so big it began developing a new 550,000-square-foot, $250 million
headquarters expansion project in Sacramento.
Corporate watchdogs
In recent years, CalPERS has developed a nationwide reputation for
shareholder activism in the name of better corporate governance, especially
bloated executive compensation packages at companies in which it has
invested. It has sued big-hitters like the New York Stock Exchange, which
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Proxy battles
One essential tenet of CalPERS philosophy is that representation among the
shareholders is essential to getting their financial goals accomplished. Some
may call them bulldogs, but CalPERS simply believes that proxy battles are
a necessary way to achieve shareholder democracy, something that wouldnt
naturally occur in a system notorious for rubber stamping the corporate
managements nominees. Access to the proxy is so important to the company
that in May 2007, it sent representatives to testify at a series of SEC
roundtables to address the issue. CalPERS executives also continue to put the
pressure on the SEC with repeated visits to all five of the SEC commissioners
and SEC Chairman Christopher Cox in order to advance its agenda.
An example of CalPERSs battle for shareholder democracy in action is its
latest tussle with United Health Care. On May 29, 2007, it submitted a
shareholder proposal for proxy access and received 43 percent of shareholder
vote in favor of the nonbinding initiative, a powerful turnout for a first vote.
United Health Care opposed the measure, claiming that proxy access would
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Managers can move you around at their discretion or make your life
miserable so that you will leave.
But because CalPERS is a state agency, youll at least know what to expect.
Each classification has a specific pay range that the firm keeps as public
information on its web site, although they start you at the bottom of the
range unless you had a higher pay scale somewhere else. Also, first- and
second-level investment officers do not receive bonuses, although there are
negotiations under way to give third-level investment officers a 5 percent
bonus, which will likely be subject to manager reviews.
Perks rate above average (as mentioned above, the full list of benefits is
available on the firms web site). All business expenses are reimbursed,
says one pleased respondents, who adds, with respect to CalPERS ongoing
educational offerings, I have never had a training opportunity denied. The
contact adds, The biggest perk, though, is this is a great place to work.
Another insider says, The best part about working at CalPERS is job
security. Hours also get high marks, most likely a result of the firms
government status. Sources report logging in no more than 50 hours per
week, with few weekend visits.
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AllianceBernstein
PRESTIGE
RANKING
DEPARTMENTS
Individual Investment Management
Institutional Investment
Management
Private Client Services
Retail
THE STATS
Employer Type: Public Company
Ticker Symbol: AB (NYSE)
Chairman & CEO: Lewis A. Sanders
Revenue: $4.53 billion (FYE 12/07)
Net Income: $379.9 million
No. of Employees: 5,580
No. of Offices: Locations in 47
cities in 24 countries
KEY COMPETITORS
Fidelity
Franklin Resources
ING
Merrill Lynch
UBS
UPPERS
Good pay and perks
DOWNERS
Uneven management
EMPLOYMENT CONTACT
See careers section of
www.alliancebernstein.com
THE BUZZ
Rising Star
Bland
Strong Research
Macho
Great Reputation
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Most Trustworthy
Audit Integrity, an independent Los Angeles firm that researches corporate
governance best practices, ranked AllianceBernstein first in its ranking of 100
Most Trustworthy U.S. Companies. The list, released in March 2007, ranked
companies that showed the highest degree of accounting transparency and
fair dealing to stake holders during 2006.
The distinction marks a turnaround for the company, which remained under
scrutiny following accounting scandals from 2002 to 2005. In 2002, Floridas
State Board of Administration sued AllianceBernstein for its responsibility in
a $334 million loss suffered by Floridas Alliance-managed pension fund,
alleging the firm had negligently invested in Enron. In April 2005, the jury
found the company not liable for purchasing Enron stock for SBAs account
and not liable for failing to properly apply its investment process. The jury
found the SBA liable to AllianceBernstein for $1.1 million in unpaid
investment management fees.
The following year, regulators charged AllianceBernstein with making
clandestine deals with select investors, allowing them to pursue short-term
arbitrage plays in certain funds in exchange for their placement of long-term
investments in Alliance mutual funds and hedge funds. In December 2003,
AllianceBernstein agreed to a $250 million settlement with regulators over
the charges and agreed to slash its management fees by 20 percent over the
next five years, a move projected to save investors $350 million.
Thinking globally
Sanders said in May 2007 he believes global opportunity exceeds U.S.
opportunities both in terms of clients and products and that the firm would
move aggressively to take advantage of global opportunities. In May, more
than half of Alliance Bernsteins assets under management were in global or
international services, and 37 percent of its clients reside outside U.S.
borders. Almost half of the firms institutional clients exist outside of the
U.S. The companys most U.S.-centric business is private clients, where less
than 4 percent of assets under management are for non U.S. clients, although
the firm is looking to globalize that business as well, Sanders said.
New Faces
In May 2007, Steven Pisarkiewicz rejoined AllianceBernstein as the
companys national managing director in its global family office group.
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Expect the interview process to be quite grueling. One insider, who went
through six interviews, says that during her initial meeting with an HR officer,
she was asked generic interview questions, such as What can you offer?
What are your strengths and weaknesses? and How much do you expect to
receive as salary? The second interview involved meeting with the team
leader and specifically expressing my interest in this position and what my
skills are and how they relate to the job. And round three was with the
manager of the team, which consisted of very specific questions regarding
trading platforms and what my day-to-day duties would be. The fourth
interview involved meeting with my potential boss boss, the VP of the
department. This round was meant to intimidate me and see how I can
respond to questions from a higher authority. Rounds five and six were with
other AVPs who just wanted a second and third opinion on me. Fortunately,
this story ends happilyafter six interviews, I was offered the job, reports the
contact.
Your process has the possibility of being significantly shorter, however. One
insider says he interviewed twice with two people each time before
receiving an offer.
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into my boss office for arriving at 9:04 a.m. two days in a row. But it may
depend on the unit you end up in, as this management practice is not
standard for the entire company, the insider continues. Upon my arrival
with the company, I had the fortunate experience of working with a delightful
young boss who was a real pleasure to work for, easy to deal with and
yielded great results.
But to get those great results, AllianceBernstein believes smart dress is
important. The dress code is formal and very corporate. And in the
main office on Sixth Avenue in New York, business formal attire is strictly
enforced and a tie must be worn every day except for the months of July and
August. But the company is looking for talent and due to that, there is a
lot of room for advancement at AllianceBernstein. Plus, talent is
recognized and valued, and if you can bring something to the table at AB,
it wont be disregarded.
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19
PRESTIGE
RANKING
UPPERS
DIVISIONS
DOWNERS
EMPLOYMENT CONTACT
www.vanguardcareers.com
THE STATS
Employer Type: Private Company
Chairman & CEO: John J. Brennan
No. of Employees: 12,000 (US)
No. of Offices: 11
THE BUZZ
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THE SCOOP
Fast track
More than 30 years old, The Vanguard Group is one of the biggest mutual
fund managers in the U.S. Ranked second only to Fidelity, Vanguard had
nearly $1.3 trillion in assets as of April 2008quite a leap from the $1.8
billion it had at its inception in 1975. Its also grown from 350,000 to more
than 19 million shareholder accounts, and from 40 employees to 12,000 in the
U.S. alone. Headquartered in the green fields of Valley Forge, Pa., Vanguard
also has offices in Scottsdale, Charlotte, Melbourne, Sydney, Amsterdam,
Brussels, Paris, Singapore, Seoul and Tokyo.
Vanguard offers brokerage services, variable and fixed annuities, financial
planning, asset management and trust services to individuals and institutional
investors around the world. Vanguard boasts 150 domestic funds (including
variable annuity portfolios) and 50 additional funds in international markets.
Its Vanguard 500 Index Fund, worth $128 billion, is consistently ranked
among the best in the country and the company is often ahead of the pack in
its use of technology and e-business strategies.
In 2007 alone, BusinessWeek, Consumer Reports, Kiplingers Personal
Finance, Money and Smart Money all hailed Vanguard as having some of the
best funds in the business. Perhaps most impressive, Forbes included 25
almost twice the number of the nearest competitorof Vanguards mutual
funds on its annual list of Best Buys.
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Vanguard U.
In addition to tuition reimbursement and professional licensing assistance,
Vanguard offers its crew members the chance to learn at Vanguard University, its
award-winning, in-house training organization. The curriculum includes programs
focused on investment management, information technology, client relationship
management and leadership development. Each Vanguard office also hosts a
Learning Center, where crew members can check out books, business publications
and audio and video tapes from a library. The Learning Centers conduct training
sessions for Vanguards many online business applications.
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PRESTIGE
RANKING
DEPARTMENTS
Commercial Banking
Consumer Finance
Corporate Investment Banking &
Markets
Personal Financial Services
Private Banking
THE STATS
Employer Type: Subsidiary of HSBC
Holdings
Chairman: Stephen K. Green
CEO: Brendan McDonagh
No. of Employees: 53,000
No. of Offices: 450+ branches
KEY COMPETITORS
Bank of America
Citi
JPMorgan
UPPERS
Stable company with strong financial
reserves
Reasonable hours
DOWNERS
Staid, conservative
Some bureaucracy
EMPLOYMENT CONTACT
See careers section of
www.hsbcusa.com
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doing so. That revelation led to the development of HSBC Premier, which
the company deems the worlds first truly global personal banking service
for the worlds 200 million mass affluent and internationally mobile
consumers. Nearly half of those surveyed cited setting up my finances as
a challenge of living abroad; HSBC Premier will be available in 35 foreign
countries and territories.
Go USA
HSBC North Americas biggest subsidiary is HSBC USA, which operates
HSBC Bank USA. The unit, which is one of the 10 largest bank holding
companies in the U.S. by assets, has more than 450 bank branches in the
country; about 400 of those are in New York, but HSBC is expanding its
branches in states like New Jersey, Florida and California. Branches also
exist in Delaware, Oregon, Pennsylvania, Washington state and Washington,
D.C.
In early 2007, The New York Times reported that HSBCs business in the U.S.
represented one-third of the companys profits, but also two-thirds of its bad
loans.
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expand across new countries and research sites and increase their access to
more people.
Back in black
Despite enduring what its chairman Stephen Green called extraordinary
strain, including its share of subprime mortgage issues, HSBC managed to
come out in the black for 2007. In the face of $2.1 billion in write-downs
related to subprime credit exposure and other factors, the bank still ended up
with a $19.1 billion profit for the year, up from $15.8 billion in 2006.
Revenue was up as well, soaring 20 percent from the previous year to $79
billion. The firms asset management unit had a good year, booking total
operating income of $1.34 billion, up from $1.07 billion in 2006. And the
banks private banking groupwhich encompasses its investment banking,
corporate banking and insurance servicesbrought in record results,
including a $1.5 billion profit, up 6.2 percent from 2006.
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frequently rotate between different jobs inside HSBC, and the company
promotes this behavior and makes it easy for you to do that.
Q&A
Once youve been invited in, expect a generally informal process with at
least two rounds of interviews. One insider says the first round consisted of
potential team members and five HR people in four hours. Another says that
the second round consisted of three interviews, one with the associate
director, one with the director and the third with the managing director. These
were all done on the same day.
Most agree about the relaxed tone of the process, calling interviews
painless, mostly behavioral-based, casual, and focused on fit and
experiential questions. Indeed, the interviews tend to consist of generic
employment experience questions with a few competency-based questions
thrown in, too. You also might expect questions about your availability,
willingness to work holidays and weekends, why you want to work there
and what you think you can bring to the company. You might also receive
this: If the office were to go 24/7, would you be willing to work any shift
during that time period?
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Swimming in money
Good news for employees concerned about the companys stability. HSBC
has huge reserves of cash. However, it sounds like the firm has a few selfimage issues. Insiders say that HSBC suffers a bit of schizophrenia in
relation to its aims and goals, specifically as to where it perceives itself in
the global marketplace. But its identity crisis is positive, at least in the
way that the bank is diversified throughout the global environment and
economy, with profits tending to break down quite evenly between Asia,
Americas and Europe.
The firm also seems to be carving its own idea of what it wants to focus on.
The idea that the firm is seen as trying to be a bulge bracket investment bank
is an anathema to them, so its moved to the global wholesale banking
bracket, ruminates one insider. So long as HSBC can retain and attract top
talent within investment banking and keep benefiting from the growth in new
markets, it should be OK. After all, it is the HSBC way to keep things very
much on an even keel, and to avoid huge changes. Indeed, overall, insiders
call HSBC a good and solid company to work for, although its not for
those who really want to make a difference or have too much energy.
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21
T. Rowe Price
PRESTIGE
RANKING
KEY COMPETITORS
DEPARTMENTS
UPPERS
American Century
Fidelity
The Vanguard Group
DOWNERS
Mediocre salaries (places greater
weight on benefits than salary)
EMPLOYMENT CONTACT
www.troweprice.com/careers
THE STATS
Employer Type: Public Company
Ticker Symbol: TROW (NASDAQ)
Chairman: Brian C. Rogers
CEO & President: James A.C.
Kennedy
Revenue: $2.23 billion (FYE 12/07)
Net Income: $671 million
No. of Employees: 5,203
No. of Offices: 20
THE BUZZ
High quality
Bunch of old guys investing
Strong brand
Second tier
Staying true to its roots
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Founding principles
When Price founded his investment firm more than 70 years ago, he already
had more than a decades worth of experience during the 1920s at Mackubin
Goodrich & Co., a brokerage firm in Baltimore now called Legg Mason.
When the rest of Wall Street was reeling from short-term worries following
the Depression, Price took a long-term approach, investing in companies
during their growth stage. This growth-stock style of investingbacked by
a solid proprietary research tradition and risk-reducing diversificationpaid
off. Today, T. Rowe Price Group is one of the largest and most successful
investment management firms in the world.
Through the years, T. Rowe Price grew just like the companies it invested in
and, as a result, underwent some major changes. In 1966, its founder sold his
stake in the firm for a relatively small sumreportedly less than $800,000
on the condition that the company remain under the control of previously
agreed-upon successors. Twenty years later, the firm went public and now
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Exceeding expectations
T. Rowe Price managed to avoid being pulled into the credit mire during
2007. The company circumvented huge losses and actually posted very
healthy numbers throughout the year. In the rocky third quarter of 2007, a
time in which many companies were experiencing billions of dollars in writedowns, things were smooth sailing for T. Rowe Price whose profits rose a
stunning 37 percent.
During the quarter, the company booked net revenue of $571 million and net
income of nearly $175 million. Investment advisory revenue rose 29 percent
for the year and, most important, assets under management were a record
$396.8 billion, an increase of $62 billion in the first nine months of 2007
alone. Cash inflow from investors and appreciation of funds were cited as the
reasons for the uptick in assets, totaling $24.8 billion and $37.3 billion for the
three quarters, respectively.
The firm credited its success to low exposure to the infected areas, steering
clear of collateral debt obligations and minimizing their investments in
structured investment vehicles, or SIVs.
Hometown heroes
T. Rowe Price has always been a strong economic force for its hometown,
Baltimore, but in October 2007, it increased its good will by announcing
plans to build a $185 million expansion in Owing Mills, Md. The firm plans
to build two new offices spanning 38 acres with office space of 400,000
square feet, which will add 1,400 new jobs to Baltimore County. With the
addition of the new offices, T. Rowe Price will employ almost 4,000 people
in the Baltimore area. The offices are planned to open in mid-2009 and will
be designed, operated and constructed according to nationally accepted
environmental criterion. Baltimore County Executive Jim Smith said that
with the new addition, T. Rowe Price is poised to take its place as Baltimore
Countys largest private employer.
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T. Rowe Price responded to this by launching a new no-load fund (and related
institutional strategies) which will invest primarily in Africa and the Middle
East. The fund will be a highly aggressive investor in a limited number of
companies that have operations out of the following countries: Bahrain,
Egypt, Jordan, Kenya, Lebanon, Morocco, Nigeria, Oman, Qatar, South
Africa and United Arab Emirates. Other developing nations such as Algeria,
Namibia, and Zimbabwe will also be considered for investments as the
financial picture abroad becomes clearer. Though emerging markets are a
huge potential moneymaker for any company, T. Rowe warns that the
political and economic volatility of the countries in these regions may create
a high risk situation for investors who are considering putting money into
them.
Christopher Alderson, a T. Rowe veteran of 18 years, has been chosen up to
manage the fund. He says that while financial companies will be the primary
investment of the African and Middle East fund, but that he also plans to
focus on the growing infrastructure and communications markets.
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$559 million from $508 million. However, assets under management fell
from $400 billion to $378.6 billion. T. Rowe Price cited weak market
conditions and increased operating expenses (the firm increased headcount
during the three-month period) as reasons for the slide. Despite the $31.1
billion decline in assets, net cash flows from existing and new clients were a
record $9.7 billion for the three-month period, offsetting a portion of the
market impact.
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GE Asset Management
PRESTIGE
RANKING
KEY COMPETITORS
DEPARTMENTS
UPPERS
Alternative Investments
Fixed Income
U.S. & International Equities
DOWNERS
THE STATS
EMPLOYMENT CONTACT
See careers section of www.ge.com
THE BUZZ
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Beefing up sales
GEAM appointed two new leaders in late 2007 to bolster its sales operations.
In September, the firm promoted Stephane Marguier to director of EMEA
sales and marketing. In this role, Marguier leads efforts to bring GEAMs
successful track record managing the assets of GEs U.S. Pension Trust to the
management of institutional assets throughout Europe and the Middle East.
As part of the new strategy, he is building a team focusing on GEAMs
traditional markets, such as pension funds and insurance companies, as well
as its existing consultant relationships.
Prior to GEAM, Marguier worked for seven years for IXIS AM, as head of
international sales in charge of Europe, the Middle East, and South America.
He is based in Paris, with responsibility for business development and
distribution of GEAMs institutional product offerings. He reports to Kathryn
Karlic, president of institutional sales and marketing.
Karlic took another direct report in December 2007, when GEAM hired J.
Bret Young as senior vice president and U.S. sales leader, responsible for the
firms institutional sales and strategic distribution efforts throughout the U.S.
Under Youngs leadership, GEAM is continuing the expansion of its U.S.
institutional client basewhich includes corporate and public plan sponsors,
insurance companies, endowments and foundationsthrough the delivery of
targeted investment products spanning global equities, fixed income and
alternative assets. Young joined GEAM from Dreyfus Investments, where he
was director of managed assets for the past seven years.
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the business as possible. As for the best way to get in GEs good graces, just
make sure you have the appropriate background, as the firm seeks out
industry experts as additions to its team.
No problem
Because the group looks for the best of the best to join them, theres
therefore little to no training required, insiders admit. But despite the outof-the-frying-pan-and-into-the-fire approach to the work, the culture is an
informal one, with a casual always dress code (with the exception of client
contact). Its probably a good thing its so relaxed, too, since hours can be
long and weekend work occurs more than once a month.
On the diversity front, the firm is proactive, even teaming up with the Robert
A. Toigo Foundation, a group that encourages minority students to enter
financial professions. Through this program, the firm actively promotes
minorities role in its business (with a focus on its internship positions). GE
also receives high marks from insiders when it comes to promoting and
supporting women and gays and lesbians in the workplace.
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PRESTIGE
RANKING
1 Franklin Parkway
Building 970, 1st Floor
San Mateo, CA 94403
Phone: (650) 312-2000
Fax: (650) 312 5606
www.franklintempleton.com
KEY COMPETITORS
BlackRock
Fidelity
The Vanguard Group
UPPERS
DEPARTMENTS
High Net Worth
Institutional Investment Advisory
Retail Investment Advisory
THE STATS
Employer Type: Public Company
Ticker Symbol: BEN (NYSE)
Chairman: Charles B. Johnson
CEO & President:Gregory E.
Johnson
Revenue: $6.2 billion (FYE 9/07)
Net Income: $1.77 billion
No. of Employees: 8,875
No. of Offices: Offices in more
than 29 countries
DOWNERS
Compensation is usually in the
middle of the pack
Diverse at the lower ranks, but
upper-level managers are mostly
middle-aged white men
THE BUZZ
Top quality
Short-term minded
Strong individual funds
Needs new energy
Good brand recognition
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Growth in M&A
Franklin Resources growth has largely been bolstered through a series of
strategic mergers and acquisitions. By 1971, Franklin Resources had grown
large enough to go public. After acquiring San Francisco-based Winfield &
Co., an investment management company., the firm moved its operations to
San Mateo, Calif. In October 1992, Franklin Resources purchased
Templeton, Galbraith & Hansberger Ltd., which managed and operated the
fifty-year-old Templeton Family of Funds. Templeton, due to the counseling
system and detailed security analysis cultivated by founder Sir John
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Templeton, was known at the time as one of the best undervalued stockpickers.
By the late 1990s, Franklin Resources had grown so large it had its fingers in
markets across the world. But its fingers got burned in Asia, when the 1997
financial crisis rippled across east and Southeast Asia. A year after the market
crashed in Thailand, which triggered the crisis, Franklin Resources income
had dropped to $68 million, down from $130 million in 1997. In 1999, the
company was forced to lay off 7 percent of its workforce, sending out 560
pink slips. Most of the cuts were made in areas of the company like clerical
operations and no investment-management jobs were lost.
Disaster strikes
In 2000, Franklin Resources funds rebounded, with six of its funds in the
series beating the Standard and Poors 500 Indexthe first time the entire
series performed that well since 1994. The good run didnt last for long,
though. Like many of the businesses with offices in the World Trade Center,
the terrorist attacks on September 11, 2001 took a physical and financial toll
on Franklin Resources. The offices of Franklins Fiduciary Trust moneymanagement subsidiary lost 87 employees that day. Following the attacks,
the companys assets under management fell $20 billion in less than a
monthfrom $264.3 billion at the end of August 2001 to $243.9 billion on
September 25thas the world financial markets reeled.
Within two years, Franklin Resources was back on track, launching its
Franklin Structured Large Cap Core Equity Fund and the Franklin Structured
Large Cap Growth Equity Fund to institutional investors who were looking
for limited risk index-based investing.
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Controversial Funds
In 2007, one of Franklin Resources holdings came under intense scrutiny due
to its alleged connection to Sudan. Though the company in question,
PetroChina, claimed that it had no business ties to the war-torn country,
human rights activists pressured firms like Franklin to sell their stake in the
company because of the actions of its parent company, CNPC, which has
admitted they are involved with the Sudanese government for the purpose of
business. Franklin Resources has publicly stated that while they support
efforts to lessen the ongoing strife in the Darfur region, they refuse to give up
PetroChina because their first priority is their fiduciary duty to their
shareholders.
Franklin also has a statement on its web site that attempts to quell the
controversy surrounding PetroChina by implying that the Chinese companys
attention to Sudan may actually help the countrys problems. An excerpt
from the statement reads, In our 20 years of experience investing in
emerging markets, we have seen that fostering economic and business
development through investment can often help in achieving reforms.
Strength in assets
Franklins fiscal 2007 fourth quarter earnings showed that it was a force to be
reckoned with, as total revenue increased 26 percent to $1.6 billion from $1.3
billion. Assets under management, meanwhile, grew more than $40 billion
versus the previous year, from $624 billion to $645.9 billion. The assets were
divided as follows: 60 percent were equity assets, 21 percent were fixedincome assets and 18 percent were hybrid assets.
Part of the reason for the jump in assets (since, assets have fallen somewhat)
was a strategic joint venture with the Dubai-based company Algebra Capital
that came in September 2007. Franklin bought 25 percent of the company in
an effort to expand its coverage in the Middle East and North Africa. In a
statement released at the time of the deal, Algebra said that it expects the
value of assets in the professionally managed funds in the Middle East and
North Africa to triple over the next five years to more than $200 billion.
During the fiscal year, Franklin also acquired a 51 percent stake in Riva
Financial Systems, the European company that created the Riva Transfer
Agent software solution suite. Though the company did not disclose the
financial details of the acquisition, it did announce that the purchase of Riva
was meant to supports the companys long-term goal of having an
international transfer agent solution. Shortly after the acquisition, Franklin
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Templeton Investor Services senior vice president, Ghassan Hakim Sr., took
over the role of chief executive at Riva.
Investing in Asia
In October 2007, Franklin significantly expanded its presence in Asia with the
launch of 38 new funds in Singapore, bringing its total funds there to 58. This
expansion was an attempt to tap into the rapidly growing wealth market in
Asia. Stephen Grundlingh, who heads operations of Franklin Templeton in
Singapore, predicts that the wealth industry in Singapore will increase by
approximately $350 billion over the next 10 years.
Close to 30 of these funds are offered in Singapore dollars, and others are
offered in a wide range of currencies. The funds include the Franklin Asian
Flex Cap Fund, the Franklin Mutual European Fund and the Franklin Natural
Resources Fund. Franklins international funds have fared very well
throughout 2007, with dividends paid out to investors in its Global Income
Fund and Emerging Markets Income Fund.
The firm went to the Far East again in February 2008, buying a 49 percent
stake in Vietnamese investment firm Vietcombank Fund Management. The
terms of the deal were not disclosed but Franklin said in a statement, We see
tremendous opportunity to grow our business by extending our local asset
management network to Vietnam. In addition to Singapore, Franklin
already had Asian offices in China, India and Japan.
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We are family
Franklin Resources is a great company with a solid reputation and a global
company with a family-owned feel. The firms approach is somewhat
conservative and controlling, but theres also some autonomy allowed,
and the corporate culture depends on what department and location you
work in. Mostly, insiders report a low-stress atmosphere with reasonable
deadlines to meet. Still, one insider working out of one of the firms Florida
offices reports that this location has recently reduced staff by nearly 50
percent, with many jobs offshored to Canada and India. As a result, says
the contact, There are very few growth opportunities now.
