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TOP

25
VAULT GUIDE TO THE

Top 25

INVESTMENT
MANAGEMENT
E M P L OY E R S
2009

EDITION

INVESTMENT
MANAGEMENT

2008 Vault.com Inc.

TOP

25
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

2008 Vault.com Inc.

Copyright 2008 by Vault.com Inc. All rights reserved.


All information in this book is subject to change without notice. Vault makes no claims as to
the accuracy and reliability of the information contained within and disclaims all warranties.
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Inc., 150 West 22nd Street, New York, NY 10011, (212) 366-4212.
Library of Congress CIP Data is available.
ISBN 13 : 978-1-58131-596-7
ISBN 10 : 1-58131-596-1
Printed in the United States of America

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

Investment Management Overview . . . . . . . . . . . . . . . . . . . . . . . . .5


History/State of the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

THE VAULT PRESTIGE RANKINGS

17

Ranking Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19


The Vault 25: 2008 Rankings . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

THE VAULT 25

21

1. Goldman Sachs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22


2. BlackRock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
3. The Blackstone Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
4. Barclays Global Investors, N.A. . . . . . . . . . . . . . . . . . . . . . . . .56
5. Lehman BrothersInvestment Management Division . . . . . .62
6. JPMorgan Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . .72
7. Pacific Investment Management Co. (PIMCO) . . . . . . . . . . . .82
8. D. E. Shaw & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90
9. Wellington Management Co., LLP . . . . . . . . . . . . . . . . . . . . . .96
10. Deutsche BankPrivate Clients and Asset Management . .102
11. Merrill LynchGlobal Wealth Management . . . . . . . . . . . .110
12. Morgan Stanley Investment Management . . . . . . . . . . . . . .122
13. Fidelity Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130
14. Lazard Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . .138
15. UBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144

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Table of Contents

16. Credit Suisses Asset Management Business . . . . . . . . . . . .156


17. CalPERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164
18. AllianceBernstein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170
19. The Vanguard Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .178
20. HSBC North America Holdings . . . . . . . . . . . . . . . . . . . . . .184
21. T. Rowe Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .192
22. GE Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .198
23. Franklin Resources, Inc. (Franklin Templeton Investments) 202
24. Pequot Capital Management . . . . . . . . . . . . . . . . . . . . . . . . .210
25. ING Investment Management . . . . . . . . . . . . . . . . . . . . . . . .218

THE BEST OF THE REST

227

Allianz Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .228


American Century Investments . . . . . . . . . . . . . . . . . . . . . . . . . .234
Ameriprise Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241
Bank of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .249
The Bank of New York Mellon . . . . . . . . . . . . . . . . . . . . . . . . . .256
The Capital Group Companies . . . . . . . . . . . . . . . . . . . . . . . . . .266
Charles Schwab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272
DC Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .278
Dreyfus Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .288
Edward Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .294
E*TRADE FINANCIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .301
Federated Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309
GAMCO Investors, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .314
GMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .319
Invesco Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .323
Janus Capital Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .331
Legg Mason . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .338
MFC Global Investment Management LLC . . . . . . . . . . . . . . . .344
MFS Investment Management . . . . . . . . . . . . . . . . . . . . . . . . . .348

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Table of Contents

Morgan KeeganWealth Management Division . . . . . . . . . . . . .354


NATIXIS Global Asset Management . . . . . . . . . . . . . . . . . . . . .360
Northern Trust Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .364
Nuveen Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .370
Pioneer Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .376
Principal Global Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .381
Putnam Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .385
Raymond James Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .391
Russell Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .399
Schroders plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .404
State Street Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .410
The TCW Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .420
TIAA-CREF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .424
Victory Capital Management . . . . . . . . . . . . . . . . . . . . . . . . . . . .430
Wachovia/Evergreen Investments . . . . . . . . . . . . . . . . . . . . . . . .434

ABOUT THE EDITOR

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A Guide to this Guide


All of our profiles follow the same basic format. Heres a guide to each entry.

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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Introduction

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

INVESTMENT
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Vault Guide to the Top 25 Investment Management Employers 2009 Edition


Introduction

Investment Management Overview


Investment management, also known as asset management, is a straightforward
business: a client entrusts his money to an asset manager, who then invests it to meet
that clients objectives. Still, outside of the relatively small circle of asset managers,
the profession is little understood.
Asset managers have many potential career paths ahead of them. Asset managers
who work for mutual funds, for example, manage money for retail clients, while asset
managers at investment banks often invest money for institutional investors, like
companies or municipalities. Asset managers can also work for hedge funds, which
combine outside capital with capital contributed by the partners of the fund and
invest the money (using complex and sometimes risky techniques) with the goal of
earning extraordinary gains.
Insiders say that investment management is a misunderstood field. So many people
think its investment banking; they think its capital markets, says Michael
Weinstock, a recruiter with Manhattan-based Advisors Search Group. Essentially,
says Weinstock, The industry is built around people who would like to have their
money managed, whether its for pension funds, 401(k) plans, endowments,
foundations, high-net-worth individuals, families or trusts. Investment management
relies on customers who feel comfortable giving money to a professional and
saying, Youre on the pulse of the market. Watch my money for me. Manage it for
me. Investment managers have the autonomy to do this without clearing every trade
with our clients.

Buy side vs. sell side


To manage the assets under their purview, investment managers buy stocks, bonds
and other financial products from salespeople at investment banks who are on what
is called the sell side. Because sell-siders earn commissions on every trade they
facilitate, they provide research and ideas to the buy sidealong with perks like
prime seats to sporting events, sold-out concerts and expensive dinners at fancy
restaurantsin hopes of making their securities look especially appealing. In
general, if the sell-side person is with you, theres no limit on what he can spend,
says an insider at Lazard, an international investment bank and money manager.
Back on the buy side, asset management firms build their business around
supporting the people who manage portfolios, including analysts, administrative

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Introduction

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.

History / State of the Industry


The beginnings of a separate industry
While the informal process of managing money has been around since the beginning
of the 20th century, the industry did not begin to mature until the early 1970s. Prior
to that time, investment management was completely relationship-based.
Assignments to manage assets grew out of relationships that banks and insurance
companies already had with institutionsprimarily companies or municipal
organizations with employee pension fundsthat had funds to invest. (A pension
fund is set up as an employee benefit. Employers commit to a certain level of
payment to retired employees each year and must manage their funds to meet these
obligations. Organizations with large pools of assets to invest are called institutional
investors.)
These asset managers were chosen in an unstructured wayassignments grew
organically out of pre-existing relationships, rather than through a formal request for
proposal and a bidding process. The actual practice of investment management was
also unstructured. At the time, asset managers might simply pick 50 stocks they
thought were good investmentsthere was not nearly as much analysis on managing
risk or organizing a fund around a specific category or style. (Examples of different
investment categories include small-cap stocks and large-cap stocks.) Finally, the
assets that were managed at the time were primarily pension funds. Mutual funds had
yet to become broadly popular.

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ERISA, 401(k) plans and specialist firms


The two catalysts for change in the industry were: 1) the broad realization that
demographic trends would cause the U.S. governments retirement system (Social
Security) to be underfunded, which made individuals more concerned with their
retirement savings, and 2) the creation of ERISA (the Employment Retirement
Income Security Act) in 1974, which gave employees incentives to save for
retirement privately through 401(k) plans. (401(k) plans allow employees to save
pre-tax earnings for their retirement.) These elements prompted an increased focus
on long-term savings by individual investors and the formation of what can be
described as a private pension fund market.
These fundamental changes created the opportunity for professional groups of money
managers to form specialist firms to manage individual and institutional assets.
Throughout the 1970s and early 1980s, these small firms specialized in one or two
investment styles (for example, core equities or fixed income investing). During this
period, the investment industry became fragmented and competitive. This
competition added extra dimensions to the asset management industry. Investment
skills, of course, remained critical. However, relationship building and the
professional presentation of money management teams also began to become
significant.

The rise of the mutual fund


In the early to mid-1980s, driven by the ERISA laws, the mutual fund came into
vogue. While mutual funds had been around for decades, they were only used by
financially sophisticated investors who paid a lot of attention to their investments.
However, investor sophistication increased with the advent of modern portfolio
theory (the set of tools developed to quantitatively analyze the management of a
portfolio). Asset management firms began heavily marketing mutual funds as a safe
and smart investment tool, pitching to individual investors the virtues of
diversification and other benefits of investing in mutual funds. With more and more
employers shifting retirement savings responsibilities from pension funds to the
employees themselves, the 401(k) market grew rapidly. Consequently, consumer
demand for new mutual fund products exploded (mutual funds are the preferred
choice in most 401(k) portfolios). Many specialists responded by expanding their
product offerings and focusing more on marketing their new services and
capabilities.

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Introduction

The year of the mutual fund scandal


Following his high-profile investigation into the research practices of several Wall
Street firms in 2002, then-New York State Attorney General Eliot Spitzer began
another industrywide probe in 2003. This time, he set his sights on the mutual fund
industry, specifically looking into whether fund companies took advantage of
inefficiencies in the stock market by quickly trading in and out of their funds to turn
a fast buck, a practice hurting long-term fund investors. Spitzer found that many
companies had indeed taken part in illegal market-timing practices. As a result,
several companies and employees were hit with healthy fines.
Bank of America was one of the hardest hit, as it agreed to pay $515 million to the
SEC in 2004. Other big firms charged with fines for market-timing practices
included MFS Investment Management, which agreed to pay $350 million to resolve
federal and state allegations; Alliance Capital Management, which agreed to a $250
million fine; Putnam Investments, which agreed to pay $110 million to settle lawsuits
with the SEC and the state of Massachusetts; and Janus Capital, which doled out
$100 million. These payouts, while significant, werent the only way these firms
were hurt by the scandal, as a tarnished reputation caused billions in outflows. Take
Putnam, for example. By the end of 2003, investors had pulled out more than $3
billion in the Putnam fund family, more than at any other major fund group since the
investigations were announced in mid-2003. Overall, by year-end 2003, 53.3 million
U.S. households owned mutual funds, slightly down from a record high 54.2 million
in 2002.

Over the hump


Despite the scandals and outflows of 2003, mutual funds enjoyed a good year in
2004. Total assets in the more than 8,000 U.S. mutual funds were approximately $8.1
trillion at year-end 2004, up from $7.4 trillion at year-end 2003. And with the
increase in wealthy individuals in the U.S., assets in mutual funds and other
investment vehicles continued to rise.
Even though the fund industry was back on track in 2004 and early 2005, it wasnt
immune to additional legal troubles. In March 2005, another mutual fund probe
ended with big-time fines, as the SEC found Putnam and Citigroup had failed to
disclose incentive payments for pushing certain funds, resulting in conflicts of
interest. Putnam received $40 million fines, Citigroup $20 million. The SEC found
fault with a Putnam affiliate that arranged with more than 80 broker-dealers to
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commissions. Citigroup, according to the SEC, received payments from 75 fund


families in exchange for shelf space within the companys retail brokerage
network, selling only funds from those families. Additionally, the NASD fined
American Express Financial Advisors $13 million, Citigroup $6.25 million and
Chase $2 million for directing investors toward costlier funds.
In addition to assets, Putnam lost a lot of employees, as headcount was cut from
5,700 at the end of 2003 to approximately 3,500 as of 2006. And in March 2005,
Putnam agreed to pay an additional $83.5 million to current and former fund
shareholders to resolve improper trading allegations. Even so, slowly but surely,
Putnam had built itself back up, and in an August 2005 Boston Globe article entitled,
After two years of turmoil, Putnam chief weathers the storm, CEO Charles E.
Haldeman was quoted as saying the worst seems to be over for Putnam. He also
noted that the firm has been getting attention for its investment performance and
parent Marsh & McClennan would not be selling Putnam.
But in February 2007, Marsh & McClennan was singing a different tune, announcing
that it planned to sell Putnam Investments to Power Financialbased out of
Canadafor $3.9 billion. Meanwhile, Marsh & McLennan said that its net income
for the first quarter of 2007, which had fallen to $268 million from $416 million for
the same period a year ago, was down due to a slump in its discontinued operations
such as Putnam. (Putnam was fully handed over to Power Financial in mid-2007.)
Meanwhile, BofAs legal woes with the SEC regarding the mutual fund markettiming scandal came to an end in early 2005, when a $515 million settlement was
finalized. The SEC had charged Bank of America with allowing some large investors
to market time mutual funds. Under the settlement, Bank of America was required
to pay $250 million in restitution and $125 million in fines. The SEC also charged
three former BofA fund executives. Bank of America and the former employees
settled without admitting or denying the SECs allegation. But Bank of America
wasnt the only firm in hot water with the SEC. In 2006, Bear Stearns (which was
acquired by JPMorgan in May 2008) paid $250 million to settle an SEC case that
charged the firm with being at the center of an illicit trading ring.
The SEC has managed to keep busy in other ways as well. In April 2007, it made a
move to update rules regarding the records that asset managers are required to keep.
The current regulations, originally adopted in 1961, havent been modified to include
provisions for modern technology, such as e-mail. Investment management firms are
trying to revamp the rules so that there is clearer guidance as to what e-mails need to
be keptcurrently, e-mails regarding securities purchases and sales are kept by

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Introduction

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.

Big changes at the top of the org chart


In May 2006, George H. Walker (former head of Goldman Sachs Asset Management
and second cousin of President George W. Bush) left Goldman Sachs for Lehman
Brothers, where he was appointed managing director and global head of investment
management. He was also added to the firms executive committee. At Goldman
Sachs, Walker had been charged with overseeing investment management businesses
worth a total of $70 billion; he was also credited with being a principal architect of
Goldmans investment management strategy for over a decade. Another powerful
name was added to Lehman Brothers executive list in August 2006, when Felix G.
Rohaytn, former U.S. Ambassador to France, New York Stock Exchange board
member and managing director of Lazard Freres, joined the firm in a position created
especially for himsenior advisor to the chairman and CEO. Rohaytn was also
named chairman of Lehman Brothers international advisory committee.

Acquisitions and spin-offs


From 2005 to early 2008, the financial services industry saw many big mergers,
several involving asset managers and brokerage firms. In 2005, behemoth financial
service provider Citigroup sold nearly all of its asset management business to Legg
Mason in a deal worth $3.7 billion, swapping its asset management unit (excluding
its asset management business in Mexico, its Latin American retirement services
operations and its interest in the CitiStreet joint venture) for Legg Masons
brokerage-dealer business, approximately $1.5 billion of Legg Masons common and
convertible preferred shares, and a $550 million loan facility provided by Citigroups
investment banking arm.
Another large deal came in 2005, when the Minneapolis-based American Express
Financial Advisors (AEFA)comprising more than 12,000 financial advisors and
the Platinum Financial Services group, which targets customers with more than
$500,000 to investwas spun off as an independent publicly traded company,
Ameriprise Financial, listed on the New York Stock Exchange under the symbol
AMP.
Additionally, TD Ameritrade was born in the summer of 2005, when Ameritrade
Holding Corp. finished two years of negotiations and agreed to pay $2.9 billion for

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TD Bank Financial Groups U.S. brokerage business, TD Waterhouse U.S.A.


(E*TRADE also expressed interest in getting in on the action, offering to buy
Ameritrade but the deal was denied.) The transaction created the largest online retail
broker as measured by the average number of retail equity trades per day, about
239,000. But by a much more important measurement, total client assets, TD
Ameritrades $219 billion was just one-fourth of its much larger competitor, Charles
Schwab.
Although it didnt win out in the Ameritrade bidding, E*TRADE did ride the wave
of consolidation that washed over the online brokerage business in 2005, acquiring
Harrisdirect, BrownCo, Howard Capital Management and Kobren Insight
Management amid rumors that it might not be done shopping. One of those firms,
BrownCo, was the online deep discount brokerage business of JPMorgan Asset
Management, which sold the unit to E*TRADE for a cash purchase price of $1.6
billion. The BrownCo deal gave E*TRADE approximately 200,000 active accounts,
28,000 daily average revenue trades, $3 billion in margin accounts, $3.4 billion in
customer credits and $29 billion in client assets.
One of the biggest acquisitions in recent years came in February 2006, as
BlackRockthe No. 1 fixed income manager in the U.S. and one of the worlds top10 asset managersentered into a monumental merger with Merrill Lynch
Investment Managers that approximately doubled BlackRocks assets under
management to $1 trillion, spelling the end of BlackRocks small-firm feel and any
anonymity off the Street. Gaining Merrills 2,569 employees, BlackRock grew its
staff to 4,500 employees (and since then, it has grown to about 6,000).
More recently, within the first quarter of 2008, the investment management industry
experienced 54 merger and acquisition deals worth a total of $9.6 billion, according
to Investment Dealers Digest. This was a record high for any first quarter in the
industrys history. Major deals included China-based Ping An Insurance taking over
a 50 percent stake in Brussels-based Fortis Investments, a deal valued at $2.15
billion. Taking into account the assets under management involved, the Fortis deal
became the investment management industrys biggest cross-border transaction in its
history. Also in early 2008, Goldman Sachs Petershill Fund acquired 20 percent of
Trafalgar Asset Managers, which has $2.8 billion in assets under management. And
Lehman Brothers recently acquired investment firm David J. Greene, which managed
approximately $2 billion in assets for high-net-worth clients.

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Vault Guide to the Top 25 Investment Management Employers 2009 Edition


Introduction

Biggest (and best) in the biz


In terms of asset management firms hold on the mutual fund market, it looks like
there may be some competition from some lesser-known firms as of late. In April
2007, BusinessWeek reported in the article The Best Managed Mutual Funds that
while Fidelity, T. Rowe and Vanguard continue to dominate the mutual fund field,
other firms are catching up in terms of risk-adjusted returns. Mutual funds from
companies such as Kinetics Asset Management and Stratton Management are
offering up impressive performances, and may just give the big dogs a run for their
money in the future.

Enter the credit crisis


In July 2007, a global credit crisis began to top headlines, and halfway through 2008,
it continued to create significant ramifications across several financial sectors. The
crisis was largely a result of an increase in U.S. foreclosures, caused by a steep
decline in property values. The foreclosures reached a boiling point in July, drying
up credit markets and reaping havoc across the financial services industry.
The foremost fallouts affected subprime mortgage lenders themselvesfirms
offering home loans at above-market interest rates to borrowers with shaky credit.
Many of these firms went out of business, filed for bankruptcy or severely slashed
headcount. Meanwhile, big banks such as Citi, Credit Suisse, UBS, Goldman Sachs,
Morgan Stanley, Lehman Brothers and Merrill Lynch with significant subprime
mortgage investments were forced to announce deep losses and make severe job cuts.
This resulted in billions of dollars in nonperforming assets being written down, and
thousands of employees out of workincluding several top executives. The crisis
also claimed investment bank Bear Stearns, which was saved from going bankrupt in
March 2008 by fellow bank JPMorgan Chase in an acquisition ultimately priced for
$10 per share. (JPMorgans original deal was cut for $2 per share but shareholder
backlash pushed it to a more respectable amount). To help finance the deal, the
Federal Reserve agreed to provide JPMorgan with a $30 billion credit line. The news
of Bears end meant ominous things for financial markets, and the U.S. Federal
Reserve soon cut lending rates for banks in an effort to try to stabilize the wildly
fluctuating markets.

Solid as the Rock


Despite the subprime mortgage crisis and the hit that the economy has taken since the
middle of 2007, the asset management industry has performed relatively well, and the

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Introduction

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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Vault Guide to the Top 25 Investment Management Employers 2009 Edition


Introduction

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.

Millionaires and mutual funds


Market research and consulting firm TNS reported in 2008 that households with
more than $1 million in net worth increased 5.9 percent between June 2006 and June
2007. That demographic is one that tends to keep assets in mutual funds and other
investment mediums high. According to the Investment Company Institute, 2007
year-end U.S. net assets for mutual funds came in at $12.02 trillion, up from $10.4
trillion in 2006. Worldwide, the mutual fund situation looked optimistic, too, as net
assets at the end of 2007 were $26.2 trillion, up from $21.82 million at the end of
2006.

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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Introduction

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.

From banking to management


Although the affects of the subprime mortgage crisis on the investment management
industry havent been as swift and immediate as theyve been on investment banking
(which has experienced losses and layoffs galore), the industry has seen increased
regulation and steadily dropping fees. Still, as far as the near future goes, investment
management has kept its head well above water, and jobs in the industry seem to be
secure and plentiful.
Recent reports by industry observers, such as KPMG and The Economist, have noted
that a range of alternative investments coupled with high liquidity in capital markets
have led to the favorable conditions that have sheltered the investment management
industry from deep losses, if not making it impervious to market ups and downs.
Also, the industry has been able to maintain its high management fees despite
markets creeping lower. In addition, according to The Economist, Two great longterm opportunities are likely to ensure that the industry will survive and prosper.
One is an aging population in the developed world that is increasingly relying less on
pensions and more on asset managers for its retirement income. The second is the
growing number of extremely wealthy individualssuch as energy billionaires in
Russia and sovereign-wealth funds in China and the Middle Eastwho are turning
to asset managers for help to invest their fortunes.
This means demand for asset managers will remain relatively high. And underlining
this demand, industry observers have even speculated recently that those affected by
the recent investment banking layoffs should consider crossing over into the
somewhat healthier investment management industry, where jobs are more abundant.

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TOP

25
PRESTIGE
RANKINGS

INVESTMENT
MANAGEMENT

Vault Guide to the Top 25 Investment Management Employers 2009 Edition


Introduction

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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19

The Vault 25 2009


[ The 25 most prestigious investment management firms ]
RANK

FIRM

SCORE

U.S. HEADQUARTERS/
LARGEST OFFICE

Goldman Sachs

8.354

New York, NY

BlackRock

7.489

New York, NY

The Blackstone Group

7.485

New York, NY

Barclays Global Investors, N.A.

6.848

San Francisco, CA

*Lehman Brothers

6.804

New York, NY

JPMorgan Asset Management

6.802

New York, NY

**PIMCO

6.725

Newport Beach, CA

D. E. Shaw & Co.

6.578

New York, NY

Wellington Management Co., LLP

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

14

Lazard Asset Management

6.315

New York, NY

15

UBS

6.176

New York, NY

16

Credit Suisse

6.162

New York, NY

17

CalPERS

6.101

Sacramento, CA

18

AllianceBernstein

6.065

New York, NY

19

The Vanguard Group

6.046

Valley Forge, PA

20

HSBC North America Holdings

6.000

Prospect Heights, IL

21

T. Rowe Price

5.872

Baltimore, MD

22

GE Asset Management

5.847

Stamford, CT

23

Pequot Capital Management

5.839

San Mateo, CA

24

ING Investment Management

5.830

Westport CT

25

5.782

Atlanta, GA

Franklin Resources

*Lehman BrothersInvestment Management Division


**Pacific Investment Management Co.
+Deustche Bank Private Clients and Asset Management
Franklin Resources, Inc. (Franklin Templeton Investments)

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Merrill LynchGlobal Wealth Management


Morgan Stanley Investment Management
Credit Suisses Asset Management Business

2008 Vault.com Inc.

TOP

25
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

Employer Type: Public Company


Chairman & CEO, Goldman Sachs:
Lloyd C. Blankfein
Net Revenue: $45.9 billion (FYE
11/07)
Net Revenue (Asset Management &
Securities): $7.2 billion
No. of Employees: 30,522
No. of Offices: 45*

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

The best
Arrogant
Everyone wants to be them
Macho; blood, sweat and tears
Incredibly great track record

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Goldman Sachs

THE SCOOP

Two branches, one tree


Goldman Sachs Asset Management (GSAM) and Goldman Sachs Private
Wealth Management (PWM) comprise the investment management division
(IMD) of the prestigious investment bank Goldman Sachs. Headquartered in
New York, IMD has offices in London, Frankfurt, Tokyo and Hong Kong, as
well as in other major financial centers globally.
In 1988, about 10 years prior to the firms initial public offering, Goldman
Sachs established GSAM to develop investment solutions for institutions and
individuals worldwide. Today, GSAM provides investment management
products and services to pension plans, corporations, governments, financial
institutions, endowments, foundations, high-net-worth clients and third party
distributors for individual investors.
Through its private wealth management business, Goldman Sachs offers
investment services to high-net-worth individuals. Private Wealth Advisors
are based in several locations worldwide, including U.S. offices in Atlanta,
Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Palm
Beach, Philadelphia, San Francisco, Seattle and Washington, D.C.