Hours, on the other hand, are mostly standard, and theres not much
overtime except for busy reporting periods. Busy parents are in luck,
because the company offers flexible schedules for employees who need to
pick up kids from day care or that sort of thing. Dress is not stiff, either,
generally adhering to a business casual code. Offices are clean,
comfortable and accommodating, but far from luxurious, insiders report.
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And managers receive high marks. One contact calls management better
than most other places I have worked.
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Capital
24 Pequot
Management
PRESTIGE
RANKING
KEY COMPETITORS
DEPARTMENTS
UPPERS
Institutional Investments
Private Equity
Private Wealth Management
Venture Capital
AllianceBernstein
Andor Capital Management
State Street
DOWNERS
THE STATS
Employer Type: Private Company
Chairman & CEO: Arthur J. Samberg
No. of Employees: 260
No. of Offices: 8
EMPLOYMENT CONTACT
Human Resources
500 Nyala Farm Rd
Westport, CT 06880
Phone: (203) 429-2200
THE BUZZ
Great reputation
Very mediocre
Great fund
Who?
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THE SCOOP
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Three-week mistake
Three weeks is a long time when you look at it from the perspective of John
Mack, who may be kicking himself for a long time for his brief stint at Pequot
Capital Management. Mack was hired by Pequot in 2005 to replace Samberg
as chairman. A Morgan Stanley employee for more than 30 years, Mack
returned to that firm to become chairman and CEO after only three weeks at
Pequot; Samberg took back his familiar place at the head of the table.
Three weeks might not seem long enough to do any real damage, but Mack
emerged a key player in a Securities and Exchange Commission investigation
into Pequot for possible insider trading. The investigation was launched in
June 2006, and Mack played a big role, starting with being called for
questioning over allegedly giving tips to Pequot ahead of proposed deals,
such as General Electric Capitals 2001 acquisition of Heller Financial. But
after he was initially called in August to testify, rumors spread that Mack
dodged questioning because of his political clout, after Gary Aguirre, a
former SEC lawyer, told Congress that he was fired from the agency when his
investigation got too close to Mack, who is a major fund raiser for President
Bush. What followed was an inquiry by Senate Finance Committee
Chairman Charles Grassley, which raised concerns that political influence
affected a decision not to interview Mack. In response, the SEC agreed to
reveal internal memos regarding the alleged insider trading at Pequot.
Despite this, in October 2006, Pequot received some good news: It would
avoid censure from the SEC for the insider trading charges. After receiving
the news, CEO Samberg told investors, I am very pleased to tell you that we
have been informed by the staff of the Securities and Exchange Commission
that it is not going to recommend any enforcement action be taken against
Pequot or any of our employees.
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Quarter of Anxiety
Pequots investors have been warned: In October 2007, Byron Wien, the chief
investment strategist, sent a letter titled Entering a Quarter of Anxiety to the
hedge funds investors. He noted that although the Federal Reserve had cut
the Fed funds rate by more than 50 basis points in September and the market
was performing exceptionally well, he was concerned that investors were
ignoring the reality of a possible recession to come.
We think there is plenty of unfinished business to be done in both the
economy and the stock market, Wien wrote, adding that 2008 is likely to be
full of dismal earnings for major financial institutions. He expressed concern
over rising stock prices for companies like Merrill Lynch and UBSdespite
the fact that they posted billions of dollars in write-downs recently. A number
of factors, he explained, could be a tipping point, and if the unemployment
rate rises or inflation begins to fluctuate, a recession is sure to make 2008 a
very difficult year for business.
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Pequot, its own $1 billion Core Global stock funds rose 3.4 percent in
September 2007 and 37 percent for the year. On the whole, hedge funds
havent seen averages that good since January 2006, when they received a jolt
with a 3.5 percent increase.
Unfriendly skies
With ownership of nearly 9 percent, Pequot Capital Management was the
largest shareholder of Midwest Air Group until February 2008, when the
airline was purchased by TPG Capital and Northwest Airlines Corp. In
August 2007, Midwest received a $16-a-share offer (worth $439 million)
offer from TPG Capital and Northwest, but the decision unnerved
management at Pequot, who believed that AirTran, who had previously put in
a bid of $15.75-a-share, would be a safer bet to take over ownership. Pequot
execs believed that the union of AirTran and Midwest would send stocks
soaringplus, AirTran had planned to compensate for the acquisition in part
with stocks, and Pequot liked those tax advantages.
Although TPG acquiring Midwest seemed like a done deal, Pequot reached
out with a letter of support to AirTran officials, who then put in a bid of
$16.25-a-share. Despite AirTrans renewed interest, TPG won the auction in
the end, paying $450 million, or $17-a-share, for Midwest.
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Another potential Pequot drawback is the travel schedule. I am on the road about
a week a month, says one midlevel contact. More junior employees travel about
twice that much to visit companies in which we are potential investors. Finally,
insiders say that diversity is not an issue. For a small firm, I think we have
worked hard to create a welcoming environment, notes a source. We do
mandatory training for all employees on gender and racial bias issues.
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Extremely competitive
compensation means that
people seldom leave
voluntarily.
Pequot Capital insider
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V A U L T
25
PRESTIGE
RANKING
ING Investment
Management
ING House
Amstelveenseweg 500
Amsterdam 1081 KL
Phone: +31-20-541-5411
Fax: +31-20-541-5497
www.ingim.com
5780 Powers Ferry Road., NW
Atlanta, GA 30327-4390
Phone: 770-980-3300
Fax: 770-980-3301
www.inginvestment.com
KEY COMPETITORS
Allianz
AXA
Citi
EMPLOYMENT CONTACT
See careers section of
www.ingim.com
DEPARTMENTS
Asset Management
Banking
Insurance
THE STATS
Employer Type: Subsidiary of ING
CEO, ING Investment Management:
Gilbert Van Hassel
CEO, ING Investment Management
Americas: Robert Leary
No. of Employees: 2,500
THE BUZZ
Great company
Losing luster
Good specialty sector funds
People are good, cultures not so
good
Quirky firm with potential
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THE SCOOP
Clients first
ING Investment Management is a leading global asset manager with assets
under management of more than 400 billion. In 2007, for the third year in
a row, Standard & Poors and the readers of CASH magazine named ING the
best mutual fund provider. During the award ceremony, Ivar Roeleven, head
of mutual funds for ING in the Netherlands, said, Of all the awards, this one
means most to us, because its awarded by the clients.
ING Investment Management is a subsidiary of Amsterdam-based ING
Group, one of the 20-largest financial institutions in the world and among the
top 10 in Europe, which serves clients through a range of banking, insurance
and asset management services. In the U.S., ING Investment Management
Americas 326 investment professionals manage more than 152 billion in
assets. Meanwhile, In Europe, ING manages 153 billion, and in the
Asia/Pacific region, it manages 78 billion.
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Streamlined operations
In 2004, ING simplified its business structure into six lines: Insurance
Americas holds insurance operations and asset management activities in the
Americas. Insurance Europe handles insurance programs in the Netherlands,
Belgium, Spain, Greece and Central Europe, and asset management activities
in Europe. Insurance Asia/Pacific runs life insurance operations and
asset/wealth management activities in Asia/Pacific, Australia/New Zealand,
Hong Kong, Japan, Korea, Malaysia and Taiwan. The wholesale banking
group handles global wholesale banking operations, with five divisions:
clients, network, products, corporate finance, and equity markets and
financial markets. The retail banking operation provides retail banking
activities in the Netherlands, Belgium, Poland, Romania and India. ING
Direct offers direct retail banking activities for clients in Australia, Canada,
France, Germany, Austria, Italy, Spain, the U.K. and the U.S. Today, ING
employs about 120,000 employees worldwide.
House of Orange
ING Group will have you seeing orange. The Amsterdam-based financial
institution has orange splashed all over its marketing campaign, possibly in
recognition of the companys Dutch roots. (The Dutch royal family is called
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the House of Orange after the official color of King William III, who
defended the Netherlands in the late 1600s.) The firm traces its roots back to
the founding of Dutch bank De Nederlanden van 1845. Nationale
Levensverzekering-Bank was founded in 1863; those two companies came
together 100 years later to form Nationale-Nederlanden, which became the
largest insurer in the Netherlands. NMB Postbank Groep came about in 1986
after the merger of Rijkspostspaarbank (founded in 1881) and Postcheque-en
Girodienst (founded 1918). Nationale-Nederlanden and NMB Postbank
Group merged in 1991, forming Dutch mouthful Internationale Nederlanden
Group; the tongue-tied began calling the new company ING Group, a name
that has stuck. ING has grown into an asset management, banking and
insurance giant, thanks in part to major acquisitions after the 1991 merger.
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Damage control
ING puts serious thought into the environmental impact of its activities and
has identified three areas to work on to control the environmental impact of
its operations: energy consumption, business travel and paper consumption.
All are now seriously monitored and regarded as priorities for action.
ING is also a signatory to the Equator Principles, which apply certain policies
and standards set by the World Bank and the International Finance
Corporation to project finance transactions, thus making sure environmental
and social risks are properly assessed and managed. Signing the accord is just
a small part of the banks ethics policy, which is highly developed. ING also
refuses to finance controversial weapons or companies directly involved with
their manufacture or trading, and in asset management, the bank will not
invest in companies involved in the manufacturing of such weapons.
A question of ethics
The National Association of Securities Dealers (NASD) called into question
INGs ethics in August 2006, when it fined four broker-dealers affiliated with
ING America Insurance $7 million for taking brokerage commissions from
mutual fund complexes in return for better treatment of their funds. Those
fined Financial Network Investment (fined $3.4 million), ING Financial
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with a global perspective and innovative way of thinking about our business,
is exciting for all of us.
Leary most recently was executive vice president of AIG Financial Products
Corp., a financial products subsidiary of AIG Group. Before AIG, he was
with JPMorgan. Leary began his career as a lawyer with White & Case,
where he helped establish the firms Middle East presence with an office in
Jeddah, Saudi Arabia.
Just a few months prior to the CEO switch in ING Investment Managements
U.S. ranks, the firms European CEO, Angelien Kemna, announced her
decision to leave the firm. Kemna, who said she was leaving in order to
pursue other personal and professional interests, had been with ING
Investment Management since 2001; shed been CEO since 2002. In June
2007, the firm poached Gilbert Van Hassel from JPMorgan Asset
Management to replace Kemna. Van Hassel, who was mostly recently
managing director and global head of technology and operations for
JPMorgan Asset Management, had been with that firm for 25 years.
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GETTING HIRED
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TOP
25
BEST OF
THE REST
INVESTMENT
MANAGEMENT
Allianz Group
Kniginstrasse 28
Germany
Phone: +49-89-3800-0
Fax: +49-89-3800-3425
www.allianz.com
Allianz Global Investors of America L.P.
888 San Clemente Drive
Suite 100
Newport Beach, CA 92660
Phone: (949) 219-2200
Fax: (949) 219-3949
www.allianzinvestors.com
KEY COMPETITORS
AEGON
AIG
AXA Financial
Bank of America
Citi
JPMorgan Chase
UPPERS
Strong corporate culture
DOWNERS
DEPARTMENTS
Asset Administration Services
Asset Management
Financial Services
Hedge Fund Management
Institutional Asset Management
Mutual Fund Management
EMPLOYMENT CONACT
Under Allianz Group section of
www.allianz.com, see careers
THE STATS
Employer Type: Public Company
Ticker Symbol: AZ (NYSE)
CEO: Michael Diekmann
Revenue: $102.7 billion (FYE
12/07)
Net Income: 7.97 billion
No. of Employees: 181,207
No. of Offices: 70
THE BUZZ
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GETTING HIRED
Be a people person
The firm is in a very interesting business with a strong corporate culture
where you meet a lot of people. Because of the firms international reach,
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you have a good view on the global economy. Flexibility and freedom
are both big at Allianz, though the firm is also a very traditional German
company where hours are strictly defined. Any hours beyond your required
37.5 hours per week were compensated. Another source agrees,
commenting that the hours were acceptable, but depended on the position
and adding that the firms dress code is business conservative.
Perks such as company cars receive praise from insiders. Although
overall, the outlook is bright, its still a cyclical company, which should
be more innovative when it comes to challenges in the future.
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KEY COMPETITORS
DEPARTMENTS
UPPERS
Generous pay
Great retirement program
THE STATS
Employer Type: Private Company
Co-Chairman & Founder: James E.
Stowers Jr.
President & CEO: Jonathan Thomas
No. of Employees: 1,600
No. of Offices: 3
Fidelity
T. Rowe Price
The Vanguard Group
DOWNERS
More female-related initiatives
needed
Hard to initially get in the firm
EMPLOYMENT CONTACT
www.americancentury.com/careers
THE BUZZ
Losing momentum
Solid research and portfolio
management, good large value
funds
Confused
Always in top quartile with
respect to performance
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THE SCOOP
Family-owned shop
Formerly called Twentieth Century Investments, American Century
Investments was founded in 1958 by Jim Stowers Jr., who first operated the
business out of a small Kansas City apartment. In 1973, Stowers was among
the few investors utilizing computer technology to aid in portfolio
management. In June 1995, the company acquired The Benham Group, a
fixed income investment management firm based in Mountain View, Calif. A
private company, American Centurys primary owners are the Stowers
Institute for Medical Research, and the publicly traded JPMorgan Chase,
which has a 45 percent equity stake in the firm. Voting control remains with
the Stowers family, and the firm is the fifth-largest direct-marketed fund
family in the country.
American Century Investments is an asset management firm, offering retail
mutual funds and money management to large institutions. Although still a
relatively small shop in terms of presenceAmerican Century only has three
office locations, in Kansas City, New York and Mountain View, Calif.the
firm has grown from a small manager offering just two mutual funds to a
global asset manager. American Century manages about $100 billion in
assets and employs 1,800 people.
Winning attitude
American Century has a history of being recognized for being a desirable
firm to work for. Fortune has named American Century one of the top-100
companies to work for in the U.S. for the past nine years, and the company
continues to climb in the rankings. In 2008, it was ranked No. 22, down
slightly from the No. 15 ranking it held in 2007. In 2007, it also ranked No.
4 in the 25 best small companies category. American Century has been
repeatedly celebrated by Fortune for being a great company for helping
employees to achieve a balance between their work and home lives.
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Armstrong and the rallying cry Put Your Lance Face On, American Century
is encouraging investors to take action and approach their financial decisions
with the same focus, drive and determination that helped Armstrong triumph
over the challenges in his life. To assist investors in the attainment of their
long-term goals, American Centuryin cooperation with the Lance
Armstrong Foundation (LAF)introduced the American Century
LIVESTRONG Portfolios. Carrying the moniker that evokes LAFs mission
of inspiring and empowering people affected by cancer, this series of mutual
funds is designed to simplify investing while supporting LAF. As part of the
deal, American Century makes an annual payment to LAF based on
investments in the LIVESTRONG Portfolios, which became available in
May 2006.
Executive shifts
In 2007, American Century underwent some major shifts in personnel,
especially in the top tiers of management. The year started off with the
biggest change of all, as the firms president and CEO, William Lyons, retired
after a 20-year career with the company and six and a half years as chief. He
was succeeded by Jonathan S. Thomas, the firms chief financial officer and
a former top executive at Morgan Stanley. Proving that American Century is
a company that values longevity and stability, Thomas is only the fourth CEO
in the firms 50-year history. He assumed the position of president and CEO
on March 1, 2007.
Lyons retirement wasnt the only switch in top brass at American Century. In
January 2007, the firm got a new executive vice president and CIO, former
international equity chief investment officer Enrique Chang. Chang now
oversees the entire investment management operation and was tapped for the
top post after just six months on the job. Joining in March 2006, he brought
18 years of industry experience to the firm. Prior to American Century, he
was at Munder Capital Management from 2000 to 2006, serving the last four
years as president and chief investment officer. In that role, he oversaw a
200-person investment operation with approximately $35 billion in assets
under management. He takes the place of former executive vice president
and CIP Mark Mallon. At the time of his retirement, Mallon had served more
than decade with American Century.
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GETTING HIRED
Shaky ground
Obtaining a position at American Century seems to be difficult. Indeed, one
insider even admits that he is not sure I would be hired if I had to do it now.
Either way, its worth a shotpotential job candidates can post their profiles on
the firms web site and await notification by e-mail of any new jobs that match
your profile information. Applicants can also search through the job database
on the site on their ownthe extensive career section of American Centurys
web site (go to the careers link on www.americancentury.com) gives explicit
instructions and plenty of information for prospective employees, including a
detailed list of benefits and resources, as well as testaments about the firms
culture by current employees. Before applying for a job opening with the
company, candidates can post their resume and then access it to make
modifications. The site also offers online tech support in case there are any
difficulties in submitting information to the site.
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It all depends
The hours you can expect to work may depend on the role you fill in the firm.
One contact in sales does not [work] in the office, and says that working in
territory and on sales calls provides for typically eight- to-12-hour days
and some weekends.
Benefits and hours seem well above average. American Century has "a stateof-the-art gym free for employees, says a source, who adds, Theres no
need for meal allowances and car services as 6:30 p.m. is the latest people
need to stay. Weekend work is rare, too, say insiders. The firm also offers
a 401(k) plan and medical benefits, as well as 25-cent sodas and many other
perks, the full list of which can be accessed on the firms web site. Offices
Visit the Vault Finance Career Channel at www.vault.com/finance with
insider firm profiles, message boards, the Vault Finance Job Board and more.
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Making strides
When it comes to diversity at the firm, things seem to be looking up, though
insiders note that there are fewer women salespeople, but mostly because if
you have a family, the job is very demanding and difficult to maintain the
expected productivity, and that there are six female sales execs out of 32.
With respect to ethnic minorities, the firm receives average marks, with one
contact noting that we have one Hispanic sales person and zero AfricanAmericans. Treatment of gays and lesbians within the firm, however, is
good. We have plus-1 on our insurance plan, so domestic partners are
eligible. On the whole, sources appear to be very satisfied. I have been
lucky to work with great people that I always wanted to do my best for, says
one insider.
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Ameriprise Financial
707 2nd Avenue South
Minneapolis, MN 55402
Phone: (612) 671-3131
www.ameriprise.com
SERVICES
Asset Management
Banking
Financial Planning
Income Generation
Insurance
Personal Trust Services
Retail Brokerage
KEY COMPETITORS
Edward Jones
Fidelity
Hartford
Merrill Lynch
Principal Financial
Wachovia
UPPERS
Opportunity is endless
We are unparalleled in the industry
Freedom
THE STATS
DOWNERS
*Advisor offices
EMPLOYMENT CONTACT
See careers section of
www.ameriprise.com
THE BUZZ
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THE SCOOP
Financial advisory
Formerly known as American Express Financial Corporation, Minneapolisbased financial planning firm Ameriprise Financial ranked No. 296 on the
latest Fortune 500. It boasts one of the largest advisory networks in the
country, and offers asset accumulation and income solutions, insurance,
personal trust services and retail brokerage services throughout the U.S. The
firms broker-dealer subsidiary, Securities America, distributes mutual funds
and annuities, and provides retirement planning and wealth management
services through more than 1,600 independent representatives.
In February 2005, American Express announced that it would spin off its
American Express Financial unitthe sixth-largest spin-off in corporate
historyin order to create two distinct businesses and allow them to
capitalize on their respective growth opportunities.
By the end of 2007, the reincarnated Ameriprise Financial had $480 billion in
assets, approximately 11,800 total financial advisors and registered
representatives, and more than 2.8 million individual, business and
institutional clients. Headquartered in Minneapolis, the firm has a New York
City location (at 7 World Trade Center), as well as other offices throughout
the country. By the third quarter of 2007, it completed its separation from
American Expresson budget and on schedule.
Sailing along
Since it was spun off in 2005, the company has grown steadily, and it rolled
into the third quarter of 2007 with solid earnings. Ameriprise Financial
reported on October 24, 2007 that its net income per diluted share increased
17 percent for the quarter. Revenue grew 11 percent to $2.2 billion and assets
climbed an impressive 12 percent over the year, reaching $492 billion.
Ameriprise Financial continued to bring in high-net-worth clients in 2007. As
of September, 2007, Ameriprise Financial managed to snag a large number of
these key accounts, with mass affluent and affluent client groups increasing
11 percent over the year. This contributed to a bump of 22 percent in
management, advice and service fees, helping to boost revenue and
investment income.
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An American tradition
Although Ameriprise Financial has a new name, the firm is built on a rich
history that goes back more than 110 years. Founded in 1894 by John
Tappan, the firm was originally called Investors Syndicate, and reached $100
million in assets more than 40 years later. Confident in passing the milestone,
Investors Syndicate got into the mutual fund market in 1940. Nine years
later, the firm changed its name to Investors Diversified Services (IDS). In
1984, American Express bought IDS Financial Services. Ten years later,
conducting business under the American Express brand, IDS reached $100
billion in assets. In 2003, the firm, then called American Express Financial
Corporation, expanded its reach, when it acquired London-based
Threadneedle Asset Management Holdings Ltd.
Ameriprise Financial took on a new challenge in September 2006, launching
Ameriprise Bank, FSB. Headquartered in New York, the bank offers services
to help clients with borrowing, cash management and personal trust needs.
Ameriprise Bank added new offerings as well, the first of which was a home
lending program, including mortgages, home equity loans and lines of credit.
Banking products are offered through the companys network of branded
financial advisors, including the companys first branded payment cards with
MasterCard Worldwide, which launched in early 2008. Prior to its spin-off
from American Express, Ameriprise offered bank products through American
Express Bank, FSB. At launch, Ameriprise Bank had approximately $1.1
billion of assets.
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By the numbers
For the 2007 fiscal year, Ameriprise Financial booked net income of $814
million, a healthy 29 percent increase versus 2006. Net revenue, meanwhile,
rose 8 percent to $8.7 billion. Although assets under management increased
3 percent during 2007 to $480 billion, they slipped somewhat during the
fourth quarter, falling from $492 billion at the end of the third quarter.
In its fourth quarter earnings release, the firm said it was pleased with its
results overall, especially in light of the difficult market environment.
Ameriprise Financial cited its conservative investment approach and balance
sheet as reasons for its success.
The company also had a solid first quarter 2008 with respect to earnings, as
net income rose 16 percent versus the same period in 2007 to $191 million.
Net revenue rose more modestly, increasing 3 percent to $2.1 billion.
Meanwhile, assets under management fell to $451 billion by the end of
March. In its earning release, Ameriprise Financial said market declines and
Threadneedle institutional outflows were largely responsible for the drop.
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Top-notch training
The firms diversity efforts are considered average, and one woman who
recently joined Ameriprise Financial says, I see a lot of women advisors and
managers. Another contact believes that women and minorities have
unique opportunities to target market segments that are traditionally
underserved by the financial services industry. Emphasizing this ability, he
says, can help minority candidates get ahead. It is all about setting yourself
apart and marketing that first to your employer, then to your clients and
network.
Employees receive initial training when they start; according to the firm,
these sessions cover financial planning, marketing, client services,
compliance and sales techniques. Future training comes in the form of oneon-one field trainings, product and compliance reviews, and mentoring.
Ameriprises online training courses are described as excellent. According
to one insider, You receive great training here, which allows you to get a
great job at another firm if you leave.
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Bank of America
Bank of America Corporate Center
100 N. Tryon Street
Charlotte, NC 28255
Phone: (800) 900-9000
www.bankofamerica.com
KEY COMPETITORS
DEPARTMENTS
UPPERS
Citi
Wachovia
Wells Fargo
DOWNERS
Pretty conservative
EMPLOYMENT CONTACT
THE STATS
www.bankofamerica.com/careers
THE BUZZ
Potential threat
Not strong in this area
Hungry for ultra-wealthy
customers
Struggling
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THE SCOOP
Americas bank
Not often is it good to be all things to all people. But Bank of America has
managed to serve the needs of millions of Americans as the countrys first coastto-coast bank. Second only to Citi in terms of worldwide assets, Bank of
America boasts 59 million consumer and small business relationships, more than
6,100 retail banking offices, nearly 18,500 automated teller machines and more
than 25 million active online banking users. Outside the U.S., Bank of America
serves clients in 150 countries, and as of early 2008, BofAs client list included
99 percent of the U.S. Fortune 500 and 83 percent of the Global Fortune 500. In
February 2008, BofA was added to the Dow Jones industrial average, the first
change to the Dows composition since 2004.
The bank serves its customers through three main business units: global
consumer and small business banking, global corporate and investment
banking, and global wealth and investment management (GWIM).
With more than 14,000 associates, Bank of Americas GWIM business serves
more than three million individual and institutional clients through three primary
businesses: Premier Banking & Investments; U.S. Trust, Bank of America
Private Wealth Management; and Columbia Management. BofA also provides
clients and institutions with access to hedge funds, private equity funds, real
estate, venture capital and other investments. According to an October 2007
Barrons survey, GWIM was the third-largest wealth manager based on
individual clients with accounts of $1 million or more as of June 30, 2007. At
the end of 2007, GWIM had more than $946 billion in total client assets,
including more than $643 billion in assets under management.
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up, rising 48 percent to $674 million in the third quarter of 2007. Net income
rose 55 percent to $143 million. The acquisition of U.S. Trust also added 30
percent to net revenue and 22 percent to its net income.
Opportunity knocks
Now known by its tagline The Bank of Opportunity, BofAs roots go back
to 1784 when Massachusetts governor John Hancock signed a charter for the
Massachusetts Bank, one of the first three commercial banks in the U.S.
More than 50 predecessor banks were eventually folded into the BofA
behemoth. The company adopted the Bank of America name in 1988 when
NationsBank acquired California-based Bank of America. Major recent
mergers include the $47 billion FleetBoston deal in 2004 and the $35 billion
acquisition in 2006 of credit card giant MBNA, which boasted more than 40
million accounts. Immediately after the MBNA deal wrapped, BofA became
the largest credit card issuer in the U.S.