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.

Still going strong


Despite ongoing problems connected to the subprime mortgage crisis,
Goldman Sachs has emerged from the tumult mostly unscathed. The firm
posted a $3.17 billion profit in the fourth quarter of 2007 and revenue of
$45.99 billion for the full year, a 22 percent increase from 2006. The asset
management and securities divisions had revenue of $7.2 billion, an 11
percent increase for the year. Assets under management soared to $868
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Vault Guide to the Top 25 Investment Management Employers 2009 Edition


Goldman Sachs

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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Goldman Sachs

a fundamental stock picking fund, not a quantitative fund. Approximately


three-quarters of the funds are invested in U.S. interests while 10 to 30
percent will be invested in Asia. In its first month of trading, GSIP was down
6 percent.

Sights on South Korea


Goldman Sachs Asset Management added to its growing family of
subsidiaries in May 2007 when it announced the purchase of Macquarie IMM
Investment Management, a South Korean asset manager. The banks two
former owners, Australian banking behemoth Macquarie Bank and the South
Korean firm IMM Investment management, owned 65 percent and 35 percent
of the company, respectively, prior to Goldmans purchase. (Goldman
declined to announce the price of the buy.) Macquarie-IMM had about $11
billion in assets at the time the acquisition was completed (in October 2007).

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.

Beating analysts expectations again


Goldman took a small tumble when profits decreased 53 percent in the first
quarter of 2008, but overall, the drop in earnings was looked upon as a
necessary adjustment due to tough market conditions. The $1.5 billion in net
income was higher than analysts had predicted for Goldman, marking the
11th straight quarter that the firm had beat analysts expectations. Asset
management performed particularly well, with assets increasing 23 percent to
$1.32 billion.
Early in 2008, Goldman announced that it would be laying off 5 percent of its
employees, or about 1,500 people. A spokesman for Goldman said the cuts
were related to its annual employee evaluations, adding that the firm was not
facing a hiring freeze.

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Vault Guide to the Top 25 Investment Management Employers 2009 Edition


Goldman Sachs

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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Goldman Sachs

OUR SURVEY SAYS

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.

Praise for management


Management gets rave reviews from respondents. One says that my
personal experience has been a very good one, adding that even at the most
senior level, people are approachable and respectful. Another notes that
there is a great open-door policy. I feel very comfortable setting up meetings
with the most senior people. And mentoring is a commonplace practice, too.
Managers seem to always be training and mentoring younger staffers, says
an insider. Another says that my boss has become my mentor. He is
extremely interested in seeing me advance and progress, and has been a
wonderful role model for me.
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Goldman Sachs

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.

Close, but not completely casual


The dress code depends on the particular office, but ranges from formal
always to business casual always except for client contact. Insiders note
that while there are no completely casual days, employees tend to exhibit a
very wide range of dress, and no one seems to mind whether you are wearing
a suit or a sweater.

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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Goldman Sachs

Even at the most senior


level, people are
approachable and
respectful.
Goldman Sachs insider

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V A U L T

BlackRock

PRESTIGE
RANKING

40 East 52nd Street


New York, NY 10022
Phone: (212) 810-5300
www.blackrock.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

The place to be
Macho
Fixed income powerhouse
Clouded by Merrill
Portfolio managers are second to
none

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THE SCOOP

BigRock means big business


Once an obscure investment management firm, BlackRock has become a
market force. After its $9.8 billion October 2006 merger with Merrill Lynch
Investment Managers (the biggest-ever fund management deal), BlackRock
became one of the worlds largest money managers. Its net income tripled
and its asset base almost doubled after the acquisition to $1.3 trillion in assets.
Today, the firm has more than 5,950 employees in 35 offices across 19
countries. Merrill Lynch holds a 49 percent stake in the company, while
Pittsburgh-based PNC Financial Services Group retains an interest of about
34 percent. Public shareholders and BlackRock employees own the
remaining 17 percent of the company.
A year into the integration, the Merrill merger exceeded BlackRocks
expectations, bringing $97 billion of new net business in long-date and
liquidity products by the third quarter of 2007. The company said its third
quarter profits increased as people looked for a safe haven for their money
in an unstable market. The firms predilection for conservative investment
strategies have kept its exposure to subprime mortgages modest compared to
many of its competitors.
The fourth quarter of 2007 was also quite profitable, as BlackRock booked
$322 million in net income, a 90 percent increase versus the $169 million it
booked in the fourth quarter of 2006. Full-year figures looked even better, as
the firm booked $995 million in net income, a whopping 208.5 percent
increase versus the $322 million it reported for 2006.

Lessons learned at First Boston


The BlackRock tale began in 1988 when the firms current chairman and
CEO, Larry Fink, left his post as a bond trader at Credit Suisse First Boston.
While at First Boston, Fink and his team helped create a new mortgagebacked security market, worth an estimated $4 trillion today. His investment
group at the bank consistently pulled in more than $100 million a year until
1986, when interest rates dropped and the group lost that much in one quarter
alone.
Fink licked his wounds and left First Boston in 1988 to join The Blackstone
Group as a partner, but the lessons he learned as a bond trader stayed with
him. What I learned [then] is that you have to understand your risk in good
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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.

CEO considered for top spot at Merrill Lynch


In October 2007, CEO Fink became a front-runner to replace Merrill Lynch
Chief Executive Officer Stan ONeal, who stepped down following the firms
feeble performance during the credit-market contractions. (Following his
retirement from Merrill Lynch, ONeal stepped down as a member of
Blackrocks board.) Reports identified Fink as one of three candidates up for
consideration for the position. Reports also indicated that hiring Fink would
not come cheap. An analysis by James F. Reda & Associates, an independent
compensation consulting firm, for New York Times blog DealBook, found that
it would take more than $32 million for Merrills board to hire the executive.
The job ended up going to John Thain, formerly the CEO of NYSE and, prior
to that, the president and COO of Goldman Sachs. It was reported, though,
that Fink did receive an initial offer but had declined. This was not the first
time Finks name has circulated in the pursuit of a top Wall Street CEO. A
few years ago, he was reportedly a contender for the top slot at Morgan
Stanley.

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.

New retirement portfolios and web site


In June 2007, BlackRock introduced its Lifecycle Prepared Portfolios, a
series of nine separate portfolios with target maturity dates ranging from 2010
through 2050, intended specifically for defined contribution plans and the
long-term retirement goals of plan participants. The series offers a complete,
institutional-quality, long-term investment solution for the retirement goals of
individual investors.
In October 2007, BlackRock launched a new web site (www.blackrock.com/fp)
for financial professionals. The site offers sales tools and portfolio analytics
designed to help financial professionals deliver super client service.

IPO nets $2 billion


BlackRocks International Growth and Income Trust, a closed-end equity
fund, raised $1.97 billion in its initial public offering in May 2007. The trust
focuses on current income and current gains with a secondary aim of longterm capital appreciation. The trust invests chiefly in equity securities issued
by companies of any market capitalization located in countries throughout the
world, and using an option writing strategy to enhance current gains. The
IPO was the largest single fund offering in BlackRocks history.

BlackRock acquires Quellos Group


In October 2007, BlackRock completed its purchase of the fund of funds
business of Seattle-based Quellos Group for $1.7 billion, making
BlackRocks fund of funds business the third largest globally. The combined
fund of funds platform will operate under the name BlackRock Alternative
Advisors. At the time of the deal, Quellos Group managed more than $200
billion in assets.

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BlackRock

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.

Come one, come all


BlackRock offers an online recruiting calendar of upcoming campus events,
but tells potential applicants please check with your schools career services
for the possibility of a resume drop if their campus doesnt appear on the
calendar. (Candidates can also submit a resume directly to the firm at
careers@blackrock.com.)
One BlackRock veteran says the firm has the typical [recruiting] process:
Candidate submits resume, someone who went to the same university reviews
the resume and selects the candidates for an on-campus interview, and a
number of candidates are selected from the on-campus interview pool for an
on-site interview. During the on-site second round, candidates will typically
go through at least four 30-minute interviews, meeting with one managing
director, several vice presidents and associates, and an analyst. Lunch with
an analyst and an associate or VP is usually included. The firms schools of
choice are pretty typical for the finance industry, and include international
schools, Ivy League schools, top-notch non-Ivies like NYU, Michigan and
Stanford, as well as lesser-known stars, such as Virginia, RPI and Carnegie
Mellon. The firm also recruits from exceptional computer science
programs, says an insider. Hiring from undergraduate colleges is usually a
very organized process, notes a source.
One BlackRock contact whose school wasnt on the visitation list says, I
submitted my resume through my schools career services and then
interviewed on campus with a representative from BlackRock. I was then
flown to New York for a Super Day and interviewed with two departments.
Finally, I was asked back one more time and met with the managing director
of the department and two directors. After the second round, candidates are
discussed in a round-table forum, after which management makes the final
decisions on extending offers. Those with offers in hand are given another
chance to assess the firm. After receiving my offer, I was invited to spend a
day at the firm visiting with my future co-workers before making my
decision, reports a source.

Depends on your level


The interviewing process largely depends on your level of experience. One
insider describes meeting with a department manager and a project
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manager before getting hired. Candidates can prepare to interview up the


ladder with managers from various departments, insiders say. The topics
covered in interviews vary depending on the interviewer. There are
interviewers who look strictly for personality and others who will grill you on
finance, economics, math, programming, and other topics related to your
major. A contact advises BlackRock hopefuls to know whats going on in
the economy. Have some level of knowledge on the financial markets. But
knowing what youve studied is even more important. The most important
thing is to know your major, continues that source. BlackRock looks for
people who are serious about what they do. If youre a computer science
major, you may be forgiven for not knowing the markets, but dont expect the
same if youre a finance major. Another insider says, Many of the
questions were focused on my activities in college, as well as an evaluation
of my interest in the group, firm and industry.
Another respondent advises candidates to be detailed in your responses.
Practice with a friend. Prepare your statements. Be ready for any question.
For example, I said I liked classical music and was instantly asked what my
favorite piece was. Expect your answers to be broken apart and analyzed,
with you leading the interviewer through your thoughts.
The interview questions were fairly common, reports another source. We
went through my resume, spoke about work ethic and my expectations of the
job. The interviews can get more technical. I was asked to share my
thoughts on current economic trends as well as answer some challenging
financial questions, recalls a contact. I also was given plenty of time to
inquire about the culture of the firm. Another BlackRocker warns, In the
second round, questions can be very technical, depending on the person you
talk to. The process is as much about your comfort level as it is the firms.
The interviews were challenging as well as beneficial to me to help me
decide if BlackRock was the right place for me, says one insider.
In preparation for an interview, one source stresses, Remember that this firm
deals with financial institutions. Dont bother with knowing what a 10-K for
Home Depot or some other manufacturing firm looks like. Know what an
insurance company, bank and mortgage bank balance sheet looks like and
how the income statement and cash flow statement are impacted. The
contact offers other advice: Theres no point pretending youre a fun and
outgoing person when youre not. These lies will be quickly unearthed and
your work life will suffer. If you like to crunch numbers but cant talk to
people, join the appropriate group. Remember, everyone who works here is
pretty smart and has no patience for people who cant perform. Put yourself
out there. Interns can apply for summer internship positions through the
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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.

OUR SURVEY SAYS

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
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BlackRock

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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Ponying up the respect


Employees are treated with a great deal of respect, contacts say. Indeed, the
firm prides itself on a culture focused on excellence, teamwork and
integrity. BlackRocks strongest asset is its culture of teamwork and
excellence, brags an insider, who admits his praise sounds like a tag line,
but it makes a huge difference in satisfaction level and ability to tackle
complex tasks. It is also small enough that most departments, if not most
individuals, are well known to all and cooperation is greatly facilitated
because of this. Teamwork abounds. The culture is very team-oriented,
says a contact. I leverage the advice of vice presidents and managing
directors to complete my assignments, and these inquiries are highly
encouraged. All professionals are very open to share their knowledge with
you. In addition, they are intelligent and well rounded. Although the firm
now has close to 1,000 professionals, the firm remains relatively fluid.

Not too political


Theres relatively few politics to deal with for a firm this size, one insider
says. I get along very well with my direct supervisors, adds a junior staffer.
They have high expectations, but I also find them to be very understanding
people. As long as you make an effort to communicate with your manager,
there shouldnt be any problems. That view is common but by no means
universal. However, this is from my personal experience, continues that
youngster. Ive heard from co-workers who would totally disagree with my
testimony. Another contact does substantiate that view, saying that
BlackRock is a very flat organization. If you want to talk to someone, walk
into their office. If someone who you do not know calls you, look up their
picture on the Web, and introduce yourself next time you run into them. One
insider says that analysts and managing directors work closely together,
along with everyone in between. Another adds that Ive never been
unfairly criticized or badly treated.
There is at least one complaint. While the relatively flat structure at
BlackRock is great, there are, especially in my department, some lifers who
are managers not because they are effective managers of people but because
they stayed long enough to continue to be promoted, gripes a source. There
is no internal training for managers on how to effectively work with
subordinates, and I think its a significant deficit.

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BlackRock

Feel the pinch


As far as the workload goes, unlike larger firms, as soon as someone leaves
BlackRock, everyone feels it. While HR tries to fill the vacant slot, it can
still be months, even years, before that position is ever filled. Of course,
your workload also depends on the department in which you work. Some
departments work longer hours than others however, a 12-hour day is very
typical for all employees of BlackRock, admits one insider. The hours are
harsh, says one respondent, who ultimately quit because I was exhausted.
Another insider says the hours are normal for New York with a start time
of between 8 and 9 a.m. and a leaving time of between 6 and 8 p.m. most
nights. Dont expect an 8 a.m. to 5 p.m. job. This is not that kind of place.
Instead, expect to work 14 to16 hours a day, in which at least 10 hours are
nonstop, high-stress labor, says a source.
Some of the hard work is a function of the firms go-getem culture.
Although not asked or looked upon to put in extra hours or work on
weekends, those feeling an obligation to the job and ownership of accounts
and projects can find themselves putting in more hours than would be
expected, observes a contact. We stay as long as it takes to complete tasks,
and it does not go unnoticed, says another. Staying late is not a function of
catering to the whims of bosses, it is a function of superior client service and
responsiveness. One respondent says that analysts come in at 6:30 a.m. and
dont leave until 9 p.m. Hours can get better as staffers become more
efficient. During my first year, my work demanded a lot of time in the
office, says one BlackRocker with a few years under her belt. I used to
work 12 to 14 hours regularly. But after working for almost three years at the
firm, I am able to finish by 6 or 7 p.m. every day. Another notes that
Sundays are mandatory for [the] first six months, but most people came both
days.
There seems to be some dispute over the existence of face time. I feel that
were expected to be at work for more time than is necessary, gripes one
source. I feel that even if we work quickly and effectively during the day
and choose to leave at a normal hour (6:30 p.m. or so), its looked down upon.
Therefore, some people just stay for the face time but really arent getting
anything substantial done during the day. Others have a different view.
Face time is not important in my group, and not a significant factor in other
groups, says one sales contact. If I finish my work for the day, I am free to
go. Another insider says that BlackRock is not a face time institution, but
given the amount of demand, there is much to be done. The firm isnt trying
to fool anyone about how much time youll spend at your desk. In the
recruiting process, hours are always reflected honestly, says one source.
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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.

Yours for the taking


Although training and education assistance are available within the firm,
comments one source, you are also expected to learn on your own. Others
say BlackRock gives its staffers everything they need to succeed. The
training is superb, raves one insider. Besides the comprehensive nature of
the initial training period, BlackRock supports continuing learning in the
workplace. There are seminars, classes and workshops sponsored by the
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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.

The view from the inside


As of late, there have been few complaints regarding office accommodations
in fact, sources tend to rate them quite highly. BlackRocks New York staffers
recently relocated so the dcor and space is very new and adequate.
Respondents there rave about the new building, new furniture [and] flat screens
for a couple of departments. One says, The office building is nice, and
everyone has their own personal space. Another source is more critical, saying
drab colors and cubes make it less than aesthetically pleasing, but he
appreciates that it is always clean.
BlackRocks dress code is business casual, although some departments are
more relaxed than others, insiders say. Sloppy or inappropriate attire is also
out. If you work on the trading floor or interact with clients, the dress code
is expected to be more along the lines of business than casual, one contact
adds. Another source observes that though it is not quite a suit-and-tie firm,
BlackRock does require employees to dress in a professional manner.

Being proactive doesnt hurt


Diversity recruiting and retention could be vastly improved, insiders say.
Rather than taking the proactive approach and seek qualified, diverse
candidates, BlackRock is sitting back, without a care in the world, until
somethingsuch as losing a prospective clientfaces itself because of the
lack of diversity, says one contact. Then, and only then, will BlackRock
make a solid effort to hire minoritiesincluding women. Most client
teams are overwhelmingly male, agrees another. Still another adds that
ethnicity is not a barrier per se, but fitting into the culture is a must, and it

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tends towards a mainstream white culture, like most U.S. financial


institutions.
Many feel the firm lacks diversity in the management ranks. It is very
noticeable that there are very few females in managerial positions, says a
source. Moreover, most of the females in the company are either in client
service teams or hold administrative positions. It is very difficult to find
female role models in portfolio management or technical positions. That
statement is balanced by the fact that there are three women on the firms
management committee. BlackRock takes strides to achieve female
diversity, but [it] remains mostly male, says a source, adding, I think the
firm may have to take an even more active role to improve the male/female
ratio. Another comments that for the developers, the split is about a 40-60
ratio of women to men.
When it comes to minority recruiting and retention, the area seems to be
improving but needs work, too. Most existing employees are white, but
the firms recognition of a very nondiversified workforce is shown by a
much more diverse incoming analyst class. Another insider says, Ive
noticed that the firm is actively improving in this area, but the lack of
diversity with respect to minorities is blatant across the firm in all
departments. Yet another believes the firms racial and ethnic diversity is
pretty good, except for the top management committee.

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V A U L T

The Blackstone Group

PRESTIGE
RANKING

345 Park Avenue


New York, NY 10154
Phone: (212) 583-5000
Fax: (212) 583-5712
www.blackstone.com

KEY COMPETITORS

DEPARTMENTS

UPPERS

Financial Advisory Services


Marketable Alternative Investments
Private Equity
Real Estate

Good compensation and perks


Very prestigious

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Cream of the crop


Does anyone really still want to
be associated with this place
after all the political fallout?
Incredibly prestigious if in
corporate private equity, but
otherwise nothing special

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THE SCOOP

King of Wall Street


The Blackstone Group was founded in 1985 by Wall Street power brokers
Peter G. Peterson and Stephen Schwarzman, and has since grown to become
one of the largest and most powerful private equity firms on the Street, with
massive assets totaling more than $98 billion. Its numbers since inception
have been impressive to say the least: the corporate private equity portfolio
has returned 30.8 percent annually since 1987 and its real estate portfolio has
returned 38.2 percent since 1991. Its reputation for big deals and even bigger
earnings in just 22 years of operations has earned CEO Schwarzman the
nickname King of Wall Street.
The financial powerhouse offers its services through four main business
units: the private equity group; the real estate group; the marketable
alternative investments unit, which includes funds of hedge funds, mezzanine
funds, senior debt vehicles, distressed securities hedge funds, equity hedge
funds and closed-end mutual funds; and financial advisory services, which
includes mergers and acquisitions advisory, restructuring and reorganization
advisory and fund placement service. Management fees, which remain stable
even in a volatile market, constitute about 37 percent of Blackstones
revenue. Blackstone has approximately 1,020 employees with offices in
New York, Atlanta, Boston, Chicago, Los Angeles, London, Paris, Mumbai
and Hong Kong.

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.

The dynamic duo


Peter G. Peterson and Stephen Schwarzman founded The Blackstone Group
as a boutique mergers and acquisitions firm in 1985 with a small staff of four,
including the two founders, and $400,000 in startup funds. Both of the
founders were old hands in the business world: Peterson briefly served as the
U.S. Secretary of Commerce (1972-1973) and as chairman and chief
executive officer of Lehman Brothers. Schwarzman, another Wall Street
heavyweight, was already a managing director at Lehman Brothers by the
time he turned 31 and eventually rose up the ranks to become the head of
Lehman Brothers global mergers and acquisitions team.
Since its founding, Blackstone has made a name for itself for the types of
high-profile transactions it has overseen. In 2000, for example, Blackstone
helped advise PaineWebber on its $10.8 billion sale to UBS and Alliance
Capital Management on its $3.5 billion purchase of Sanford C. Bernstein. In
2005, the firm advised Comcast on its $18 billion acquisition of Adelphia
Communications and, a year later, it also worked with Goldman Sachs to
advise the food and drug retailer Albertsons on its $17.4 billion sale to a
consortium of investors.

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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.

Real estate transactions


Blackstone remains a giant in the real estate business, and recently proved its
prowess by buying the nations largest office building owner and manager,
Equity Office Properties Trust, for $36 billion in November 2006. It was the
largest leveraged buyout in history at the time of the deal and changed the
REIT industry significantly by taking such a huge company private.
Blackstone paid $48.60 a share for the real estate company, which was
founded by Sam Zell in 1976. In 2006, Blackstone bought more than $20
billion worth of real estate, increasing its already heavy real estate portfolio
to a whopping $32 billion.

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.

Red for the quarter, black for the year


Although Blackstone took quite a hit in the fourth quarter 2007, the firms
numbers for the year werent bad. The firm booked a $170 million loss for
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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.