More recently, in October 2007, BofA completed its purchase of LaSalle
Bank Corporation. The $21 billion acquisition of LaSalle made BofA the
largest bank by deposits in Illinois and Michigan, and added 17,000
commercial banking clients, 1.4 million retail customers, 400 banking centers
and 1,500 ATMs to BofAs holdings. In May 2008, LaSalle branding was
replaced with Bank of America's at bank locations and ATMs.
BofA saw one acquisition slip away in 2007, though. In April, the bank had
announced it would buy a 24.9 percent stake in SLM Corp, better known as
the student lender Sallie Mae. The $2.2 billion deal was supposed to close in
late 2007, but because Sallie Maes outlook suffered in rough credit markets,
the deal fell apart in December 2007.
Credit collapse
While Bank of America was steadily growing its global markets and
investment banking business, the market was slowly gearing up for a major
downturn. The bad news finally hit hard across the financial services
industry, and in the third quarter of 2007, Bank of America had a net income
decline of 32 percent to $3.7 billion from $5.42 billion a year earlier. It also
reported a drop in diluted earnings per share of 31 percent to $0.82 from
$1.18. But the company took its biggest hit in its global corporate and
investment banking division, which reported a 93 percent decrease in net
income from $1.43 billion to a paltry $100 million. The decline was due
mainly to write-downs in its global markets business. The firm took $607
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million in trading losses, $527 million in losses related to mortgage and credit
derivatives, and a $247 million write-down for leveraged loans. CEO
Kenneth Lewis responded to a question on the third quarter conference call
about the potential acquisition of an investment bank by saying, I've had all
the fun I can stand in the investment banking business at the moment.
Bank of America moved quickly in response to changes in the market to
reduce its investment banking capabilities. The company eliminated 3,000
banking positions, mostly within the business lending, treasury services,
capital markets and advisory services and support services divisions. At the
same time, Brian Moynihan, who had previously led the GWIM business,
was tapped to succeed Gene Taylor at the head of BofAs global corporate and
investment bank. Taylor, who had spent 38 years with BofA, agreed to
remain on board as a temporary adviser to Moynihan to assist with the
transition. Keith Banks, president of BofAs asset management business,
took Moynihan's place in the GWIM division.
A strategic review of the capital markets and investment business concluded
in January 2008, with BofA saying it would focus the divisions operations
on areas of traditional strength. That meant reducing activities in structured
products, especially risky collateralized debt obligations (CDOs); realigning
overseas businesses to build on debt, cash management and trading; and
selling off the equity prime brokerage business. This led to employment
reductions of 650 in the global markets and global investment banking
groups. Approximately 12 percent of BofAs capital markets and investment
banking staff were affected. Lewis called the cuts a reaction to the realities
of today and as far as we can see in the future.
One week later, news spread that BofA cuts included a large number of
securities stock analysts. Robert Morris, Institutional Investors top-ranked
oil and gas analyst for six consecutive years, was among those who lost his
job. John McDonald, Institutional Investors No. 2 large-cap bank analyst in
2007, was also let go.
A rough quarter
Immediately after announcing its restructuring, BofA had bad news for its
investors: earnings in the fourth quarter of 2007 fell 95 percent, the result of $5.28
billion in write-downs related to mortgage-related losses. These write-downs
reduced trading profits in the capital markets group by about $4.5 billion, and other
income by about $750 million. BofA lost $400 million to struggling cash funds,
which led to additional write-downs of $400 million linked to securities originally
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purchased from those funds. Market conditions also shook BofAs equity
investment businesses, sending income down $750 million for the quarter.
Countrywide on board?
In January 2008, BofA announced it would be acquiring the countrys largest
mortgage lender, Countrywide Financial, for approximately $4 billion in
stock. The price valued the troubled Countrywide at $7.16 per share, and
under the terms of the deal, Countrywide shareholders would receive 0.1822
of a BofA share in exchange for each Countrywide share.
In 2007, California-based Countrywide Financial had become a symbol of the
American mortgage market collapse, as its foreclosure rate doubled, it recorded
its first quarterly loss in 25 years and rumors flew that it was on the verge of
bankruptcy. So why would BofA make the acquisition? For one thing, the bank
already owned a 16 percent stake in Countrywide (BofA paid $2 billion for the
share in August 2007) and part of its stakeholder rights was the ability to beat
any other bid for the lender. In communications about the deal, BofA noted it
will gain significant capabilities, including Countrywides proven distribution
and technology operations. In addition, the merger will position BofA as a
leader in the effort to help keep more Americans in their homes and ensure that
more Americans have the opportunity to achieve home ownership.
Although Countrywides subprime mortgage issues topped headlines, its core
business is its loan servicing portfolio, in which revenue has remained steady
(subprime-related mortgages only account for 10 percent of its portfolio).
Analysts also noted that BofAs proposal was priced at a discount, and in 10
years, BofA could turn it into a profitable piece of its pie. The purchase is
expected to close in the third quarter of 2008. Until the acquisition closes,
BofA and Countrywide will operate as separate companies.
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GETTING HIRED
Best of America
Hone your game, because Bank of America is a competitive place to get a job. Its
culture and top talent pipeline makes it an employer of choice for many. By and
large, the focus is on experience and right fit. If you think you could be a good
candidate, check out the career site (www.bankofamerica.com/ careers), and
listen to some of its associates talk about their experiences at the bank. On its
career site, you can also create, manage and store a profile on the site or just check
out the firms resume and interview tips section for guidance about what to
expect during the process.
No matter what your career level, expect at least three rounds of interviews,
possibly including four back-to-back interviews in one day. One insider reports
getting flown to headquarters in Charlotte for the second round. While you can
expect to hobnob with some big titles throughout the process (senior vice
presidents, senior finance managers, etc.), the good news is everyone is very
social, personable, kind and treated me and all others with respect. One
insider even goes so far as to call his interviewing experience a lot of fun.
Another candidate describes a phone interview with a recruiter and an inperson interview with the department head and a frontline manager, although the
insider adds, I didnt get to speak until halfway though the interview. Still, the
meeting demonstrated my abilities and the contact got an offer two days later.
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inyou may be wearing a tie every day or even a suit if youre in a highprofile group. Some employees dont seem to mind either way. One insider
admits that dress code isnt much of a make or break for me.
Grab a rung
Insiders seem to be divided when it comes to opportunities to climb the
corporate ladder. One contact says the firm offers great opportunities for
advancement and movement, and encourages its associates to seek new
roles anywhere in the bank after every 18 to 24 months in order to circulate
the talent and make sure that you really learn how the bank makes money.
Another insider dryly comments if there were chances to move up, Id be in
favor of it, adding that the firm would rather hire an external candidate
making a lateral move instead of a talented internal one. Another respondent
says the firm does a fantastic job of developing its talent and the
organization really invests in you.
Hours are fairly reasonable, report insiders. It hinges on your group, says one
insider, but an average of 50 to 52 hours per week is pretty typical, though
many analysts will average less than 45 hours a week. Seldom working
more than eight-hour days is also standard, reports another contact.
Compensation and perks are pretty decent, too. The bank offers four weeks
of paid vacation and an excellent overall benefits package, including a
pension. And it matches up to 5 percent of your salary that you contribute
to your 401(k). You also get the standard medical, dental and vision
package, as well as tuition reimbursement, discounts on tons of
merchandise, and spirit points, which can be used to buy merchandise such
as iPods and can count toward vacations, etc.
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KEY COMPETITORS
DEPARTMENTS
UPPERS
Asset Management
Asset Servicing
Broker-Dealer & Advisory Services
Issuer Services
Treasury Services
Wealth Management
THE STATS
Employer Type: Public Company
Ticker Symbol: BK (NYSE)
CEO: Robert Kelly
Revenue: $11.33 billion (FYE
12/07)
Net Income: $2.04 billion
No. of Employees: 42,100
No. of Offices: 54
Northern Trust
SEI Investments
State Street
DOWNERS
More family-friendly policies needed
EMPLOYMENT CONTACT
See careers section of
www.bnymellon.com
THE BUZZ
Large custodian
Sharks in suits
Private wealth shop
Second tier
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THE SCOOP
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Bethlehem Steel, and Pittsburgh Coal and Glassand its most successful
investment, the startup that eventually became Gulf Oil. The Mellon familys
involvement in managing the bank ended when Richard K. retired in 1967.
The Bank of New York began to manage funds for its private clients in 1832.
Throughout the 20th century, the bank enlarged its trust and investment staff
to attract and manage funds beyond the realm of trusts. The Bank of New
York was early to the trend of emphasizing alternative investment strategies,
acquiring Ivy Asset Management, a leading fund of hedge funds manager, in
2000, and subsequently expanding into other alternative investment
categories, including real estate. Mellon accelerated its momentum as an
asset manager in 1983, with the establishment of Mellon Capital
Management.
Cool as a cucumber
The Bank of New York Mellons CEO, Robert Kelly, is the former CEO of
Mellon Financial. Kelly was appointed to that post in February 2006, as the
result of an extensive search process launched to find a successor to Martin
McGuinn, who previously announced plans to retire. Kelly, 51 at the time of
his appointment, joined Mellon from Wachovia Corporation, where he was
CFO and senior executive vice president since 2000. Voted best large
capitalization bank CFO in America by Institutional Investor in both 2004
and 2005, Kelly hit the ground running, taking over for McGuinn
immediately after his appointment. And he was again deemed the man for the
job when Mellon joined forces with The Bank of New York in July 2007.
Bank of New York Chairman and CEO Thomas Renyi became The Bank of
New York Mellons executive chairman. But within two years, Renyi will
step aside to let Kelly fill his shoes.
Perhaps it was his cool-and-collected demeanor that kept him in the top role.
Kelly was under pressure from the get-go since stepping foot in his new office
at Mellon, as he took over for McGuinn at a time when the former CEO was
getting hammered for Mellons flailing stock price. But upon taking the
helm, Kelly remained calm, declining to announce changes of direction,
strategic reviews or management purges, reported Financial News.
Instead, he listened to clients, analysts and, perhaps most importantly, staff,
all of whom had their own ideas about what was right and wrong with the
firm.
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As far as his plans for the combined company, Kelly told reporters in
December 2006 that lose no customers is going to be our rallying cry, and
we are going to hate it if we lose customers.
Shop-a-holic
Mellons wildly successful Dreyfus acquisition is just one example of why
The Bank of New York Mellon now has so many thriving subsidiaries in its
arsenal. A year before buying Dreyfus, Mellon acquired money manager The
Boston Company for $1.45 billion. And over the next decade or so, Mellon
continued to build out an enviable mix of businesses. Between 2000 and
2003, the firm acquired four companies for the Mellon Private Wealth
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and shifted the banks focus away from bank-sourced financing to capital
markets-based financing.
The second change was the creation of BNY ConvergEx Group, an
entrepreneurial collaboration with Eze Castle Software to offer institutional
trading and investment technology products, especially to hedge funds. The
partnership was officially launched in October 2006, with additional backing
from private equity firm GTCR Golder Rauner. The new entity operates as an
affiliate of The Bank of New York Mellon, which holds a 35.4 percent stake.
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Mixed bag
The bank reported mixed results for full year 2007. Net income came in at
$2.04 billion for 2007, down from $2.85 billion in 2006. Total revenue,
however, increased to $11.33 billion, up from $6.84 billion in 2006. BP
Mellon Asset Management, which controls all of the banks investment
management units, brought in $1.58 billion in total revenue in 2007, up from
$310 million in 2006. The firm pointed to the Mellon merger, net new
business and improved equity markets as reasons for the mostly
encouraging results (subprime mortgage exposure accounted for much of the
dip in the firms net income).
Adding in Pittsburgh
In March 2008, the firm said it would add at least 60 new positions during the
year in Pittsburgh in its BNY Mellon Wealth Management unit. The positions
will come in the firm s information security and general wealth management
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units. According to the firm, the new positions will bring BNY Mellon
Wealth Management's total Pittsburgh workforce to about 600.
GETTING HIRED
Nothing fancy
Competition to get hired is fairly fierce. After all, the employee overall
turnover rate is very low. In spite of this (or maybe in light of it), the interview
process can be long and strict, though other insiders call the process relaxed,
nothing fancy, relatively informal and even one of the best I have been
involved with so far. The contact goes on to expound that there are no tough
or silly questions, most of the questions are job-related and previous
experience is a plus. It might help to emphasize teamwork, learning
capability and flexibility during your interview too, insiders say.
If youre interested in passing on your resume, check out www.bnymellon.com/
careers, where prospective employees can search jobs that reflect the banks
recent mergerpositions listed under both the Bank of New York and the
Mellon Financial Corporation monikers. Candidates can also learn about the
firms internship program, which spells out day-to-day responsibilities and
qualifications applicants need in order to apply.
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events and activities during the summer and spring seasons. And most of
time, employees are allowed to dress business casual, with Friday jeans
days offered for non-frontline department members. Casual days or no,
however, cargo pants, city shorts, low-cut blouses or revealing camis
and T-shirts or sweatshirts with words, phrases or logos are not allowed at
any time. Another insider notes that many company rules are applied on an
individual basis and because of it, some people wear hats, jeans and
sandals.
Prepare to kiss up
Getting ahead involves saying the right thing and impressing the right
person. One insider calls the workplace extremely micromanaged with a
lot of managers. Mediocre management seems to be the consensus amongst
insiders. Management is bad, one insider says flatly, adding its hard to
imagine a worse place. Middle management is some of the worst Ive ever
seen or heard about. Others say employee morale is low among nonmanagement and management is condescending and hovering, which gives
the place a nearly Orwellian atmosphere. The slightest error is written up,
and the extent to which the staff is punished depends on the person above
them, says one insider. Another says that low morale, in my opinion, will
lead to more turnover, which has the potential to lead to the sticky finger
temptation by those in a position to take advantage of the many channels of
large money movement.
It all depends
Hours spent in the office tend to depend upon your area. However, if your
end time is 6 p.m., you wont get out until 6:30 or 7 p.m. If its 6:30 p.m.,
you wont get out until close to 8. One must stay until the desk is cleared of
items. And while this was only supposed to occur at end of month or
quarterly, it has happened more often than not due to a large amount of work
being handed to the administrators toward the end of day, even though there
would be several hours in the afternoon of downtime when there was little or
nothing to do. Perks, however, make up for a little bit of lost ground in other
areas. There is three weeks standard vacation without yearly carryover, a
great sick package with 12 sick days per year, which you can use for your
spouse or children, a good corporate 401(K) plan, tuition
reimbursement and one annual profit-share program for every employee.
And there are also lots of internal training events, which are much better
than the average of industry and a real strong point for company business.
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DEPARTMENTS
Accounting & Finance
Administrative
Communications
Customer Service
Facilities/Meeting Planning
Human Resources
Information Technology
Investment Research &
Management
Legal/Compliance
Marketing
Portfolio Control
Retirement Plan Services
Sales
Training
Warehouse/Distribution
KEY COMPETITORS
American Century
Fidelity
FMR
The Vanguard Group
UPPERS
Room to grow and try new things
DOWNERS
A definitely corporate environment
EMPLOYMENT CONTACT
www.capgroup.com/careers/index.html
THE STATS
Employer Type: Private Company
President: Philip de Toledo
No. of Employees: 9,000
No. of Offices: 19
THE BUZZ
Industry giant
Past its prime
High quality
Who?
Strong fund performance and
flows
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THE SCOOP
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and through Capital Guardian in the U.S. and Canada. The firm also has a
private equity subsidiary Capital International, Inc. (CII), which makes
investments in non-U.S. markets.
All American
The jewel of the Capital Groups business is its American Funds group, a
family of 30 mutual funds that has more than $1 trillion in assets. That makes
it the third-largest mutual fund company in the world behind Fidelity and
Vanguard.
American Funds Growth Fund of America became the first U.S. mutual fund
to reach $200 billion in assets in October. The Growth Fund of Americas
assets have quadrupled in the past four years. Some analysts have raised
concerns such rapid asset growth could hurt performance by limiting fund
managers agility, while others seem undeterred by the size. Company
spokesman Chuck Freadhoff told Reuters the company does not consider the
stock funds size to have contributed to an underperformance that has hurt
our shareholders. The fund had returned 16.64 percent year-to-date at the
end of October.
Case dismissed
In February 2008, the Capital Group had reason to celebrate: after three long
years, a lawsuit aimed against the American Funds group was dropped for
good. The case began in 2005, when Bill Lockyer, Californias former
attorney general, filed a suit on behalf of the state alleging that American
Funds did not properly disclose fees paid to brokerages that were essentially
kickbacks. He accused the group of encouraging a system that would result
in preferential handling to American Funds. The case was bitterly fought for
years, with the Capital Group arguing that the fees defray the cost and efforts
involved in educating financial advisors about American Funds. Though it
took some time, apparently the state of California now agrees with that
assessment. In its ruling on the case, it actually praised the company for
lowering costs and educating advisors.
A reason for the sudden change of heart may be the change in attorney
general. Former Governor Jerry Brown took the office in January 2007, one
year before the case was dismissed. Despite early continuations of the case
in the first months of Browns term, it was under his administration that the
charges were finally thrown out. Though American Funds may have avoided
steep fines with the decision, it did not emerge from the legal battle
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unscathed. The firm agreed to pay $2.5 million to cover the attorney
generals costs, in keeping with the custom of reimbursing the state for the
cost of the lawsuit and investigation.
New facilities
The Capital Group opened its new Irvine, Calif., campus in September. The
34.2-acre site houses more than 2,000 employees. The organization has
announced plans to take on another 800 employees at the location in the
accounting, finance and information technology departments.
The firm announced in May 2007 it would also set up new facilities in
Carmel, Indiana and Chesapeake, Va. The company, which currently
employs almost 1,000 employees in Central Indiana, relocated 300 of its
Indianapolis-based Capital Bank and Trust employees to the new Carmel
location by years end.
The firm also invested $12 million to enlarge its American Funds customer
service center in Chesapeake, Va., creating 250 new jobs there. The new
expansion nearly doubled the investment capital and the number of new jobs
since the Capital Group first came to Chesapeake in December 2005. The
Virginia Department of Business Assistance will support the project with
training assistance through the Virginia Jobs investment program.
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GETTING HIRED
See it all
At www.capgroup.com/careers, you can search openings by category or
location, learn about the firms recruiting process and what the firm
specifically looks for when seeking out ideal candidates. You can also see
photos of its offices across the globe and read employee testimonials.
The Capital Group management prefers to call those who work at the firm
associates, rather than employees. According to corporate literature, the
use of the term indicates that everyone who works for the Capital Group plays
an important role in the companys growth. It should come as no surprise,
therefore, that job candidates undergo a thorough interview process.
Applicants should be prepared to meet many people with whom you may
interact if you become an associate. Those interested in employment at the
Capital Group should search the listing of open positions on the firms site,
www.capgroup.com. Searches can be conducted by location or job function.
Resumes can be submitted online; they can also be faxed or mailed to a
specific office with an opening.
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Staying power
Insiders say the firm isnt going anywhere anytime soon. The bottom line is
the Capital Group has been around since the 1930s, explains one source.
We survived the big stock crash in the 1930s and are still going strong.
Insiders also note that the firm has broken records and passed many
milestones, all while remaining humble and honest. The Capital Group will
be around for a very, very long time.
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Charles Schwab
101 Montgomery Street
San Francisco, CA 94104
Phone: (415) 636-7000
Fax: (415) 636-9820
www.schwab.com
BUSINESSES
Charles Schwab Bank
Schwab Corporate & Retirement
Services
Schwab Institutional
Schwab Investor Services
THE STATS
Employer Type: Public Company
Ticker Symbol: SCHW (Nasdaq)
Chairman & CEO: Charles R.
(Chuck) Schwab
Revenue: $4.99 billion (12/07)
Net Income: $2.4 billion
No. of employees: 13,300
KEY COMPETITORS
E*TRADE FINANCIAL
Edward Jones
Fidelity
Merrill Lynch
TD Ameritrade
UPPERS
Many perks
DOWNERS
Corporate culture driven by the
bottom line
EMPLOYMENT CONTACT
www.aboutschwab.com/careers
THE BUZZ
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THE SCOOP
Talk to Chuck
Charles Schwabs more than eight million individual and institutional clients
know whom to call when they have questions. A brokerage giant, with about
$1.4 trillion in assets, Charles Schwab was one of the first to offer its services
online, and is also available by telephone, wireless devices and via 300
offices across the U.S. As of April 2008, the company oversaw 7.2 million
client brokerage accounts, 1.3 million corporate retirement plan participants
and 332,000 banking accounts.
Schwabs volatile past, however, proves that sometimes its a rocky road to
success. The company was founded in 1974 after the U.S. Securities and
Exchange Commission deregulated the fees that brokers charged to trade
stocks in 1974. Schwab billed itself as a brokerage house for the everyday
American and, in the years after, built a loyal customer following based on
that principle. It went public in September of 1987 with a $132 million initial
public offering and steadily grew in size and revenue from there. In 1996, it
became a pioneer in the industry by offering its services online, winning
multiple awards and new accounts for the revolutionary approach to
investing. But in 2000, the dot-com bubble burst, and Charles Schwabs
share price plummeted, causing the company to downsize 33 percent of its
workforce.
In an attempt to garner the attention of wealthy Americans and boost revenue,
then-CEO David Pottruck acquired U.S. Trust in 2000. Though managing the
wealth of some of the most elite Americans, Charles Schwab was losing
money by failing to compete with low-cost competitors like E*Trade and
Ameritrade. Pottruck was ousted in July 2004, Charles R. Schwab took back
the helm as CEO and the company launched a Talk to Chuck national
advertising campaign, which hoped to earn back the trust of their original
clientele.
In July 2007, Charles Schwab shut the door permanently on its wealth
management division by selling U.S. Trust to Bank of America for $3.3
billion. The firm shared the riches of this sale with its shareholders by paying
out a $1 per common share dividend to shareholders in August of the same
year. It also repurchased 102 million of its own shares (for $2.1 billion) with
the money it gained through the U.S. Trust sale.
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Booming business
The San Francisco-based firm markets itself as an everymans financial
services firm that is affordable and reliable. Through Charles Schwab & Co.,
Inc. (member SIPC), Schwabs Investor Services segment provides a range of
retail brokerage services and products, including stocks, ETFs, bonds and
other fixed income investments, CDs from dozens of banks across the U.S,
thousands of mutual funds, retirement and college savings accounts, and
financial planning and asset management services. It also provides referrals
to independent registered investment advisors.
Banking services are offered through Charles Schwab Bank (member FDIC)
and include a high-yield investor checking account, home mortgages, home
equity lines of credit and a Visa credit card. Schwab Corporate & Retirement
Services offers retirement plan and equity compensation plan services to
corporate plan sponsors and their employees. The Schwab Institutional
enterprise offers trading and support services to thousands of independent
investment advisers.
In 2007, Charles Schwab turned a crucial corner when it reported in its third
quarter earnings that income from continuing operations was more than $300
million for the first time since its fall during the dot-com era. In the midst of
a very difficult market, Charles Schwab proved that not everyone was
suffering, posting income from continuing operations of $323 million, an
increase of 26 percent over the previous quarter. Over the past year and a
half, Schwabs growth has steadily increased, with income from continuing
operations rising an impressive 33 percent. Its strategy to appeal to the
average Joe was finally paying off with big numbers. The 2007 annual
numbers were just as good. The firm increased revenue to $5 billion from
$4.3 billion in 2006, while increasing income from continuing operations to
$1.1 billion from $900 million.
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manage a new set of real estate investment products for Charles Schwabs
fixed income and actively managed equity funds.
In December of 2006, Schwab acquired The 401(k) Company from Nationwide
Financial Services, Inc. (NYSE: NFS) for $115 million as an addition to
Schwabs Corporate & Retirement Services enterprise. With client assets
totaling $21.7 billion at the time of the buy, The 401 (k) Company was a leader
in winning accounts in the mega plan segment. Charles Schwabs acquisition
of the company was part of a plan to boost its own involvement in the mega
plan segment. In a press release about the purchase, Charles Schwab said that
buying The 401 (k) Company was simply an extension of doing business for its
key clientele, explaining, Many Americans are depending on their 401(k)
accounts to help them achieve a comfortable retirementits one of the pillars
of our retirement security system.
Banner year
In addition to strong numbers, Charles Schwab received a host of other
accolades in 2007. Barrons named it the No. 1 company for five-year
performance numbers. Mr. Schwab himself, or the Chuck of ad fame, won
San Francisco magazines award for CEO of the Year. Consumer Reports rated
Schwab No. 4 in its top online brokers list in June 2007, and gave the firm the
much coveted rating of Excellent in the categories of banking and asset
management, research and education, and customer support. In 2008, Schwab
ranked No. 5 in the Barrons 500, a ranking of the 500-largest (by sales) publicly
traded companies in the U.S. and Canada that aims to identify those corporations
most successful at boosting their sales and cash flow.
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The firm also took home awards from Computerworld (Top 100 Places to
Work in IT) and PotentialPark for its positive employee environments. And
due to Schwabs solid year by the numbers, Chuck himself took home $8.2
million in total compensation.
GETTING HIRED
Strong Schwab
The hiring process is pretty smooth and relatively painless. Its also
fairly quick. One insider says, It took two weeks from the date I submitted
my application online to the date I was offered the position. Expect at least
two to three rounds of interviews after applying through the site.
At www.aboutschwab.com/careers, you can create a profile, search open
positions and even sign up to receive job e-mail alerts. The site also lists
upcoming recruiting programs such as campus events and career fairs. After
you submit your resume online, the firm says that a Schwab recruiter will
review the information and if you meet the criteria theyre looking for in a
candidate, well call you to discuss your experience, skills and other topics.
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DC Energy
8065 Leeburg Pike
Fifth Floor
Vienna, VA 22182
Phone: (703) 506-3901
Fax: (703) 506-3905
www.dc-energy.com
KEY COMPETITORS
Asset Management
Trading
THE STATS
UPPERS
DEPARTMENTS
DOWNERS
Location is too far from D.C.
Long hours
We dont have a lot of women at
our firm
EMPLOYMENT CONTACT
www.dc-energy.com/careers.html
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THE SCOOP
Nitty gritty
Founded in 2002, DC Energy is a trading firm that uses rigorous analytics to
capitalize on investment opportunities in energy markets, most commonly in
electricity. In starting the company, CEO Dean Wilde took the same
philosophies that he uses to run his business strategy consulting firm, Dean &
Company, and applied them to trading and asset management. More
specifically, DC Energy uses in-depth analytics to make investments in the
energy markets that have a sustainable and superior return on investment.
Wilde told Harvard College Investment Magazine in 2005, We believe that
a granular understanding of the fundamentals can identify and create value in
business.
Power traders
After starting the company with just eight people, Wilde now leads a 50person shop based just outside Washington, D.C. Since its inception, DC
Energy has had a 100 percent annual growth rate. The firm buys and sells
roughly $50 million of power each day, places millions of trades each year
and manages almost 10 billion data records. How so successful? By being
picky. Unlike most larger investment firms, DC Energy targets specific
markets opposed to making highly leveraged market bets amplifying narrow
spreads.
Whats more, the company is structured around markets, not functions.
Employees at DC Energy work across all aspects of an investment, including
strategy development, implementation, execution and portfolio development.
The firms philosophy is that breaking people up according to function
hinders idea flowand teamwork. DC Energy is big on both, boasting on its
web site that its employees do not make decisions in a vacuum, and that the
success of the firm as a wholenot individual achievementdrives financial
rewards.
Wilde thing
DC Energy CEO Dean Wilde has a history in the investment business as cofounder and chairman of Dean & Co., a strategy consulting and investment
firm he started in 1993. Dean & Co. neighbors DC Energy with its location
in Vienna, Va., just outside of D.C. The firm boasts impressive numbers due
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Issuing a challenge
For the most part, this tight-knit firm keeps its operations wrapped in a cloak
of secrecy. CEO Dean Wilde gives few interviews and the companys
website has carefully avoided the standard links to its myriad
accomplishments and self-congratulatory press releases. But in 2007, DC
Energy had an issue that necessitated a public filing. On June 10th, DC
Energy issued a complaint to Federal Energy Regulation Committee claiming
that a Canadian company, Hydro-Quebec, had bought transmission
congestion contracts that exceeded the day-ahead transfer capability between
Quebec and New York. DC Energy claims that Hydro-Quebec illegally drove
up its profits, yielding a 9,870 percent return on its investment on these
congestion credits. While Hydro-Quebecs profits were skyrocketing, DC
Energy was losing money on negative congestion contracts. The price of
these negative congestion contracts skyrocketed from $3.33 megawatts/day
to $176 megawatts/day after Hydro-Quebec started operating in the area. DC
alleges that Hydro-Quebecs misuse of its contracts caused them to lose $2
million in spring 2007.
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process, through which truly only the best of the best are given offers.
Getting a foot in the door is relatively easy. Getting through the interviews
is an entirely different story. Overall, You really cannot beat this job. You
just have to get in it.
So whats the firm looking for? We are extremely interested in
mathematically inclined people. One such insider does the math: We
interview about 150 people out of 500 to 1,000 resumes and give offers to
about 30 to 40 people each year. Even if granted a first-round interview, a
candidate historically has only about a 15 percent chance of receiving an offer
from DC Energy.
Top-tier recruiting
To find its chosen few, DC Energy only visits top-ranked schools. The firm
looks to the IviesHarvard, Yale, Cornell, Dartmouth and PrincetonMIT,
Stanford, Carnegie Mellon, Chicago, Johns Hopkins and the University of
Virginia. One insider says school selection is pretty much dictated by where
we have alumni at the company. At each of these schools we will interview
on campus, and give presentations and attend career fairs. All other schools
must meet much more stringent criteria, but its not entirely hopeless for
candidates who come from other schools. We have an off-campus effort,
which seeks people from about 50 additional schools, says a contact. We
solicit resumes online and bring promising candidates to interview at our
office. However, we dont visit these schools, so it is harder to get an offer if
you are not from one of our targeted schools.
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Our yield from on-campus interviewing is one-to-five offers per school, with
an average of two-to-three, says one math-inclined insider. Our off-campus
interviewing process, where we invite candidates from nontargeted schools to
interviews at the firm, has resulted in only one offer from 25 people
interviewed. According to one contact, Those coming through our offcampus channels are subjected to more scrutiny (generally four 45-minute
case interviews at the Vienna, Va., office). Case questions are at the
challenging end of the spectrum, but the firm is extremely flexible and
allows a candidate to explore several different answers before settling on
one. Insiders say DC Energys case-interview process is like interviewing
for a consulting firm.
Those whose hearts are set on a job at DC Energy must polish their test-taking
skills, as theres no hope of wooing superiors through an internship. DC
Energy does not offer summer internships.
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job is problem solving. Also, I really enjoy the large amount responsibility
you are given. The firm still feels entrepreneurial, so employees are given
a great deal of discretion concerning how they contribute. Insiders say the
firms employees are heavily quantitative but have good communications
skills and lack the arrogance you see at many other firms. We dont have
a star culture herea team mentality is heavily stressed.
DC Energy has experienced fast and explosive growth in recent years.
Headcount growth has been over 50 percent the past four years, and
aspirations continue to grow, says a contact. Its been difficult to deal with
the transition to becoming a bigger company. But the old guard is still intact
and it is a good group. One source says the firm is breaking out of a smallfirm mentality. This place, at times, still resembles the breakout startup it
was when I joined three-and-a-half years ago. Although one contact feels
that as the firm has grown it has become less tightly knit, people are still
very much the samevery brainy, and excellent with numbers and thinking
on their feet.
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generally these deadlines are known well in advance. The firm, in general,
tends to be flexible, particularly in the morning. If I have a doctors
appointment, or a dinner appointment, I know I can almost always be there,
says one contact. As long as my work gets done, when I work doesnt matter
too much. In general, the firm supports very good work/life balance.
According to one insider, Hours and expectations vary somewhat by team,
but volatility is relatively low, meaning its pretty easy to plan your life. Face
time is not stressed; output is.
Still, given the 24/7/365 nature of power markets theres often a sense of
always being connected to the office, even from home, which can be
frustrating. One insider notes, I work a lot compared to my friends in D.C.
There tends to be a fair bit of e-mail banter in evenings and on weekends that
you need to keep up on. You also need to work evenings and weekends
frequently to complete trades.
DC Energy insiders, despite sometimes logging hefty hours, consider
themselves well compensated. The atmosphere is relaxed and the stress
level is relatively low for the amount we get paid, says one insider. Another
raves of excellent compensation.
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With respect to gays and lesbians, Its a very tolerant and forward-thinking
environment. There are several openly gay/lesbian individuals in the firm,
and I have no reason to believe they are anything less than comfortable
working here, says a contact. The fact that they can be so open about it is
really eye opening compared to some other work environments Ive seen.
Another contact says of the issue, No evidence of any discrimination or
discomfort.
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Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Phone: (212) 922-6000
Fax: (212) 922-7533
www.dreyfus.com
KEY COMPETITORS
DEPARTMENTS
UPPERS
Asset Management
Insurance
Mutual Fund Management
Retirement & Pension Fund
Management
THE STATS
Employer Type: Subsidiary of Bank
of New York Mellon
CEO: Jon Baum
President: J. Charles Cardona
Revenue: $137.3 million (FYE
12/07)
No. of Employees: 1,400
No. of Offices: 10
BlackRock
Federated Investors
The Vanguard Group
DOWNERS
Perks could be improved
EMPLOYMENT CONTACT
www.bnymellon.com/careers
THE BUZZ
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THE SCOOP
Parental Merger
Dreyfus parent company, Mellon Financial Corporation, underwent a huge
merger in July 2007 when it merged with the Bank of New York to form the
Bank of New York Mellon Corporation, combining to pool their funds for an
impressive total of $1.1 trillion assets under management. The company
announced the merger in December 2006 to overwhelming industry and
shareholder support, and the deal was sealed with a majority vote in May of
2007. Combined, the two companies have annual revenue of more than $13
billion and a whopping $23 trillion in assets under custody and
administration, and operate in over 37 different countries. The merger will
also mean that Mellon will shift its location, from its former home base of
Pittsburgh to New York City.
For Dreyfus, the merger means increased access to a larger network of
investment management professionals. Even before combining with the
Bank of New York, Mellon had an impressive collection of asset management
companies working together, including The Boston Company Asset
Management and Newton Investment Management Limited in the U.K. But
with the merger complete, Mellon now has access to the Bank of New Yorks
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A familiar face
The Dreyfus Corporation got its start in 1947 when its founder, Jack Dreyfus,
founded a brokerage house in New York City called Dreyfus & Co. In 1951,
Dreyfus developed an interest in the concept of mutual funds and purchased
a small management company called John G. Nesbett & Co., which offered a
common-stock fund named the Nesbett Fund Incorporated. Dreyfus & Co.
became the Dreyfus Corporation, and the Nesbett Fund was dubbed the
Dreyfus Fund Incorporated. Nearly 15 years later, Dreyfus went public.
Dreyfus prides itself as being one of the first mutual fund companies to
launch a retail advertising campaign in 1957. A year later, Dreyfus made a
splash when it took out a full-color supplement with The New York Times to
attract retail clientele. It was around this time that the company adopted the
image of a lion as its badge on Wall Street and has since become one of the
most recognizable corporate trademarks in the U.S. Today, its public profile
is bolstered by its highly recognizable chief economist and chief investment
strategist Richard B. Hoey, whose ubiquitous presence on television, radio,
and print keeps Dreyfus squarely in the public eye.
The firms recent financial history has seen its fair share of ups and downs.
After its assets under management hit the $181 billion mark at the end of
2002, total assets fell to $168 billion in September of 2003. They continued
to fallespecially in its equity and money market fundsdespite Dreyfus
efforts to beef up its assets under management through a variety of
acquisitions. In March 2004, the company purchased the Thomas Plumb
balanced fund, which had $230 million in assets under management at the
time. Then, in November 2003, the lion stuck its claws into Bear Stearns
mutual fund assets worth $4.7 billion. By the end of 2005, the lion may have
had some nicks and bruises, but it had fought its way back up from $158
billion at the start of the year to its 2003 asset levels.
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Mutually Beneficial
Even with the increase, Dreyfus was still lagging behind its competition, with
below-average performance overall. In 2006, it worked doggedly to combat
this malaise, beefing up its mutual fund line up with over 10 additional funds,
which focus on equity, fixed income and international markets. The new
funds include the Dreyfus Premier International Bond Fund, the Systematic
International Equity Fund, the Dreyfus Premier Small Cap Growth Equity
Fund and The Global Alpha Fund, which topped $160 million in assets in its
first nine months on the market.
An individual who wants to invest in these new funds need $1,000 to invest
in regular accounts and $750 for individual retirement accounts. The
strengthened mutual fund lineup was essential in helping the company
achieve its goal of reaching $200 billion of assets under management,
something they accomplished the firm accomplished in mid-2007.
GETTING HIRED
Try em all
At careers.mellon.com, candidates can view job postings, access saved
application information andif you want to really play your oddsapply for
up to four jobs at once. Prospective applicants can also browse listings by
department (finance, fund accounting, human resources, information
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Edward Jones
12555 Manchester Road
Des Peres, MO 63131
Phone: (314) 515-2000
Fax: (314) 515-2820
www.edwardjones.com
KEY COMPETITORS
Charles Schwab
Raymond James Financial
UPPERS
DEPARTMENTS
Administrative/Support Services
Compliance & Registrations
Finance
Human Resources
Information Systems
Internal Audit
Marketing
Operations
Products & Services
Research
Sales Hiring & Training
Service
Trust Company
DOWNERS
Limited platforms
Benefits are average at best
Behind the times
EMPLOYMENT CONTACT
See the careers section of
www.careers.edwardjones.com
THE STATS
Employer Type: Private Company
Managing Partner: James D.
Weddle
No. of Employees: 32,400
No. of Offices: 10,000+
THE BUZZ
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THE SCOOP
A cautious approach
Edward Jones offers its investors a wide variety of municipal, government
and corporate bonds, mutual funds, common stocks and tax-advantaged
securities. Taking a conservative, long-term view on investing, Edward Jones
financial advisors recommend blue-chip companies that have proven, solid
and stable track records, while dissuading investors from buying into trendy
stocks or fads.
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In the Why We Are Different section of its web site, Edward Jones makes
the unusual concession that because of its conservative approach to investing
it is a company that isnt the right choice for everyone. Edward Jones
admits its methods may be considered old-fashioned, but holds firm when it
comes to rejecting risky investments. The research team analyzes stocks on
the basis of five main criteria: country, longevity, safety, size and long-term
analysis. Dont expect Edward Jones financial advisors to dip into emerging
markets with your portfoliothe country criterion specifically states that it
only does business with companies in the U.S., Canada and Western Europe.
Its analysts perform detailed reviews on potential stocks, sometimes spending
years gathering information before approving a company to go into the
Edward Jones portfolio.
Although some of these requirements may seem a bit stringent for the average
investor, Edward Jones vigilant approach seems to be paying off. In February
2008, it was named No. 8 in BusinessWeeks Customer Service Champs
ranking. For the second year in a row, it received the highest marks of all the
brokerage firms included.
Part of the reason why customers stick with Edward Jones is because its
financial advisors are increasingly involved in their portfolios. Unlike other
firms, where self-directed investment tools are quickly usurping the role of
financial advisor, Edward Jones is increasing its relationships between clients
and advisors, with investment decisions being made under the guidance of a
financial advisor rising to 59 percent in 2007 from 53 percent in 2006.
Whats in a name?
More than 30 years after his father, Edward D. Jones, founded his company
in downtown St. Louis, Missouri, in 1922, Edward D. Ted Jones Jr. took
the firm to the streets and began developing branch offices so that his
financial advisors could help their clients face to face. Everyone, in his view,
should be given access to professional investment advice, which should
ideally come from a financial advisor who works and lives in the same
community and who could really understand a clients financial needs. In
1955, Edward Jones first branch office was opened in Mexico, Mo., which
proliferated into more than 300 branch offices across the country by 1980.
There are now more than 10,000 Edward Jones offices, including 9,200 in the
U.S., more than 590 branch locations in Canada and more than 230 branches
in the U.K. In addition to having more office locations than any other
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GETTING HIRED
Several rounds
A minimum GPA of 3.0 is preferred for campus hires, and according to the
firm, its looking for candidates with strong analytical, marketing, leadership
and communication skills. Like many financial services firms, Edward
Jones hiring process includes fingerprinting and background checks in order
to comply with industry regulations.
The interview process itself can be very lengthy and involved, but sources
also say the experience is worthwhile and designed to cover all the bases.
One current insider says his experience included an application, initial
phone screen, an office visit, second phone screen, surveys and a face-to-face
interview. A financial advisor recalls one face-to-face interview, one phone
interview, a trial door-to-door survey and another face-to-face interview.
Throughout this process, he met with two financial advisors and spoke with
a corporate hiring liaison. The purpose of the door-to-door survey, he adds,
is simply to gain an appreciation of the Edward Jones way.
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Be the boss
My hours are extremely flexible, says one contented financial advisor. I
run my own office, so I can go to pick up my kids at school, go to
appointments, go to events and take time off as needed. Other independent
advisors agree. We make our own schedules, says another advisor. It is
quite nice to have that flexibility.
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Still, being your own boss doesnt always mean an easy workload. I set my
own hours, but work 60 to 80 hours per week to get my business off and
running, explains one source. Luckily theres no pressure from the firm
about punching the clock. Adds another advisor, We are free to come and
go, so long as we run an ethical and profitable office.
One financial advisor whos been with the firm for five years reports earning a
$10,000 bonus last year, of which $3,000 was for new accounts and $7,000
for exceeding performance expectations. Across the board, rewards are based
on performance. Financial advisors receive no base salary, an insider
explains. Instead, they earn commissions, with incentive bonuses during the
first three years. Another says the take-home pay tends to be low, once business
expenses are factored into the equation. We pay tremendously for our benefits,
notes one contact. I also pay a lot out of pocket for office expenses, postage,
marketing, etc. These issues would not be a big deal if the payout was higher, but
our payout is average at best until you are a really high producer.
Trying to improve
The majority of financial advisors are white males, and as one source puts it,
I havent seen too many women. Still, most sources believe Edward Jones is
improving when it comes to diversity, saying the company understands its
lack of minorities. Another insider says the company is also working to
address a lack of respect for alternative lifestylesthat is, gays and lesbians.
Though diversity may need some work, employees give high marks to
regional leaders, field trainers and mentors who are said to be very helpful.
At the same time, higher-ups encourage a great degree of autonomy.
Pro professionalism
Since most financial advisors work on their own, office concerns arent a big
issue for most respondents. The branch facilities department in St. Louis takes
care of things for you so you can concentrate on the day-to-day business of
sales, says one advisor. Another gives his workspace the thumbs-up for a good
reason: it was decorated by my wife, so its even nicer.
Edward Jones believes in dressing the part of a professional, so even
though you are able to dress as you see fit, sources say that business attire
is encouraged. While there is no requirement for formal attire, there is
strong encouragement for it, agrees an advisor. Still, people have some
leeway when necessary. In the heat of the summer, no jacket required!
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E*TRADE FINANCIAL
135 East 57th Street
New York, NY 10022
Phone: (646) 521-4300
www.etrade.com
DEPARTMENTS
Banking Services
Futures & Options
Mutual Funds, Exchange-Traded
Funds & Bonds
Online Money Management
Research
Retirement
Trading & Portfolios
THE STATS
Employer Type: Public Company
Ticker Symbol: ETFC (NASDAQ)
CEO: Donald Layton
Revenue: $2.22 billion (FYE 12/07)
Net Income: -$1.71 billion
No. of Employees: 3,757
UPPERS
Young, energetic and vibrant
people
Very entrepreneurial and relatively
flat hierarchically
DOWNERS
Long hours
Going through tough times
KEY COMPETITORS
Charles Schwab
Fidelity
TD Ameritrade
EMPLOYMENT CONTACT
See the careers section of
www.etrade.com
THE BUZZ
Online king
A total mess
Cool brokerage firm
Mortgage portfolio troubles;
takeover candidate
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THE SCOOP
E*Verything Online
New York-based E*TRADE FINANCIAL was one of the first brokerage
houses to go online to make trading directly accessible to individuals. Today,
its one of the countrys top online brokerage houses, with 4.8 million
accounts worldwide, most of them individuals who make their trades almost
exclusively via the Internet. Begun as an online platform for stock market
investors to make cheap trades during the dot-com boom of the late 1990s,
E*TRADE FINANCIAL is now an integrated financial services firm,
offering financial products and services for retail and institutional customers
ranging from stocks, bonds, options, mutual funds and exchange-traded funds
to checking and money market accounts, certificates of deposit and credit
cards.
Through various acquisitions and by building up its on-the-ground presence,
the firm was on its way to becoming even bigger. In 2005, it acquired two
online discount brokerage companies, BrownCo (the brokerage offering of
J.P. Morgan Invest) and Harrisdirect. Over the years, the firm has also
increased its wealth management operations, acquiring Kobren Insight
Management and Howard Capital Management in 2005.
Although lately the firm, like many others, has taken a severe hit due to the
mortgage crisis, E*TRADE is still a huge name in the brokerage business and
a new CEO is expected to turn the firm around. Today, E*TRADE services
customer accounts worldwide and is a leader in the online brokerage business
with over $190 billion in customer assets. It has 16 branded web sites
worldwide, and its subsidiaries include E*Trade Securities, E*Trade Bank
and E*Trade Global Asset Management.
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2007, when it ranked the firm the No. 1 major market maker in terms of price
achievement on incoming NYSE-listed orders.
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brokerage. Citigroups Prashant Bhatia went so far was to predict the worst
for the company, estimating that there was a 15 percent chance that it would
be facing bankruptcy in the short-term future. However, the company
received a capital infusion of $2.55 billion from Citadel Investment Group,
ridding itself of its troubled $3 billion asset-backed securities portfolio.
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Vibrant office
E*TRADE is simply a great place to work, comments an insider. To be
sure, the firms youthful place in the market is reflected in its culture. The
firm feels like a startup at times, says a contact. The environment is very
entrepreneurial and relatively flat hierarchically. As a result, its easy to
move up from within, because its not as structured as some other firms.
One source observes, The culture is reflective of E*TRADEs position in the
brokerage industry, meaning the firms initial goal, unlike any others in the
market at the time, was to allow the individual investor access to the same
information as traditional brokers and empower the individual investor with
this information. Backed by this mission, E*TRADEs culture has always
been that of a standout nontraditionalist; the day-to-day culture reflects this
attitude of nonconventional empowerment. E*TRADErs are young,
energetic and vibrant.
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Federated Investors
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Phone: (412) 288-1900
Fax: (412) 288-6446
FederatedInvestors.com
KEY COMPETITORS
BlackRock
Dreyfus
Legg Mason
UPPERS
DEPARTMENTS
Closed-end Funds
Equity & Fixed Income Funds
Money Market Funds
Mutual Funds
THE STATS
Employer Type: Public Company
Ticker Symbol: FII (NYSE)
Chairman: John F. Donahue
Revenue: $1.128 million (FYE
12/07)
Net Income: $217.5 million
No. of Employees: 1,270
DOWNERS
Dress code is suit-and-tie
professional
Minority diversity could be improved
EMPLOYMENT CONTACT
See the careers section of
FederatedInvestors.com
THE BUZZ
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THE SCOOP
Fund-filled Federated
One of the top players in money market funds, Federated has come a long
way since its foundersJohn Donahue, Richard Fisher and Thomas
Donnellystarted selling savings plans and mutual funds door to door in
Pittsburgh, Pa., in 1955. As of April 2008, the firm is one of the nations
largest investment managers, with about $340 billion in assets under
management. In April 2008, six of the firms mutual funds received Lipper
Fund Awards for their outstanding performance. That same month, Federated
released its latest quarterly earnings, reporting a 10 percent increase in net
income versus the same period a year earlier to $56 million. Meanwhile,
revenue climbed 16 percent to $305.7 million.
Federated is a wholesaler of investment productsincluding 148 domestic
and international equity, fixed-income and money market mutual funds, as
well as a variety of separately managed accountswhich it sells to 5,400
client firms, including brokers-dealers, bank broker-dealers, corporations,
pension funds and government entities. Its specialty, though, is money
market funds, which constitute more than half of Federateds total assets
under management.
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In 1998, the company completed its initial public offering on the New York
Stock Exchange, led by J. Christopher Donahue, founder John F. Donahues
son who had joined the firm in 1972 and was appointed chief operating
officer in 1993. Since 1998, J. Christopher Donahue has been president, CEO
and director of the company. His brother Thomas R. Donahue is chief
financial officer and treasurer.
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In August 2007, the company increased its $267 billion in assets under
management, acquiring certain assets of the $365.7 million Rochdale Atlas
Portfolio. The Rochdale Atlas Portfolio became part of Federated
InterContinental Fund, which according to Federated is positioned to be a
core international equity holding that invests in both developed and emerging
markets.
GETTING HIRED
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the firms eRecruit applicant homepage of the firms web site, job seekers are
invited to view job postings or create and update an online resume to be saved
on file with the company. Candidates can access this information through the
careers link on FederatedInvestors.com. Once there, applicants can check out
open positions in numerous departments, including investment management,
accounting and finance, investor services, sales and product development.
Once youre called in to speak with the firm, expect at least four interviews
that may include chats with department heads, HR staff and the CIO.
And be preparedyou might even get more than you initially came in for
(but in a good way, of course). One insider says that during his interview,
HR asked me if I wanted to interview for a second job posting in another
department. After reviewing the description, two managers from that
department interviewed me.
Be a pro
The atmosphere within Federated is very professional, and compliance
and ethics are very important. The culture is also very structured, says one
respondent, and procedures take top priority. Though the dress code is
suit-and-tie professional, one contact loves this. This source also likes
the fact that people are here to work and not goof around.
As for the companys benefits program, it provides comprehensive health
insurance, a 401(k), employee stock purchase plans and tuition assistance,
among other offerings. While health care benefits are limited with high copays, they kicked in at the beginning of the month following your hiring
date. Retirement options also receive good marks from respondents, with
one source commenting that the options offered are pretty good.
And hours worked, notes one contact, can be flexible. Relationships with
management are also good and receive high marks from insiders as well.
Diversity efforts, however, could use a shot in the arm. One insider in the
Pittsburgh office notes that there is very little diversity in the workforce,
unless you consider females a minority, adding that this trend may be
indicative of the region.
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KEY COMPETITORS
DEPARTMENTS
UPPERS
Asset Management
Financial Advisory
Fixed Income
Individual Investment Management
Investment Partnership Group
Institutional Brokerage
Institutional Investment
Management
Mutual Funds
Research
Good compensation
Goldman Sachs
Merrill Lynch
Morgan Stanley
DOWNERS
Not well known
EMPLOYMENT CONTACT
Under contact us section of
www.gabelli.com, see career
opportunities
THE STATS
Employer Type: Public Company
Ticker Symbol: GBL (NYSE)
Chairman & CEO: Mario J. Gabelli
Revenue: $292.4 million (FYE
12/07)
Net Income: $79.6 million
No. of Employees: 211
No. of Offices: 7
THE BUZZ
Solid reputation
A little loose with the law
Aggressive
Small boutique, great
performance
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THE SCOOP
Still growing
Despite the tough markets, 2007 wasnt a bad year for GAMCO. It managed
to increase its assets under management by 10.4 percent, boost investment
advisory fees by 10.3 percent and post record revenue of $292 million for the
year. Its fourth quarter results were also a record, as it booked $89 million in
revenue, a 7.9 percent annual increase. GAMCOs third quarter results
included an 8 percent rise in net income compared with third quarter earnings
for 2006.