Schwarzman in the public eye


Prior to Blackstones IPO, CEO Schwarzman was a frequent media target, as
many believed his lavish spending habits did not quite matching up with his
philanthropic ones. After the IPO, given an approximate $650 million boost
to his liquid wealth, Schwarzman became an even hotter target for members
of the media, which pointed out, on several occasions, the going prices for his
numerous homes (in the Hamptons, Jamaica, Saint-Tropez, Florida and
Manhattan).
Indeed, Blackstone going public and private equity increasingly coming
under the public eye meant a lot of unwanted press coverage for CEO
Schwarzman in the past year. But there were some bright pieces written
about the controversial Blackstone co-founder and chief. Perhaps the most

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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

Make your move online


Before applying for a position with The Blackstone Groupwhether its an
internship, analyst or associate position at any experience levelits a good
idea to log on to the firms web site. At www.blackstone.com/careers, those
interested in Blackstone can check out current open positions domestically
and internationally, as well as learn about the particulars of the recruiting
process, which begins early in the school year.
For analyst positions, Blackstone recruits at Columbia, Harvard, Virginia and
Penn (Wharton), but concentrates on finding undergrads at Harvard and
Whartonany others depend on which alum feels like going to their alma
mater to recruit that year, offers an insider. Another source agrees that
analysts primarily come from Harvard and Wharton, but admits there are
a few from other schools, including Yale and UT Austin. The contact adds,
In principal, if someone gets their foot in the door, any good school will be
given a chance. As far as the type of people Blackstone likes to put on
salary, the firm says its looking for energetic, self-motivated, team-oriented
individuals with fresh ideas and innovative solutions who thrive on challenge
in a fast-paced, dynamic environment.

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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.

Round after round


If you want to attain a position at the firm, be sure to pencil in enough time
for interviewing. One insider reports two rounds of interviews at Blackstone
offices in New York, with four to six interviews in each round. But its not
uncommon to have to go through more than three interview rounds. A private
equity contact went through many rounds of interviewsthree to six, and
met with between two and four people in every round, adding, Each
interview lasted between 30 and 45 minutes. Questions were detailed,
analytical and thought-provokingminimal cookie-cutter type questions.
An analyst, who was tapped to interview by Blackstone says, The type of
questions you get in interviews all depends on who you interview with. Some
people like to bullshit and do a personality interview, and some like to grill
you. Its hard to generalize. One insider claims the interview process is
fairly normal and says he met almost every partner in the group to which
he was applying. He adds, There were lots of culture fit questions, more
than I had at previous employersGoldman and McKinsey.
A first-year analyst recounts his experience in a later interview round: I met
with three teams, for two to five hours each. Overall, the contact says, The
interview process can be stressful at times and there is an emphasis initially
on technical ability. I met people at every level, including several partners.
Indeed, during final-round interviews at Blackstone headquarters, analysts
will meet with one or more partners, who all have their own styles, says a
source. A former banker adds, Its really a crapshoot when you interview.
So much has to do with who you meet and on which day you meet them, and
if your personality jives with whom you meet.
No matter who you get, though, expect some pretty technical questions in
the first round, says one contact. If you go to Wharton, or had a summer
internship in banking, anythings fair game. But no one expects you to get
everything right. An insider says one of the favorite Blackstone questions
is, If you increase depreciation by $10 million, how does that flow through
all three financial statements? They also like to throw out the the clock
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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.

OUR SURVEY SAYS

The ties that bind


The firm cultivates a culture of top-notch workers who enjoy each others
company. Blackstone is made up of a group of people who like each other
and respect each others immense talent, offers one insider, who adds,
Theyre aggressive on the outside, very demanding on the inside and a bit
old school as compared to the bigger firms. Another agrees, adding,
While there are times of high stress and people are very demanding,
everyone is very friendly, and its not uncommon for people to spend time
outside of work together. Indeed, numerous respondents admit theres a lot
of camaraderie, and say Blackstone is made up of a tight group of people
who, on the whole, like each other. But dont expect to invite everyone at
the firm to your birthday party. At the higher levels, there are some strong
personalities, like there are anywhere, says a banker, which can be hard to
deal with. So you hope you get staffed on the right deals with the right
people.
Another contact expresses a similar sentiment: Youre generally treated
well, but because there are so many big-swinging senior people with rough
elbows floating around the office, you need to be careful about how you
behave, especially during normal work hours before the senior guys leave.
One source has nothing but good things to say about his units junior bankers,
and in particular, the units associates: Theyre a phenomenal group of
people, incredibly smart and reasonable. To go somewhere where there are
seven associates and I like all seven of them is extremely rare. Of course,
this shouldnt be taken lightly because, according to a former analyst, your
associate determines the majority of your experience. Says one junior
staffer who revels in the great responsibility offered him, Analysts typically
do a fair amount of work that associates at other firms might do. He adds
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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.

No rest for the workers


Hours spanning the range of 90 to 100 per week with frequent weekend
office visits arent uncommon, insiders say. One associate puts his hours at
about 70 to 80 on average per week, but admits, Theres not much [B.S.]
work, so I have less of a bad feeling about spending hours in the office as a
result. Another analyst says hes logging in about 80 to 90 weekly. The
first year was painful, says a former M&A analyst, who adds, It couldve
been worsebut it couldnt have been much worse. The contact reluctantly
recalls his old schedule: No vacation for the first 52 weeks, with maybe a
couple of free weekends in that time. I averaged working from 9 a.m. to 1
a.m. from Sunday to Thursday; 9 a.m. to 7 p.m. on Friday; and noon to 6 p.m.
on Saturday. So, on average, thats 96 hours a week. Although the contacts
second year was better, it was more a result of a slower deal flow than
seniority. He adds, Second-year analysts here worked just as hard as the
first-years. It all depends on how many deals you have and what kind they
are. A private equity contact also admits the hours are very long, with
significant weekend work, and with nights ending anywhere between 10 p.m.
and 5 a.m. The contact adds that the hours do get better as you move up
the ladder: first-year analysts have it the worst, associates have it significantly
better, unless theyre on a live transaction, and senior analysts are someplace
in between.
Expect the firm to rule with a proverbial formal always fist when it comes
to attire. Its formal all the time, adds a Blackstone source. And people

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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.

Few compensation complaints


In general, compensation receives extremely high marks from insiders.
Although one first-year associate wont offer numbers, he does admit that his
compensation is very high compared to other offers [he] got out of Bschool. According to another insider, the private equity group pays above
the Street but not at the highest tier. The contact adds, We have the
Goldman attitude of we are the best in the world, so we dont have to pay top
dollar to recruit and retain the best talent.
Although perks are good, or at least standard for investment banking, its a far
cry from years past. A source says that free fancy dinners used to be one of
Blackstones big selling points: When hiring analysts, the partners used to
sell you on this perk. While nights at Le Cirque are gone, you still get to
fly first class if your flight is over a certain distance, says a banker, and you
still get to stay at the Four Seasons and the Ritzbut who knows how long
all this will last. Currently, Blackstone bankers get complimentary car
service or a free cab ride home if they work past 9 p.m. Employees also get
dinner stipends when working late during the week and meal allowances on
the weekend.
Blackstones New York office receives high grades from insiders, and
although the London outpost doesnt (offices are pretty dark), one U.K.
insider says employees across the Atlantic will be getting a new office soon
that will be top notch.

Better coaching needed


Training programs at the firm are below par, insiders report. Unlike the bulge
bracket banks, Blackstone doesnt have the typical several-weeklong training
program for new analysts and associates. Blackstone is too small to run a
big training program, observes an insider. Historically, analysts went
through a two-week training program, but beginning with the 2003 analyst
class, the program was extended to three weeks. One analyst who went
through the program says it was very good. You get exposed to a lot of
information in a short amount of time and youre not required to study and
take exams like at other places. He adds that theres a lot of emphasis on
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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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Theyre aggressive on the


outside, very demanding
on the inside and a bit old
school as compared to the
bigger firms.
Blackstone insider

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V A U L T

Barclays Global Investors, N.A.

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Outstanding; top of the line


Passive
Very very smart
Not a US player
Rapidly expanding

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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.

BGI makes it BIG with ETFs


Founded in 1971, San Francisco, Calif.-based BGI pioneered the index
investing strategy for major institutional investors. The strategy involves
developing funds that give investors low-cost exposure to indexes like the
S&P 500, market sectors like energy or technology, or commodities like gold
or petroleum. In the 1990s, exchange-traded funds, or ETFs, were created
and revolutionized the traditional index fund. ETFs are bought and sold like
common stocks on securities exchanges. They are attractive to many
individual and institutional investors and financial intermediaries because of
their relative low cost, tax efficiency and trading flexibility. Investors can
purchase and sell shares through any brokerage firm, financial advisor or
online broker, and hold the funds in any type of brokerage account.
In time, these exchange-traded funds, or ETFs, became mainstream, with
almost every major major investment-management firm around the world
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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.

ABN AMRO offer withdrawn


In October 2007, parent Barclays withdrew its bid to buy fellow global
financial services giant ABN AMRO for $91 billion. The acquisition would
have made Barclays the largest institutional asset manager in the world.
Following the termination of merger negotiations, ABN AMRO agreed to pay
Barclays a $286 million breakup fee, an amount that exceeds the sum
Barclays had invested in the proposed deal. A consortium led by the Royal
Bank of Scotland subsequently purchased ABN AMRO for $100.7 billion.
RBS began bidding for ABN AMRO within days of Barclays initial offer.

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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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Barclays Global Investors, N.A.

GETTING HIRED

It does the job


Its fairly bare-bones for job seekers, but BGI invites you to settle in and
explore its site nevertheless. At www.barclaysglobal.com/about/careers,
potential applicants can browse current openings sorted by your desired title.
Within the site, interested candidates can also submit a resume, get a list of
HR contacts and read a list of employee benefits.
We wont fill your head with ideas of grandeurjust ideas, promises the
firm on its graduate careers site (www.bgigraduatecareers.com) geared
toward PhD, MBA and other masters degree holders. The site also includes
information for undergrads looking for positions with the firm. On the site,
candidates can learn about internship programs (youll need to have a copy of
your resume on your computer to apply online, however) as well as training
and other continual education programs. The site also includes several firstperson accounts written by current insiders about what its like to work for the
firm. The hiring process is fairly standard, sources report. One insider says
going through two rounds of interviews is not uncommon.

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Barclays Global Investors, N.A.

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.

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V A U L T

5
PRESTIGE
RANKING

Lehman BrothersInvestment
Management Division

399 Park Avenue


New York, NY 10022
Phone: (212) 526-7000
www.lehman.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

"Fixed income geniuses"


"Sorority/fraternity"
"Fantastic to work for"
"Somewhere between the
intensity of Goldman and UBS"

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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.

Groups and divisions


Within private investment management, Lehman Brothers investment
representatives manage relationships with high-net-worth individuals and
businesses, providing comprehensive investment, wealth advisory and capital
markets execution services. Working together on teams, investment
representatives leverage professionals across the firm. Lehman Brothers
private investment management division focuses on ultra-high-net-worth
clients, individuals with over $10 million dollars in investable assets.
Several advisory groups work with the investment representatives to better
serve their clients. One of the largest is the client solutions group (CSG),
which works with the reps to market the wealth management platform. The
portfolio advisory group provides custom asset allocation and investment
advice, as well as tax and estate planning guidance to clients. The capital
advisory group works with investment representatives and specialist teams to
provide integrated wealth management and corporate finance solutions for
executives, small to midsized companies and private equity funds, as well as
senior executives of Lehman Brothers. Lehman Brothers Trust Company
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offers services including fiduciary, investment and financial planning for


individuals, businesses and institutions.
Another part of private investment management is the institutional client group,
which provides brokerage and market-making services to small and midsized
institutions in the fixed income and equities capital markets. This group also
works closely with a project Lehman calls partnership solutionsan effort to
build business relationships with minority- and women-owned financial firms.
Lehman's asset management business operates under two brand names:
Neuberger Berman in the high-net-worth and retail fund channels, and
Lehman Brothers Asset Management in the institutional channel. Neuberger
Berman's private asset management business provides discretionary,
customized portfolio management. Experienced money managers, each with
a distinct investment style and discipline, tailor investment strategies to fit
clients' individual goals, financial needs and tolerance for risk.
Neuberger Berman was one of the first firms to offer no-load mutual funds,
starting in 1950. Today, the Neuberger Berman family of funds spans asset
classes, investment styles and capitalization ranges. Its open-end mutual
funds are available directly to investors or through distributors, and its closedend funds trade on major stock exchanges.
Lehman's asset management business also offers a full range of asset
management products for pensions, foundations, endowments and other
institutions, with established track records in strategies across the risk/return
spectrum in cash, fixed income, equity and hybrid asset classes. Also within
asset management, Lehman Brothers has its absolute return strategies platform,
which offers a wide range of hedge fund products to institutions and qualified
individual clients. Lehman offers proprietary single-manager funds, proprietary
multiple-manager funds of funds and third-party single-manager funds.
Lehman Brothers private equity business has been an active and successful
investor since 1984. Since then, Lehman Brothers investment partnerships have
managed a number of private equity portfolios, with a significant amount of the
firm's and employees capital invested alongside that of its clients. Lehman's
private equity business groups include real estate, merchant banking, venture
capital, private funds investments, credit related investments (CDOs and
mezzanine), infrastructure and private fund marketing, among others.

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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.

Fixed income falls


Lehman was one of only a few Wall Street banks to escape massive losses
from subprime mortgages in 2007, even though it had been the No. 1
underwriter of subprime-related securities in 2006. Still, its 2007 fourth
quarter profits of $886 million were down 12 percent from the same period in
the previous year, the result of decreases in its fixed income business.
Negative valuation adjustments on trading assets, principally in the firms
securitized products and real estate businesses, resulted in Lehmans fixed
income capital markets segment taking a net revenue reduction of $830
million at the close of 2007. These valuation adjustments were partly offset
by valuation gains on economic hedges and liabilities, as well as realized
gains from the sale of certain leveraged loan positions. Lehmans equities
business posted record net revenue in the fourth quarter of 2007, and for the
full fiscal year, it posted revenue of more than $4 billion.
Overall in 2007, Lehmans capital markets revenue rose just 2 percent versus
2006. Investment management and investment banking picked up the slack,
climbing 28 percent and 24 percent, respectively. Furthermore, in the first
quarter of 2008, the investment management division posted record net
revenue of $968 million, up 39 percent versus the first quarter of 2007.

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Still, mortgage did hurt


As was the case with most big Wall Street firms, Lehman Brothers recently
experienced significant job reductions. In February 2008, it was reported that
Lehman Brothers would be further reducing its workforce by 200 jobs in its
mortgage capital business in the U.K., which were in addition to the
approximately 3,000 cuts that were announced in late 2007 and early 2008.
In January 2008, it was reported that Lehman planned to lay off
approximately 140 fixed income employees. Earlier in the year, Lehman had
closed its BNC Mortgage subsidiary, eliminating more than 1,000 jobs. In
mid-January, Lehman decided to reduce its mortgage business even further,
suspending its wholesale and correspondent lending activities at its Aurora
Loan Services subsidiary, which meant 1,300 more pink slips were handed
out. This also resulted in the closure of three of Auroras operational centers
in California, New Jersey and Florida.
Previously, in September 2007, the firm restructured its residential mortgage
origination business, scaling down its operations in the U.K. and U.S., and
closing down its Korean mortgage unit completely. This restructuring meant
the loss of approximately 850 jobs worldwide. At the same time, Lehman
said its remaining residential mortgage businessesincluding Aurora Loan
Services, ELQ Hypotheken and Libertuswould operate under the name
Lehman Mortgage Capital.

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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well as its acquisition of MNG Securities, an established equity securities


brokerage firm in Turkey.

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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can be choosy. Indeed, Lehman has high standards in terms of education,


morality and professionalism. And its very selective with its huge
candidate poolonly a limited amount of spots are available. One contact
calls Lehmans selectivity a function of the high standards that are set for all
incoming employees, explaining that the firm makes every attempt to
identify candidates that are a fit both from a qualification as well as a personal
standpoint. During the hiring process, much emphasis is placed on
discovering that perfect match. Finding workers that fit into our culture
leads to greater long-term success.

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.

Internships: pretty much compulsory


If youre serious about working at Lehman, set your sights on an internship
as soon as you can. Its almost imperative to get a summer internship if you
want to work at Lehman. And be prepared to buckle down. Summer
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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.

OUR SURVEY SAYS

Spread the love


Insiders say Lehman is all about culture, which sources describe as being
close-knit, vibrant, entrepreneurial, intense, collegial, fantastic,
cooperative, congenial, supportive, professional, team-oriented,
communicative and thoughtful. Some even call it the best culture on Wall
Street. Also, Lehmans one firm credo seems to be a serious mantra among
employees. One firm is not just a buzzword here. Our people work well
together to deliver the best results for our clients, says one insider. The firm
also prides itself on a unique work hard, play hard culture where people are
accessible, down-to-earth and care about each other. And everyone is nice and
ready to teach others. Theres no feeling of oppressive or depressing corporate
malaise as with certain other larger banks, notes one contact. This is probably
the happiest firm on Wall Street.

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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V A U L T

Asset
6 JPMorgan
Management

PRESTIGE
RANKING

245 Park Avenue


New York, NY 10167
jpmorgan.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

"Tops"
"Probably past its prime, but still
intense"
"Outstanding private bank"
"Nothing exemplary"

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Some degree of bureaucracy


Could use some system upgrades
Not a lot of perks

EMPLOYMENT CONTACT
jpmorgan.com/careers

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JPMorgan Asset Management

THE SCOOP

Big just got bigger


One of six business lines that fall under the JPMorgan Chase brand name,
JPMorgan Asset Management provides investment management, private
banking and private client services. In addition to asset management,
JPMorgan Chase also encompasses investment banking, treasury and security
services, commercial banking, retail financial services and card services. All
of these businesses are part of JPMorgan Chase & Co., a global financial
services firm with over $1.6 trillion in assets and a staff of more than 170,000
in over 60 countries. Assets under management in the investment
management business as of March 2008 reached $1.2 trillion, cementing
JPMorgans role as one of the largest active asset managers in the world.
Currently, 38 percent of JPMorgan Asset Managements revenue and 51
percent of its earnings come from international business.
JPMorgan provides more than 210 investment strategies for equity, multiasset, fixed income, currency, real estate, hedge funds and private equity
assets. Its the world's largest hedge fund manager and one of the worlds
largest money market fund managers. Its also one of the largest private
equity fund and real estate managers in the U.S. Additionally, through its
joint venture, China International Fund Management, JPMorgan has become
one of the largest Sino-foreign equity asset managers in China (a Sino-foreign
joint venture is one between a Chinese and a foreign company within the
territory of China). In 2007, JPMorgan added investment management
offices in India and South Korea. And in 2008, it added something much
larger: the 85-year-old investment bank Bear Stearns.

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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2001, instantly creating the third-largest financial institution in terms of assets


in the U.S., behind Citigroup and Bank of America.
On July 1, 2004, JPMorgan Chase officially merged with Bank One
Corporation for a purchase price of $58.5 billion. Upon the merger, the
combined company possessed $1.1 trillion in assets, rivaling Citigroups $1.2
trillion. The dealone of the largest financial mergers in U.S. history, which
also extended JPMorgan Chases domestic reach beyond the East Coast
boosted JPMorgan Chases ability to compete with Citigroup not only in
investment banking and commercial lending, but also in consumer banking,
which is Bank Ones key strength.

On the top of their game


Move over, Goldman Sachs. In survey results released in March 2007,
industry publication Absolute Return announced that JPMorgans asset
management unit had become the largest hedge fund in the U. S., stealing
Goldmans top spot. And in 2008, JPMorgan retained its position as the No.
1 hedge fund manager, according to Absolute Return. With hedge fund assets
under management of $45 billion, JPMorgan headed the list of 241 funds that
altogether oversee more than $1 trillion.
JPMorgans success in the field certainly had something to do with the
banking giants 2004 acquisition of Highbridge Capital Management, a multistrategy hedge fund manager with offices in New York, London and Hong
Kong.

Hoping for a comeback


Many banking giants posted record losses in the third quarter of 2007, but
JPMorgan Chase pleased investors by posting a profit. The bank posted
slightly more than a 2 percent increase in earnings despite a write-down of $2
billion. Its retail and investment banking divisions were hardest hit, while
asset management was one of the firms star performers, as profits in the
division soared more than 50 percent to $521 million in the third quarter.
For the fourth quarter of 2007, JPMorgan Chase was also able to report a
relatively healthy net income of $3 billion. Although this was markedly down
from the $4.5 billion the firm posted in the fourth quarter of 2006, it was much
better than many of its peers, which took net losses for the quarter. Again,
investment banking write-downs and mortgage-related losses in the firms retail
division were the drag on earnings, while asset management has a terrific quarter
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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.

Latest results are lukewarm


For the first quarter of 2008, JPMAM 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. However, net income
fell to $356 million, a 16 percent decline versus the $425 million it booked in the
previous years first quarter. Its net revenue, meanwhile, was flat at $1.9 billion.
Overall, parent JPMorgan Chase wasnt doing too hot in the first quarter of
2008, either. Net revenue fell to $17.9 billion from $19.7 billion versus the
previous years first quarter, and net income came in at $2.4 billion, rather
paltry compared with the record $4.8 billion the firm brought in for the first
quarter of 2007. Poor market conditions as well as significant leveraged
lending- and mortgage-related write-downs in the firms investment banking
unit were yet again mostly to blame for the tepid results.

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.

Expect to meet a lot of people


Interviewers are primarily concerned with degree of fit. Interview topics
include interest in the program, understanding of what you will be doing and
general problem-solving thought process. One insider recalls, I had two
interviews on campus and approximately six interviews at JPM in New York.
I met with various people throughout asset management, including associates,
VPs and MDs. The firm takes personality fit pretty seriously, so odds are,
if theyre serious about you, youll meet with a ton of people. Candidates
are asked questions that test thought processes on evaluating an industry and
a company within that industry. Also expect technical questions focused on
accounting. Interviewers are looking to rate you on subjects such as
intellectual curiosity, ability to listen, integrity and ability to work in a team.

If you can, intern


An internship can help. Ideally, the firm would like to hire from the internship
program to ensure that new hires are a good fit. Sources say, The most
efficient way to get a job within JPM is to intern. The firm typically hires 20
to 25 summer intern analysts for investment management, and looks to hire 20
to 25 full-time analysts. One former intern recalls, I found it easy to get a job
offer once I had successfully completed the internship. Internships are
essentially three-month interviews for full-time employment. Work can be
unrelated to that of full timers, but its more an introduction to the firm.

OUR SURVEY SAYS

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.

Comp could use improvement


Insiders give average marks to their compensation. Some say compensation
is not competitive and there are not a lot of perks. Another bummer: The
compensation in this career is backend-loaded. Insiders say the firms
annual raises are definitely below average and not competitive. Aside from
paycheck comp, JPMorgan sources complain of awful IT. The firm could
use some system upgrades. A contact says, It sometimes takes a long time
to get something fixed on my computer.