GAMCOs assets under management reached $31 billion at the end of 2007.
During the year, the firm saw strong returns on funds as well as increased
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Super Mario
One defining feature of the company is its high-profile founder and CEO,
Mario Gabelli. A Chartered Financial Analyst and Columbia University
MBA grad, Gabelli is a self-taught stock picker who, in an interview with
Investors Business Daily, recounted that he learned the stock market as a 16year-old caddie at a White Plains, N.Y., golf course. Gabelli spent several
years working as an analyst in the industry before founding his eponymous
firm in 1977, during a time when money managers and research firms were
struggling due to changes in the industry. Gabelli credits his companys
success to meticulous research techniques, based on applying Graham &
Dodds principles to the analysis of domestic, cash-generating, franchise
companies in a wide range of industries.
The terms of GAMCOs $105 million IPO in 1999 allowed Gabelli to retain
control of 80 percent of the firms equity and 97.6 percent of the firms voting
power. Additionally, he reportedly receives 10 percent of the firms pre-tax
profits, plus portfolio management fees. Today, Gabelli owns about 72
percent of the company; he earned $58 million in 2006.
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Despite his wealth, Mario Gabelli cannot seem to find his way out of trouble.
In March 2006, the U.S. government said it would join a civil fraud lawsuit
against Gabelli, which claims that Lynch Interactive Corporation, for which
Mario Gabelli served as chairman, created sham companies to bid for cell
phone licenses at a series of Federal Communications Commission auctions
between 1995 and 2000. Initially, Gabelli vowed to fight the charges, but by
June of 2006, he agreed to settle.
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you find anything youre interested in, you can just e-mail HR via a form
located on the site. But if you dont find the exact job youre looking for, the
firm might even work with you. GAMCO directs potential applicants to just
e-mail a cover letter specifying your area of interest and your resume.
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GMO
40 Rowes Wharf
Boston MA 02110
Phone: (617) 330-7500
www.gmo.com
DEPARTMENTS
Asset Allocation
Emerging Equity
Forestry
Global Fixed Income
Global/International Quant Equity
International Active Equity
U.S. Quant Equity
KEY COMPETITORS
Goldman Sachs
Lehman Brothers
Morgan Stanley
EMPLOYMENT CONTACT
See the employment opportunities
section of www.gmo.com
THE STATS
Employer Type: Private Company
Founder & Chairman of the
Board: Jeremy Grantham
Chief Operating Officer &
Executive Committee Chairman:
Scott Etson
No. of Employees: 400
No. of Offices: 6
THE BUZZ
World-class organization
Not well known
Well respected
Small, family-friendly
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THE SCOOP
GMO Mojo
Based in Boston, GMO is a global investment management firm with $152
billion in client assets as of January 2008. Its $10 million minimum
investment required means the firm caters to supremely wealthy individuals
and institutional clients, such as corporations and endowment funds. For
those who cannot locate the money for the $10 million minimum investment,
GMO also runs half of Vanguard U.S. Value and all of Evergreen
Investments. The firm also sub-advises on several John Hancock funds, and
manages absolute-return hedge funds and other alternative investment
products. In addition to its headquarters in Boston, GMO has offices in San
Francisco, London, Sydney, Zurich and Singapore.
Jeremy Grantham still serves as chairman of the board of GMO, the private
firm he co-founded in 1977 in Boston with Richard Mayo and Eyk Van
Otterloo. Initially called Grantham, Mayo, Van Otterloo and Co., GMO
began with a focus on small-cap U.S. stocks. In the 40 years since, the firm
has shortened its name but broadened its focus, to include international and
quantitative divisions, among others. GMO remains 100 percent owned by
its senior employees, with more than 75 percent of the partnership owned by
Grantham and Van Otterloo. Mayo left the firm in 2001 to start a hedge fund.
GMO attempts to systematically beat the market by relying strongly on value
investing principles and quantitative research. Many of its investments
reflect a philosophy that assets will eventually revert to their historical mean
valuation, and it takes about seven years for markets to get back to their mean.
The strategy has proven successful for GMO. Its stock and bond funds
returned 19 percent on an asset-weighted basis in the three years ended
November 30, 2007, double that of the S&P 500.
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hedge funds will cease to exist. (The firms mean reversion philosophy holds
that since stock prices have risen above trend in recent years, they must now
fall back to a more sustainable growth rate.)
This isnt the first time Grantham has predicted a major downturn. In the late
1990, he rightly predicted the dot-com bust that came in 2000. Many of the
firms clients decided not to pay attention to his advice. They chose instead
to take their investment dollars elsewhere, costing GMO about 45 percent of
its assets under management at the time. The company buttressed the
investments of those who remained with smart bets on Treasury inflationprotected securities, real estate investment trusts and emerging markets
equities. Many of the investors who left eventually came back.
This time, investors appear to be sticking around. In 2007, the firm won
mandates from the Alaska Permanent Fund, Washington State Investment
Board, Metropolitan Government of Nashville and Davidson County, South
Carolina Retirement System, Kansas City Employees Retirement System and
the St. Louis Public School Retirement System.
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GETTING HIRED
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Invesco Ltd.
One Midtown Plaza
1360 Peachtree Street, N.E.
Atlanta, GA 30309
Phone: (404) 479-1095
www.invesco.com
KEY COMPETITORS
DEPARTMENTS
UPPERS
Institutional Investment
Management
Private Wealth Management
Retail Mutual Funds
Entrepreneurial culture
Does a good job of hiring and
promoting individuals regardless of
sex, race or sexual orientation.
THE STATS
DOWNERS
BlackRock
Franklin Resources
T. Rowe Price
EMPLOYMENT CONTACT
www.invesco.com/about
THE BUZZ
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THE SCOOP
Whats in a name?
Formerly named AMVESCAP, Invesco is one of the worlds largest publicly
listed fund managers, with more than $481 billion in assets under
management as of April 2008. The company markets its services to
individuals, corporations and government institutions, and transacts
principally through seven brands: AIM, which operates primarily in North
America, managing and distributing mutual funds to retail and institutional
clients; Trimark, which offers investment solutions to institutions,
organizations, companies and individual investors across Canada; Invesco,
which manages a wide variety of financial products, including equities, fixed
income and alternative investment products; Perpetual, which offers U.K.
clients ICVCs, investment trusts, PEPs, ISAs, pension products, offshore
funds, institutional funds and other specialist mandates; Atlantic Trust, its
private wealth management division for high-net-worth individuals, families
and foundations; PowerShares, which is known for its broad lineup of
distinctive exchange-traded funds; and WL Ross which manages private
equity investments like fund of funds and distressed debt investments.
Invesco Ltd., listed on the New York stock exchange, is an integrated
investment manager that allows its operating business wide latitude in the
areas of fund management and client service. Its 5,437 employees work in
offices in 40 cities in North America, Europe and Asia. In May 2007,
shareholders voted to change the firms name from AMVESCAP to Invesco
to more accurately reflect our integrated strategy that united all of our
businesses under a shared culture, said Marty Flanagan, president and CEO,
in a press release.
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shares of the companys funds, thereby profiting at the expense of the funds
long-term shareholders. In September 2004, the firm agreed to settle the case,
paying $450 million.
Growing assets
During the past two fiscal years, the firm has put up some solid numbers.
After a strong 2006, the firm booked $3.879 billion in revenue in 2007, up
19.5 percent versus the $3.247 billion it booked in the previous year. Net
income was also up in 2007, increasing 39.5 percent to $673.6 million from
$482.7 million
Invescos assets under management remained on the rise in 2006 and 2007,
even rising above $520 billion in October 2007. But due to the broad sell-off
in financial markets worldwide, theyve fallen since.
Despite the downturn in the industry, the firms first quarter 2008 earnings
were flat versus the same period one year earlier. Invesco booked $155.2
million in net income for the quarter, the same amount it recorded in the first
quarter 2007.
Buying power
In September 2006, the firms completed its acquisition of PowerShares
Capital Management, a provider of exchange traded funds (ETFs). The deal
brought a family of 37 distinctive ETFs, to be distributed by AIM
Investments. The addition of PowerShares ETFs expands [the firms] ability
to offer investment solutions to investors and their advisors, said CEO
Martin Flanagan in a statement. The powerful combination of PowerShares
exciting ETFs, AIM Investments broad range of actively managed mutual
funds and our top-ranked money market funds offers advisors a uniquely
comprehensive array of investment choices from which to build better
portfolios for their clients. At the end of April, PowerShares had more than
110 ETFs, including four actively managed ETFs.
About a month later, the firm sealed the deal on another acquisition, this time
of WL Ross & Co., a financial restructuring group. As part of Invesco, WL
Ross & Co. assumed responsibility for the firms direct private equity
business, which had $4.4 billion in combined assets at the time. The deal
appeared to be a win-win for both parties: The addition of this exceptional
team to the firm expands the range of high quality alternative investment
offerings for our clients, said CEO Flanagan in a press release. WL Ross &
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Co. founder Wilbur Ross added, Joining Invesco, one of the worlds premier
asset managers, greatly expands our resources and allows us to introduce our
capabilities to a broader set of investors globally.
Web savvy
In November 2007, AIM Investments web site was recognized as one of the
investment management industrys top 10 by kasina, a management
consulting firm. Sites were selected based on content, functionality, quality
and overall user experience; in total, 60 web sites were evaluated. The 2007
honor marked the ninth year that AIM received a top 10 overall rating from
kasina. AIMinvestments.com also was ranked among the top-10 mutual sites
for intermediaries and consumers by management consultancy Dalbar, which
evaluates and ranks mutual fund web sites on a quarterly basis, based on the
scope of functionality and their usability. AIMinvestments.com ranked in the
top 10 for the first three quarters of 2007.
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GETTING HIRED
Looking inside
Rising up through the ranks may be the best bet at Invesco. The company
tries to hire internally in my department, says one source working in
research. Candidates at Invesco find their interviewing opportunities through
a range of leads. Some use referrals from within the company, and others
send cold resumes to recruiters or queries that originate within the firm. Yet
others come through schools, MBA programs or job search web sites such as
Monster.com.
Those looking to land a job with Invesco shouldnt expect the recruiting
process to be an in-and-out affair. Generally, the interview process is very
comprehensive and can be quite long. One candidate notes that it took
over two months. Another says he sat with 10 to 12 different people and
visited the office three to four different times. I was interviewed by staff at
all levels from HR to peer group to upper management. Yet another adds
that the hiring process was extensive. I had interviews with my direct
supervisor, his manager, all the people in the department in groups, each of
the other managers and our director.
Questions range from the standard to more nontraditional. One contact says,
I had to describe myself and talk about my work experience and what my
expectations were for the job. I was asked about my future plans and how I
study for an exam. Another says, I was asked questions concerning my
industry experience, technical skills, philosophy and approach to building
strong working teams. I was also queried about my personal interests and
priorities. I felt my personal interview process was professional, very
thorough and well done.
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results. Many sources also note the firms entrepreneurial spirit. The
downside to this environment is that due to the decentralized and federalist
nature of the firm, its sometimes difficult to get good cooperation for
enterprise-wide projects. However, another respondent says that the
entrepreneurial culture is shifting. Changing industry conditions and
company cost savings measures have brought about a shift in organizational
practices and employee attitudes. Consequently, our culture has seen a minor
but discernable move in the direction of increased centralization and tighter
controls. We are, for the most part, entrepreneurial, but realizing an
increasing degree of centralization and associated bureaucracy.
With respect to hours, most state that they work roughly the industry average,
and the amount of work is highly variable depending on the client. One
contact says, My hours are directly tied to the demands of my clients and the
number of staff members I have to complete the work. I work an average of
55 to 60 hours per week, and the majority of my staff30 employees
routinely work 45 to 50 hours per week.
Another says that youre expected to do what it takes, but on the flip side,
there is the realization that people need to get away. Im able to work around
things that I want to do such as my kids events and weekend getaways.
However, another source warns that with layoffs comes more work, saying,
Short-staffed means long hours. One contact, perhaps relaying the majority
insider sentiment, says the firms culture is generally upbeat and the firm
maintains a positive environment in which to learn and advance a career.
Pretty satisfied
Sources give middle-of-the-road marks to salaries, but most insiders say they
are happy with the benefits and perks, which include generous employee
stock option plans, profit sharing, a 401(k) plan, gym membership discounts
and car service [for those] who work past a certain time. One insider says,
Benefits far exceed anything I have seen elsewhere. The company
contributes 5 percent 401(k) match, which is average, but we have a money
purchase plan where the company contributes 10 percent of salary and bonus
to a 401(k)-style plan with instant vesting. The source adds, The stock
purchase plan allows you to buy stock at 15 percent under the price at the start
of that session for a period of 27 months.
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Reaping rewards
Sources describe being rewarded for good work, and report good pay and
bonuses. However, some insiders say pay hasnt been that great as of late.
Salaries have been more or less stagnant for four years, says one source,
and bonuses have fallen in that time frame, which has resulted in the slip in
rating. Previously, I wouldve said that the firm made an effort to be very
competitive, but times have not been that good for the company and this has
been reflected in the pay structure. Another source notes, I started a few
years ago, and this company was known for its outstanding pay and benefits.
But this has turned around, and the pay is below standards, while the benefits
are still a bit above average. Another acknowledges, We are far overpaid
in this industry based on our contribution to society, but underpaid versus
what peers at firms of our size are getting paid for the exact same job.
Unit by unit
On-the-job training is offered by the firm within each business unit, but in
terms of training as a benefit, some sources complain the firm is lacking.
Training is critical in my role in order to be up to date on current risk
practices. I know that a number of other staff members have concerns over
the cutting back of training budgets in the last couple of years. Another
states, Training in our industry, and particularly at this firm, is minimal.
There is a lot of on-the-job learning, and mentoring is an area that could be
instituted as a way to improve development of junior people.
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KEY COMPETITORS
BUSINESSES
UPPERS
Investment Management
Printing & Fulfillment
Good culture
American Century
Fidelity
T. Rowe Price
DOWNERS
THE STATS
Employer Type: Public Company
Ticker Symbol: JNS (NYSE)
CEO & Director: Gary D. Black
Revenue: $1.12 billion (FYE 12/07)
Net Income: $126.3 million
No. of Employees: 1,613
No. of Offices: 11
EMPLOYMENT CONTACT
Follow the careers link on
www.janus.com
THE BUZZ
Recovering nicely
Losing luster
Great value-added programs
Occasional blow-ups
Growth investing
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THE SCOOP
Advisory giants
In its 38 year history, Janus Capital has grown to be a major player in the asset
management market with more than $187.6 billion in assets under
management as of the end of March 2008. The firm provides investment
advisory services through two subsidiaries, Janus Capital Management
(JCM) and Enhanced Investment Technologies (INTECH). Janus Capital
Management is wholly owned and has become one of the largest equity
managers in the U.S. In addition to growth, core and international equity
funds, JCM offers balanced, specialty fixed income and money market funds.
INTECHs investment process is based on a specific mathematical theory that
attempts to capitalize on the random nature of stock price movementswith
a goal of outperforming a passive index while controlling risk and trading
costs. INTECH, headquartered in Palm Beach Gardens, Fla., manages assets
for large institutions and endowments.
Janus also owns 30 percent of Perkins, Wolf, McDonnell and Company, a
Chicago-based asset management firm with over 22 years of history of
managing small- and mid-cap value mutual funds and separate accounts.
Out of print
On paper, Janus has two business segments, but it earns almost all its revenue
from the investment management segment. A second segment, Rapid
Solutions Group, offers digital printing of marketing and compliance
communication, fulfillment services and offset printingbut does not
contribute significantly to revenue or income. In fact, from the time Janus
acquired the printing company in December 2003, Rapid Solutions has lost
between $3 and $5 million on about $20 million in revenue each quarter.
Total losses racked up by Rapid Solutions during the time they were a
subsidiary of Janus equal approximately $50 million.
In October 2007, Janus finally made the decision to cut Rapid Solutions
Group loose, announcing that it planned to sell the printing company as soon
as possible. After the company made plans to sell, it was forced to take a tax
impairment charge of $0.21 per share which caused net income to fall by 59
percent.
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Gday, mate
In February 2007, Janus announced that it had set its sights on the land Down
Under, opening a representative office in Melbourne in an effort to reach
Australias rapidly-growing pension funds. According to the firm, it planned
to seek institutional and sub-advisory mandates in both Australia and New
Zealand; a spokesman for Janus said that the firm considered Australia its
greatest regional opportunity. No wonder. Australia has a mandatory
retirement saving program that has attracted several international fund
managers. Janus aims to get in to the game by developing working
relationships with superannuation funds, government funds and local
investment consultants.
Turnover concerns
Turnover plagued Janus top ranks in 2007, with the evacuations of several of
the companys top executives. In February, executive vice president and CFO
Dave Martin and executive vice president and general counsel John Bluher
departed, though Bluher agreed to stay on as a strategic consultant for a few
months. Martin, who said he wanted to move out of Denver, was replaced by
senior vice president and controller Greg Frost, a 10-year Janus veteran.
Bluher was succeeded by Kelley Howes, a senior vice president and general
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INTECH miscommunication
There was some controversy over a potential takeover of Janus subsidiary
INTECH resulting from a gaff made by CEO Gary Black at the companys
first quarter earnings conference call for 2007. In recent years, Janus has
appeared to be moving toward complete control of its INTECH subsidiary. In
April 2007, it paid $81 million to raise its INTECH stake from 82.5 percent
to approximately 86.5 percent. (The remaining shares are held by the
founders of INTECH and its employees.) When announcing the additional
shares, Black stated his plans for the future of INTECH and Janus saying, I
would expect that you would continue to see us increase our percentage of
INTECH. We are not sure exactly how much we would buy each year, but
you can assume that over the next few years we will continue to buy until we
get to 100 percent.
It only took a few hours for the news to make the rounds. Later that day,
Black took back his comment and Janus put out a press release with a mea
culpa of sorts that said, Janus Capital Group does not anticipate owning 100
percent of INTECH.
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million for the first quarter of 2008 from $38 million in the first quarter of
2007.
Previously, for the full year 2007, assets under management saw healthy
gains, increasing by 21.5 percent during the year to $206.7 billion. Despite
market turbulence, the firm finished the year strong, with net inflows of $3
billion in the fourth quarter. Overall, 2007 was the first year of positive
inflows in seven years for Janus-managed products. Total revenue also rose,
from $935.8 million in 2006 to $1.11 billion in 2007. However, net income
for the year fell slightly, from $133.6 million in 2006 to $126.3 million in
2007.
GETTING HIRED
Its selective
On its careers site at www.janus.com, Janus says its particular about the
people who work here and likes people who are particular about where they
work as well. On the site, potential applicants can also learn about the firms
benefits and culture, and search for positions and apply online. The firm culls
from top-tier schools for talent, but the firm also hires out of other
companies, including other investment management houses. According to
the firm, Janus recruits candidates from a variety of backgrounds and
experiences, looking for top people in their disciplines.
Expect at least three interviews, including a meeting with human resources
and managers and supervisors from your prospective department. Typically,
there are two rounds of interviews, with three to five interviews in each
round, depending on the type and level of the job. Some sources report
going through three interviews, two with the hiring manager, one with the
team. Questions focus on past experience and include behavioral-based
questions. One contact says, I first had an HR interview. Then I had an
interview with my direct manager. My third round was an intense interview
with the head of the department and an interview with a department member
to assess fit.
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Diversity practices receive solid ratings. Many senior leaders are women,
says a source, including many VPs and the chief marketing officer.
Another source concedes, Women are promoted and mentored, but says,
They must give up any work/life balance the further up the ladder they
move. With respect to minorities, an insider says, Denvers pretty white,
but Janus has a very liberal in attitude towards diversity and is most interested
in hiring and promoting the best available people. The contact adds that the
firm is open about sexual preference as well. She says, The openness of
gays here is far greater than other companies Ive worked for.
The dress code is pretty relaxed, say insiders. Its casual always except for
client contact. Jeans on Fridays are acceptable, says one contact, and
some departments allow jeans all the time. Another says that the firm offers
casual summers.
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Legg Mason
100 Light Street
Baltimore, MD 21202-1099
Phone: (877) 534-4627
Fax: (410) 454-4923
www.leggmason.com
KEY COMPETITORS
DIVISIONS
UPPERS
Institutional
Mutual Funds/Managed Services
Wealth Management
BlackRock
Edward Jones
Fidelity
DOWNERS
THE STATS
Employer Type: Public Company
Ticker Symbol: LM (NYSE)
Chairman, CEO & President:
Raymond A. Chip Mason
Revenue: $4.3 billion (FYE 3/07)
Net Income: $648.8 billion
No. of Employees: 3,820
No. of Offices: Offices in 17
countries
EMPLOYMENT CONTACT
Follow the careers link at
leggmason.com
THE BUZZ
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THE SCOOP
Powerful partnerings
Legg Mason owes its existence to 19-year-old John Legg Jr., who got his start
with an entry-level job at a Baltimore brokerage firm named for its founder,
George Mackubin. The firm began in 1899; by 1904, young Legg was a
partner. Forty-five years later, he gained complete control of the business. In
1970, Legg & Co. merged with Mason & Co., a brokerage founded by
Raymond A. Chip Mason. Legg Mason went public in 1983. Chip Mason
remains at the head of the firm, which has also stayed put in Baltimore.
At the close of 2005, Legg Mason announced news that would skyrocket the
firm into the upper echelon of American asset and mutual fund managers.
Legg Mason had successfully acquired of almost all of Citigroups worldwide
asset management business, more than doubling its assets under management.
Citi transferred over $400 billion to Legg Mason, launching the firm up to
more than $860 billion assets under management. In exchange, Legg Mason
gave Citigroup its private client brokerage and capital markets businesses,
plus hefty chunks of common and nonvoting preferred stock as well as $500
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million in cash. In April 2006, Standard & Poors recognized Leggs new
clout by adding it to its benchmark S&P 500 stock index, replacing Guidant.
Extreme pay
Legg Mason made newsmost of it unflatteringfor its executive
compensation in 2006 when it was reported that its chairman and CEO, Chip
Mason, was paid $35.7 million (including an imputed long-term option award
value equal to $21.2 million), more than triple his total compensation for the
previous year. Analysts assumed the massive raise was directly related to the
deal with Citigroup, which Mason personally oversaw. Still, Masons pay
package (a combination of salary, stock and bonus) was significantly larger
than those paid to CEOs at comparable financial firms, most of whom were
paid less than half of what Mason earned.
The CEO was not the only Legg Mason executive whose pockets were richly
lined. Other top executives had their compensation doubled in fiscal 2006;
Mark Fetting, head of asset management, earned $7.14 million, up from $3.2
million in fiscal 2005. Meanwhile, though Legg Mason shares rose 60
percent during fiscal 2006, the company found itself on a 20 percent decline
midway through fiscal 2007.
Downward spiral
Legg Masons earnings took a turn for the worst in July 2006 and have been
struggling to recover ever since. The news in 2006 was dire: earnings were
far short of expectations, and shares fell nearly 9 percent. Assets also fell for
the first time in five years, as clients pulled $6.5 billion from various funds
and separate accounts. Superstar fund manager Bill Millers venerable Legg
Mason Value Trust had its worst year since 1990 and stock prices
plummeted causing investors to lose $2.5 billion in shareholder value.
Analysts pointed to the Citigroup swapwhich had seemed like such a
windfall for Leggas a source of the problem, since integration of massive
business units is never a simple (or cheap) task.
At the fiscal year end of 2007 (the 12 months ended March 2007), Legg
Mason had experienced significant losses, but were still building assets under
management, reaching $969 million and setting sights on the big $1 trillion
goal. During the year, there was some additional turmoil, as Jim Hirschman
stepped down as president of Legg Mason while retaining his role as CEO
and chairman of Western Assets.
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In the first two quarters of its fiscal 2008, the company rebounded somewhat,
and finally reached the landmark number of $1 trillion in assets under
management. But CEO Raymond Chip Mason wasnt happy with the
performance of the companys equity flows, calling them disappointing.
He wasnt afraid to cite equity fund managers as a cause for the downturn
saying, Three of our largest equity managers continue to struggle with
outflows caused primarily by recent underperformance. Having these
managers fall below their long-term performance norms, all at the same time,
has been challenging for us.
Unsafe SIVs
Adding to Legg Masons woes is the fact that it holds $10.7 billion in
structured investment vehicles, representing 6 percent of its money market
assets. Panic on Wall Street set in about SIVs in August 2007 when people
became suspicious that they are linked to the subprime mortgage debacle that
roiled markets in summer 2007. As a result, in October 2007, the company
found it necessary to pump $100 million into one of its money market funds
to increase their liquidity in order to maintain triple A ratings. Two other
funds with exposure to SIVs received $238 million in credits. Due to
unstable markets, Legg Masons stock price dropped 23 percent in the first
half of fiscal 2008.
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GETTING HIRED
Break a Legg
Legg Mason is always looking for qualified talent to add to the success of its
business, saying its committed to identifying and hiring the best at all levels
throughout the firm. Legg Mason culls candidates from many geographic
regions, including the East Coast, South and Midwest. One insider says, more
specifically, the firm recruits from all major selective colleges and universities
on the East Coast, with a limited Midwest focus. Legg Mason also hires from
other firms and based on referrals from employees, as well as through the
Internet, print ads and job fairs. See www.leggmason.com/careers for further
information.
Interns report satisfaction with their experiences. One enjoyed the work and
as an infrastructure engineering intern, I was able to travel all around
campus and interact with employees in both the 100 and 300 buildings.