Its not about face time


JPMorgan employees enjoy flexible working hours with no face time
required. The rule of thumb is work until your work is completed and then
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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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The general consensus is


that this is the best line of
business to work for at
JPMorgan Chase.
JPMorgan Asset Management
insider

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V A U L T

7
PRESTIGE
RANKING

Pacific Investment Management


Company LLC (PIMCO)

840 Newport Center Drive


Suite 300
Newport Beach, CA 92660
Phone: (949) 720-6000
Fax: (949) 720-1376
www.pimco.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Bond kings
Massive
Excellent macro research team
Some good funds
Fixed income powerhouse

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THE SCOOP

PIMCO-ed out to Allianz


California-based Pacific Investment Management Company (PIMCO) is an
institutional money manager with more than $800 billion in assets under
management. PIMCO was established in 1971 as a subsidiary of Pacific
Mutual Insurance Company (now known as Pacific Life) to sell separate
management services for employee benefit plans, endowments and
foundations. At its inception, PIMCO had a mere $12 million in assets under
management. By 2000, that number had ballooned to more than $215 billion.
In May 2007, German insurance giant Allianz AG purchased a majority stake
in PIMCOs parent, PIMCO Advisors L.P., today known as Allianz Global
Investors of America L.P., leaving Pacific Life with a minority interest of just
3 percent. Although Allianz owns a 97 percent stake in PIMCO, it has little
input in the day-to-day affairs of PIMCO, which still operates like a
partnership. At the end of 2007, PIMCOs client list included more than half
of the 100 largest corporations in the U.S.
As in previous years, PIMCO took home several awards and honors in 2007.
Derivatives Week named the firm Credit Investor of the Year, Foundation &
Endowment Money Management called PMIC the Nonprofit Bond Manager of the
Year and Pensions Management named it High Yield Bond Manager of the Year.

Covering all bases


PIMCO is divided into four main departments: portfolio management, account
management, product management and business management. Portfolio
managers are responsible for market research, portfolio strategy and trade
execution. Account managers conduct client servicing, develop solutions for
client investment needs and ensure investment portfolios meet clients
objectives. The product management unit provides the link between portfolio
management and account management, and is responsible for launching new
investment vehicles and growing PIMCOs institutional business. The business
management group is responsible for setting the strategic vision of the firm.
PIMCO has more than 1,000 employees, including more than 335 investment
professionals, who service approximately 870 institutional clients and over
5,400 mutual fund clients. Every sector of the bond market is included in
PIMCOs investment universe, including governments, corporates,
mortgages, asset backs, money market and hedged international. Based in
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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.

Back in the ball game


But that was then and this is now. In September 2007, Forbes reported that
of the top-five largest bond funds, PIMCO Total Return, with its $103 billion
in assets, had the worst 12-month record (albeit the best 10-year record).
Gross told a reporter that the sudden failure was like the Yankees when they
dont make it to the World Series. So where did Gross go wrong?
When the index wasnt performing well in 2006, investors stopped putting
money into it. Critics, like The Wall Street Journal, called into question
Gross ability to adapt to the changing bond market. Admittedly, he was
suddenly playing it safe, steering away from riskier bonds and focusing on
short-term Treasurys and currency bets, among other things.

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Unaccustomed to not being on topPIMCOs Total Return Fund is the largest


bond mutual fund and has for years outpaced both the bond market and almost
all of its competitorsthe normally chilled out Gross (he practices yoga
regularly) started feeling the stress. According to the Journal, With PIMCOs
bets misfiring, Mr. Gross was so stressed that he left the office, taking an
unplanned vacation, sitting at his home with his wife. He told the paper, I just
had to leave for nine days, I couldnt turn on business television, I couldnt pick
up the paper, it was just devastating Weve increased the volatility [of the
portfolio] but Im not enjoying it. You cant sleep at night.
By mid-2007, though, it seemed that Gross had cleared his head and the gambler
had jumped back into the game. Everybody is selling risky assets, he told
Forbes in September. Weve been out of the market. Well, now were back in.

Building a stronger team


Time will tell how some of Gross recent risky purchasesbonds from Time
Warner Cable, Duke Energy and Ford Credit, among otherswill pan out.
To be sure, he has plenty of help should he falter along the way. Wall Street
rejoiced when Gross hired former Federal Reserve Chairman Alan Greenspan
as a consultant in May 2007an alliance of godlike figures, Forbes
explainedbut the major news is the new PIMCO trinity.
Mohamed El-Erian rejoined PIMCO in January 2008 in a new position as
managing director, co-CEO and co-CIO. He now works with Gross, the founder
and CIO, as well as Bill Thompson, the CEO. El-Erian previously worked at
PIMCO as a member of the portfolio management team. He spent seven years
with the firm before being hired as the president and CEO of the Harvard
Management Company, the worlds largest university endowment. El-Erian will
be a key member of the management team, helping to strengthen PIMCOs
relationships with global institutions and fuel the future of the firms business.
El-Erians appointment, however, isnt intended to be a replacement.
Thompson and Gross assured investors that they have no plans to leave
PIMCO; each were recently re-elected to their current positions for five-year
terms by the companys board of directors. The organization is also proud to
say that many of the executives who have been with the company from the
start are still members of its management team.

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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

Finding the right fit


The PIMCO hiring process is very thorough and competitive, and the firm
invests deep resources to ensure that individuals are the right fit. Insiders
say PIMCO is looking for those who are intellectually curious, extremely
driven and interested in long-term careers in investment management.
PIMCO employees tend to have very long tenures with the firm, so extra
care is implemented during recruiting to make sure the candidates are a good
fit for the firm and the role, adds a source. Most sources feel the extremely
rigorous recruiting standards are worth it, because the net result is new hires
who mesh well with the culture and keep the low turnover rates intact.
Because of this, its no wonder PIMCO turns to top educational institutions
for its campus recruiting. For MBA hires, the firm targets Harvard, Stanford,
Wharton, Chicago, Kellogg, Sloan, Columbia, UCLA and NYU. For its
undergrad hires, it looks to Harvard, Stanford, Yale, Princeton, Penn, MIT,
CMU, Columbia, NYU, UCLA, USC and Brown, among others. Hiring
managers also look at undergrads from other schools who submit their
resumes via the PIMCO web site, explains a contact. It is highly
recommended to send both a resume and cover letter when applying.

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.

Learn the ropes


Summer internships are available to both undergraduates and MBA
students. Insiders call these paid positions an opportunity to learn about the
investment management industry, fixed income and PIMCO, and the
internship can lead to a full-time job offer at the end of the summer.
One former intern describes the experience as very rigorous and rewarding.
During the summer, I was exposed to all aspects of fixed income investment
management: developing a global outlook and forecasts, understanding
portfolio structuring, reviewing different fixed income sectors and products,
and building client relationships. It was very comprehensive and challenging,
and I learned a lot during the 10 weeks. A PIMCO internship comes with a
lot of responsibility, which makes it a fairly accurate representation of what
a full-time career at PIMCO is like.

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OUR SURVEY SAYS

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.

Never a dull moment


Sources say they receive very competitive salaries and bonuses, and work
extremely hard in exchange. While 60 to 70 hours per week is about average,
some insiders say they put in less time, around 50 hours a week. Hours are a
function of everyones interest in the work and striving to do better, rather than
a need for face time, which is great, a source says. Indeed, if people spend extra
hours at the office, its because they are dedicated to providing our clients with
best-in-class investment performance and client service.
Even though days at work are intense and busy, most respondents welcome the
daily challenges that keep them on their toesand are satisfied with their overall
work/life balance. Ive always had time to spend with family and friends, says
a contact.
Casual Fridays offer a respite from the corporate dress code, and some
locations have casual summers. There are a few times, for holidays and other
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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.

Reasons to stick around


PIMCO scores high on its attitudes toward ethnic minorities, women and GLBT
employees. PIMCO is extremely fair in terms of hiring and promoting
minorities, says a manager. Compared to other organizations I have worked for
where the firm culture catered toward a majority, PIMCO creates a culture that is
welcoming for all and is extremely fair. This was very important in my decision
to accept my full-time offer. All things considered, another source calls PIMCO
an excellent firm and says, I plan to be here until I retire.
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V A U L T

D. E. Shaw & Co.

PRESTIGE
RANKING

120 West 45th Street


39th Floor, Tower 45
New York, NY 10036
Phone: (212) 478-0000
Fax: (212) 478-0100
www.deshaw.com

DEPARTMENTS

KEY COMPETITORS
Carlyle Group
Citadel Investment
E*TRADE FINANCIAL
Fidelity
Fortress Investment Group
Merrill Lynch

Brokerage
Investment Advisory

UPPERS

THE STATS

Interact with and work among


people of highest caliber
Great compensationD.E. Shaw is
known to be a pay master

Employer Type: Private Company


Chairman & CEO: David E. Shaw
No. of Employees: 1,300

DOWNERS
Very selectivetough to get in
Work can get demanding

EMPLOYMENT CONTACT
See recruiting at www.deshaw.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Incredibly brainy, very


competitive, great compensation
Sweatshop
Very strong firm
Quant shop

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D. E. Shaw & Co.

THE SCOOP

High tech finance


The brainchild of ex-Columbia University computer science professor David
E. Shaw, D. E. Shaw is an ultra-private investment and technologydevelopment outfit that operates out of New York, London, Silicon Valley,
Houston, Kansas City, San Francisco, Washington, D.C., and Hyderabad,
India. The firm trades stocks, bonds, options, futures, warrants, convertible
securities and other financial instruments used by corporations and
governments worldwide.
D. E. Shaw employs over 1,300 people all over the world. Since its inception
in 1988, it has substantially grown its funds from $28 million to
approximately $35 billion in aggregate investment capital as November 1,
2007, making its founder David Shaw a very wealthy man in a relatively short
time. D. E. Shaws reputation as a giant in the hedge fund business is well
known throughout the industry. In 2007, Absolute Return ranked D. E. Shaw
fourth in assets under management for all the hedge funds in the country and
Risk named it Hedge Fund of the Year.

Only the elite


Like its founder, who served under President Clinton as part of the Presidents
Council of Advisers on Science and Technology, the firm is big into research.
Since its founding in 1988, D. E. Shaw has sought out investment
opportunities primarily in the tech and science worlds, relying on research
conducted by some of the smartest graduates from mathematics, physics and
computer science graduate programs. (Less than one in every 500 applicants
makes it through the companys doors.) Known as quants, D. E. Shaws
researchers use computer-driven mathematical formulas to pick investments,
manage risk and reduce costs.
Thats heady stuff for those on Wall Street without the I.Q. levels to work for
D. E. Shaw. Thats likely what earned the firm Fortune magazines
description as the most intriguing and mysterious force on Wall Street back
in 1996. Most of the magic occurs behind the closed doors of D. E. Shaw
Research, LLC, the internally funded research unit headed up by Shaw
himself that engages in long-term, high-risk research that will lead to
transformative scientific innovationsand payoffs.

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D. E. Shaw & Co.

Genius loves company


Founder David Shaw traveled to Wall Street from Stanford University, where
he received a PhD, and Columbia University, where he taught computer
science until 1986. By the time Shaw quit his job at Morgan Stanley, where
he helped set up the firms quantitative trading operations, he was fed up with
life in a huge investment firm and wanted to start a trading shop where quants
could be quants without the political and business friction of larger
companies. So, with $28 million in startup capital in his pocket, Shaw
founded D. E. Shaw.
Not surprisingly, throughout his tenure as CEO of the company, Shaw has
surrounded himself with fellow brainiacs. D. E. Shaws employees include
the 2003 U.S. Womens Chess Champion, a Life Master Bridge player, a
Jeopardy! winner and a former member of the odds-defying MIT blackjack
team. These team members have orchestrated transactions that varied from
investing in existing ventures managed by outside entrepreneurs to start up
firms incubated in the D. E. Shaw camp. One such startup: Juno Online
Services. Soon after the firm launched Juno, it went public in 1999 and later
merged with NetZero in September 2001 to form United Online, the secondlargest Internet access provider in the country at that time, after America
Online.
In October 2007, David Shaw was given the honor of admission to an
exclusive club that includes world visionaries such as Al Gore, former
Supreme Court Justice Sandra Day OConnor, Mike Bloomberg, Google
Chairman and CEO Eric Schmidt, and filmmaker Spike Lee. Shaw was
inducted into the American Academy of Arts and Sciences, which honors
leaders in scholarship, business, the arts and public affairs. Academy
President Emilio Bizzi said the following about the honor, Throughout its
history, Fellows of the Academy have been dedicated to advancing
intellectual thought and constructive action in America and the world. We are
confident that our newest group of Fellows will help us fulfill that mission in
significant ways.

Banking partners, take two


Recently, D. E. Shaw became partners with one of the biggest investment
bankers in the business. In June 2007, Lehman Brothers acquired a minority
stake in the hedge fund in a deal that was rumored to be worth between $1.2
billion and $1.7 billion. It was the second time in its 20 years of operations
that D. E. Shaw had partnered with an international banking giant.

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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.

Buying James River


Despite the rocky markets, D. E. Shaw felt confident enough to make a buy
of its own when it acquired James River Group in June 2007 for $575 million
in cash. This Virginia-based property and casualty insurer has performed
formidably since it went public in 2005, with shares up 92 percent since its
debut on the market. The deal was considered a particularly shrewd move for
D. E. Shawmany thought James River accepted an offer which
undervalued it significantly. Nonetheless, the management at James River
seemed happy to be associated with the elite hedge fund, with chief executive
J. Adam Abram saying of the deal in a press release, We are pleased with the
prospect of having such a well capitalized and committed partner as we go
forward. The D. E. Shaw group understands and has embraced our business
model and shares our companys approach to the business.

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Putting its rupees to work


In November 2007, the Securities and Exchange Board of India approved
D. E. Shaws registration as a foreign institutional investor in the country.
This enabled D. E. Shaw to expand its activities in India, allowing it to make
direct investments in Indian public markets. At the time of the approval,
D. E. Shaw already had $1.25 billion invested in the country, and over 600
employees operating out of offices in Hyderabad and Delhi. The firm began
operating in India in 1996.

GETTING HIRED

Their main concerns


No one can claim that D. E. Shaw doesnt have its priorities straight. The
firm considers hiring as its second most important activityafter making
money. So if youre looking to get in, you may be in luck, even though its
usually a pretty long process. A typical candidate goes through seven to 10
rounds of interviews, acknowledges one insider. And the group you meet
during your interviews could be panels comprised of anyone from project
leaders to associate directors. While the recruiting tab on the firms web
site, www.deshaw.com, lets applicants browse jobs and apply online, there
are other ways to get in besides the traditional application process. The firms
market hires are from headhunters, newspaper advertisements and a decent
chunk come to us from internal referrals, says one contact.
Within its jobs site, the firm also offers recruitment videos detailing the D. E.
Shaw culture along with Q&As and testimonials from current employees.
Prospective employees who wish to apply can fill out a form on the web site
or contact recruiting-inquiries@world.deshaw.com with any questions they
have about the hiring process.

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OUR SURVEY SAYS

Shaw says relax


The culture at D. E. Shaw is very informal and very open. Insiders call
working for the firm a wonderful experience and say that theres lots of
freedom given to employees with a scope provided to develop ones
interests. The informality extends to the firms required dress, too, which is
casualtheres no specific dress code to adhere to. And if you need
flexible scheduling, youre in luck. The firm offers flexible hours so people
can work during their productive best instead of trying to fit work into slots
they dont find comfortable. Another plus: weekend work is rare, insiders
say. Compensation is good, too. D. E. Shaw is known to be a pay master,
both in the U.S. and in India, reveals one contact.

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V A U L T

9
PRESTIGE
RANKING

Wellington Management Co.,


LLP

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

The benchmark for institutional


asset managementexcellent
managers of money
Second tier
Fantastic in fixed income
Professional, demanding
Well respected, old school

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Wellington Management Co., LLP

THE SCOOP

Greater Boston management


The first balanced mutual fund in the U.S., the Wellington Fund, was created
in 1928. Five years later, Wellington Management Company was
incorporated. The young firm survived the Great Depression and went public
in 1960. In 1967, the Boston-based Wellington merged with a fellow
Beantown company, an investment consulting firm named Thorndike, Doran,
Paine and Lewis. Wellington reverted to private status in 1979, and today is
classified as a Massachusetts private limited liability partnership.
As of December 2007, Wellington had more than $550 billion in assets under
management, representing institutional clients and mutual fund sponsors in
over 40 countries. Wellington manages domestic, international and global
equity, fixed income, currency, commodities, real assets and active asset
allocation portfolios. It also places special emphasis on its research
departments, which work in tandem with portfolio managers to provide
market insight and analysis.
In addition to its headquarters in Boston, Wellington operates offices in
Chicago, San Francisco, Atlanta and Radnor, Pennsylvania. It also has
international offices in London, Tokyo, Sydney, Singapore, Hong Kong and
Beijing.

Bright and early


Wellington expects its employees to be ready and creative upon arrival, so
employees who expect to spend the early hours cruising the Internet and
guzzling coffee will be highly disappointed. In 1958, Wellington began its
tradition of a daily morning meeting attended by all 100+ financial employees
in the Boston office. Every day portfolio managers, researchers and
representatives from senior management teams gather in the early hours to
discuss projects and share information. Wellington says this routine has
become a significant part of the firms cultureteamwork in action. While
most financial services employees swap ideas casually over lunch or at their
cubicles, Wellingtons theory is that formalizing the process yields greater
results.
Dont walk into Wellington with the idea that research is somehow less
glamorous than portfolio management. According to the firm, its
independent research is the cornerstone of everything it does. Wellington
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strives to developand keepits expert researchers and analysts, building


their career paths within the firm. The companys collaborative mindset
extends to research departments, where analysts often collaborate across asset
classes and investment disciplines, and participate in discussions with each
other and with portfolio managers.

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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the New Covenant Growth Fund, which is overseen by a subsidiary of the


Presbyterian Foundation. Wellington is the core manager of the large-cap
blend fund with 61 percent of its assets. The New Covenant Growth Fund has
outperformed the S&Ps 500 index in the last three rolling three- and fiveyear periods. In October 2007, it was rated No.1 on Marketwatchs list of five
Morningstar recommended religious funds.

Doing good by giving back


Wellingtons philanthropy is conducted in part through the nonprofit Wellington
Management Charitable Fund, which awards grants to programs and institutions
that provide educational and extracurricular enrichment to disadvantaged
children across the country. Past grant recipients have included schools, youth
entrepreneurship programs, health centers and career development/job training
organizations. In addition, Wellington Management sponsors volunteer
programs, in which employees can spend two days a year during business hours
volunteering at nonprofit organizations.

Moving towards a brand new view?


In the fall of 2007, there was some speculation that Wellington would abandon
its State Street home for a more scenic viewin a new high rise tower which
ascends 31 stories into the Boston skyline. The Boston Globe reported in
September 2007 that the investment firm was in negotiations with Boston
Properties, a local real estate company, to lease the entire thirty one stories of a
new building at Russia Wharf, which is estimated to be completed with
construction within the next two years. The new office would have
approximately 550,000 square feet of office space and would integrate all of the
Boston Wellington employees into one uniting signature building. Estimated
rent for the building would just slightly exceed that of the most prime real estate
in Boston, with Boston Properties asking for $70 per square foot.

GETTING HIRED

Learn the ropes


Start your job search at www.wellington.com/careers, where you can learn
about day-to-day life at Wellington via employee testimonials and search
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international job opportunities (in administration, information systems,


investment administration, investment management, marketing/product
management and relationship management). You can even find tips what to
expect when interviewing with the firm (one warning from Wellington: the
process may be lengthy) such as whom you can anticipate meeting during
the process. Campus recruiting is also covered on the site, with sections for
MBA candidates as well as undergrads. Wellingtons internships last 10 to 12
weeks, and the firm typically hires MBA interns in anticipation of our fulltime hiring needs. But if you dont happen to find something that grabs your
interest on the site, be sure to check back frequently. According to the firm,
its careers section is continually evolving, with new opportunities being
added regularly.

OUR SURVEY SAYS

Pride, in the name of culture


Wellington prides itself on its corporate culture, and with good reason, says
a source. Despite the starchy blue-suit exterior, the firm is a warm and very
congenial place to work. Although bureaucracy and a lot of schmoozing
are certainly present, all in all, Wellington is a class act. A former insider
warns, The firm is an old boys club with not too many women in very high
positions. However, according to the firm, approximately one-third of the
professionals at Wellington are women. Benefits are praised, though. The
best package I have ever heard of, says one source.

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Despite the starchy bluesuit exterior, the firm is a


warm and very congenial
place to work.
Wellington Management insider

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V A U L T

10
PRESTIGE
RANKING

Deutsche BankPrivate Clients


and Asset Management

345 Park Avenue


New York, NY 10017
Phone: (212) 454-3600
Taunusanlage 12
Germany
Phone: +49 69-910-00
Fax: +49 69-910-00
www.db.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

See careers at www.db.com

Awesome global management


firm
Middle of the road
Friendly, intelligent, energetic
Some solid products, but nothing
to write home about
Top of the line

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Deutsche BankPrivate Clients and Asset Management

THE SCOOP

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.

Deutsche Banks other businesses


Besides its asset management offerings, Deutsche Banks corporate and
investment bank group division oversees the firms capital markets business,
including the origination, sales and trading of capital markets products, in
tandem with the banks corporate advisory, corporate lending and transaction
banking businesses. It also oversees mergers and acquisitions and gives general
corporate finance advice primarily for global corporations, financial institutions,
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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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Deutsche announced its full-year earnings on Ackermans 60th birthday, and


his gift was the absence of any disastrous results. The banks numbers were
expected to drastically decline for the year as a consequence of its losses in
the subprime market, but the results that came in were rosier than many had
predicted. The banks only losses due to the credit crisis in the fourth quarter
of 2007 were a meager 50 million write-down to compensate for LBO loans.
The company posted a 7 percent increase in net income for the full year, with
total net income for the year rounding out at 6.5 billion. Net revenue was
also modestly higher for the year, by a margin of 8 percent at 30.7 billion.
The change was driven by a strong advisory revenue of 314 million and
increases in global transaction banking of 12 percent for the year. Again, the
investment banking unit trailed behind the rest of the company, posting a 43
percent decline (514 million) in pre-tax profits in the final quarter.
The first quarter of 2008 wasnt as rosy, as Deutsche reported its first quarterly
loss in five years. The firm took 2.7 billion ($4.2 billion) in leveraged buyouts
and asset-backed securities write-downs during the quarter, and posted a net loss
of 131 million, versus the 2.12 billion profit it booked in the first quarter of
2007. The good news was the firm was not hit nearly as hard as some if its
rivals. During the first quarter of 2008, Deutsche only eliminated 1,000
investment banking jobs, compared to the 5,000 banking cuts that competitors
such as Citi and Merrill Lynch were forced to make.

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.

People come, people go


Deutsche Bank has been building up its employee bank in certain sectors
while strategically trimming in others in order to keep current in a market that
has shown incredible volatility over the past year. Deutsche had to make
some essential cuts in its global markets division in early January 2008,

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eliminating approximately 300 positions in the fields of equity sales and


trading, debt capital markets and derivatives. However, the firm also
announced that it would be beefing up its commodities staff by anywhere
from 15 to 25 percent because of the high prices of oil and gold.

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.

GETTING HIRED

Take the leap


If youre curious about becoming a full-time Deutsche Bank employee, make
your first stop www.db.com/careers, where you can check out the banks
application center section along with a list of recruiting events and career fairs.
Deutsche also offers several different FAQ sections that address potential job
concerns of recent undergraduates, MBA candidates and professionals. The firm
also has a section devoted to employee testimonials from all levels.
The hiring process for Deutsche Bank is very thorough, says one contact. The
key focus is on, What is the right fit for the candidate? and What does the
candidate want? Said candidates report going through up to three rounds of
interviews, which means they can expect to meet with as few as two to as many
as 10 different interviewers, depending on the position. Once the actual
interview began, it was all competency-based questions, plus some
teamwork questions and initiative questions. Interviewers were easy to
talk to and very laid-back, says a source. They did ask some market-sizing
questions and finance-related questions, but mostly they were just trying to get
a feel for my personality.
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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.