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Lots of benefits
Legg Mason seems to pay in line with the industry average, and insiders say
the firm offers many benefits, including a 401(k), stock purchase program,
vendor discounts and exceptional health, dental and vision plans. Although
there are no benefits for interns, the position is still a fairly lucrative one,
reports one insider. The compensation package is very nice for interns.
Not surprisingly, as a service firm, Legg Mason puts its client interests first
at all times. Also, like other financial services firms, long hours are
embedded in the firm culture. Depending on the group, working one to two
weekends per month isnt out of the ordinary, although most report not
working weekends at all. One financial advisor notes, Hours are up to you,
but you are responsible for your own productivity.
In terms of dress code, Various departments that have no client contact are
allowed to dress in casual clothing at all times. As for diversity, the firm
seems to have everything in line. One insider says, No discrimination of any
kind is evident. Theres a demonstrated commitment to seeking the best team
members.
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DEPARTMENTS
Asset Allocation
Alternative Investments
European and International Equities
Hong Kong & Asian Equities &
Fixed Income
Japanese Equities & Fixed Income
North American Equities
North American Fixed Income
KEY COMPETITORS
Bank of New York Mellon
Northern Trust
State Street
EMPLOYMENT CONTACT
www.mfcglobal.com/careers.html
THE STATS
Employer Type: Subsidiary of
Manulife Financial Corporation
Chairman and CEO: Donald A.
Guloien
Revenue: $C35.5 billion* (FYE
12/07)
Net Income: $C3.23 billion*
No. of Employees: 300
*Manulife
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GETTING HIRED
Life at MFC
If youre interested in joining the MFC Global team, surf on over to
www.mfcglobal.com/careers.html, where you can view open positions in
English and French (Manulife is based in Quebec). If you find a job that you
think youd be qualified for, you can apply right on the site. And if nothing
happens to match your current qualifications, never fearif you dont find
the perfect position, just complete the firms profiler feature, which will
keep you on file as a potential applicant when a position opens that meets
your background. The firm also has a section for students and new graduates,
which separately lists suitable opportunities for entry-level candidates.
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BUSINESSES
Fundamental Equity & Credit
Research
Institutional Product Management
Portfolio Management
Quantitative Research
Trading
THE STATS
Employer Type: Subsidiary of Sun
Life Financial
Chairman: Robert Pozen
President, CEO & CIO: Robert
Manning
Revenue: $1.687 billion (FYE
12/07)
No. of Employees: 2,413
No. of Offices: 15
KEY COMPETITORS
Fidelity
Putnam
The Vanguard Group
UPPERS
Very collaborative environment
You rarely or never have to work
weekends
DOWNERS
Training could be better
Average salaries
EMPLOYMENT CONTACT
Follow the careers link on mfs.com
THE BUZZ
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Canadian connection
MFS Investment Management is an 80 percent owned subsidiary of Sun Life
Financial, a Canadian financial services conglomerate headquartered in
Toronto. Sun Life bought its stake in MFS for $45 million in 1982, when
MFS managed just 13 mutual funds. Today, it manages more than 70.
MFS holds the distinction of having established the first mutual fund in the
U.S. This first fund, Massachusetts Investors Trust, was launched in 1924
and became one of the first investment companies to make full operations
disclosures to its shareholders. The Boston-based MFS Investment
Management can also boast that it debuted one of the first municipal bond
funds and the first globally diversified fixed income mutual fund in the U.S.
It also launched the countrys first global balanced fund and was an early
provider of 401(k) plans.
Today, MFS offers a wide range of products and services to investors,
including mutual funds, fixed and variable annuities, separately managed
accounts and retirement plans. MFS has approximately $170 billion in assets
under management, operating with more than 2,400 employees in two U.S.
offices and 13 global offices. The firm has over five million shareholders.
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Subprime transparency
In a response to a jittery market rocked by billion-dollar write-downs over
subprime concerns, MFS attempted to calm investors by publishing the funds
that had exposure to the subprime market. In September 2007, the company
put a message on its web site explaining its analysts train of thought in
investing in the subprime market and assuring investors that MFS money
market funds owned subprime mortgaged-backed securities. The funds that
contained the most subprime investments were mainly mutual funds, the
MFS Limited Maturity Fund and the MFS Research Bond Fund. They only
had 3 percent to 6 percent and 1 percent to 3 percent of their assets in
subprime investments, respectively. A handful of other funds, including
funds in their Variable Insurance Trust and Sun Life Series Trust portfolios,
had less than 1 percent exposure.
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uses the profits in order to invest 130 percent of the portfolio in long term
investments. This form of investment draws heavily on the research of MFS
fundamental analysts, who are divided into eight global sector teams. A
quantitative research team also analyzes stocks based on a multi-factor model
that considers such factors as valuation, momentum, sentiment (including
share buybacks) and earnings quality
The global research team is led by David Antonelli to the position of chief
investment officer for non-U.S. and global equity investments. Antonelli was
promoted to CIO in the spring of 2006 after serving executive vice president.
He serves as co-director of global research with Michael Roberge, who is
chief investment officer for U.S. Investments.
On the rise
For the fourth quarter of 2007, despite a rocky market, the firm booked $444
million in revenue, a healthy rise from the $390 million it booked in the
fourth quarter of 2006. Overall in 2007, MFS increased revenue to $1.687
billion from the $1.662 billion it recorded in 2006.
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insider notes that while its not easy to find something that suits everyone,
the firm offers many training classes to attempt to remedy this.
The casual always dress code gets high marks from insiders, who only are
required to dress more formally for clients. I like this, one insider says
simply of the casual atmosphere. Theres jeans on Friday, too, just in case
business casual isnt quite casual enough.
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Morgan KeeganWealth
Management Division
Morgan Keegan Tower
50 Front Street, 17th Floor
Memphis, TN 38103
Phone: (901) 524-4100
Fax: (901) 579-4406
www.morgankeegan.com
KEY COMPETITORS
Edward Jones
Raymond James Financial
Wachovia
UPPERS
DEPARTMENTS
Equity Capital Markets
Fixed Income Capital Markets
Morgan Asset Management
Private Client Group
Regions Morgan Keegan Trust
THE STATS
Employer Type: Subsidiary of
Regions Financial Corporation
CEO: John Carson Jr.
President: R. Patrick Kruczek
Revenue: $1.3 billion (FYE 12/07)
Net Income: $165.8 million
No. of Employees: 4,000+
No. of Offices: 400 (approx.)
DOWNERS
Salaries could be better
EMPLOYMENT CONTACT
E-mail: recruiting@morgankeegan.com
See career opportunities at
www.morgankeegan.com
THE BUZZ
Boutique
Second tier
Small player in the South
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Walking in Memphis
One of the largest full-service securities brokerage and investment banks in
the South, Morgan Keegan provides underwriting, equity and fixed income
research, sales and trading, and private client services, such as investment
advice and wealth management. Its wealth management business is divided
into two sections: investment planning, which includes asset allocation, asset
evaluation, research and investment studies; and financial planning, which
includes estate planning, stock option issues, retirement planning, college
funding, wealth protection and other business needs. Morgan Keegans
private client group includes financial advisors who offer a range of financial
services to individual investors.
One of Morgan Keegans most popular products is the MOR Account, a
comprehensive asset management program aimed at individual investors who
want to simplify their finances. As online banking has allowed consumers to
consolidate their accounts, making statements simpler and easier, Morgan
Keegan realized that a similar setup could be used in asset management. The
MOR Account lets individuals manage their cash, bills and statements online,
plus it provides personalized investment advice and a margin loan feature.
Account holders can access funds via Regions Bank ATMs.
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Regional success
Morgan Keegan is a subsidiary of Regions Financial Corporation, one of the
nations largest financial services companies and a member of both the
Forbes 500 and the Fortune 500 (it ranked No. 245 on the 2008 list). Regions
operations are mostly based in the South and Midwest, and likewise, Morgan
Keegans roots are in southern soil. The firm was founded in Memphis in
1969; in the beginning, it had only five employees. By 1970, it had earned a
seat on the New York Stock Exchange, and in 1976, it opened an investment
banking division. It was acquired by Regions Financial in 2001.
In November 2006, Regions Financial merged with AmSouth
Bancorporation, a move that created one of the top-10 bank holding
companies in the U.S., with headquarters in Birmingham. The new company
began with about $140 billion in assets and $100 billion in deposits. Regions
Financial and Morgan Keegan retained their names and brands, and Regions
Chairman, President and CEO Jackson W. Moore was named chairman of the
merged company. C. Dowd Ritter, who had been chairman, president and
CEO of AmSouth, stepped in as president and CEO of Regions. Ritter
assumed the duties of chairman of the board upon Moores retirement at the
end of 2007.
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Analyst accolades
Morgan Keegan may not be located on Wall Street, but its analysts have
demonstrated that employees working for the company are certainly in the
know when it comes to the Street. The Wall Street Journals 2008 Best on the
Street Survey ranked Morgan Keegan equity analyst Harsh Kumar among the
top five in the nation for the specialty semiconductor industry. In addition,
six Morgan Keegan analysts ranked among the countrys top stock pickers
and earnings estimators in the 2008 Financial Times/StarMine Global Analyst
Awards. Two Morgan Keegan analysts ranked as No. 1 stock pickers in the
survey, and one ranked as a No. 1 earnings estimator.
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For the full year 2007, Morgan Keegan increased revenue to $1.3 billion from
$1 billion in 2006, and boosted net income to $165.8 million from $151.1
million.
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Friendly folks
Mostly, Morgan Keegan promotes a great, friendly culture where employees
are left alone to work but receive great support from the good people in
management, who want you to succeed and are looking out for your best
interest. Others refer to the firm as having a small, family feeling. Its also
competitive, young, challenging and rewarding. Employees are said to be
friendly, fun people who have numerous interests outside of work. One source
confirms that there is a very flexible culture that rewards people who can make
money for the firm. Downsides at Morgan Keegan include competing with
bigger firms with more resources, says one insider. But they want results,
and the good thing is the firm can deliver. As for the dress code, its
professional business attire only. Everyone is expected to be in suits, says a
contact in Morgan Keegans Memphis headquarters. However, Morgan Keegan
does allow for casual Fridays during the summerwith, of course, the exception
for client contact.
Hours are about average for the industry, and as for climbing up the corporate
ladder, one contact believes that getting promoted at Morgan Keegan could
be a function of who you know, not what you know. A female insider also
complains that women still fall behind men in pay and management.
Perky
Morgan Keegan insiders mostly give low marks to their salaries. The base
salary is a joke, says one associate, [especially] for women. Insiders note
that bonuses are paid in August and February. The August bonus is a fixed
percentage of base salary, while the February bonus is based on the
profitability of the department.
Perks at Morgan Keegan include discounted gym memberships, plus the
firm matches part of the 401(k) contribution, and it issues options and
restricted cash. There is also a deferred compensation plan. One contact
reveals that the firm used to have a stock purchase plan but it stopped when
Regions bought us. The source adds that stock options are available for
senior VPs and up. Other benefits at Morgan Keegan include a qualified
parking/mass transportation plan, partial tuition reimbursement for approved
courses, and free counseling for employees and their families.
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KEY COMPETITORS
AFFILIATES
UPPERS
Credit Agricole
HSBC Holdings
Socit Gnrale
DOWNERS
Never enough time to get
everything done
EMPLOYMENT CONTACT
www.globalam.com.natixis.com, click
on contact
THE STATS
Employer Type: Subsidiary of
Natixis
Chairman: Jean Clochet
CEO: Pierre Servant
No. of Employees: 2,700
No. of Offices: 68
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Holding strong
Natixis Global Asset Management serves as a holding company for a group of
specialized investment management firms with a total asset management of
$869.3 billion as of December 31, 2007. The firms organizational culture aims
to encourage the exchange of ideas and experiences, innovation and risk taking.
Each affiliate concentrates on those investment styles in which it will thrive. The
multi-boutique approach brings together about 20 financial and real estate
management companies throughout the U.S., Europe and Asia. Natixis Global
Asset Management is one of the top-15 largest asset managers in the world,
based on assets under management and among the top five in Europe.
French banks Caisse dEpargne and Banque Populaire each hold a 34 percent
share in Natixis, the parent company of Natixis Global Asset Management.
Natixis offers corporate and investment banking, asset management, private
equity management, private banking, financial services and receivables
management. Natixis has about 23,000 employees and a net income of about
$10.7 billion.
Growth spurt
Financial Research Corp. recognized Natixis Global Associates, Natixis
Global Asset Managements U.S. distribution organization, as the fastest
growing fund complex (among those with $10 billion or more in assets) over
the 12-month period ended October 31, 2007, as measured by the ratio of net
flows to net assets. Among the firm's hot sellers were the Loomis Sayles
Bond Fund and the Loomis Sayles Strategic Income Fund. The firm also
attributed the growth to a focus on client needs instead of specific funds.
Still growing
In September 2007, Natixis Global Asset Management announced plans to
buy AlphaSimplex Group, the investment firm founded by Massachusetts
Institute of Technology finance professor Andrew Lo. Natixis said the
purchase would bolster its alternative assets offerings. Lo will continue to
serve as the companys chairman and chief scientific officer. In addition to
its work in dynamic asset allocation and risk analytics, AlphaSimplex
specializes in the synthetic replication of multi-strategy absolute-return
vehicles. Natixis did not disclose terms of the agreement.
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Subprime scrambling
In November 2007, Natixis parent banks Groupe Banque Populaire and
Groupe Caisse dEpargne bailed out Natixis stressed bond insurer, CIFG,
which had faced exposure to the mortgage crisis. (Natixis created CIFG in
2001 to broaden its offerings to investors. CIFG guarantees hedge funds and
other clients with heavy investments in U.S. mortgage-backed securities.)
The two larger banks paid $1.5 billion to take ownership of the insurer and
prevent a cut in its credit rating with Standard & Poors, Moodys and Fitch
Ratings. All three ratings companies had publicly questioned CIFGs ability
to guarantee mortgage loans in the current economic environment.
Following the bailout, Moodys and Fitch Ratings announced they were
unlikely to reduce the insurers ratings, while Natixis revealed it would book
a $642 billion provision in the fourth quarter 2007 to transfer the unit to its
largest shareholders. The banks, which now wholly own CIFG, said they
would provide the insurer with a $1.3 billion capital infusion and a $200
million long-term credit line. The rescue represented one of the largest in
Europe relating to the recent credit crisis.
In December 2007, Natixis joined four other French banks in announcing
they would set up an investment fund to bail out small to midsized asset
managers facing a liquidity shortage. The banks set up the fund, reportedly
worth up to $1.47 billion, in the beginning of 2008. The banks financed the
conduit with high-rated, asset-backed securities.
New faces
In January 2008, Natixis named David Giunta the president and chief executive
officer of Natixis Global Associates. Most recently, Giunta worked at Fidelity
Investments as president of the Fidelity Charitable Gift Fund. Previously, in
December 2007, the firm named employee Duncan Wilkinson its executive vice
president, director of U.S. affiliates. Wilkinson will oversee day-to-day
management of the firms relationship with its 15 affiliated investment
managers, as well as corporate development activities aimed at enhancing the
firms investment offerings. He will focus on strengthening the bonds between
the firm, its investment affiliates and Natixis Global Associates.
Modeling suit
In February 2008, Natixis announced it was suing private equity firm Terra
Firma for allegedly producing a faulty financial model for television rentals
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business Boxclever, which refinanced in 2002 but defaulted on its debt in less
than a year after the deal closed. Natixis, which once held $393 million in
Boxclever notes, had already settled a related lawsuit against two other
financial firms that worked on the deal: West LB of Germany and CIBC of
Canada. Natixis reportedly lost $196.4 billion in when Boxclever defaulted.
GETTING HIRED
Be available
The firm hosts a list of its available positions under the recruitment link in
its human resources section at www.natixis.com. The site also has
information regarding career development, internships and training
opportunities. In its meet us section, you can also learn about upcoming
university-organized events at which Natixis will be appearing. Additionally,
youll get the opportunity to talk with professionals from various business
lines, according to the firm.
Once youve decided that youre interested in a position, you can either fill
out an online application (be sure to upload your resume to the site) or send
in your application materials to the appropriate physical address. If you
choose to go the snail mail route, the firm requests the typical cover letter and
resume submissionbut may also ask you for a photo. If they like what they
see and youre asked in, expect up to eight to 10 interviews and meetings
with senior managers.
Good times
The culture is one thats fun, innovative and entrepreneurial. Still, expect
to work hard. Spending 60 to 70 hours at the office each week isnt
uncommon, as is weekend work that occurs more than once a month. It helps
that the people and industry are great. Compensation, benefits and
treatment by managers all receive high marks as well, as does office space and
training programs. The firms diversity efforts are also rated highly by insiders.
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UPPERS
BUSINESSES
DOWNERS
THE STATS
EMPLOYMENT CONTACT
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Free to be
Northern Trust prides itself on two things: exclusive focus on asset
management and administration and independence. While other asset
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Awards season
According to Pensions & Investments, Northern Trust was No. 14 in total
worldwide assets in 2007 and No. 8 in total worldwide institutional assets. It
also ranked No. 16 in endowment and foundation assets.
Northern Trust also regularly wins a number of awards and honors. In 2007,
the firm won Global Investor magazines Fund Administrator of the Year
award. It also snagged several rankings in the 2008 Global Investor
magazine poll, bringing in a No. 2 spot in the best FX service overall, best
research and best daily research and market commentary categories, along
with a No. 3 spot in the trading category. Employees, too, can feel that theyll
be taken care of at the firmin February 2008, Northern Trust one of the Top
Ten Places to Work in Dublin, Ireland.
Charitable assets
Each year, Northern Trusts goal is to donate approximately 1.5 percent of its
pre-tax profits to charities each year. At the end of fiscal 2007, the firm had
given over $17.5 million in cash contributions to a number of charities around
the worldan increase of 13.7 percent in giving over fiscal 2006. Northern
focuses its contributions on crisis and critical services organizations, such as
those that provide housing, food, child care and health services to low-income
families. Over the course of 2007, the firm supported causes ranging from
building a schoolhouse in India and a mobile dentist clinic for low-income
families in Chicago.
Getting literary
Northern Trust remains headquartered in Chicago, and one of its greatest
contributions to its hometown is the Heartland Literary Society, a literary
association founded and co-sponsored by Northern and the Chicago Tribune.
Created in 1994, the nonprofit societys mission is to further interest and
awareness of great contemporary literature in the Chicago area, and hosts
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Surprise party
In April 2008, Northern Trust surprised everyone who thought that the recent
onslaught of mortgage-related financial disasters in the industry extended to
every bank. The firm reported stellar first quarter results, with net income
coming in $385.2 million, up from $186.7 million in 2007s first quarter.
Revenue, too, did extremely well, coming in at $1.15 billion for 2008s first
quarter, up from $823.8 million in the first quarter of 2007. The firms
impressive balance sheet was due in large part to its connection as a member
bank of Visa U.S.A. When Visa had its initial public offering in March 2008,
it meant good news for Northern Trustthe firm reaped a $244 million pretax benefit. CEO Frederick Waddell said that the firms excellent growth in
trust, investment and other servicing fees, foreign exchange trading income
and net interest income were also major factors in Northerns remarkable
results.
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Nuveen Investments
333 W. Wacker Drive
Chicago, IL 60606
Phone: (312) 917-7700
Fax: (312) 917-8049
www.nuveen.com
KEY COMPETITORS
DEPARTMENTS
UPPERS
Financial Advisory
Individual Investments
Institutional Investments
THE STATS
DOWNERS
Average salaries
Diversity could be better
Black Rock
Fidelity
PIMCO
EMPLOYMENT CONTACT
See careers section of
www.nuveen.com
THE BUZZ
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Branded billions
Founded in 1898 as John Nuveen & Company, and acquired by insurance
conglomerate The St. Paul Companies in 1974, Chicago-based Nuveen
Investments has spent much of the past 100 years operating almost solely as
a municipal bond investment banker. But recently, it has evolved into a
complete money manager, offering a full range of financial services through
its affiliates.
Today, Nuveen provides investment advisory, investment management,
distribution and administration services to its family of funds and high-networth and institutional investors. The firm sells its funds through banks,
brokerages, insurance agents and other financial service providers. The
company managed $164 billion in assets as of December 30, 2007.
Nuveen Investments markets its investment management services to
individual and institutional customers through six distinct brands: Nuveen,
for fixed income investments; NWQ, covering value-style equities; Santa
Barbara Asset Management, committed to growth equities; Tradewinds
Global Investors, specializing in global value equities; Rittenhouse,
managing blue chip growth equities; and Symphony, an institutional manager
of market-neutral alternative investment portfolios. The company has its
headquarters in Chicago, and also has offices with its affiliates in Atlanta, Los
Angeles, San Francisco, Santa Barbara and Radnor, Penn.
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accounts all suffered in the sales category, bringing the total assets under
management down to $170 billion from $171.6 billion the quarter before.
There were also some positive numbers for Nuveen for the quarter. Operating
revenue was up 18 percent, as a result of higher management fees. This was
due to higher assets under management as a result of the acquisition of
HydePark Investment Strategies.
A new launch
In April 2007, the firm announced the creation and IPO of the Nuveen MultiCurrency Short-Term Government Income Fund. According to the firm, the
fund, which raised around $900 million in its common share offering, will be
investing directly in short-term international (non-U.S.) government debt
securities, and indirectly through the purchase of forward currency contracts
and other derivative instruments that offer exposure to the returns of shortterm international government securities.
In a press release, Bill Adams, executive vice president of Nuveen
Investments, said of the fund, Given the potential for a slowing U.S.
economy and continuing decline in the U.S. dollar, investors may benefit
from exposure to non-U.S. rates and currencies. He added that investors
looking for attractive levels of income but who dont want to significantly
increase their portfolio risk profile may find this fund to be an effective tool.
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No issues, mostly
When it comes to the firms repute, insiders have few complaints. The firm
has good products and a solid reputation, sources note. Insiders say
Nuveen is family-friendly, a nice place to work and embraces a
work/life balance. I love the people, says a respondent. Family time and
community service are top priorities, with most staffers leaving the office
before 7 p.m. on weekdays, and weekend hours are virtually unheard of.
Salaries get average marks, but the firm will pay for industry-related
designations such as CIMA, CFP and CFA. And it offers a good health care
package, a college scholarship program and six-week sabbaticals after 15
years with firm. Though women and minorities have yet to claim a large
presence at the conservative firm, sources note a recent push in diversity
hiring.
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Pioneer Investments
60 State Street
Boston MA 02109
Phone: (617) 742-7825
Fax: (617) 422-4231
www.pioneerinvestments.com
KEY COMPETITORS
DEPARTMENTS
UPPERS
Alternative Investments
Global Asset Management
Hedge Funds
Mutual Funds
Portfolio Management
Quantitative Research
THE STATS
Employer Type: Subsidiary of
UniCredit Group
CEO: Daniel Keith Kingsbury
No. of Employees: 2,300
No. of Offices: Locations in 25
countries
Eaton Vance
Fidelity
Putnam
DOWNERS
Paths to advance within the
company should be clearer
EMPLOYMENT CONTACT
See career opportunities at
www.pioneerinvestments.com
THE BUZZ
Great funds
Not well known
High aspirations
Old line mutual funds
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Hitting eighty
Pioneer Investments celebrated its 80 anniversary in 2008, having evolved
significantly since Barrons journalist Philip L. Carret began the Pioneer
Fund, the third-oldest mutual fund in the U.S. Carrets initial investment
consisted of $25,000 collected from friends and family that he invested
primarily in under-valued stocks. By 1951, Pioneer Funds assets had
exceeded $1 million, and the fund counted 500 investors.
The firm spent the second half of the 20th century aggressively expanding in
the U.S., Asia and Europe. It became the first investment management firm
to launch mutual investments in Italy, the first foreign investment fund in
Germany and the first open-ended fund in Poland. In 1999, Pioneer launched
a hedge fund family, later called Pioneer Alternative Investments.
As of March 2008, Pioneer Investments has more than $300 billion in assets
under management, of which $74 billion is managed in the U.S. Since being
acquired by UniCredit in 2000, the firm has experienced double-digit annual
asset growth. Today, Pioneer has a presence in 25 countries, with more than
2,300 employees, including 679 in the U.S. and more than 300 investment
professionals globally.
Pioneer offers mutual funds, separately managed accounts, retirement
products and alternative investments to retail investors and institutions
around the globe. The firms U.S. retail products are sold exclusively through
financial advisors and third-party firms. Pioneers asset management
philosophy rests on three pillars: fundamental research, quantitative research
and portfolio construction. Pioneer performs more than 90 percent of the
research required in portfolio management in-house.
Italian bank UniCredit acquired the Pioneer Group in 2000. UniCredit is the
third-largest bank in Europe and has 28 million customers in 19 countries.
The bank has more than 7,300 branches and about 135,000 employees
worldwide.
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Changing compensation
In May 2007, Pioneer announced it would carry out a new compensation plan
aimed at aligning managers interests with shareholders interests and
emphasizing long-term gains. The plan ties 80 percent of portfolio managers
bonuses to pre-tax returns against benchmarks for a four-year period ending
December 31st of each year. The other 20 percent of the bonus stems from
qualitative performance measures such as teamwork, leadership,
communications and marketing. The companys annual bonus pool is
increased or decreased based on Pioneers overall results. Senior executives
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International expansion
In October 2007, Pioneer Investment signed an asset management joint
venture agreement with Bank of Baroda in India, expanding its presence in
Indias mutual fund market. The venture represents the first of its kind in the
India and gives Pioneer Investments a 51 percent stake in existing in the Bank
of Baroda local asset management company, which will take the name Baroda
Pioneer Asset Management Company.
Also that month, the firm announced the launch of its business in Russia and
the future appointment of Elena Loginova to the role of general director of
Pioneer Investments Russian subsidiary. The business began with the launch
of four investment funds in September. The move comes as UniCredit makes
a push into retail investment banking in Russia with plans to double the
number of branches belonging to its subsidiary International Moscow Bank
to more than 100. The eastern European arm of UniCredit completed the
acquisition of Russian brokerage Aton Capital in September 2007.
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O, Pioneers!
The firm takes pains to emphasize its work/life balance and highlight the
benefits it offers, which range from professional counseling for employees to
paying for part of workers gym memberships. Other aspects of firm life
including the offices and managementget high marks from insiders, along
with the lax daily dress. Employees adhere to a business casual dress code,
which involves collared shirts and nice pants and skirts (just no open
shoes). Training is also very good, report satisfied insiders. Its hardly
utopia, though. There are apparently few opportunities for advancement,
say contacts. In addition, the firms employees have earned quite a reputation
in the Boston community. As a result of Pioneers sponsorship of various
charity, volunteering and philanthropic efforts, the firms staff was named one
of the top-five most generous by the Boston Business Journal in 2007.
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KEY COMPETITORS
DEPARTMENTS
EMPLOYMENT CONTACT
AIG Investments
Barclays Global Investors
Invesco Institutional
THE STATS
Employer Type: Subsidiary of the
Principal Financial Group
CEO: Jim McCaughan
No. of Employees: 1,422
No. of Offices: 19
THE BUZZ
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THE SCOOP
Principals office
Principal Global Investors, the asset management subsidiary of insurance and
financial services giant Principal Financial Group, offers a range of equity,
fixed income and real estate investments, in addition to specialized advisory
services. Its roots go back to 1879 to the founding of Bankers Life, the
predecessor of the Principal Financial Group. The company took on its first
retirement plan client in 1941, and its assets under management reached $1
billion by 1960. By 1985, assets hit $10 billion, and by 1995, they reached
$50 billion.
Today, the firm has $242.4 billion in assets under management (as of March
2008), with a focus on retirement plans and institutional clients. Principal
Global Investors manages the assets of 11 of the 25 largest pension funds in
the U.S., and more than two-thirds of its assets under management represent
pension funds.
The firms fee mandate increased 20 percent in the fourth quarter of 2007,
compared with the same quarter in 2006, and 44 percent for the entire year,
reflecting strong growth in third-party assets under management. It now
employs 1,409 people, including 529 investment professionals.
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was the sixth year Principal appeared on that list. AARP recognized
Principals Working Caregiver Leave Program, which allows employees to
choose a part-time schedule for up to 12 weeks per year while maintaining
job security and full benefits.
Also in October 2007, Principal Financial Group appeared on Working
Mother magazines list of the 100 Best Companies for Working Mothers, also
its sixth year on that list. And in September 2007, the firm ranked among
LATINA Style magazines 50 Best Companies for Latinas to Work in the
United States, its 10th year on the list.
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Putnam Investments
One Post Office Square
Boston, MA 02109
Phone: (617) 292-1000
www.putnam.com
DEPARTMENTS
Individual Investments
Institutional Investments
Retirement Plan Investments
KEY COMPETITORS
Fidelity
MFS Investment Management
The Vanguard Group
UPPERS
Meritocratic culturethose who
work hard succeed
THE STATS
DOWNERS
EMPLOYMENT CONTACT
www.putnam.com/careers
THE BUZZ
High quality
Performing poorly, not growing
Well known
Should look for a new image
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THE SCOOP
Prudent Putnam
George Putnam founded Putnam in 1937 with The George Putnam Fund of
Boston, a balanced mutual fund with a flexible mix of stocks and bonds. The
great-great-grandson of Justice Samuel Putnam, a 19th-century trustee for
clipper-ship captains, he took his ancestors professional credo to heart when
starting the fund, which read, Those with the responsibility to invest money
for others should act with prudence, discretion, intelligence and regard for the
safety of capital as well as for income. Known as the prudent man rule,
this ideology has since become the industry standard for responsible money
management, giving Putnam Investments bragging rights for its creation.
Marsh & McLennan acquired Putnam in 1970, but Putnam didnt stand still
in its quest to attract new business. In 2001, the company teamed with private
equity firm Thomas H. Lee Partners to offer a fund targeted to wealthy
investors, the $1.1 billion TH Lee Putnam Ventures fund. The fund looks for
later-stage venture companies in the technology sector, and generally invests
between $20 million and $50 million.
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Not cutting it
As of January 2006, Putnams assets under management had dropped from
$267 billion to $191 billion in almost two years, and institutional clients
dropped from 700 to 175. Despite Haldemans cheerleading early on, by
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September 30, 2006, Putnams assets had fallen further still, to $182 billion,
and revenue had dropped 8 percent to $342 million.
As Putman continued to under-perform, and Marsh & McLennan faced
increased competition from rivals, the parent company began to consider selling
off the asset management unit. It hired Goldman Sachs and Merrill Lynch to
review offers from potential buyers, of which The Wall Street Journal reported
in September 2006 there were several. The Journal added, though, that a sale
was far from a sure thing, and that Marsh & McLennan could decide to spin off
the unit to shareholders, which would save it a big tax bill. Or it could hang on
to the purveyor of Putnam mutual funds if bids are underwhelming.
In the end, Marsh & McLennan received more than 30 inquiries and seven
serious bids for Putnam, and in February 2007, Great-West Lifeco inked a
deal to acquire Putnam for $3.9 billion in cash.
Done deal
In May 2007, shareholders in Putnams 105 funds seconded the sale to Great-West
Lifeco. Great-West, North Americas fifth-largest life insurer, doubled its assets
worldwide with the addition of Putnam. The deal also helped Great-Wests parent
company, the Montreal-based Power Corporation of Canada, to achieve its goal of
expansion in the U.S. Previously, Great-Wests main business in America was
providing medical insurance to slightly more than two million consumers.
The transaction held promise for Putnam as well, and executives hoped that the
Canadian mutual fund manager would take a leading role in helping Putnam to
regain some of the assets it had lost; within the last decade, it has lost more than
half. I know that they can teach us a lot and I know that they can challenge us
a lot, Haldeman told The New York Times in February 2007.
By November 2007, Putnams assets under management reached $195
billion, before slipping thereafter.
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GETTING HIRED
Pick a path
On its career web site (www.putnam.com/careers), Putnam encourages candidates
to apply and eventually embark on a firm-sanctioned career path. On the site,
candidates can also find information on how to applydetailed descriptions of
jobs, benefits the firm offers, profiles of current employees and more. Typically,
MBAs join the firms early career development program, which includes
structured training, job assignments and a wealth of opportunities to network with
both peers and senior management. The training offered in the program is taught
by senior Putnam staff, and comprises four components: orientation, investment
education seminars, business seminars and personal effectiveness training. For
undergraduates, Putnam runs an investment associate program, which includes
three years of structured training, job assignments and developmental activities.
Additionally, the firm offers investment associates a program to prep them for
business school called, appropriately, the MBA Preparation Program.
Sink or swim
The pendulum swings widely in regards to the firms corporate culture.
Working at Putnam is great, one insider enthuses. Another says that
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KEY COMPETITORS
Edward Jones
Morgan Keegan
UPPERS
DEPARTMENTS
Asset Management
Financial Planning
Investment Banking
DOWNERS
Diversity needs improvement
THE STATS
Employer Type: Public Company
Ticker Symbol: RJF (NYSE)
Chairman & CEO: Thomas A.
James
Net Revenue: $3.1 billion (FYE
9/07)
Net Income: $250.4 million
No. of Employees: 5,500
No. of Offices: 2,200
EMPLOYMENT CONTACT
www.raymondjames.com/careers
THE BUZZ
Committed
Small player in the South
Staying the course
Regional fund pushers
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THE SCOOP
Something to celebrate
In the past decade, Raymond James Financial has tripled its revenue. The
firm hit a milestone in November 2007 when it announced that it had
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surpassed $1 billion in revenue for the fiscal year of 2007, crediting recordbreaking production levels of its 3,000-plus financial advisors.
Year-end revenue and profits were also a bright spot for Raymond James. Net
revenue increased to a record $2.6 billion from $2.4 billion in 2006, while net
profits clocked in at a record $250.4 million, a 17 percent increase from 2006,
which was quite a feat during the subprime credit crisis and weakening U.S.
economy.
Halfway through the 2008 fiscal year, the firm had less to celebrate. Assets
under management had slipped from $37.1 billion to $35.4 billion, and for the
six-month period ending March 31, 2008, the firm booked net income of $116
million, a 3 percent decrease versus the first six months of fiscal 2007.
However, revenue was still on the rise. Overall net revenue increased 12
percent during the period to $1.4 billion, and both asset management and the
private client group saw increases in revenue. Asset management revenue
rose 6 percent to $112 million for the six-month period, while private client
revenue shot up by 10 percent to $1 billion.
A brand is born
Robert James founded his eponymous firm in 1962 as an investment advisory
located in St. Petersburg, Fla. Two years later, the firm merged with
Raymond and Associates to form Raymond James & Associates. In 1966,
CEO (and son of the firm's founder father) Thomas James joined the firm.
RJA continued to grow in the late 1960s and in the 1970s. Raymond James
obtained seats on the New York Stock Exchange and American Stock
Exchange (in 1973 and 1977, respectively), and went public in 1983.
International expansion came in the late 1980s with the opening of offices in
Paris (1987) and Geneva (1988).
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there will be four or five firms. Among the firms thrown around for possible
acquisition was Raymond James. TheStreet.com also noted that Raymond
James strong retail brokerage presence in the Southwest would make it an
attractive buy. Analysts speculate that it would be too difficult and costly for
a large company to enter that particular market on its own; acquiring a
regional firm like Raymond James would offer an immediate in.
However, Raymond James, for the most part, would like to stay on its own.
While we may be the subject of speculation, we remain committed to
independence, Thomas James, chairman and CEO of Raymond James, said
in a statement to TheStreet.com.
Diversity, please
One criticism of Raymond James is that its a mens club with little to no
diversity at the top. In October 2007, three fomer employees at Raymond
James St. Petersburg headquarters filed a lawsuit alleging sexual
discrimination at the company. The allegations include less pay for women,
sexual harassment, being passed over for promotions and training, and racial
discrimination. The St. Petersburg Times reported that one woman lost her
job after she claimed a manager told her she was being difficult and had a
negative attitude. Another female employee said that a vice president
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touched her back inappropriately and that she was paid less than her male
counterparts.
Representatives from Raymond James called the claims wholly unjustified
and said in a statement that all promotions were merit-based. The court filing
requests for the case to be labeled a class-action lawsuit on behalf of other
female employees at the financial firm.
Speaking of which, in January 2008, two female Raymond James employees
were appointed to senior-level positions in operations and administration.
And in February 2008, two female executivesShelley Broader, president
and CEO of Sweet Bay Supermarkets; and Susan Story, president and CEO
of Gulf Power Company, a subsidiary of Southern Companywere elected
to the board of directors. Additionally, in May 2008, Angela Biever, a former
RJF board member was appointed chief administrative officer of the
company.
Fine time
Sadly, the discrimination lawsuit wasnt the only hardship that Raymond
James faced in 2007. In February, the St. Petersburg-based company was
slapped with a $2.75 million fine from NASD, a brokerage regulator. NASD
claimed that Raymond James had failed to provide supervision to more than
1,100 financial advisors across the states from April 2000 to December 2004.
Superiors did not monitor sales activity and, therefore, could not gauge
whether advice was reasonable or sound.
Donna Vogt, a branch manager in Wisconsin, was barred from the industry for
disregarding age, risk or personal needs when assessing the proper
investment advice for clients. NASD complained that one client, an 84-yearold woman, lost more than 60 percent of her portfolio due to Vogts
irresponsible advice. Raymond James paid the fine but did not admit any
wrongdoing.
Making a pact
In July 2006, Raymond James & Associates became the first regional
brokerage to join a pact that makes it easier for brokers to jump ship without
fear of being sued. The pact was originally set up in 2004 by major Wall
Street firms. The intention is to create protocol by which brokers can leave
firms with some client information, without having to worry about litigation.
Under the pact, the definition of some client information is enough so that
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the broker can contact the client to ask whether they want to bring their
business to that brokers new firm. Brokers are prohibited, however, from
bringing with them specific information about a clients account. The
original firms to set up the pact were Merrill Lynch, Citigroups Smith Barney
and UBS Wealth Management USA. In addition to Raymond James, Morgan
Stanley, Wachovia Securities, SunTrust Capital Markets, Stephens Group and
StillPoint Advisors have since joined the pact.
GETTING HIRED
Its an honor
At www.raymondjames.com/careers, job listings are divided into two categories
career opportunities for experienced hires and student opportunities for those
just entering the workforce. You can apply online for any position that happens to
pique your interest. The site also lists benefits the firm offers along with a Life at
Raymond James section, which describes the day-to-day life at the firm, the
training programs offered and the attractions of the different cities in which RJ
operates.
As for the particulars of joining the fold, you may go through up to seven
interviews before getting hired, though insiders dont necessarily find the long
interview process to be a problem. It made me feel as though it was an honor to
be hired, admits one respondent. Another contact reports being interviewed by
just a financial advisor and then the owner of the firm. You can expect basic
behavioral questions such as How do you handle bad teammates? and How
did you handle difficulties you faced in your last position? Also be ready to
discuss your weaknesses and strengths. One insider wryly admits that
candidates should be prepared to talk about your favorite football team and how
great the other offers you are contemplating are, since both of these tactics
seemed to help candidates in the past.
If youre just coming into potential employment with the firm straight from
college, however, there are a few things that are likely to set you apart from the
pack. Be energetic, outgoing, willing to learn and work hard and willing
to play and have fun. It also doesnt hurt to possess good critical and analytical
thinking skills, as you could be put on the spotlight in a meeting anytime to give a
perspective on a topic or issue. So be a team player who can multitask while
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still possessing the skill to work alone if need be. Being a go-getter who is
willing to be educated on new ways of doing things will also work in your favor.
No trouble at all
At Raymond James, workers largely live by one credonothing is too much
trouble for a client. But that doesnt mean that employees are doormats.
Insiders describe the firm as great, independent, progressive, valuesoriented and phenomenal. Opportunities for advancement are available to
anyone seeking them, and there is flexibility to change jobs since the
company strives to ensure each employee loves his or her job and is happy doing
it.
The dress code is business casual, but on Fridays, jeans are allowed. The rest
of the garb rules seem pretty accepting. Tattoos must be covered, and nose
piercings just became approved to have, one insider says. But despite the
progressive culture, the pay is low. However, the firm tries to make up in other
areas by offering employees work flexibility, including the ability to work
from home if they cant make it to work for any reason. The firm also seems
to be accommodating when it comes to family obligations. One insider
describes a monthly department meeting normally held at 8 a.m. changed to 4
p.m. due to employees who said they couldnt make it due to obligations, such
as having to drop their kids off to school in the morning. Other perks offered
include the opportunity to buy company stock for a 20 percent discount,
vacation and sick time that rolls over and tuition reimbursement.
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And the firms diversity is improving, though its still not cutting edge.
One insider confesses having a primarily gay client base but with no direct
marketing pieces for this group. The representation of women within the
company, however, is slowly changing. Ethnic diversity is pretty decent as
well, with both black and white employees working together. But theres
certainly always room to perfect diversification efforts. One contact says
simply that theres not enough diversityparticularly with minorities, gays
and women.
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Russell Investments
909 A Street
Tacoma WA 98042
Phone: (253) 439-9500
www.russell.com
DEPARTMENTS
Alternative Investments
Investment Consulting
Investment Management &
Research
Manager & Product Research
Russell Implementation Services
Russell Retirement Services
Russell 20-20
KEY COMPETITORS
Bank of New York Mellon
Barclays Global Investors
Northern Trust
Standard & Poors
State Street
UPPERS
Family-oriented, respectful
culture
DOWNERS
Training offerings could be better
THE STATS
Employer Type: Subsidiary of
Northwestern Mutual
CEO: Craig Ueland
No. of Employees: 2,000+
No. of Offices: 20
EMPLOYMENT CONTACT
Visit careers section of
www.russell.com
THE BUZZ
Large custodian
Sharks in suits
Second tier
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Growing pains
Russell has remained true to its Tacoma roots since its founding in 1936, but
the firm has reportedly begun examining optionsincluding a possible move
from the its cramped quarterswhen its lease expires in 2013. The firm has
outgrown its four downtown office buildings that house 1,100 employees and
feature two open trading floors of about 45,000 square feet. It is considering
expanding its existing buildings, or constructing a larger facility either in
Tacoma or in the Puget Sound area. Tacoma residents and city officials have
already begun rallying to keep Russell in Tacoma, offering the firm tax breaks
and other incentives. Russell will reportedly make a decision about the space
issue later in 2008.
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Schroders plc
31 Gresham Street
London, EC2V 7QA
United Kingdom
Phone: +44 (207) 658-6000
Fax: +44 (207) 658-6965
www.schroders.com
Schroder Investment Management
North America Inc.
875 Third Avenue, 22nd Floor
New York, NY 10022-6225
Phone: (212) 641-3830
Fax: (212) 641 3985
www.schroders.com/us
KEY COMPETITORS
AMVESCAP
Deutsche Bank
Merrill Lynch
EMPLOYMENT CONTACT
See the career opportunities section
of www.schroders.com
DEPARTMENTS
Institutional Services Mutual
Funds Private Banking Private
Equity
THE STATS
Employer Type: Subsidiary of Public
Company
Chairman, Schroders plc: Michael
Miles
CEO, Schroders plc: Michael
Dobson
Revenue, Schroders plc: 1 billion
(FYE 12/07)
No. of Employees: 2,900
No. of Offices: 37
THE BUZZ
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THE SCOOP
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Thinking globally
There is no animosity between Schroders and Citibank, seven years after the sale
of Schroders investment banking arm. In late October 2006, the two companies
announced that Citibank clients in a number of European countries would be able
to invest for the first time in portfolios that include alternative investments such
as private equity and hedge funds via an exclusive agreement with Schroders.
Schroders and Citi partnered again in August 2007 to bring customers the
Citibank QDII ProductSchroder International Selection Fund. The venture,
which allows for international mutual funds in China, consists of six products
covering different asset categories, markets, and sectors for which customers can
select.
We have carefully selected these six funds together with Citibank in order to
give Chinese retail investors a range of different asset categories with various risk
and return profiles, Lieven Debruyne, head of mutual funds for Schroders in
Asia, said in a statement. This collaboration also underpins our commitment to
the China market.
Recent buy
In February 2007, Schroders acquired the Germany-based property asset
manager Aareal Asset Management GmbH and its related companies. Under
terms of the deal, Schroders will pay 28.0 million for AAM, which had 1.3
billion in assets under management. AAM manages seven property funds in
Europe, and is headquartered in Wiesbaden, Germany, with additional offices
in Amsterdam, Milan, Luxembourg, Stockholm and Paris. AAMs major
clients are insurance groups, pension funds and government organizations.
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Research chiefs
Schroders likes to brag that 75 percent of its research is done in-house. A 2007
survey at Schroders showed that many investors could outlive their assets,
meaning that they needed to take a more active role in their retirement plans to
ensure their needs are met. Of the 600 investors polled in the survey, 88 percent
expected to retire before 65 and almost half expected to retire before 60.
We, as an industry, and the government need to dream up some good solutions,
Alan Brown, chief investment officer, told the Financial Times. The message
has to go out to people that they need to save. Some serious wake-up calls are
needed. According to the Financial Times, companies like Schroders have to
adapt from defined benefit schemes to defined contribution schemes, which put
more pressure on the individual to save for retirement.
Record-breaking profits
The third quarter of 2007 was a bright spot as well as a milestone for Schroders.
The fund management group recorded its best profits in the firms 200-plus-year
history. In addition, pre-tax profits rose more than 50 percent and private equity
profits tripled. Overall, net profits in the third quarter rose to 98.1 million from
64 pounds during the same quarter in the previous year.
For the full year 2007, the firm had a lot to celebrate. Revenue rose 21 percent
versus 2006 to 1 billion, while profits before taxes increased 35 percent to
392.5 million. Meanwhile, earnings per share leaped 36 percent, and funds
under management rose 8 percent to 139.1 billion. The asset management unit
saw profits before taxes rise 22 percent to 266.5 million, and private banking
experienced a 54 percent increase in before-tax profits, booking 41.3 million.
Private equity had an amazing year, with before-tax profits leaping 92 percent to
84.7 million.
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GETTING HIRED
Casual times
As for day-to-day life at Schroders, expect anything. Even though its an
overall laid-back corporate culture, you still may need to stay late once in a
while. The casual atmosphere seems extends to the dress code as well. Ties are
always optional for men, and casual Fridays are in effect throughout the year.
In addition, employees can dress in casual attire every day during the summer
months. Insiders note that women can be more casual than men.
One source says wars that theres little opportunity for advancement within the
New York branch. Its very small and as a result, there are not many places to
go. And although the company officially touts its inclusive working
environment, some insiders disagree, noting that there is little diversity within
the firm.
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KEY COMPETITORS
Bank of New York Mellon
Merrill Lynch
UPPERS
DEPARTMENTS
Investment Management
Investment Research & Trading
Investment Servicing
DOWNERS
THE STATS
Employer Type: Public Company
Ticker Symbol: STT (NYSE)
Chairman & CEO: Ronald E. Logue
Revenue: $8.3 billion (FYE 12/07)
Net Income: $1.26 billion
No. of Employees: 27,110
No. of Offices: Offices in over 26
countries
EMPLOYMENT CONTACT
See the careers section of
www.statestreet.com
THE BUZZ
Strong research
Going downhill
Nose to the grindstone
Mediocre investment talent
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THE SCOOP
A penny saved
State Street has been saving, earning and investing pennies since 1792 when
Massachusetts Governor John Hancock approved the charter for the Union
Bank, State Streets oldest ancestor bank. In 1925, the Union Bank merged
with the State Street Trust Company, which only a year earlier had become
custodian of the first U.S. mutual fund.
By the 1970s, State Street had long become a household name and began
expanding its operations abroad. In 1970, State Streets first international
office was opened in Munich, followed by a London office in 1972. By the
mid-1980s, under the direction of chief executive William Edgerly, State
Street narrowed its focus on servicing financial assets for institutional
investors and transformed itself from a regional retail bank to an international
financial services provider.
State Street kept on earning pennies right through its 200th year: In 1991,
State Streets assets under custody surpassed $1 trillion, and in 1992, assets
under management reached $100 billion. The reconfiguring and focus on
institutional asset management also continued. In 1996, State Street acquired
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New deal
In July 2007, State Street completed its acquisition of Bostons Investors
Financial Services Corp. for nearly $4.5 billion in stocks, leaving the firm
with more than $15 trillion in assets under custody. In sealing the deal, State
Street became the leading investment service provider to offshore and hedge
fund industries.
State Street insiders said it was confident that the acquisition would deliver
value for shareholders, customers and employees. The company expected the
conversion for new customers to be completed within 18 months. Integration
and restructuring costs are expected to be an estimated $650 million for State
Street, and the company says the acquisition of Investors wont boost its
profits until 2009. Investors went public in 1995 and had $1.95 trillion in
assets under administration at the time of the deal announcement.
As a result of the acquisition, Logue said he expected to see about 1,700
employees laid off. This transaction is a consolidation, as opposed to an
integration, he told The New York Times in early 2007. Yes, there will be
short-term employee dislocation. But at the end of the day we will have a
stronger, Boston-headquartered company.
Heres another concern for investors: Analysts say that 18 percent of
Investors revenue stems from business with client Barclay Global Investors,
a major State Street competitor. If Logue is worried, he isnt letting it show:
We fully expect that we will continue to service BGI, he told MarketWatch.
We have serviced many of our competitors for many years.
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Tough break
State Street is currently facing three lawsuits claiming that it mismanaged
bond funds that were supposed to be conservative but suffered huge losses
due to risks within the subprime mortgage industry in the summer of 2007.
As a result of those imprudent investments, bond funds managed by State
Street, which were supposed to track a well-defined index of investmentgrade, U.S. government and corporate bonds, lost up to 40 percent of their
value when the market for mortgage-backed securities collapsed in August
2007, a lawyer for UniSystems said in a statement, according to the Boston
Business Journal.
UniSystems, a New York-based publisher, and Prudential Retirement
Insurance and Annuity Co. were the first to file lawsuits in October 2007.
They were followed by Nashua Corp., a New Hampshire-based producer of
paper and imaging products that lost $5.6 million by investing its pension
funds in State Streets Bond Market Fund.
A spokeswoman for State Street told the Associated Press that the company
was disappointed that a small number of our active fixed income clients
have sued We pride ourselves on our commitment to clients, and we
believe that we managed these strategies consistent with stated investment
objectives.
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In spring 2008, Hunts successor was named, as Scott Powers, former CEO
of Old Mutual Asset Management, took over as president and CEO of State
Street Global Advisors. Prior to Old Mutual, Powers worked in senior roles
at Mellon Institutional Asset Management and Boston Co. According to
Financial Week, the appointment of an outsider and industry veteran was seen
by many industry observers as a hopeful sign, underscoring State Streets
commitment to the asset management business.
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GETTING HIRED
Theyre particular
Gear up for a selective process at State Street. Insiders note that though the
firm lists internal postings, the hiring execs prefer external recruitment and
like to use headhunters. Either way, State Street holds a very high
standard for education, skills and experience, but the level of difficulty in
obtaining a position depends on which job youre going for. For example, its
very easy to obtain entry-level positions, at any time throughout calendar
year, according to one source, but more senior positions tend to be more
difficult and often require candidates to have specific knowledge. In the
technology group, we do not generally take people right out of college
unless theyve completed an internship, as we are generally looking for a bit
of experience in IT. State Street recruiters search for candidates on
university campuses throughout the New England area, as well as other parts
of the U.S. to support the various locations. The firm also finds candidates
on career web sites and at career conferences, as well as through word-ofmouth referrals, industry networking and executive search firms. For more
senior-level positions, State Street recruits from business schools.