OUR SURVEY SAYS

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.

The skinny on diversity


Although some sources say gender equality at the bank is rather limited and
career progression is better for single, white males, theres no ceiling for
female professionals. Still, its hard to find good female role models who have
advanced past the VP or director level. However, one source notes that Deutsche
Bank has been on the Working Woman top employers list for a while. Theyve also
hosted a Women on Wall Street conference for over 10 years. Another insider
adds, Deutsche was named by The Advocate as one of the best places for gays to
work. In addition to Women on Wall Street, the firm notes that it has several other
diversity-devoted networks in North America, including the Rainbow Group,
which focuses on gay, lesbian, bisexual and transgender employees professional
and personal development; the Diversified Network, focusing on historically
underrepresented ethnic groups; and the Multicultural Partnership Network, a
forum serving as a voice for Deutsche Banks minority officers.

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V A U L T

11
PRESTIGE
RANKING

Merrill LynchGlobal Wealth


Management

4 World Financial Center


250 Vesey Street
New York, NY 10080
Phone: (212) 449-1000
Fax: (212) 449-7357
www.ml.com

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

Lots of bureaucracyyou need to


be good at playing politics
Compensation lower than
competitors
Some offices could use a facelift

EMPLOYMENT CONTACT
ml.com/careers

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

The Big Dog


On its way down after the credit
crisis
Recovering
Overly self-important
Hugethe standard for US
wealth management

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THE SCOOP

The Bulls investment division


Merrill Lynchs Global Wealth Management (GWM) group is a business
division of banking giant Merrill Lynchs global wealth management sector,
which advises high-net-worth individuals, small and medium-sized
businesses, and employee benefit plans. Headed by President Robert
McCann since June 2005, GWMs impressive $1.6 trillion in client assets
makes it the largest business of its kind in the world. Nearly two-thirds of
assets under management come from clients with assets of $1 million or
more, while the other third comes from employee retirement plans
administered and managed on behalf of corporations. Consisting of more
than 16,000 financial advisors in 680 global offices, the GWM group has nine
core functional areas: advisory, private banking and investment, global bank,
trust company, investments and insurance services, corporate and investment
services, retirement, marketing and distribution. The firm believes so
strongly that these six areas cover all the bases that it copyrighted a phrase for
its comprehensive approach to wealth management: Total MerrillSM.
The GWM unit has the goods to back up its claim of such comprehensive
service. In the third quarter of 2007, Merrill nabbed the award that industry
execs consider the Nobel Prize for Private Banking. Private Banker
International, a London-based industry magazine, awarded Merrill the
prestigious honor. But the accolades dont stop there. In 2007, Barrons
named 24 Merrill advisors to its Best 100 Advisors list. Up from 22 advisors
in 2005, Merrills performance topped that of any other advisory firm. Also,
Smart Money dubbed Merrill GWM the Top Full-Service Brokerage House in
2006, an honor the bank had been awarded seven times since 1998. It
dropped to No. 2 in 2007, just behind Edward Jones.
Theres also no shortage of awards honoring the financial institutions
diversity among its employees. In June 2007, Merrill Lynch once again
garnered cheers for placing twenty of its female employees on Barrons Top
100 Women Financial Advisers list. The Times of London named Merrill one
of the top-50 companies in the Where Women Want to Work survey. In
addition, LATINA Style magazine has named Merrill Lynch one of the best
places for Latinas to work in the U.S. for the past decade. More recently,
DiversityInc ranked Merrill No. 7 on its annual Top 50 Companies For
Diversity list.

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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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Previously, in December 2007, largely thanks to Thain, Merrill also received


a much-needed cash infusion by selling stock worth $6.6 billion to foreign
investors. This sale came one month after Merrill sold $6.2 billion stakes to
Singapores Temasek Holdings and Davis Selected Advisors. Januarys
investors included the Kuwait Investment Authority, the Korea Investment
Corporation and Mizuho Financial Group of Japan. According to Merrill,
none of these groups will have any influence in the firms operations or the
boards decisions.

Merrills Downtown move


In May 2008, Merrill Lynch inched toward relocating its New York City
headquarters to the former site of the World Trade Center. The three-millionsquare-foot building, which will be erected at the corner of Cortlandt and
Church Streets, might serve as the new home for about 10,000 Merrill
employees. (Currently, Merrills headquarters are located at 2 and 4 World
Financial Center, and the lease expires in 2013.) The Port Authority of New
York and New Jersey is still in talks with Larry Silverstein, who is developing
the new building.

Money to be made in Dubai


While Merrill Lynch has had a presence in Dubai for nearly 50 years, it
answered the call of GWM investors by opening a regional office in June
2007. The expansion followed the announcement of a new index tracking
Dubai shares. GWM President Robert McCann said in 2006 at a press
conference that through the Dubai Investable Index (DII), the first investable
index to track stocks on the Dubai Financial Market, Merrill plans to create
and make a market in derivative-linked products to the index, which will
allow portfolio managers in the Middle East and North Africa to manage their
risk more efficiently.
According to regional publication Gulf News, The Dubai Investable Index
will allow international investors to bypass strict rules on foreign
ownership of local companies. It will be the first in a series of benchmark
indices Merrill plans to launch for the region. And Gulf News pointed out
that international business currently contributes just 11 percent of Merrill
Lynchs revenue, noting that the Middle Easts robust economic growth
presents additional growth opportunities.
Underlining the vast growth opportunities in the region, in June 2008, Merrill
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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.

The cruelest month


In April 2008, Merrill announced that it had endured a $1.96 billion loss for
the first quarter of the year, a figure that stood in stark contrast to the $2.03
billion in earnings it booked in the first quarter of 2007. Revenue also
plummeted, falling to $2.93 billion from the $9.6 billion it reported in 2007.
Merrill attributed much of the losses to $9.4 billion in mortgage-related writedowns.
The bad news unfortunately didnt end there. Merrill also announced plans
to slash 3,000 positions by the end of 2008. The cuts were largely spurred on
by a $6 billion write-down and its third quarterly loss in a row. Previously,
Merrill had written down $24 billion in subprime-related debts, and had
already decreased its U.S. headcount by 1,100 in the first quarter of 2008.
The most recent wave of cutbacks were expected to continue to affect
Merrills bottom line in 2008, producing a $350 million restructuring charge
for the second quarter.

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GETTING HIRED

Only the best


When it comes to hiring, insiders say Merrill Lynch is primarily interested in
the cream of the crop. Merrill looks for exceptional candidates and does not
settle for mediocrity, a source explains. Theres a strong emphasis on
academic success, so the firms MBA recruiters tend to focus on heavy
hitters like Wharton, NYU, Georgetown, Columbia and the University of
Chicago. Undergrad targets include Villanova, Georgetown, Cornell, Penn
State and Howardmostly East Coast schools. Students whose alma
maters arent on the firms radar can apply through the main Merrill Lynch
web site or contact one of the program managers or recruiters. Still, warns
a source, its very difficult to get in unless you are from a target school or
have personal connections. One source estimates that based on the
numbers of positions that are offered, the analyst program is more selective
than Ivy League schools. And because most new hires come through the
summer associate and summer analyst programs, it can be difficult to be
hired if you have not interned.
That said, landing a job at Merrill isnt impossible. Show genuine interest
and you will get serious consideration, tips an associate. Another insider
says that with a strong resume and interview, students have a good chance
of getting a job.

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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The golden ticket


Sources say Merrill extends offers to most successful interns, which makes
the internship hiring process just as tough as full-time employee recruiting.
Securing an internship starts by applying through the school career services
center with a cover letter and resume. All applicants must also apply online
at Merrills web site. Says one former intern, this led to an interview when
the company came to our school for the official recruiting process. After my
first interview, I had several interviews in person and over the phone with
multiple managers to see if I could be placed in one of the groups as an
intern.
Potential interns should expect at least two to three interviews, which are
typically conducted by a combination of senior managers and associates or
assistant vice presidents. An insider says interview questions will cover
why youre interested in the company and the financial industry, what your
experience is, what sort of classes you had taken, whether you can analyze a
specific graph or chart, and what you know about a particular product or
financial services area.
Interns are paid a prorated salary based on full-time starting pay, and the
internship program itself is said to be very organized, with an emphasis on
interaction between various business groups and, more importantly, other
intern peers. Work may include strategy, product innovation and pricing.
Assignments are usually two to three projects during the three-month time
frame. They were all real business cases, adds an ex-intern. Another
former intern says the type of work was dependent on what business group
you were placed in, but the summer analyst program also involved a summer
challenge that required interns to analyze other businesses within the global
wealth management unit and come up with strategies to improve business
results. At the end of the program, unless the internship went badly, you
are extended an offer with either your existing group or another group within
Merrill Lynchs Global Wealth Management.

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OUR SURVEY SAYS

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.

Average pay, awesome hours


Merrill Lynch insiders arent raving about their compensation, but theyre not
complaining too much, either. One recent hire says his only quibble is that
the bank should base entry-level bonuses on performance, rather than a flat
rate. Obviously, not all analysts perform the same. Says another analyst,
While I am happy with my own compensation, I know for a fact that Merrill
is ranked extremely low on the topic of compensation against its competitors,
both on the advisory side and for the Wall Streeters. As a top-tier bank, I
think it is important to stay competitive with the other top banks, a source
says. In that regard, I believe compensation can be improved.
However, many are pleased with other perks of life at Merrill. The firm offers
great medical packages and other benefits that are extended to employees
and their families, where applicable. Hours are excellent, too, with

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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.

Doors are open


Managers at Merrill are praised for being fair and friendly and offering
constructive criticism when its needed. Insiders say questions and
concerns are answered promptly. Managers generally give excellent
feedback to their subordinates to help them develop professionally, one
source says, although some provide more attention to their direct reports
than others do. A recent hire says that managers respect my time and have
high expectations of me, a sentiment that others share. My manager is
demanding but very careful to provide me with equal amounts of support and
encouragement, another reports. Even newbies notice that opportunity for
achievement is quickly provided, and managers are very generous with
rewarding hard work. It does not take long before a hardworking
individual may be heard by management, adds a contact.
The firms training is intense at first, but then it tapers off. New hires and
seasoned staff alike take advantage of structured training seminars and
Merrill Lynch Universitys online virtual instruction. Employees get their
start with five weeks of formal training that include classroom training,
exams, projects, etc. The basic sessions cover a good amount of important
areas, including accounting, corporate finance and technology. Wealth
management training also included other skills, such as etiquette and
communication and presentation skills. Unfortunately, compared to initial
training, on-the-job education is poor. There could definitely be more
opportunities, one source says.

Time for updates


Dress code varies by business group, and also depends on where you are
based. Business casual is a good rule of thumb, but depending on what
area you work in, you may find yourself wearing business formal more
often. A source says that New York is very formal all the time. Jersey City

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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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Merrill LynchGlobal Wealth Management

Merrills culture places an


emphasis on cultivating
talent within the firm with
the hopes of retaining that
talent well into the future.
Merrill Lynch insider

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PRESTIGE
RANKING

Morgan Stanley Investment


Management

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

Better trajectory needed for


employees to advance
Diversity needs improvement

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

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Innovative, smart people


Falling apart
Coming back; on the upswing
What a way to kill a brand
Will be top soon

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THE SCOOP

Three parts of a whole


One of the leading investment banking firms in the world, Morgan Stanleys
business is divided into three practice areas: investment management, wealth
management and institutional securities. Morgan Stanley Investment
Management (MSIM) provides global asset management products and
services, including equity, fixed income alternative investments and a direct
investing business. These products are distributed via three principal
channels: the firms proprietary channel (its own salespeople), a nonproprietary channel (third-party brokers, dealers and other financial
institutions) and an institutional sales channel.
The firms global wealth management unit caters to individuals and small- to
medium-sized businesses and institutions, offering retirement plan services,
brokerage and investment services, financial and wealth planning, annuity
and insurance, credit, trust and banking, and cash management. Its private
wealth management arm is aimed at high-net-worth individuals and
foundations with $20 million or more in investable assets.
Finally, institutional securities covers Morgan Stanleys world-renowned
investment banking, sales, trading, financing, research and risk management
analytics operations.

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.

Focus on the family


Morgan Stanley expanded its private wealth management division in July
2007 by creating a new unit called the family wealth group, which will cater
to the most elite class of affluent families: those with a net worth of $50
million and above. The new group will be managed by U.S. Trust veteran
Robert Stolar who has an extensive background in wealth consulting and
family offices. A small team of former U.S. Trust employees, including
Christine Guidera and Mary Davies, followed him over to Morgan Stanley to
help strengthen the new division. The firm also gave Stolar the title of
president of Morgan Stanley Trust, NA.

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Not a happy holiday for Morgan Stanley


The ongoing subprime problems the firm had faced came to a head in
December 2007, which marked the first time in Morgan Stanleys history that
the firm suffered a quarterly loss. After sustaining a $5.7 billion subprime
mortgage loss-related write-down, the firm posted a $3.59 billion loss for the
fourth quarter of 2007. (The firms profit a year earlier was $1.98 billion.) In
a statement, CEO John Mack said he would be relinquishing an annual bonus
due to the results, calling the write-down the firm took deeply
disappointing and adding that accountability for our results rests with me.

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.

Restructuring and reducing


Few firms in the financial industry have managed to emerge unscathed from
the subprime mortgage messand Morgan Stanley is no exception. The
firms restructuring efforts, announced in February 2008, will not only result

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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.

Not much going Morgans way


Morgan Stanley was dealt another blow in February 2008 after it was
unsuccessful in its effort to create a securities business enterprise with
Vietnam State Capital Investment Corporation. Morgan Stanley was shut out
from completing the deal after the Vietnam government yielded to competing
banks demands, which claimed that the proposed deal would end up unfairly
favoring Morgan Stanley.

Out of the woods?


Despite the setbacks, Morgan Stanley ended up ahead of expectations when
the first quarter of 2008 rolled around. While the companys overall profits
were down 42 percent from the year before and revenue decreased 17 percent
from the first quarter of 2007, Morgan Stanley still managed to surpass
analysts predictions. But the firm was hardly in the clear. The firms equity
trading group managed to bring in the best quarter in its history, but Morgan
Stanley also took two write-downs, worth a combined $2.3 billion, related to
its mortgage and loan businesses.

GETTING HIRED

Get those typing fingers ready


If youre applying online via the firms web site, note that the the process
begins with a long online application form that asks for a lot of information,
so make sure youre successful in your written communication. In addition
to the online application process, you can also turn in a resume through your
campus career center.
Through the former route, if the firm decides it likes you, you will be phoned
very quickly, and they will arrange a telephone interview with you. The

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phone interview usually consists of managers assessing your skills and


talents, previous work history and what you can contribute to Morgan
Stanley. Insiders say that during the initial on-campus interview, there are
no quantitative questions or case questions. You will, though, have to
answer the question, Why investment banking? You should also be
prepared to focus on how youve worked in teams, which is important
because Morgan Stanley describes its culture as being focused on teams.
And never forget the cardinal rule of interviewing: be enthusiastic.
If you pass the initial round, you will be called to a second-round interview
at the firms offices, where youll have a chance to meet the managers and
team leaders who will be in your department and actually hiring you. Expect
to have to answer endless questions, including your reasons for applying
and why you applied to Morgan Stanley. And be sure to grab some coffee
beforehand. They will never get tired of asking you questions, and will keep
coming at you with more and more questions and examples you will have to
give. But overall, insiders call the process as a whole very simple and
relaxed.

OUR SURVEY SAYS

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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means casualits more of a business casual, sweater/short-sleeved dress


shirt type of day.
Management receives high marks from insiders, who call their bosses very
intelligent and say they have lots of integrity. They also really take care
of their employees, making them a pleasure to work for. Managers are
getting better and better to boot, contacts say. One pleased insider notes, I
have been with the bank more than 10 years, and my supervisors thank me
every day for being here.

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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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

Fidelity Brokerage Services


Fidelity Management & Research
Company
Financial Advising
Retirement Services

Colleagues are intelligent,


motivated and team players

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

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Great place, top quality


Great history but past its prime;
losing good people to hedge
funds
Improving slowly
Big and boring

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THE SCOOP

The big dog


Seeking financial advice, about 24 million individuals go to Fidelity
Investments, the largest mutual fund company in the U.S. As of the end of
2007, Fidelity Investments had $1.6 trillion assets under management.
Operating in 100 cities throughout the U.S., Canada, Europe and Asia,
Fidelity Investments 46,400 employees field more than 263,000 phone calls
per day from retail and institutional clients, while its online discount
brokerage sites handle an average of 2.4 million hits a day.
Managing 436 mutual funds, Fidelityalso known by its legal name, FMR
has been the countrys largest mutual fund company since 1988, when it
surpassed competitor Merrill Lynch. The company now holds a 10 percent or
greater stake in at least 100 of the countrys largest 1,000 companies. It is
also the countrys largest provider of defined-contribution 401(k) retirement
savings plans and a leading online brokerage firm. The company also offers
discount brokerage, retirement, estate planning, wealth management,
securities execution and clearance, life insurance, and other services to its
individual and institutional clients.

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.

Climbing their way to dominance


Fidelity Investments was originally created through the Boston management
firm, Anderson & Cromwell. By 1963, the firm started publicly offering its
International Fund, renamed Magellan in 1965. Nearly at the same time, in
1964, Fidelity entered into the corporate pensions plans market when it
created FMR Investment Management Service Inc. and later offered
retirement plans for the self-employed through the Fidelity Keough Plan.
As the companys services matured, so did its structure. In 1972, FMR was
formed as Fidelitys holding company. By that time, the firm had already started
selling directly through advertising and toll-free telephone lines. It had also
started branching out beyond the mainland U.S., with the formation of Fidelity
International in Bermuda in 1968. By 1974, Fidelity became the first moneymarket fund to offer check-writing services for investors through its Fidelity
Daily Income Trust. By 1976, Fidelity had amassed $3.5 billion in assets under
management.
In 1995, Fidelity became the first mutual fund company to launch a home page
on the Internet and as a result, by 2000, they had more than $955 billion in
managed assets under its belt. But with the economic slump that followed the
dot-com bust, Fidelity faltered. By 2002, Fidelity lost nearly $30 billion since
the market peaked in 2000thats a bigger loss than in any other time in the
companys history, including the crash of 1987 that forced Fidelity to sell nearly
$1 billion of share in more than 1,000 companies of the firms 75 stock funds.
Today, the company has rebounded impressively, and its dominance in the
mutual fund world is unparalleled by any other company. In 2006, it posted
revenue of $13 billion and oversaw $1.3 trillion in investments.

Launching new platforms


In October 2007, Fidelity announced that it was launching a $50 million web
platform that would allow advisers to more easily manage their clients
portfolios.

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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.

GETTING HIRED

Milk your contacts


If youre not recruited directly by Fidelity, you have other options. It may
help, for example, if you know someone who works there. Once you are
invited in, expect a pretty simple interview process that could range from
one to four interviews. One interviewee applying for a fund accounting
analyst position experienced a very structured interview process with both
HR and the managers within the fund accounting department. The questions
were not too difficult, and fairly standard and straightforward. One piece of
advice an insider offers is to make sure that the manager you interview with
is the one you will work with. In the customer service department, The
interview was very standard, involving customer service questions, says one
source, who adds, A degree was preferred, but there were high school
graduates in the training class. The contact says Fidelity wanted every
detail of your life in the background processevery temp job, every date
exact, which was a bit much for the entry-level position.
However, for a financial analyst position, the questions arent so simple and
mostly relate to financial markets and equity markets in particular. Sample
questions from one interview include, Do you have an equity portfolio?
What are your best investments? Your worst ones? What have you learned
from them? What drives this or that stock and why? Do you think markets
are efficient? Differentiate bottom/up and top/down investment strategy.
How do you value a company? Which methodology do you prefer? Do you
have a value or a growth bias?
Regardless of the point you may be in your career, on the Fidelity site,
www.fidelity.com, under careers, potential applicants can explore current
openings sorted by full-time, international and temporary distinctions.
Students and recent graduates also get their own section on the site, which
lists jobs along with a college recruitment schedule.

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OUR SURVEY SAYS

Just the good ol boys, never meaning no harm


The culture is conservative and a bit of a good old boys network, but its
also an enormous company, so ones experience varies widely depending on
the group and management in ones current group. While Fidelitys culture
can be corporate, most people are intelligent, motivated and team
players. Compensation is pretty good, too, insiders reportif youre willing
to wait it out. It takes time to build up your reputation, and many of the
benefits here do not go into effect until after one year at the company,
contacts say. However, the longer you stay, the more contacts you make, and
if you are a good performer, you will be rewarded with higher raises and
bonuses than standardsometimes much higher. And in time and with
great performance, the payouts can be enormous, even though the base
salaries can at first seem a little low. The other perks Fidelity offers are
shares that are given out on an annual basissometimes biannuallyonly
to employees that they wish to reward. Although these shares are not stock,
they are virtual shares at Fidelity that are valued based upon Fidelitys
performance, each share per year can be worth $100 to $400. And
higher-level shares pay out more frequentlythe higher your level or
performance, the higher the number of shares you can receive.

Meet the challenge


Opportunities to advance are great. Whenever I felt the need for a
challenge, management always offered me opportunities to expand my skill
set by transitioning into a new role. However, the corporate culture here
does make advancement a little slow, given that there are so many
employees, and there are a lot of HR rules around promotions and raises
with a few exceptions except for superstars. Others say there are so many
opportunities to move around and move up. The place is a real meritocracy,
based on the accuracy of your recommendations. Also, there is no need to
have an MBA to get promoted if you make great calls. Yet another says,
The firm has a great network of opportunities and encourages employees to
move from one job to the next within the firm.
Still, says a source, there is no career path set up so you can get into a
position of interest. Another agrees with the sentiment, noting that getting
off the ground floor takes some time. And moving to the portfolio
management arm or the venture capital side is still out of the question.
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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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In time and with great


performance, the payouts
can be enormous, even
though the base salaries
can at first seem a little
low.
Fildelity insider

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Lazard Asset Management

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Outstanding private bank


Snobby
Managed accounts guru
Demanding
Great Euro funds

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THE SCOOP

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.

Past and present


Lazard Asset Managements parent company can trace its roots back to 1848,
when three brothers (Alexandre, Simon and Lazare Lazard) created a dry
goods company in New Orleans. The Lazard brothers moved their company
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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.

An inside story (or two)


In 2007, much to the chagrin of the firm, former Lazard banker William D.
Cohan released his tale of the banks mysterious roots in his book The Last
Tycoons: The Secret History of Lazard Frres & Co. Cohan, who began his
career as a journalist and then spent six years working for Lazard, details his
experience and tells stories regarding the banks beginnings to its present-day
dealingsand including everything from extramarital affairs to murdered
bankers in the process. The bank has called the book substantially
inaccurate, adding that it has nothing to do with the present state of Lazard
or its business. Publisher Doubleday shot back that the tome gives a wellrounded, historical portrait of the bank.