High demand
Interviews largely depend on your department and your experience. At the
very least, expect your interview process to involve managers and staff, say
insiders. Others note that there are not many slots and lots of applicants
who go through a tough interview process. Again, the process varies,
depending on what job youre applying for, but most agree that the hiring
process is extensive and in depth, with multiple interviews by varied
individuals.
I met with seven people, including the head of HR, chief investment officer
and other business unit executives, says one respondent. Another went
through a phone screening followed by an on-site interview with all team
members, and then an interview with the related business group and upper
management. You may also interview with HR, then at least two
employees on the floor, and then go back and negotiate with HR on your
starting date, says a contact. The decision to include management in
interviews, according to one manager, depends on the level. One source
only met with two interviewers and three different employees. Another,
who had six interviews also met with future peers as part of the process.
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Questions asked are specific to how you would handle sensitive situations,
conflict resolutions, and coaching and mentoring employees. One contact
reports fielding basic questions about mutual funds and typical behavioral
questions, adding that if you can speak knowledgably about futures and FX
funds, theyll think youre a genius. In addition to work experience, State
Street interviewers focus on past behaviors and specific examples of such.
Another interviewee was asked questions with attention to schooling and
methodology of thinking. You might also have to field project management
questions. Another insider, who went through a total of eight interviews,
says all of his interviewers had the same approach.
Open to all
State Streets working environment is light and fun, and stress levels are
kept at a minimum. Others say the workplace culture is very laid-back
and that the firm is the kind of place where you can work there for your
entire career. Collegial is a word that comes up again and again when
State Street insiders are asked to describe their corporate culture. Indeed,
building camaraderie is important.
Day-to-day life at State Street tends to be high energy, client-focused and
process-driven, yet staffers are given ample opportunities to be
entrepreneurial, as the culture is also called professional and
encouraging, and the firm has an eye to promote from within. It is very
much a mature atmosphere of mature professionals, says a contact. And as
the company continues to grow, the culture is changing, becoming
increasingly performance-based and less political or bureaucratic. Another
agrees that State Street is evolving, saying, Great strides are being made to
ensure that there is a greater level of transparency in all communications,
decisions and actions.
Helping out
While everyone is very nice and helpful, networking seems to be a
significant factor in moving up, says an insider. If you play golf, there seem
to be plenty of opportunities, notes another. Networking and forming good
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Go casual
Dress is mostly business casual but also hinges on the department in which
you happen to work. The code is business casual in operational areas and
business in customer-facing areas, says one contact, adding that the policy is
a fair and reasonable one. Another says that while the dress code is
business casual, if you have a lot of important meetings, youll be wearing a
suit more often. There are also casual Fridays.
Either way, most dont mind dressing up when the occasion calls for it.
While the code is casual, I almost always dress formally, as I have meetings
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almost every day with the outside and need to represent my company, says
a source. The policy is business casual, but you see far more formal attire
during the week. Senior management wears ties; sales people wear suits.
The dress is business casual, but most executives wear suits on a daily
basis. And for nonexecutive employees, meetings with senior management
require more formal attire. According to one contact, more formal is
always better, particularly for women in management roles.
State Street insiders are pretty satisfied with their office spaces as well, with
few exceptions. Spaces range from brand new with state-of-the-art
technology to simply conducive to productivity. Offices are very nice,
but not as luxurious as some other financial service firms. Many highlevel professionals are given high-walled cubicles rather than offices. One
source works from a soft-walled office.
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Focusing on diversity
Most insiders also rate State Streets diversity efforts highly. One insider
notes that the diversity is probably representative of the percentages in the
population. Another contact says that State Street is a very diverse
company and that all employees are required to attend a yearly diversity
awareness program. State Street has taken strides to make in creating a more
diverse workplace. The firm is receptive, says one contact, who also notes,
In my team of 22 investment professionals, there are only four women.
However, the company is very focused, making sure that State Street
staffers not only promote and encourage diversity, but also demonstrate
through actions that women are supported, says another. In fact, women
are increasingly becoming not just representative in our workforce, but also
at the most senior levels. One female respondent says, I believe the glass
ceiling does not exist at my company.
However, another says that this is an extremely white male organization;
what applies to women applies double to minorities. There are not too
many minorities in power positions at State Street. Another contact notes
that if you were to look at diversity from a management perspective, you
find the diversity lays in the lower ranks, whereas the management positions
seem to go mostly to young and old white males, adding that a low number
of women hold higher management positions and those that do are 48 or
older. In the firms defense, according to one insider, the Boston market
does not have a lot of diversity as compared with other cities. Indeed,
creating a diverse workforce is difficult to accomplish in New England
financial services. Nevertheless, at State Street, there is great effort to
improve in this area. For example, the company supports various affinity
groups representing various cultures and ethnic groups.
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KEY COMPETITORS
DEPARTMENTS
EMPLOYMENT CONTACT
THE STATS
Employer Type: Subsidiary of
Socit Gnrale
CEO: Robert Beyer
Revenue: $130.4 million (FYE
12/07)
No. of Employees: 1,020
No. of Offices: 4
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THE SCOOP
Major assets
The TCW Group is a Los Angeles-based asset management with over 1,000
employees. From two offices in L.A., one in New York City and one in
Houston, Tex., the firm offers products in all four major asset classesU.S.
equities, U.S. fixed income, international and alternativesto corporations,
retirement funds, financial services companies, endowments, foundations and
wealthy retail investors. Among the firms flagship products are concentrated
core equities, mortgage-backed securities and mezzanine investing. As of
March 31, 2008, TCW had $130.8 billion in assets under management. Its
parent company, Socit Gnrale Asset Management, currently has
approximately $460 billion under management.
Award-winning fund
In March 2008, for the fifth year in a row, the TCW Total Return Bond Fund
was the top ranked fund in the Standard & Poors/BusinessWeek Annual
Excellence in Fund Management Awards. One of 24 winners chosen from a
field of thousands, TCWs fund is the only fixed income mutual fund to win
the award every year since S&P and BusinessWeek starting handing out the
honors in 2003.
In addition, TCW Total Return's portfolio manager Jeffrey Gundlach (who is
also TCWs chief investment officer and a member of the firms board of
directors) took home a prestigious honor in 2008 for his work with the fund.
In January, Morningstar named him Fixed Income Manager of the Year.
TCW Total Return mainly invests in AAA-rated mortgage backed securities.
In TCW we trust
Robert Day founded the firm in 1971 in Los Angeles, Calif., under the
moniker Trust Company of the West. In its first year of business, with $16
million in assets in its pockets, TCW became the third independent trust
company in the state of California. The firms 1974 merger with
Shareholders Asset Management Company gave TCW the surge it needed.
By the end of 1975, assets under management had grown to $568 million, and
the firm had 57 total clients. TCW went bicoastal in 1979, opening up a New
York office on Park Avenue. The next year, the firms client roster topped 100
and assets were at $3.2 billion. TCWs San Francisco office opened in 1986,
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and in 1988, the firm established its first offshore fund. Two years later, TCW
acquired DBL Americas Development Inc., now known as TCW Worldwide
Opportunities, in its first emerging markets venture. In 1993, TCW made
another important acquisition, Dillon Read Intl. Asset Management, and
opened offices in London and Hong Kong. By the following year, the firm
had over 1,000 clients.
The firms biggest milestone to date came in 1999, when assets under
management grew by 34 percent in one year to $71 billion, equaling the
growth in the entire first 17 years of firm. Its no wonder that French banking
giant Socit Gnrale found the firm attractive and acquired a majority
interest in TCW in 2001. In 2005, as assets under management went climbing
steadily above the $100 billion mark, Robert Beyer took over as CEO.
Parental dispute
TCW recently has been feeling some heat because of problems happening
within its parent company, Socit Gnrale, specifically a January 2008
incident in which a rogue trader cost the firm billions of dollars in losses.
Pensions & Investments reported in February 2008 that huge trading losses,
billion-dollar structured-debt write-downs, faulty control systems, allegations
of insider trading and talk of takeover at the Paris-based bank have cast a
cloud over the Los Angeles money manager. The publication also said TCW
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has been keeping close contact with its important clients, to prevent them
from running scared from SocGens problems. TCW assured its investors
that they had nothing to worry about. A spokesperson for TCW told Pensions
that TCW is in no way involved in any of the fraud due to rogue trading.
TCW is an autonomously managed, indirect subsidiary of Socit Gnrale.
We use separate risk management, compliance, trading and back-office
systems, and controls.
Still, SocGens woes caused the financial community to label it a takeover
target, which raises questions about TCWs future. According to an analyst
with Atlanta-based Watson Wyatt Worldwide, It all depends on who the new
parent might be: what is their experience with the asset management industry;
what else do they have in that area A lot of things come into play.
GETTING HIRED
MySpace, anyone?
The careers section at www.tcw.com allows candidates to submit their
resumes online, but doesnt give potential candidates many other
opportunities to explore the job possibilitiesnone are posted on the site. If
you happen to have any questions, though, the firm is happy to answer them.
You can contact the firm by filling out an online form, where it welcomes any
comments the curious may have.
But while TCWs official site doesnt contain any specific job listings, the
firm has managed to get creative in how it does its recruiting. It has even
begun listing open positions on the jobs section of MySpace.com in an
attempt to cull students into employment from their natural electronic
habitat. In these listings, the firm emphasizes that it is seeking strong
organizational, multitasking, analytical and problem-solving skills.
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TIAA-CREF
730 3rd Avenue
New York, NY 10017
Phone: (212) 490-9000
www.tiaa-cref.org
DEPARTMENTS
Brokerage Services
Insurance & Trust Services
Retirement & College Savings Plans
KEY COMPETITORS
AIG
Fidelity
The Vanguard Group
UPPERS
Extremely relaxed culture
DOWNERS
THE STATS
EMPLOYMENT CONTACT
See the careers section of
www.tiaa-cref.org
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THE SCOOP
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The 1918 charter of TIAA states that it will conduct business without profit to
the corporation or to its stockholders. For the first 20 years of its existence,
TIAAs sole shareholder was the Carnegie Corporation. During those 20 years,
prudent investing in government, railroad and industrial bonds allowed it to
survive the depression and even grow its assets under management from $19
million in 1929 to $105 million in 1939. By the end of World War II, TIAACREF had a virtual monopoly on the academic retirement-fund space.
As the company grew, it had to find new ways to adjust to a post-World War II
economy, which saw the number of college graduates triple, life expectancy soar
from 48 to nearly 70 years, and inflation explode to more than 7 percent per year
in the 1940s.
In response to these changes, TIAA conducted a comprehensive economic study
to determine how a combined fixed income and variable annuity program would
have worked in the past. The study found that an individual would have fared
better from participation in a diversified annuity program than in a fixed income
annuity alone. So, in 1952, the College Retirement Equities Fund (CREF) was
created to provide a variable annuity fund to complement TIAA. Later in 1952,
an editor at Fortune wrote to a colleague: I think this is the biggest development
in the insurance-investment business since the passage of the Social Security Act.
Together, TIAA-CREF continued to look for new ways to serve its members. In
the 1970s, it was one of the first companies to use a portfolio of international stocks
as part of its investment strategy. Then, in the late 1980s, it expanded its variable
annuity offerings to allow members to invest in directly owned real estate
properties.
But it wasnt all smooth sailing for TIAA and CREF, which were formed as
nonprofit organizations dedicated to serving the nonprofit education and research
community. In 1987, as a result of the 1986 Tax Reform Act, TIAAs life and
health insurance operations became taxable, and the Taxpayer Relief Act of 1997
made the rest of TIAA-CREFs operations taxable. The acts by Congress had a
significant affect on TIAA-CREF, transforming it from a pension and insurance
organization solely for employees of education and research institutions into a
group of financial companies providing products and services to the general
public.
TIAA-CREF investors have reason to be happy: During its first 53 years of
existence, the CREF Stock Account delivered an average annual rate of return
of 10.4 percent per year, while TIAAs Traditional Annuity paid its investors
its guaranteed interest rate plus a dividend in each of those 53 years as well.
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California dreaming
TIAA-CREF scored a big win in late June 2007 when it entered into an
exclusive relationship with the California State Teachers Retirement System
(CalSTRS), a service open to 800,000 employees. CalSTRS entrusted TIAACREF with the responsibility of being the sole investment provider for its
retirement savings vehicles, which serve over 1,400 school districts. TIAACREF will be responsible for the recordkeeping and the trust functions for
CalSTRS retirees, while both companies will work on expanding the variety
of products available. Retirement products have become increasingly
essential to teachers in California, who do not currently receive Social
Security for their time in the class. In fall 2007, TIAA-CREF assumed
custody of approximately $170 million in assets under the new program.
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represented by the web address powerof.org. As part of the powerof.org site, the
firm recognizes all the other dot-orgs and dot-edus out in the world who serve the
greater good. Past honorees include Caltech, CUPA and Trees Forever.
GETTING HIRED
Just relax
The culture at TIAA-CREF is a very relaxed and cooperative one where
people arent trying to knife one another in the back. Hours, too, are
similarly relaxed. The hours are typically the standard 40 per week,
explains one insider, but you spend nine hours at work because of your lunch
break. The dress code, too, is a fairly loose onebusiness casual with
jeans and sneakers every Friday. This translates to men only needing to
wear a shirt with a collar, and women only needing to wear a top that looks
somewhat professional. One insider even admits that the dress code is
about as close to being casual as possible without officially being there. One
aspect of life at TIAA-CREF thats not relaxedand this sounds like a
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Manager merry-go-round?
As for management, there appears to a fairly high rate of turnover. One
insider reports having five managers in three years, along with lots of
changeboth good and bad. On one hand, the company is trying very hard
to update the culture and operations to 21st century standards, but the
problem is that there two groups of individuals working therethose lifers
who are entrenched and have been unable to adapt to a competitive culture,
and those who are new to the company and were attracted by the excitement
of real change and progress. And frequently, many of these newer
individuals have left the company because of frustration and lack of real
progress, such as ongoing technology problems.
A little indistinct
Things seem hazy when it comes to the diversity issue at TIAA-CREF. Insiders
admit being not too sure about the whole diversity issue and say that while there
seems to be some minorities at TIAA, its a lot less than at other places Ive
worked. Other contacts, however, say its a very diverse and women/minorityfriendly environment, with equal opportunity for everybody based on merit.
Regardless, the firm seems to be making strides in this area, highlighting programs
like its Supplier Diversity Program, which the firm says encourages
competition among diverse and diversity conscious suppliers.
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DEPARTMENTS
Equity Funds
Fixed Income
Hybrid Funds
Money Market
Institutional Funds
Individual Retirement Accounts
Variable Insurance Fund
KEY COMPETITORS
American Century
Fidelity
T. Rowe Price
The Vanguard Group
EMPLOYMENT CONTACT
E-mail: VictoryJobs@VictoryConnect.com
www.key.com/careers
THE STATS
Employer Type: Subsidiary of
KeyCorp
Chairman & CEO: Robert Wagner
No. of Employees: 213
No. of Offices: 5
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THE SCOOP
Clevelands bank
Victory Capitals parent company, KeyCorp, adds considerable clout to the
small firm. KeyCorp is a commercial and retail banking empire based in
Cleveland, Ohio, which ranked 319th on the Fortune 500 in 2007. As of the
year-end of 2007, KeyCorp had $99 billion in assets. Despite a downturn in
the economy, KeyCorps numbers were solid in 2007, with an annual net
income of $919 million, an increase of 18 percent from 2006.
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quickly. He was hired as president in 2004 and, within one year, was
promoted to chairman and CEO.
A classy move
Theres good news for investors who have a lot of money invested in Victory
Capital Management Funds. In September 2007, the firm introduced a new
share class geared towards institutions and high-net-worth clients that are 25
basis points lower than the Victory Funds A Class. In order to qualify for this
no-sales load, reduced-fee share class, one must have at least $2.5 million in
a fee-based program. The new share class is also designed to appeal to bigger
institutional customers such as compensation plans that have more than $25
million in total assets.
Victory is a winner
Victory Capitals funds have a reputation for making consistent, conservative
and smart investments. In 2008, USA Today made note of that consistency
coupled with the growth potential of Victorys Small Company Opportunity
Fund, which was named to the Mutual Fund All-Star Team for the second
consecutive year. The fund was singled out as a great buy in the category of
value funds. Victorys Small Company Opportunity Fund trades under the
ticker symbol SSGSX, has $301.3 million assets under management and has
grown 110 percent in the past five years. That growth was slightly upset in
2007 when it lost 10 percent of its value. However, USA Todays rationale for
naming the fund an all-star comes from the fact that it performed far better
than many of its competitors through the year, due to its small exposure to
financials and high exposure to energy stocks. It also ranked in the top 25
percent of all small company value stocks in the past three years.
The firm has also won recognition from The Wall Street Journal for the strong
performance of its funds. The paper named the Victory Focused Growth
Fund and the Victory Special Value Fund as Category Kings in July 2007.
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Wachovia/Evergreen
Investments
Wachovia
301 South College Street
Suite 4000
One Wachovia Center
Charlotte, NC 28288-0013
Phone: (704) 590-0000
www.wachovia.com
Wachovia Securities
One North Jefferson Street
St. Louis, MO 63103
www.wachoviasec.com
Evergreen Investments
200 Berkeley Street
Boston, MA 02116
www.evergreeninvestments.com
DEPARTMENTS
Capital Management Group
Corporate & Investment Banking
General Banking Wealth
Management
THE STATS
Employer Type: Public Company
Ticker Symbol: WB (NYSE)
Chairman & Interim CEO: Lanty
Smith
Net Revenue: $31.6 billion (FYE
12/07)
Net Income: $6.31 billion
No. of Employees: 120,000
No. of Offices: 3,889
KEY COMPETITORS
Bank of America
Citi
SunTrust
UPPERS
Culture is competitive in a healthy
way
Great work/life balance
Great relations with managers
DOWNERS
Corporate bureaucracy
Budgets and technology are
lacking
Unimpressive offices
EMPLOYMENT CONTACT
For Wachovia and Wachovia
Securities:
www.wachovia.com/careers
For Evergreen Investments:
See the career opportunities section
of www.evergreeninvestments.com
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THE SCOOP
Empire building
In the past few years, Wachovia has been busy building an empire. Less than
two years after its $14 billion merger with First Union in 2001 (although First
Union actually purchased the significantly smaller Wachovia, the Wachovia
handle survived the marriage), Wachovia and Prudential Financial completed
the legal merger of their retail brokerage business in July 2003. In November
2004, it acquired Birmingham, Ala.-based SouthTrust Corporation for $14.3
billion. In 2006, Wachovia added Golden West Financial to its ranks for a
price tag of $25.5 billion.
One of the companys most significant acquisitions came in 2007, when it
snapped up brokerage firm A.G. Edwards for $6.8 billion in cash and stock.
The transaction made Wachovia the third-largest retail brokerage firm in the
world. With A.G. Edwards under its belt, Wachovia has expanded its global
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reach and now has almost 15,000 financial advisers. A.G. Edwards
shareholders received $0.98 share of Wachovia common stock and $35.80 in
cash for their A.G. Edwards shares. The merger integration process is not
expected to be fully realized until sometime in 2009.
While all this acquisition may be padding the companys coffers, the move to
acquire various businesses hasnt been particularly well received by
shareholders. As of May 2008, Wachovias share price was $28, down from
a trailing 52 week high of $57, and the firm hasnt experienced any major
earnings as a result of the new additions. Wachovia employees have also
suffered as a result of the merger bonanza. The company said in reports on
the merger that it would be eliminating 4,000 jobs over a four-year period and
closing approximately 230 brokerages.
Subprime suffering
Wachovia became one of the many victims dreaded mortgage crisis in 2007,
taking losses of nearly $1.1 billion in collateralized debt obligations. As
subprime concerns hit their peak in fall 2007, Wachovia suffered losses across
the board that were reflected in its third quarter earnings report from 2007.
Earnings in the corporate and investment banking division were down $428
million as a result of the billion dollar losses on CDOs. However, there were
bright spots in the companys quarterly report. The wealth management
division recorded earnings of $92 million, while growing revenue by 4
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percent. In addition, net interest income was up as a result of the merger with
Golden West, and Wachovia garnered high company loyalty scores of 53.1
percent, a record for the company.
In January 2008, Wachovia announced that it had barely made money in the
fourth quarter of 2007, as profits plummeted 98 percent due to a $1.7 billion
reduction in the value of its portfolios as well as a $1.5 billion write-down for
bad loans. Profit fell to $51 million, down from $2.3 billion in the same
period in 2006.
The first quarter of 2008 wasnt much better, as Wachovia reported a net loss
of $350 million before preferred dividends. These results, which reflect
higher credit costs and the continued disruption in the capital markets,
compared with earnings of $2.30 billion, or $1.20 per share, in the first
quarter of 2007.
More bad news surfaced during the second quarter, when it was revealed that
the firm was being investigated by federal authorities for allegedly laundering
drug proceeds by Mexican and Colombian money-transfer companies.
Wachovia is one of several firms that have come under investigation for such
activities. According to The Wall Street Journal, Wachovia and other U.S.
banks severed relationships with Mexican foreign-exchange firms in
December 2007 and January 2008 after authorities began their inquiries.
Some have struck agreements with the government to improve their efforts to
fight money laundering, avoiding prosecution.
Winning attitude
Despite its recent troubles, Wachovias trophy shelf continues to be full, with
a host of awards proving that the huge bank is still one of the most respected
companies in the world. It was named No 1. in customer satisfaction in the
American Customer Satisfaction Index for the seventh straight year, and
placed in the top five in customer satisfaction in the June 2007 J.D. Power and
Associates Retail Banking Satisfaction Study. Wachovia was also No. 1 in
major banks in overall customer satisfaction and third overall among all
banks surveyed by Consumer Reports. Evergreen Investments also picked up
its own honor, winning the Dalbar Customer Service Award in 2007 for the
11th consecutive time.
Wachovia Wealth Management was named the High Net Worth Leader of the
Year by the publication Private Asset Management in September 2007. In
December 2007, Wachovia placed highest in customer satisfaction for
primary mortgage loan originators for the year, according to a report issued
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by J.D. Power and Associates. And in February 2008, it placed No. 1 for the
seventh straight year on the American Customer Satisfaction Index, a survey
conducted by the University of Michigan Ross School of Business.
As far as being a great place to work, Wachovia consistently scores high
marks. Recent honors include being named one of Working Mothers 100
Best Companies for the 11th consecutive year, ranking in the top-50
Companies for Diversity by DiversityInc magazine for sixth consecutive year
and appearing on Essence magazines Top 25 Great Places to Work list. In
addition, CollegeGrad.com named Wachovia one of its Top 100 Companies
for the fifth consecutive year, and Training magazine ranked the firm on its
list of North Americas top 125 companies for Developing Human Capital. In
addition, Wachovia is one of Pink magazines Elite Eight of Top Companies
for Women, and Institutional Investor named Wachovia its Most Shareholder
Friendly Company among large cap banks in its April 2007 issue.
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positions are fairly senior level; they require several interviews. Another
agrees, Wachovia is very selective about who they bring into the firm. We
spend a lot of time screening candidates to determine if they would be great
cultural fits. A good candidate would be one that exudes and demonstrates
our corporate values: integrity, respect and value the individual, teamwork,
service, personal excellence and accountability, and winning. The firms
hiring process is designed to identify not only quality candidates, but also
candidates that will add to the culture of the firm.
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Rave reviews
Managers within Wachovias asset management unit get very high marks.
According to one insider, My manager and our team highly values inclusion
and diversity of thought. My manager is brilliant, considerate, hardworking,
loyal and quick to divert credit to his team. Another contact says, I have
had and continue to have great managers that provide both flexibility and
guidance, enabling me to grow in my career. An equally satisfied insider
adds, I feel that my management team is great. We have a number of things
in place to ensure that were well evaluated at the end of the year and that
were getting continuous feedback. The firms 360-degree evaluation
calls for peers, direct reports and managers to rate your performance.
Employees also go through a formal review process as well.
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Training is another thing Wachovia has nailed. We have our own dedicated
training team, albeit small, that frequently wins awards within our
organization for the stellar work that they do, says one source. The training
model is focused on technical proficiency, sales skills, industry designations,
licenses, soft skills and reinforcement. The program also has a direct tie to
the career development discussions we have with our employees two times
per year. Another insider adds, The firm provides formal training, and
more importantly, it provides the resources and opportunity to pursue
additional training to build your career.
Demonstrating commitment
Sources say Wachovia is successful in the diversity department. We have a
number of affinity support groups throughout the bank, explains one insider,
and our senior leaders are held accountable for this issue. Is Wachovia
perfect? Absolutely not, says another contact, but were making great
strides to being the best employer for women, minorities and the GLBT
community. Obviously, the firm is doing something right, since it has
received many accolades from publications and various diverse
organizations. The amount of focus Wachovia places on hiring a diverse
pool of candidates is called exemplary, by insiders. And one notes, If you
prove that you are capable, honest and hardworking, the skys the limit
regardless of your background, ethnicity, religion, sex or sexual orientation.
Specifically with regards to women, one female insider says, We have a prowoman culture, especially for our industry. Our asset management firm and
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my respective business within that firm has four senior female leaders and
three male senior leaders. However, once you get past a certain layer in the
organization, we do not have as much female representation. In other words,
the higher you go within our broader company, the fewer women you see in
positions of power. That said, there are some women at the very top of the
organization, but not that many. On the topic of gays and lesbians, an inside
source says, Ive heard from several gay people at our firm that they came
to our firm because we are so open and focused on diversity.
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