Praise from the press


Lazards funds seem to continue to dazzle the press. In January 2007, Forbes
magazine ranked Lazard International Small Cap foreign fund as a best
buy, and in the same month, The Wall Street Journal listed LAMs large-cap
fund as a category king. Wealth Manager magazine also had praise for
Lazard. In a September 2006 article entitled Best of Breed, the publication
ranked the firms emerging markets fund as No. 1 on its list, adding that LAM

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achieved a steady record by focusing on stable companies selling at modest


prices.

Full steam ahead


Wasserstein was assured the chance to see through his plans to expand the
company through at least the end of 2012, due to a contract he signed in 2007
extending the term of his CEO role past its previous end date of 2008.
Wassersteins new base salary will be $900,000, less than his previous salary
of $4.8 million a year. However, Wassersteins new compensation comes in
the form of 2.7 million restricted stock units, which will be fully vested when
he ends his term as chief executive in 2012. Wasserstein will also receive
incentive compensation in his role as CEO. In 2007, Wassersteins bonus was
$36.2 million of stock, which will be redeemable in March 2011.

GETTING HIRED

From New York to Paris


Lazards asset management group employs a broad range of professionals,
including research analysts and portfolio managers, sales and marketing
professionals, and those who support the group from an operational
perspective. If you think you have what it takes, go to the careers link at
www.lazard.com for more information. Lazard recommends sending
resumes and cover letters for North American asset management positions to
LAMRecruiting@Lazard.com. Those interested in asset management jobs in
Paris can send their information to recruitment.france@lazard.fr.
For full-time hires, LAM does a considerable amount of lateral recruiting. It
also recruits from leading universities and business schools throughout the
U.S. and Europe. In addition, LAM recruits for summer interns, which
typically work for 10 to 12 weeks between their third and fourth years of
undergraduate school. LAM says it likes to hire interns who have some
relevant experience or who have demonstrated an interest in investment
management.

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LAM 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.

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V A U L T

15 UBS

PRESTIGE
RANKING

1285 Avenue of the Americas


New York, NY 10019
Phone: (212) 713-2000
Fax: (212) 713-9818
www.ubs.com/1/e/globalam
financialservicesinc.ubs.com

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

See career candidates at


www.ubs.com

Employer Type: Business Units of


UBS AG
CEO, UBS AG: Marcel Rohner
CEO, UBS Wealth Management
Americas: Marten S. Hoekstra
Head, UBS Global Asset
Management, Americas: Kai
Sotorp
No. of Employees: 19,000+**
No. of Offices: 440+***
**Wealth management, U.S.
***Branch offices

They dont pay us enough


The lack of guidance
The office isnt the best

EMPLOYMENT CONTACT

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Top of the line


Hurting lately
Strong international reputation,
improving domestic business
Whos left?
Great private bank

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UBS

THE SCOOP

Global asset aspirations


One of the largest financial services firms in the world, UBS AG offers a full
range of investment banking and investment management services and has
over 80,000 employees worldwide. Its business is divided into four global
groups: UBS Global Asset Management, UBS Investment Bank, UBS Global
Wealth Management and Business Banking, and Corporate Center. Wealth
management services in the U.S. are provided by UBS Wealth Management
US; this arm of the practice has more than 19,000 employees, including over
8,000 financial advisors, and over $743 billion in client assets as of February
2008.
UBS Global Asset Management is one of the largest asset managers in the
world, with over 3,600 employees in 25 countries and American headquarters
in Chicago. As of December 31, 2007, UBS Global Asset Management
boasted combined institutional and wholesale assets of $786 billion.
In January 2007, UBS Global Asset Management signed an agreement to
acquire Standard Chartereds mutual funds management business in India for
CHF147 million. UBS expected Standard Chartereds mutual funds
management business in India to have assets under management of around
$3.3 billion at the time the deal closes. At the time, Standard Charter
managed 16 mutual funds, 10 of which were fixed income, two asset
allocation and four in equities. The equity funds represented around 19
percent of total assets under management.

No Paine, big gain


UBS debuted on the New York Stock Exchange in 2000, part of the Swiss
corporations plan to increase its presenceand acquisitions powerin the
U.S. Shortly thereafter, UBS spent $11.8 billion on brokerage firm
PaineWebber; by 2002, both the UBS PaineWebber and SBC Warburg names
were officially scrapped. SBC Warburg became what is now UBS Investment
Bank and the former PaineWebber became UBS Financial Services, an
operating unit of UBSs global wealth management and business banking
practice in the U.S. UBS said the renaming was an effort to present a united
front and a one firm branding for its businesses around the world.
The purchase of PaineWebber was a significant coup in UBSs wealth
management practice in North Americaat the time of the acquisition
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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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Shake-up at the top


Two months after the announcement of DRCMs reintegration into UBS
Investment Bank, CEO Peter Wuffli abruptly relinquished his functions at
UBS, and Marcel Rohner, former CEO and chairman of UBS Global Wealth
Management and Business Banking, was appointed as UBSs new head.
Raoul Weil was appointed to succeed him as head of global wealth
management.
But that wasnt the end of changes at the top in 2007. At the end of the third
quarter, UBS joined competitors like Merrill Lynch, who also fired top
executives as a result of dismal earnings. Clive Standish, UBSs CFO, and
Huw Jenkins, chairman and CEO of UBS Investment Bank, were ousted in
October 2007.

Third quarter disaster


The U.S. subprime market took a bite out of many banking giants bottom
lines in the third quarter of 2007, and UBS was no different. The Swiss
company reported net losses of CHF 726 million and wrote down CHF 4.2
billion, negating any of its fixed income division profits from the first half of
2007.
Our third quarter result was unquestionably disappointing, CEO Marcel
Rohner said in a press release. However, we have introduced a number of
measures to improve performance. With the new management team, we are
implementing changes to address the weaknesses that led to the losses.
Those changes included the firings of Jenkins and Standish.

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.

Raising capital overseas


When the dust of 2007 settled, UBSs write-downs totaled approximately
CHF 18.4 billion, prompting the bank to seek capital injections from foreign
investors. In December 2007, UBS announced that the Government of
Singapore Investment Corp. (GIC) was willing to invest CHF 11 billion for a
9 percent stake in the bank. At the same time, an anonymous Middle Eastern
investor offered CHF 2 billion for a smaller stake. (Media reports suggested
that the Middle Eastern investor could be a government agency in Oman or
an investment fund in Abu Dhabi.)
These investments, which are subject to approval by regular shareholders,
would include a sale of UBS convertible notes that will convert into ordinary
shares in 2009. A spokesman for the Singapore Investment Corp. said it was
premature to assume that the GIC would wind up holding a seat on UBSs
board, but added that he expected one to be offered.

The streamlining continues


To further scale back its risk-taking activities, in January 2008, UBS closed
its U.S. principal finance unit and reduced the capital base of its real estate
unit by two-thirds. UBS also cut in half its employees who worked in
underwriting, packaging and trading mortgage-related securities. Talking
about the fixed income unit, CEO Rohner said he would continue to examine
and refine our strategy, with the objective of improving efficiency and
returning the area to profitability. However, he warned that 2008 could be
another difficult year.

France grows, India stalls


In February 2008, UBS completed the acquisition of Frances Caisse Centrale
de Reescompte (CCR) Group, which had been announced in October 2007.
CCR, a major French asset and wealth manager, held approximately 13.3
billion of invested assets as of December 31, 2007. UBS paid 387 million
for the company, acquiring both its business and its 190 employees.

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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).

No April Fools joke for UBS


On April 1, 2008, UBS AG announced it would be writing down
approximately CHF 19 billion in losses associated with the U.S. housing
market, adding to the already approximately CHF 18.4 billion it wrote down
in the second half of 2007. UBS said that its latest write-down will ultimately
produce an approximately CHF 12 billion loss for the first quarter of 2008.
In addition, it said that its chairman, Marcel Ospel, would not be standing for
re-election to the board of directors. Peter Kurer, group general counsel of

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UBS and a member of its executive committee, was nominated to succeed


Ospel.

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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recommend starting with the firms Graduates and Interns programUBS


holds regular campus events (and the firm suggests contacting your colleges
career services center to determine whether we will visit your campus).
But even if you get an interview, keep in mind that that the firm is quite
selective with undergraduate hiring as they only interview a handful of people
after receiving hundreds of resumes and there are very limited open spaces
available within the program.

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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OUR SURVEY SAYS

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.

High marks for the higher-ups


Managers are generally supportive and interested in employee development
and very interested in the development of young talent. On the whole,
respondents praise managements openness. All managers I have
encountered have treated entry-level employees with respect and kindness,
says one insider. Another contact raves, I have found some wonderful
mentors who go out of their way to make sure Im involved and challenged
in my work. Not only are managers committed to their employees, but
theres also an overall helpful atmosphere where we feel like we are all in
this together. And many managers and subordinates have very friendly,
informal relationships where higher-level people will go out of their way to
help you or give you a contact who can.
If youre hoping for a boss whos also a mentor, you may be in luck. Many
managers will even try to informally mentor subordinates and help develop
talent where they can, says one insider. But getting an exceptional manager
might come down to luck of the draw. One insider reports, I have a great
manager, but many people dont. Another agrees, adding, Most managers
treat me very well and with respect, but many of my colleagues have not had
the same respect given.

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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.

The customary cube


As far as office space goes, its cubicles for anyone whos not an executive
director, which is fairly standard, although most facilities are equipped with
cafeteria and a $40 per month gym. While some say the space is fine,
others admit the cubicles are antisocial, dont provide a good environment
for team building and collaboration, and dont promote innovation.
Meanwhile, those stationed in the firms Weehawken, N.J., office say the
location is out of the way, not very appealing visually and essentially
not decorated.

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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Many managers will even


try to informally mentor
subordinates.
UBS insider

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PRESTIGE
RANKING

Credit Suisses Asset


Management Business

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

Employer Type: Subsidiary of


Credit Suisse Group
CEO, Credit Suisse: Brady W.
Dougan
Chairman & CEO, Asset
Management: Robert Shafir
No. of Employees: 48,100*
No. of Offices: 57*
*Credit Suisse Group

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Extremely competitive
Lack of focus
Solid products
Conceited

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THE SCOOP

Restructured and reliable


With 57 offices spanning across 26 different countries, Credit Suisses asset
management business operates as a globally integrated network. It provides
asset management services, makes private equity investments and manages
private equity funds for institutional, mutual funds and private investors. It
also provides financial advisory services to high-net-worth individuals and
corporate investors.
Asset management is one of three businesses within Credit Suisse Group.
This structure, created in January 2006, has resulted in a more focused
franchise that offers global reach and has been relatively successful, despite
an unsteady year in worldwide financial markets. The asset management
business of Credit Suisse has shown nothing but consistent growth for this
banking giant, and continues to be a backbone of reliability.
Credit Suisses asset management business offers products across the full
spectrum of investment classes, ranging from equities, fixed income and
multiple asset-class products to alternative investments such as real estate,
hedge funds, private equity and volatility management. The unit manages
portfolios, mutual funds and other investment vehicles governments,
institutions, corporations and private individuals.
In April 2008, Robert Shafir was named the new CEO of Credit Suisses asset
management business. Shafir, also the CEO of Credit Suisse Americas, is a
former Lehman Brothers banker who joined Credit Suisse in August 2007.
He succeeded David Blumer, who stepped down to become head of financial
markets at Swiss Re.

Zurich to Boston, and everywhere in between


The integration of Credit Suisses businesses also included Credit Suisses
global investment banking operations, formerly known as Credit Suisse First
Boston. While its parent company can trace its Swiss roots back 150 years,
First Bostons history goes back more than 70 years to the founding of the
First National Bank of Boston with the passing of the Glass-Steagall Act of
1932. By 1970, First Boston was considered an integral member of Wall
Streets prestigious bulge bracket of the most successful and largest securities
firms.

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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.

Strategies paying off


Credit Suisse often takes a backseat to their major domestic competitor, UBS,
which is the largest of the European banks. But recently, it was awarded the
prestigious honor of The Bankers Global Investment Bank of the Year and
cited specifically its restructuring efforts as a reason for their revitalization.
It also took home the awards for Best Leveraged Finance House, Best High
Yield Bond House and Best Convertibles House.
Honors from various other magazines include Buyouts Large Lender of the
Year and Finanical News Best Direct Market Access and Algorithmic
Trading Tools for the second year in a row. The firm was also notably given
the honor of Euromoneys Best Bank in Switzerland and Best Investment
Bank in Switzerland.
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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.

Wooing the wealthy


With the rise of personal wealth growing in the US, this Swiss banking
company hopes to cash in on managing the fortunes of ultra-high-net-worth
Americans. In October 2007, it opened a private banking office in Houston,
Tex., which management hopes will extend the firms influence even further
into the wallets of wealthy Americans. The office in Houston will be run by
Jay ONeill, who previously worked at Merrill Lynch where he was the
market leader for the firms private banking and investment group in the New
England and Mid-Atlantic regions.
In the past two years, Credit Suisse has opened offices in Irvine, Calif.;
Philadelphia, Pa.; Greenwich, Conn.; Detriot, Mich.; and Rye Brook, N.Y.
The openings were all attempts to garner the attention of the elite audience
that resides in these key spots. Credit Suisse currently has 17 offices in the
U.S. that offer private banking services.

Down, but not out


In February 2008, Credit Suisse announced that it wrote down $1.88 billion
in subprime mortgage-related losses, simultaneously posting a 2007 fourth
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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.

GETTING HIRED

Selective and competitive


Landing a job at Credit Suisse is no cakewalk, insiders say. Credit Suisse is
a world-class financial institution that attracts some of the best talent in the
world, one respondent explains. Naturally, competition for employment is
high. A current vice president says his first job at the bank came after an
extensive interview process, including multiple visits and nearly one full day
of interviews. Meeting with a number of different people throughout the
recruiting process is to be expected.
Others say the firms selectivity can vary by location and division. The New
York office is said to be especially tough, but across the board, Credit Suisse
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is very selective on both personality traits and knowledge of the business


area you are targeting. Credit Suisse does the bulk of its recruiting at toptier business schools, and also takes lateral hires and experienced
candidates. A campus recruiting web site (www.credit-suisse.com\careers)
posts information about openings for full-time positions and internships.

Get ready to shake hands


Job offers are preceded by lots of meeting and greeting. I met with nine
members of the asset management division on three separate days, a current
staffer recalls. Since I was competing for a sales position, I met with various
members of the sales team and portfolio management. Most of the questions
revolved around my related educational and professional experiences.
Another source reports eight interviews, including multiple interviews with
my current manager. I met with representatives from distribution, marketing,
portfolio management, legal and operations.
A few sources say they had fewer rounds to go through. I had two
interviews, says an associate. The first with an HR rep, my direct manager
and a colleague on the team. And my second was with my direct manager,
her manager and a consultant. Another who joined the firm after college
says he attended a number of recruiting events on and off campus before
being invited for three interviews. Some recruiting events are said to be
invite-only, but Credit Suisse also offers informational interviews for
candidates who want to know more about the firm.
Questions for most candidates to expect include, Why are you interested in
private banking? and How does your background and experience lend itself
to this business?. An experienced hire recalls being asked, Why are you
looking to leave your current position? Some interviewers may throw in
scenario questions such as, Im 40 years old, have two kids and $10
million net worth. How would you allocate my portfolio?

OUR SURVEY SAYS

Working toward One


The atmosphere at Credit Suisse is professional but not restrictive, insiders
say. Whats more, the entrepreneurial spirit is fostered. The result is a
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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.

Great training, little time


Insiders like to brag that Credit Suisse has one of the best training programs
around. The firm understands the importance of its human capital and
provides frequent educational seminars for its employees. Product training
is offered by specialists who are phenomenally knowledgeable and always
accessible for answering specifics on products and situations. The only
drawback, explains one source, is that theres sometimes no time to take any
classes because of staffing shortages.
Credit Suisse managers get high marks for being there to guide you when
you need it. Its a very professional environment, and mutual respect
between managers and subordinates is considered the norm. Respondents
say they enjoy a sense of cooperation and teamwork with peers and bosses
alike.

The word on hours


Sources say their hours vary depending on department and title. Those
working in sales report working 40 hours a weekor even lessso its no
surprise they call the workload quite manageable. At the other end of the
spectrum, a relationship manager says he averages 70 or 80 hours each week.

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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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CalPERS

PRESTIGE
RANKING

Lincoln Plaza, 400 P Street


Sacramento, CA 95814
Phone: (916) 795-3829
Fax: (916) 795-4001
www.calpers.ca.gov

KEY COMPETITORS

DEPARTMENTS

UPPER

Actuarial & Employer Services


Branch
Audit Services
Benefit Services
Fiscal Services
Government Affairs
Health Benefit Services
Investments
Member Services

Good diversity efforts

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

King of pension plans


Archaic
Responsible, intelligent
Not as sharp as perceived
Activist investors, massive

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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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allegedly allowed floor traders to engage in investment practices that hurt


investors, and banned investment of its funds in nine companies that do
business in Sudan until the government of that country ends the ongoing
atrocities in its northwest Darfur region.
Though its been advocating corporate governance since 1984, CalPERS has
recently emerged as a force to be reckoned with when it comes to the field of
pushing businesses to hit their benchmarks. It takes its responsibilities in that
department so seriously that in 2002 it formed an official Corporate
Governance Investment Program (CGI), which focuses on highly
concentrated portfolios and actively engages in the business practices of
corporations which they feel are underperforming. This program has $5.4
billion dollars of capital invested amongst 12 external corporate governance
managers and co-investment partners.
Another branch of CalPERS corporate governance is its public identification
of companies that are not meeting their profit expectations. Every year,
CalPERS issues a list of mismanaged organizations, which it calls the
CalPERS Focus Listmade up of the poorest long-term performers in the
firms domestic stock portfolio. The companies that appeared on the focus
list in 2007 are Corinthian Colleges, Dollar Tree Stores, EMC, International
Paper, Kellwood, Eli Lilly & Co., Marsh & McLennan, Sanmina-SCI, Sara
Lee, Tenet Healthcare and Tribune Co.

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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be disruptive, divisive and expensive for the company. CalPERS is so


devoted to making inroads on the corporate board of United Healthcare, it set
up its first ever web site to support an initiative of this kind, which can be
found at healunitedhealthgroup.com.
In October 2007, CalPERS started applying pressure of a similar kind to the
Sara Lee, one of the few companies that does not give its shareholders the
right to amend bylaws by a majority vote. It was backed by four proxy
advisory companies in its battle against Sara Lee: Egan-Jones, Glass Lewis,
Institutional Shareholders Services and Proxy Governance. On October 25th,
an overwhelming 81 percent of shareholders voted on a nonbinding
resolution that called for Sara Lee to change its voting laws. CalPERS owns
4.2 million shares of Sara Lee stock.

Footloose and fee free?


CalPERS could become a trailblazer in the fee structure of asset management
companies if it approves a new proposal that would eliminate base fees for
money managers, only paying the managers whose returns beat the index.
CalPERSs present system is already partially performance-based. It
provides managers performing beyond their benchmarks with a bonus fee, in
addition to a small fee that is charged up front. Chief Investment Officer
Russell Read and Senior Investment Officer Christianna Wood wrote in a
memo to CalPERSs investment committee that the reason for the proposed
change was that the external manager program overall is not performing up
to expectations. In the new system, money managers would not be paid a
fee unless they beat the benchmark index by half a percentage point to one
percentage point.

GETTING HIRED

Bring your No. 2 pencil


Brush up on your test-taking skills before you consider applying to CalPERS.
Because its is a state agency, its employees are civil servants. Therefore,
potential employees must take an exam. Its a very structured process, says
one source. The State Personnel Board (SPB) administers tests for most
positions, but CalPERS oversees the testing and hiring process itself for some

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of the banking, actuarial and IT openings. CalPERS offers continuous


testing, while the SPB administers tests on an as-needed basis.
One insider says the firm recruits nationally for certain professional
classifications; mainly locally for technical and clerical positions. The
agency notes that there are pension actuarial programs, investment
management and benefit program specialist positions open at the
Sacramento headquarters. For more information, you can contact the firms
HR department at (916) 326-3065 or go to CalPERS.com/about/career, where
you can also access a detailed listing of the firms extensive benefits,
including health, dental and vision plans, as well as retirement benefits and a
deferred compensation program.
There are usually two to three rounds of interviews involved once youre
called in. These meetings can be with the hiring manager and sometimes
with HR, who makes the initial screening and passes on the resumes to the
appropriate hiring divisions. And be sure to use your connections (if you
happen to have any). One insider says, If you know someone with the
organization, submit your resume directly to the hiring group and submit an
application to HR. Candidates who are local are definitely preferred. In
fact, out-of-state applicants are not encouraged, and CalPERS usually
doesnt pay for the interviewing expenses.

OUR SURVEY SAYS

Start your career engine


CalPERS is a good place to start your career if you are interested in working
in investments. Many employees are from Sacramento or Northern
California and work for CalPERS because its the only large investment
organization other than CalSTRS (California State Teachers Retirement
System) in Sacramento. Although there are quite a few colleagues with a
state worker mentality, employees are also generally easy to get along
with and not too competitive. But again, since CalPERS is a state
agency, theres also a lot of bureaucracy and politics involved. Due to
this, promotions are not standardized across the units, so check with
people you know in the organization before working for a certain group.
The good news? It is difficult to get fired. The not-so-good news?

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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.

Getting better and better


The agency has taken steps in recent years to promote diversity inside and
outside of the workplace. In June 2007, CalPERS joined the California
Aspire Achieve Lead Pipeline Project, a diversity effort that promotes legal,
financial and IT careers to diverse youth. CalPERS CEO Fred Buenrostro
said that the program aims to make a difference in encouraging, guiding and
mentoring young people to pursue careers that they might not have
considered. Sources say the firm is also doing a great job of hiring
minorities and women within the workplace. One insider estimates that
women make up about 70 percent of the staff.

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AllianceBernstein

PRESTIGE
RANKING

1345 Avenue of the Americas


New York, NY 10105
Phone: (212) 969-1000
Fax: (212) 969-2229
www.alliancebernstein.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Rising Star
Bland
Strong Research
Macho
Great Reputation

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THE SCOOP

Rise to the top


Founded in 1962, AllianceBernstein was created to be the investment
management unit of Donaldson, Lufkin & Jenrette, with the intention of
specializing in management of pension fund assets. In 1978, the company
introduced its first money market fund and opened its first international office
in London. Ten years later, the company went public as a master limited
partnership and was listed on the New York Stock Exchange. In the 1990s,
AllianceBernstein went on a shopping spree, acquiring Equitable Capital
Management, Shields Asset Management and Whittingdale Holdings
Limited. In 2000, the company bought Sanford C. Bernstein & Co., which
invests for institutions and high-net-worth individuals. In 2006, the company
changed its name from Alliance Capital Management to Alliance Bernstein,
trading its New York Stock Exchange symbol AC for AB.
Today, AllianceBernstein represents the third-largest publicly traded asset
management firm, offering a slew of mutual funds. The company has more
than 70 domestic and international funds and offers individuals managed
accounts, retirement plans and college savings plans. The firms client list
includes big U.S. public and private employee benefit plans, foundations,
public employee retirement funds, pension funds, endowments, banks,
insurance companies and high-net-worth individuals. Through its Sanford C.
Bernstein subsidiary, the firm also provides in-depth research, portfolio
strategy and trade execution to the institutional investment community. As of
February 29, 2008, the firm managed $751 billion in assets ($102 billion for
private clients, $478 billion for institutional investors and $166 billion for
retail investors).
For its 2007 fiscal year, AllianceBernstein booked total revenue of $4.545
billion, a 14.6 increase versus 2006. Net income, meanwhile, came in at
$379.9 million, a 15.7 percent increase versus the previous year.

Coming into focus


In the summer of 2003, AllianceBernstein tapped a new chief executive,
Lewis Sanders, who previously held vice chairman and chief investment
officer posts at the firm. Sanders replaced Bruce Calvert, who remained on
as the companys chairman until the end of 2004, when Sanders assumed the
extra role. Shortly after taking the helm, Sanders announced the company
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needed refocusing. To start, in an attempt to refocus AllianceBernsteins


business on value and growth equity and fixed income, Sanders sold the cash
management business to asset manager Federated Investors in October 2004.
Under the agreement, Federated acquired the assets under management of 22
third-party-distributed money market funds of Alliance Capital Cash
Management Services, which totaled approximately $29 billion at September
30, 2004.
High on Sanders list of priorities was transforming the money manager into
an investment research leader. As part of this initiative, AllianceBernstein
formed a team of researchers to analyze strategic changes in technology and
the economy. The firm created another team to concentrate on growth stock,
and yet another team to use quantitative investment research across various
investment disciplines. Furthermore, the new chief set out to shift the
companys focus from promotion to performance, concentrating less on
talking about doing and more on actually doing. Analysts viewed this
improved focus, combined with a diversified asset mix and the continuing
profitability of the private client segment, as a likely catalyst for helping the
firm rebound from legal difficulties and the poor post-2001 investment
environment.
Signs of Sanders vision being realized appeared in June 2005, when the
firms Sanford C. Bernstein subsidiary signed an equity research agreement
with CLSA, the brokerage arm in Asia of Frances largest bank, Credit
Agricole. The two organizations present research to institutional customers.
The operating agreement between the firms leveraged their individual
strengths by allowing the research analysts of each firm to consult each other,
share data, compare macro and micro views, and to produce reports
incorporating each others research.

New retirement portfolios


In April 2007, AllianceBernstein announced the creation of customizable
target-date retirement portfolios for large, defined contribution plans. The
portfolios offer plan sponsors the operational and reporting simplicity of
prepackaged strategies but allow for customization, including options how
much of the portfolio is actively or passively managed. Each target-date
retirement portfolio in the series is a daily-priced, separate account that
invests in a set of collective investment trusts representing the component
asset classes.

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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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Pisarkiewicz formerly ran the companys structured equities business before


leaving to take on the top asset management position at Bank of New York in
May 2003. In April 2007, AllianceBernstein appointed Dan Darfler and
Kathleen Dunlap to the position of director, defined contribution advisor,
overseeing the East Cost and West Coast regions, respectively. The
appointments signify a commitment to enhance AllianceBernsteins defined
contribution specialist team. Prior to joining AllianceBernstein, Darfler
served as vice president of institutional sales at J.P. Morgan Retirement Plan
Services. Dunlap was a managing director at Barclays Global Investors for
more than a decade.

Not too bad


The firms fourth quarter 2007 results werent pretty, but they werent bad
given the poor market conditions. The firm experienced a 17 percent drop in
earnings versus 2006 fourth quarter results. However, the firm experienced
net inflows of $8.5 billion for the quarter, pulling up net inflows on the year
to $32.2 billion, consisting of inflows from institutional investments of $17.7
billion, $8.6 billion from private clients and $5.9 billion from retail accounts.
In an earnings release, CEO Sanders called the investment results for the full
year 2007 mixed, amid considerable market turbulence. He cited strong
returns in equity services, a difficult year for value equity services,
respectable results in global fixed income, with the firms weakest
returns coming in diversified hedge fund services, which performed poorly
as risk premiums rose sharply in all segments of the capital markets in the
second half of the year.

GETTING HIRED

Watch and learn


Whether youre a college graduate or an experienced professional, you can
check out the careers tab at www.alliancebernstein.com, which offers a number
of video testimonials from current employees, in-depth descriptions of positions
and job listings for all levels of experience. Candidates can create an account on
the site and submit a cover letter and resume. The firm notes that applicants can
expect an e-mail notification regarding the status of their application within a
maximum of three weeks.
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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.

OUR SURVEY SAYS

Welcome to corporate America


Its as corporate as it gets at AllianceBernstein, but thats not always
something to frown upon. After all, they do make a lot of money, and the
wealth is somewhat distributed to the employees as well as executives when
it comes to bonuses, 401(k) matching and yearly salary increases. Raises
arent too shabby, either. One insider reports being offered a 7 percent raise
within nine months of my start date as well as a 10 percent bonus at the end
of the year. Perks also receive props from insiders, who laud the 15 days
of vacation, three personal days, and office perks, such as free cereal,
coffee, soft drinks, fruit and juice. The New York office cafeteria is
delightful, and you can find gourmet lunches of every variety prepared in
front of you by chefs for about $7.
Hours spent at the office are not bad, but you should probably make sure
youre prompt. One contact relates a story of the very troubling strict
enforcement of being at your desk no later than 9 a.m., adding, I was called
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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.

The face of finance


And the talent pool runs deep at the firm. AB is quite a diverse place to
work, and you will indeed find people from all over the world. Still, some
think its mostly lip service. One contact says, There was some diversity, but
I had the feeling it was more to say that they were diverse than actually caring
about diversity. But overall, insiders say that the future is bright for
AllianceBernstein, which continues to produce results for all their clients.
One insider puts it plainly: I think AB is a great company and I want to stick
with them.

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There is a lot of room for


advancement.
AllianceBernstein insider

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19

The Vanguard Group

PRESTIGE
RANKING

100 Vanguard Boulevard


Valley Forge, PA 19355
Phone: (610) 648-6000
Fax: (610) 669-6605
www.vanguard.com

UPPERS

DIVISIONS

DOWNERS

Client Relationship Group


Financial
Fixed Income Group
Human Resources
Information Technology
International
Investment Programs & Services
Legal
Planning & Development
Quantitative Equity Group

Formal business attire


Culture perhaps too laid-back at
lower levels

The company is doing great


competitively speaking
People are very nice

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Mutual fund king


Too self-righteous
Well respected
Good, but getting watered down

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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.

New chief named


One of Vanguards biggest recent developments came in its top management
ranks. In March 2008, F. William McNabb III was named the new president
and director of Vanguard as well as current-CEO Jack Brennans successor.
McNabb, who will takeover CEO duties by March 2009, joined Vanguard in
1986. Most recently, he worked as managing director, overseeing Vanguards
institutional and international businesses, which include about $700 billion in
assets under management. Brennan, Vanguards president since 1989 and
CEO since 1996, will stay on with the firm (once McNabb takes over his
chief duties) as chairman of the board of directors.

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One of these things is not like the others


Founder John C. Bogle knew he was taking a different track in mutual funds
when he launched Vanguardthe Vanguard Experiment, he called it.
Bogle wanted to find ways to cut administrative costs in the mutual fund
industry; as a result, Vanguards model is unlike that of other mutual funds.
Instead of being controlled by an external management company, Vanguard is
owned by its shareholders and its funds are independent investment
companies that in turn own the Vanguard Group. This lowers the funds
operating expenses by cutting middleman fees, and Vanguard further lowers
the bottom line by spending very little on marketing. As for the savings, well,
those go to the customers who pay low fees. Vanguards top executives have
been vocal in their critique of the mutual fund industrys habit of charging
high fees and hitting customers with hidden costs.

Join the crew


If you work at Vanguard, youre not an employee, youre a crew member.
All employees have been called crew members from day one; the firm itself
was named for the ship British admiral Sir Horatio Nelson commanded in the
Napoleonic Wars. This pioneering spirit led Vanguard to create its First Index
Investment Trust in 1976 (the First Index is now known as the Vanguard 500
Index Fund). It was the first indexed mutual fund to be made available to
individual investors, and in 1977 Vanguard stopped relying on outside
brokers completely and began marketing directly to investors.

Taking home the hardware


Aside from winning trophies for its funds, Vanguard wins them for its culture.
In 2007, CollegeGrad.com recognized the company as one of the Top 100
Entry Level Employers in the U.S., and BusinessWeek placed Vanguard at No.
33 on its Best Places to Launch a Career list. Also in 2007, for the third year
in a row, Fortune named Vanguard one of the Top 100 Employers for MBAs.
In addition, Vanguard was recognized as a Best Employer for Age Diversity
by Jobs4Point0.com in 2007, and AARP rated the firm No. 42 on its 100 Best
Employers for Workers Over 50, meaning that there will be plenty of
experienced vets to teach the entry-level crew the ropes.

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GETTING HIRED

Nationwide talent search


The career opportunities section of www.vanguard.com has a career search
tool that lets applicants submit resumes online. The site also has information
about career fairs, college recruiting activities, culture and benefits, as well as
its information technology department, which has been recognized as a leader
in its field by Computerworld, CIO, InformationWeek and Forbes.
And if youre in right place at the right time, the firm may come to you.
Vanguard notes that it travels near and far to meet talented people for
recruitment. You can check out recruitment listings under career events to
see when theyre coming to your town. But be aware that it is easier to get
ahead from the insidewhenever possible, Vanguard fills open positions
internally, the firm notes.
Vanguard offers full-time, paid summer internships in its financial operations,
client relations and technology departments in addition to hosting summer
MBA programs within a number of business units. Vanguard offers recent
college graduates full-time, rotational programs designed to provide an
intensive work-training experience across every aspect of a particular
discipline. The companys four specialty programs cover advanced-level
work-study in client relations, finance, management and information
technology. Tapping one of Vanguards crew members is a good way to get
in the door considering the companys employee-referral bonus program,
which awards up to $3,000 to workers who recommend would-be employees.

When you want to go to the principals office


The interviewing process can be extensive, warn insiders. Typically youll
meet with three to four people, including one from HR, the actual boss you
would be working for, a co-worker, maybe a supervisor in the department,
says one source. Another says, If selected, you will first meet with the HR
manager of the hiring department. Next you will meet with the
supervisor/manager for the interview. If you pass and meet all the
qualifications of the job, your last interview will be with the principal of the
department.

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OUR SURVEY SAYS

Great place to work


Insiders say Vanguard is a good place to build a career. Its a great place to
work, says one source, and people are very nice. One source says, It is
quickly gaining on its largest competitors and will be No. 1 in the industry in a
few years. Indeed, says another, The company is doing great, competitively
speaking, and, overall, its a good company to work for.
I have nothing but good things to say about Vanguard, says one respondent
who started at Vanguard straight out of college. Ive been with the company
for a little over five years and have been promoted three times. Another praises
Vanguards relaxed but stimulating culture. The climate is very laid-back and,
at times, maybe too much so among the lower ranks, he says. However, as
you progress up the organization to more senior levels, there is a level of
competition for funding and highly skilled employees. Overall, though, it is a
very supportive environment and challenging atmosphere. Upper management
is approachable, say sources. Independent thinking is encouraged, says one
insider. The one thing that received complaints is the firms dress code. Many
insiders groan about the formal business attire (with business casual Fridays).
Insiders say the opportunities for advancement in the AIM program are
almost endless. The company really looks to retain these employees,
giving them excellent salary and benefit packages and grooming them to
be future leaders of the company. Of the programs pay, one source says,
The salary and package is excellent, and pay is even more impressive when
you factor in the amazing benefits, emphasis on work/life balance and cost of
living compared to competitors in New York City.

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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It is quickly gaining on its


largest competitors and
will be No. 1 in the
industry in a few years.
Vanguard insider

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V A U L T

20
PRESTIGE
RANKING

HSBC North America


Holdings

2700 Sanders Road


Prospect Heights, IL 60070
Phone: (847) 564-5000
www.hsbcusa.com

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

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Great global firm


European-focused
Expanding in US
Could be a big player but arent

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THE SCOOP

Organizing North America


HSBC North America Holdings, a subsidiary of London-based HSBC
Holdings, was formed in 2004 as an umbrella for HSBCs U.S. and Canadian
business. This includes HSBC USA, HSBC Bank Canada and HSBC
Finance (formerly Household International). HSBC North America and its
subsidiaries offer personal and commercial banking services, mortgage
services, consumer finance, private banking, insurance and corporate
investment banking under to more than 60 million customers. It has more
than $300 billion in assets.
Parent company HSBC Holdings is the U.K.s largest banking company, with
total assets of over $2.2 billion as of June 30, 2007. It has 10,000 offices in
82 countries and territories, and provides a full range of financial services,
including consumer and business banking, asset management, investment
banking, securities trading, insurance and leasing to its 125 million
customers.
In March 2003, HSBC finalized its monstrous $14.2 billion acquisition of
Household International, a major provider of consumer finance and a top-10
issuer of credit cards in the U.S. The company later changed the name of that
Household International business to HSBC Finance Corporation.

From riches to rags


The acquisition of Household International paid off well, at first. At the time,
Household was the largest subprime mortgage lender in the U.S., and that
status worked well with HSBCs plans to expand into the U.S. market. The
rising costs of housing fueled profits, and in 2006, HSBC Finance
Corporation led the subprime home loan industry with nearly $53 billion in
loans.
But by early 2007, the U.S. mortgage marketespecially among the
subprime sectorwas in trouble, and so was HSBC Finance Corporation.
HSBC became one of the first banking giants to be severely affected by
delinquent subprime mortgages, and in February 2007, executives announced
that the company had increased its reserves in loans by more than $10.5
million, more than 20 percent higher than analysts predictions.

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The Household fallout


By the time the first quarter of 2007 was finished, Bobby Mehta, head of
HSBC North America and HSBC Finance, was forced to resign. Sandy
Derickson, an HSBC Bank USA executive and vice chairman of HSBC
Finance, also was forced out.
In September 2007, more layoffs came. HSBC announced that it would close
its Decision One Mortgage unit, a division of HSBC Finance that offers
subprime loans. The closing affected 750 employees at offices in South
Carolina, North Carolina and Arizona, and cost the company $65 million in
restructuring as well as an $880 million goodwill impairment to HSBC
Finance.
The company said it would continue to provide service to customers whose
Decision One mortgages hadnt yet been securitized; there are nearly $350
million of those loans in existence.
In November 2007, HSBC announced that it would cease trading subprimebacked securities from the U.S. market entirely, cutting another 120 jobs at
offices around the world.

Going global in the U.S.


As a company with a strong worldwide presence, HSBC wants to show its
global prowess in the U.S., too. In September 2007, HSBC opened a nonIndian resident office in Fremont, Calif., to facilitate banking for the many
Indian customers who are not native to America.
The office will not only allow this specific group to conduct cross-border
transactions but also choose from tailored deposit, mortgage and investment
programs. Today, there are 22 million non-resident Indians around the world
who expect, and indeed demand, global banking expertise and the highest
levels of service, said Manasije Mishra, head of NRI Services, HSBC India,
in a news release. Between the U.S. and India, HSBC currently serves more
than 160,000 NRI customers and the new joined-up solution with HSBC USA
will make this process even more seamless.

Affluent Americans abroad


Following a 2007 survey of its American customers, HSBC discovered that
more than 50 percent had considered living abroad or traveling for extended
periods of time but found that it might be hard to manage their finances while

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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.

Greenest of them all


In the midst of subprime misery, HSBC received a feel-good honor in January
2008, when it was named the most environmentally conscious bank. The firm
nudged out ABN AMRO, Barclays, HBOS and Deutsche Bank, as well as
U.S. powerhouses Citigroup and Bank of America, which ranked sixth and
seventh, respectively. The ranking was performed by Ceres, an
environmental group that urges companies to address climate change. It is
not surprising that HSBC came out on top. In an article about the firms
performance on the Ceres ranking, The New York Times Deal Book pointed
out that HSBC has been carbon neutral since the end of 2005.
And in May 2007, HSBC spearheaded a five-year, $100 million partnership
to respond to the urgent threat of climate change worldwide. The firm was
joined in the coalition by The Climate Group, Earthwatch Institute,
Smithsonian Tropical Research Institute and WWF. The partnershipwhich
involved the largest donations to each of these charities and the largest
donation ever made by a British companyhas significant program targets
and offers transformational support for the environmental charities. The
donation will help to deliver increased capacity, and help the charities to

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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.

GETTING HIRED

Several ways in the door


If youre itching to interact with high-net-worth clients and help them to
manage their portfolios, a position working as a premier relationship
manager via www.hsbcusa.com/careers might be right up your alley.
Openings such as these, plus various other investment management positions
within the firm, are listed along with detailed descriptions on the site.
Candidates can also post a resume on the site and return to update it, and read
about HSBCs extensive employee benefit offerings. At the candidate
preparation section of www.hsbcusa.com/careers, the firm lists resume tips
and other helpful hints for candidates. Candidates can also check out listings
of upcoming recruiting events within the careers site by region. Its also
possible to be contacted by a recruiter for an interview.
Referrals play a big role in landing a job at HSBC. And if you are an
employee at HSBC looking for a job within the company, there is an
intranet-based internal job site that will allow you to search for jobs by
region, business unit, type of position and apply online. Many employees

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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?

Get with the program


HSBC Holdings, the ultimate parent company of HSBC Bank USA and
HSBC Finance, offers several programs to recent graduates, and the firm also
offers internship programs in investment banking and wealth management.
Candidates can apply to all of HSBCs programs either through their school,
primarily U.K. universities, or via its online application form at
www.hsbc.com/graduates. The site also lists details on the companys
graduate recruiting program, as well as a schedule of campus visits and other
career-centered events.

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OUR SURVEY SAYS

Casual culture, but with opportunities


The corporate culture is an informal and entrepreneurial one, and its also
flexible, laid-back, disciplined and open, with great emphasis on
helping others. The firm is growing fast and therefore provides great
opportunities for young analysts. You can quickly assume responsibility
once you demonstrate that you possess the necessary skills, says one source.
You can be involved in all facets of a deal process. Another notes that the
staff is supportive, but adds, There is a lot of bureaucracy.
Nevertheless, office hours are very reasonable and average 45 to 50
hours per week. And though workload can be significantly higher for
urgent deals and when multiple deals are being worked on at the same time,
that seems to be the exception more than the rule. Generally, analysts can
take work home and dont have to stay in the office past 6 p.m. The dress
code is called semiformal. Even so, though ties are not required in the
office, sometimes [theyre] worn for client meetings.

The firms many faces


There are people from all over the world working here. Indeed, diversity
is extreme, which sometimes might lead you to think that diversity takes
precedence over competency. But a New York-based source admits, There
is a need for more diversity in upper management. One insider working in
Toronto says that diversity is virtually nonexistent, adding that currently
all investment professionals are male and generally are Canadian nonminorities.
In addition, the company has merged two or three times in the last five years,
so the corporate culture here is evolving. One way in which the firms said
to be evolving: focusing on the all-important U.S. market. The company
will be expanding in the U.S. over the next couple years, notes one source,
who adds, Its a good company overall, but like any other place, there are
strengths and weaknesses. Another insider says simply, I believe that the
overall outlook is positive.

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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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T. Rowe Price

PRESTIGE
RANKING

100 E. Pratt Street


Baltimore, MD 21202
Phone: (410) 345-2000
Fax: (410) 345-2394
www.troweprice.com

KEY COMPETITORS

DEPARTMENTS

UPPERS

Equity Finance Fixed Income


Global Human Resources Global
Investment Services Individual
Marketing Group Investment
Technology Legal & Compliance
Marketing Communications +
Brand Identity Operations
Retirement Plan Servicess Third
Party Distribution

Highly ethical culture

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

High quality
Bunch of old guys investing
Strong brand
Second tier
Staying true to its roots

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THE SCOOP

The golden rule


Since its founding in 1937 by Thomas Rowe Price Jr., T. Rowe Price has risen
to the top of the U.S. fund-manager ranks. The firm offers a market-leading
family of mutual funds, as well as asset management advisory and discount
brokerage services for individual and institutional investors, retirement plans
and financial intermediaries. Guiding its Baltimore-based operations is a
senior management team that has been with the company for an average of 25
years and a portfolio management team that has, on average, 19 years of
investment experience.
As of March 2008, these managers and advisers managed more than $378.6
billion in assets from offices in the U.S., as well as in Amsterdam, Buenos
Aires, Copenhagen, Hong Kong, London, Luxembourg, Singapore,
Stockholm, Sydney, Tokyo and Toronto. According to the firm, these
advisers apply a disciplined, risk-aware approach to investing, focusing on
diversification, style consistency and fundamental research. T. Rowe Prices
more than 100 mutual funds and separate account strategieswhich include
money-markets, bonds, international securities, and small-, mid- and largecap equitiesare tailored to match investors risk and taxation profiles.

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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operates its investment advisory business through its subsidiaries, namely T.


Rowe Price Associates and T. Rowe Price International.

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.

Exploring new territory


Investing in emerging markets are an essential move for American firms that
want to gain a firm footing in a market other than the struggling domestic one.
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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.

Fourth and first were looking good


On the heels of a solid third quarter, T. Rowe Price turned in an impressive
showing in the fourth quarter of 2007. The firm booked net revenue of $598
million and net income of $191 million, representing increases versus the
2006 fourth quarter of 22 percent and 28 percent, respectively. Overall, for
the full year, the firm increased net revenue by 23 percent to $2.2 billion, and
net income by 27 percent to $670.6 million. Assets under management as of
the end of the year stood at $400 billion, helped by net cash inflows from
investors of $33.8 billion.
And during James A.C. Kennedys first full year as CEO (he took the post on
January 1, 2007), T. Rowes stock price experienced a healthy rise, gaining
more than 30 percent during the year to close at $60.88. (Although the share
price took a dive in the first quarter of 2008, falling to as low as $44.59, it
rebounded in the second quarter and was hovering back around $60 as of May
2008.) Kennedy himself had a quite a nice year, too, taking home $7.9
million in total compensation. Prior to his being named chief executive,
Kennedy served as director of the firms equity division. He first joined the
firm in 1978.
T. Rowes first quarter 2008 earnings were also strong, though the quarter did
provide some difficulties for the firm. Its net income rose to $151.5 million
from $143 million in the 2006 first quarter, and its net revenue increased to

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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.

GETTING HIRED

See if the Price is right


If you go to www.troweprice.com/careers, you can check out information on
the firms fellowship programs, standard job listings and university
recruitment events (which take place everywhere from near its headquarters
in Baltimore all the way to southern Florida). Within the careers section, the
firm also highlights its involvement within its community, such as
encouraging volunteering amongst employees. Potential hires must fit in
with the companys culture. Our company is very keen on preserving our
history, cultural heritage and collegiate make up, says one source. Any
hires are closely screened from a human chemistry point of view.
Insiders say sometimes T. Rowe Price makes applicants jump through hoops.
The interview process is long, says a contact based in Europe who went
through several interviews. A source in the U.S., though, notes that new hires
should expect to go through only two to three interviews. Another U.S.based employee notes that anywhere from one to 10 interviews may be
required. An investment management insider says landing a customer
service job is a good way into the firm. Entry-level customer service
individuals can start with the firm with relative ease, he says, and move into
a different role as is appropriate for their level of performance and interest.
The firm does offer internships, and one insider says, Some internal
internship programs allow the students to meet with upper-level management
for lunch, as well as other growth experiences.

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OUR SURVEY SAYS

Bring the ethics


T. Rowe Price expects a lot from its employees. Insiders say T. Rowe Price
is high on integrity, demanding its employees act in a highly ethical
manner. The firm also places strong trust in upper management and has a
flat organizational structureits not hierarchical. Our culture and
heritage have evolved over the last 60 years and we rarely hire investment
professionals outside our firm, says one source. Instead, we grow our own
analysts through our summer intern program. T. Rowe Price employees
enjoy excellent interaction with managers and subordinates and other
colleagues and a great atmosphere, according to one source. Another
insider says, Although were growing in size, the firm still seems like a
family. The community recognizes it as a strong employer and most
associates are proud of their jobs.
The firms salary structure is a little off, but thats because T. Rowe Price
places greater weight on benefits than salary. Perks and good benefits
include health club reimbursement, generous 401(k), 50 percent match on
the first 4 percent you contribute to the stock plan and 100 percent education
reimbursement. Hours arent bad, overtime is often necessary.

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22

GE Asset Management

PRESTIGE
RANKING

3001 Summer Street


PO Box 7900
Stamford, CT 06904-7900
Phone: (203) 326-2300
www.geam.com

KEY COMPETITORS

DEPARTMENTS

UPPERS

Alternative Investments
Fixed Income
U.S. & International Equities

Seeks out the best in the field

Barclays Global Investors


SEI Investments
State Street

DOWNERS

THE STATS

Household name, but not in asset


management

Employer Type: Subsidiary of GE


President & CEO: Jay Ireland
No. of Employees: 450

EMPLOYMENT CONTACT
See careers section of www.ge.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Solid name, good on a resume


Recent stumbles
High quality
Too cautious

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GE Asset Management

THE SCOOP

Shedding light on asset management


GE Asset Management Incorporated (GEAM) falls under the financial
umbrella of the world-renowned General Electric Company. Fortunes 2007
Most Admired Company, General Electric traces its beginnings to 1878,
when Thomas Alva Edison founded Edison Electric Light Company. GEAM,
which has an 80-year investment heritage, was established in its current
incarnation and registered with the SEC in 1988 to provide investment
management services to institutional and retail investors.
Headquartered in Stamford, Conn., GEAM (along with its subsidiaries) has
more than 450 employees in locations in the U.S., Canada, Europe, China,
Singapore and Japan. Its core investment competencies include U.S. equity,
international equity, emerging markets equity, fixed income, real estate and
private equity. GEAM also offers a family of more than 20 mutual funds
including U.S. growth and value funds, small-cap funds, global and
international equity funds, and fixed-income fundsdesigned to meet a wide
variety of investment needs. As of March 31, 2008, GEAM had $182 billion
in assets under management, a slight slip from the $190 billion it had under
management at the end of 2007.

GE lifer takes over


GE promoted one of its own to the top spot at GEAM in June 2007, naming
Jay Ireland, a 27-year GE vet and former head of NBC Universal Television
Stations and Network Operations, to the president and CEO post. Ireland
succeeded Ronald Pressman, who had only just took over the top spot in July
2006, when longtime CEO John Myers resigned. Pressman was summoned
to take over as president and CEO of GE Real Estate when Michael Pralle
abruptly departed, leaving the top slot open.
A graduate of St. Lawrence University and former U.S. Army officer, Ireland
joined GEs financial management program in 1980. He subsequently joined
the companys corporate audit staff, and later held several financial and
product management leadership positions at GE Plastics in the U.S. and
Europe. He returned to GEs corporate offices to lead investor relations and
its corporate audit staff, and was named CFO of GE Plastics in 1997. He
became president of NBC Television Stations in 1999, and was promoted to

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president of NBC Universal Television Stations and Network Operations in


December 2006.

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.

GETTING HIRED

We bring good jobs to light


Check out www.gecareers.com for GE Asset Management jobs (along, of
course, with a host of other GE gigs across all departments). Within its asset
management group, the firm specifically highlights its financial management
program for new hires, which gives candidates exposure to the asset
management field and puts participants on rotations into as many aspects of
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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.

OUR SURVEY SAYS

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

Franklin Resources, Inc. (Franklin


Templeton Investments)

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

Global company with a familyowned feel


Benefits and amenities are
generous, and the stock purchase
plan is top notch

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Top quality
Short-term minded
Strong individual funds
Needs new energy
Good brand recognition

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Franklin Resources, Inc. (Franklin Templeton Investments)

THE SCOOP

Business Ben would be proud of


Industrious like Ben Franklin himself, Franklin Resourceswhich operates
under the Franklin Templeton Investments nameis the largest publicly
traded mutual fund company in the world. As of April 2008, it had
approximately $591.1 billion in assets under management. Its more than 100
mutual funds are invested in stocks at home and abroad and overseen by
Franklin Resources 8,875 employees operating in nearly 30 countries.
The San Mateo, Calif.-based firm was founded more than 50 years ago in
1947 by Rupert S. Johnson Sr. Originally, the firm specialized in
conservatively managed mutual funds. Its conservative Franklin Income
Fund, for one, was created in 1948 and has paid investors uninterrupted
dividends for 55 years. Its other notable funds include the Templeton Growth
Fund, the Mutual Shares fund and the Mutual Discovery fund.
Today, the firm operates mainly in two segments: its investment management
and related services segment and its banking and finance segment. Through
its investment management arm, Franklins advisors provide investment and
fund administration services, as well as shareholder services, transfer agency,
underwriting, distribution, custodial, trustee and other fiduciary services to
companies and individuals alike. The banking and finance arm provides
retail-banking and consumer-lending services, including securitization,
consumer credit and debit cards, real estate equity lines, and home equity and
mortgage lending.
Franklins clientsthat hail from the U.S., Canada, the Bahamas, Europe,
Asia, South America, Africa and Australiaare serviced via the Franklin,
Templeton, Mutual Series, Bissett and Fiduciary Trust brands.

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.

Out with the old, in with the new (Johnson)


In July 2005, Franklin Resources co-CEO and president, Martin Flanagan,
left the company to run AMVESCAP, a rival mutual fund company. Gregory
Johnson, Flanagans counterpart and son of Franklin Chairman Charles
Johnson, became the companys sole chief executive, solidifying the
Johnsons hold on Franklin Resources. (The Johnsons own more than onethird of the company.) Flanagan and Gregory Johnson had taken on the roles
of co-CEO only a year earlier when Charles Johnson stepped down as CEO
after running the company for 46 years.

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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.

On fire in the first quarter


For its first quarter of fiscal 2008, Franklin booked $518.3 million in net
income, up sharply from the $426.8 million it recorded the previous years
first quarter. Revenue also rose, increasing to $1.685 billion from $1.629
billion a year earlier. The firms positive numbers were even more impressive
given the poor market environment in which many financial firms found
themselves struggling.

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GETTING HIRED

Its a numbers game


As far as snagging the right people, Franklin Resources plays as many of its
cards as it can in order to widen its search. The firm runs national and local
newspaper ads, lists in various trade publications, participates in local job
fairs, attends career days at local universities and colleges, and posts open
positions on several web sites.
If youre called in, it may be wise to plan to be up for anything when it comes
to interviews. You might face a panel interview with each potential hiring
supervisor or manager. Or you may have a series of very intense
interviews with managers and analysts. Or you might luck out and meet
with laid-back, friendly and easygoing staff and have an interview
that is more like a chat. You could even end up having lunch with a vice
president.

OUR SURVEY SAYS

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.

Middle of the pack


In terms of compensation, Franklin is usually in the middle of the pack, says
one contact. Although chances are you can find a bigger number elsewhere,
you should still take into consideration the entire package. For example,
benefits and amenities are generous, and the stock purchase plan is top notch.
One source working out of the San Mateo office reports a gym, surprisingly
good cafeteria and an employee care center. There are other perks too, such as
a bonus, which is up to 12 percent of your salary, says one insider. The
company also pays 90 percent of your health insurance premium, and Franklin
matches 50 percent of the first 6 percent of retirement plan contributions. As
far as paid time off, vacation time for new hires starts with three weeks, and
while there are no stock options for lower-level employees, all employees
can participate in the company stock purchase plan where you purchase
company stock at a discount. Also, tuition reimbursement is offered, but
only if the courses directly apply to the department youre currently working
in. Initial training offered by the company is very good, although
continuing education is mostly web-based.

No harm in trying harder


Franklin, on the whole, does a very good job of hiring and promoting
qualified applicants regardless of gender or ethnic background. Some note,
however, that geography may have quite a bit to do with how hard the firm
tries to diversify their workforce. In South Florida, the company doesnt
have to make a huge effort to recruit minorities, reports one insider. The
labor pool here includes people of many races and nationalities already, so
they just have to hire the best person for the job. Women, however, are
represented at about average rates for corporate America, although upper
levels are still middle-aged, white men. And it sounds like no workplace is
safe from a little bit of good old-fashioned nepotism. One source says, Its
not uncommon to find people who get in due to connections.
In general, though, people seem to be pretty content. The company has been
very good to me over the years, says one insider. I feel very satisfied working
for Franklin, reports another. And the future looks bright, too. The overall
business outlook for the company is great, reports one insider. Franklin should
weather just about any future inclement business climate quite well.

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The company offers


flexible schedules for
employees who need to
pick up kids from day care
or that sort of thing.
Franklin Resources insider

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V A U L T

Capital
24 Pequot
Management

PRESTIGE
RANKING

500 Nyala Farm Road


Westport, CT 06880
Phone: (203) 429-2200
Fax: (203) 429-2400
www.pequotcap.com

KEY COMPETITORS

DEPARTMENTS

UPPERS

Institutional Investments
Private Equity
Private Wealth Management
Venture Capital

Intelligent and likeable colleagues


Extremely competitive
compensation

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

Little to no formal training


Up-or-out mentality

EMPLOYMENT CONTACT
Human Resources
500 Nyala Farm Rd
Westport, CT 06880
Phone: (203) 429-2200

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Great reputation
Very mediocre
Great fund
Who?

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Pequot Capital Management

THE SCOOP

Private success story


Employee-owned Pequot Capital offers funds to institutional and wealthy
private investors. The funds focus primarily on health care services,
technology and small-cap firms for institutional investors and wealthy
individuals. By following its own unique investment strategy, Pequot Capital
Management has become one of the largest hedge funds in the world. While
most large hedge funds take an across-the-board investment approach,
ranging from equities to currency and interest rate hedges, Pequot
(pronounced PEA-kwat) primarily focuses on equity investments ranging
from venture capital and private equity, to positions in mid- to large-cap
public companies, to credit and distressed debt investments.
Pequot, based in Westport, Conn., manages approximately $6.9 billion in
assets, and has 20 funds and approximately 220 employees. The firms
private equity and venture capital arm, Pequot Ventures, has more than $1.8
billion in capital commitments.
In March 2008, Pequot Capital decided to separate its businesses, and Pequot
Ventures will be spun off and be known as FirstMark Capital, LLC, as of June
30, 2008.

The beginning of the firm


The origins of Pequot Capital Management can be traced to the mid-1980s,
when current Pequot Chairman Arthur J. Samberg began the first Pequot Fund
as a unit of Dawson-Henry Capital Management, a money manager in
Southport, Conn. The fund, which was started with $3.5 million, grew quickly,
and the firm was renamed Dawson-Samberg Capital Management in 1989. The
renamed firm became a star during the tech boom of the late 1990s, as Pequot
funds reaped the benefit of being early investors in America Online in 1994 and
securing a chunk of Yahoo! when the company went public in 1996.
In 1999, Samberg and Jonathan T. Dawson went their separate ways when
Pequot was spun off as a separate company with Samberg as the head.
Though the company claimed the split was amicable, some say a division
over the risks Pequot was taking was a factor. Alternative Investment News
claimed that Dawson felt the companys investments were spread too thin and
that Pequot was too tech-heavy, while Samberg pushed for more risk-taking.
Dawson, in turn, left to run Dawson-Giammalva Capital Management.
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Clashing investment theories fueled rumors of a similar divide within Pequot


during late 2001. This time, observers say Samberg was afraid the company
was too big, while Pequot President Daniel C. Benton pushed the firm to
focus on technology companies. Internal conflict notwithstanding, Pequot
continued to grow, with new offices opening in March 2001 in London and
Taiwan. Benton finally left to form Andor Capital Management, while
Samberg remained at Pequot Capital.

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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Not exactly off the hook


In August 2007, two Senate committees issued a report concerning Aguirres
firing. The report urged the SEC to devise a set of rules and procedures to
conduct future investigations. It acknowledged that Pequots trades just
before GE Capitals acquisition of Heller Financialas well as a few other
select instanceswere suspicious and should have been fully investigated.
The committees also agreed that Aguirre did the right thing by pressing for
Macks testimony, whatever his political connections might have been. The
SEC, however, didnt collect Macks testimony until a year later, when the
statute of limitations rendered it useless. One of Aguirres supervisors had
warned him that it would be difficult to get Macks testimony because of
politics. Thinking he was doing the right thing by reporting that supervisor,
Aguirre did just that, and was subsequently fired.
The SEC should have taken Mr. Aguirres allegations seriously, Grassley said
in a statement following the release of the report. Instead, it circled the wagons
and shot the whistle-bloweran all-too-familiar practice in Washington.

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.

On the other hand


Bloomberg reported in October 2007 the same month that Wien sent his
infamous, pessimistic letterthat hedge funds had returned an average of 3.2
percent that month, the biggest gain in nearly two years. According to
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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.

GETTING HIRED

Hitting the mark


Getting your foot in the door at Pequot hasnt changed much with the times
and thats certainly true when it comes to its nonexistent job postings on its site.
But if youre interested in submitting a resume to Pequot, you can try e-mailing
Pvresume@pequotcap.com. And proceed with care, since the firm is known for
being a little picky. Indeed, with less than 200 employees and only four U.S.
offices (located in New York, Massachusetts, Connecticut and South Carolina),
Pequot is a very selective employer. The firm does accept resumes at its
Westport, Conn., headquarters and maintains an e-mail account for employment
questions (HR@pequotcap.com). But youd better be on top of your game if
you want to get in, and fresh graduates are all but excluded from consideration.
The firm rarely takes candidates out of school, and prefers to hire from the
sell side (banking or research) with one to three years of experience.
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Recruits should have a good story ready when interviewing. Candidates


generally need to show some compelling case for why they are specifically
interested in the buy sidetoo many are just looking for better pay and an
escape from the crappy conditions of the sell side. And during the process,
expect around three rounds of interviews that could include everyone from
your potential manager to Pequots CFO.

OUR SURVEY SAYS

Relaxedbut buckled down


The culture receives high marks from insiders, who call it casual and extremely
informal, and say that there are few problems as long as you are productive.
Make sure, then, that you churn out the appropriate output during your 50 to 60
hours in the office (though you may work more, including weekends about once
a month). We live well and enjoy many diversions to help with the inevitable
stressful days when the market moves against us, one insider says. Additionally,
the firm provides great ability to make an impact, the ability to be paid for
performance, intelligent and likeable colleagues, and very little annoying
bureaucracy or hierarchy. I could not imagine a better work environment.
You can also dress casual always, contacts say (as long as its not too casual,
of course). Insiders also boast of the firms ability to retain its staff. Extremely
competitive compensation means that people seldom leave voluntarily.
However, there is somewhat of an up-or-out mentality. Employees either need
to show they can scale to the next level or they risk being asked to leave.

Bring a life vest


One area where Pequot lags is training. Were not really set up for formal
training, which is why we generally prefer not to hire straight out of school.
However, the firm throws new hires into the deep end. We do set up junior
employees with mentors who help them learn the process of modeling,
talking to companies and doing basic research. The support staff, such as it
is, is generally praised. Secretaries are well paid and highly professional.
We do not have elaborate support structures, however, because we dont tend
to produce much in terms of written material.

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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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Great company
Losing luster
Good specialty sector funds
People are good, cultures not so
good
Quirky firm with potential

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ING Investment Management

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.

INGs mixed bag


In February 2008, ING Group reported that its fourth-quarter net profit for
2007 had increased by 18 percent to $3.65 billion, up from about $3.1 billion
in 2006. Although the firm took a $286 million charge connected with its
subprime woes, net profit for the year was up by 20 percent. Its asset
management units sales, meanwhile, jumped 61.3 percent in the fourth
quarter of 2007 compared to the previous years last quarter. The firm noted
that the jump in sales was partially due to the fact that the institutional
markets business was able to take advantage of wider credit spreads in its core
funding agreement and guaranteed investment contract business, resulting in
an eightfold increase in value of new business from this activity. For full
year 2007, however, the unit saw a 4.5 percent decline in income, partially
due to market concerns over volatility and economic conditions, the firm
said.
ING Chairman Michel Tilmant said that the firm mostly managed to avoid
much of the brunt of the industrys subprime problems, adding our business
profile and solid risk management have helped shield ING from the direct
impact of the credit and liquidity crisis.

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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.

Home base in Atlanta


Headquartered in Atlanta, ING Insurance Americas is the North American
arm of ING Group. In the U.S., where ING has over 14 million customers
and 10,000 employees, the firm operates through two main units: ING U.S.
Financial Services and ING Investment Management Americas (IIM).
Together they offer retirement plans, mutual funds, managed accounts, direct
banking, institutional investment management, annuities, life insurance,
employee benefits and financial planning. In addition to Atlanta, major U.S.
offices are located in Hartford; Minneapolis; New York; Denver; Des Moines;
Torrance, Calif.; West Chester, Pa.; Scottsdale, Ariz.; and Minot, S.D. In the
U.S., ING Group also provides real estate investment management through
ING Clarion, personal banking products through ING Direct, and financial
markets and corporate services through ING Wholesale.
IIM provides its clients with a broad range of products, including traditional
equity and fixed income instruments, alternative assets, structured products,
hedge funds and funds of funds. Clients include high-net-worth individuals,
institutions, mutual fund distributors and managed accounts.

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.

From the U.S. all the way to China


In 2000, ING Group made two major acquisitions that significantly beefed up
its operations in the U.S. It paid $5 billion to acquire Minneapolis-based
insurer ReliaStar Financial in May, and $7.7 billion to acquire Hartford-based
Aetna Financial Services in December. The firm also purchased insurance
assets from Equitable of Iowa Companies (in 1997) and Seguros Comercial
America (in 2001), and banking businesses Belgian Bank Brussels Lambert
(in 1998), BHF-Bank (in 1999) and Polish Bank Slaski (in 2001).
In October 2004, ING Canada bought Allianzs Canadian property and
casualty insurance operations. Under the deal, ING acquired Allianz of
Canada and its subsidiaries: Allianz Insurance Company of Canada, group
insurer Trafalgar Insurance Company of Canada, and Canada Brokerlink, a
network of insurance brokerages operating in Ontario and Alberta. Owing to
the deal, INGs gross written premiums in Canada increased by
approximately C$600 million to reach more than C$4 billion. Over 800
employees from Allianz Canada were taken on by ING.
In March 2005, ING purchased a 20 percent stake in Bank of Beijing, one of
Chinas largest city banks. According to ING, the deal, worth 166 million,
was part of a broader strategic alliance. Bank of Beijing, which was renamed
from Beijing City Commercial Bank, was founded in 1996 and is now
Chinas 16th-largest city commercial bank. The bank employs more than
3,600 people in 116 branches, and at the time of purchase, had total assets of
18.9 billion.

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Out with the old


After INGs 2004 divestitures of Baring Asset Management and Delta Asset
Management, industry watchers began to question the firms commitment to
asset management. But in summer 2005, ING Investment Management
Americas then-CEO Robert Crispin told Pensions & Investments that the
sales were nothing more than a move to cut the fat and build a leaner, more
centralized money management platform offering both quantitatively and
fundamentally managed investment products. Crispin went on to explain,
ING has made a tremendous commitment to the investment management
business in the U.S., adding significant resources and expertise to some of the
key growth areas ... Part of our long-term strategy was to take a close look at
the areas we excel at and add real value for clients globally, and to divest
business that were non-core, nonperforming or duplicative ... When we
looked at how to build a firm, we decided that we wanted one key investment
management firm. The feeling was that we wanted to build off of the
platform we had, and we felt we could accomplish that without Baring.

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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Partners ($1.3 million), Multi-Financial Securities ($1.2 million), and Prime


Vest Financial Services ($1 million)made up the ING Advisors Network.
As reported by The Wall Street Journal, Between 2001 and 2003, [the ING
Advisor Network] gave special marketing treatment to 10 mutual fund
complexes that participated in a platform known as the Strategic Partners
Program, according to the NASD. The benefits included special placement
on the ING firms intranet web sites, direct links to the web sites of the
participating fund companies, increased exposure to the registered
representatives of the ING firms and participation in annual national
meetings. In return, the mutual funds paid the ING broker-dealers millions of
dollars to participate in the program. ING was one of several firms targeted
by NASD in recent years, in an attempt to stop the practice of directed
brokerage.

Golden performance in the Czech Republic


The ING International Czech Equity Fund came in first place in the Golden
Crown Competition for the best financial products in 2007. It was the fourth
time in a row that ING Investment Management won the Golden Crown
award in the mutual fund category. The winning fund invests in the Central
European equity market and has achieved high long-term appreciation. The
fund manager, Jaroslav Krabec, manages the largest equity fund administered
in all of the Czech Republic.
The Golden Crown Competition awards the best financial products in the
Czech market. Since 2003, all the leading banks, insurance companies,
leasing, investment and other financial institutions have participated in the
annual competition. One hundred financial experts from the Financial
Academy select the best performing products in their individual category.

Crisp approach to leadership


ING Investment Management welcomed a new U.S. CEO in September
2007. Following the July 2007 announcement that Chairman and CEO
Robert Crispin would retire at the end of the year, the firm appointed Robert
Leary, a lawyer-trained banker, to take his place.
Rob brings a great complement of capabilities to the organization and our
future strategy, said Tom McInerney, CEO of ING Insurance Americas, in a
statement. His quality of leadership and client relationship skills, coupled

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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.

Big buy in Argentina


In November 2007, ING announced that it would be acquiring Argentine
pension fund Origenes AFJP and annuity company Origenes Seguros de
Retiro from Santander and Grupo Bapro to further strengthen it position in
Latin America. The transaction made ING the largest pension fund manager
and second-largest annuity provider in Argentina, further enhancing the scale
of its recently boosted Latin American wealth management business. In all,
the deal was worth an estimated $280 million.
These pension and annuity businesses both have exceptional market
positions in Argentina, making this acquisition an excellent platform with
which to grow INGs wealth management and retirement services position in
the region, said Tom McInerney, CEO of ING Insurance Americas, in a
statement. This acquisition represents another milestone in INGs strategy
to support growth through suitable bolt-on acquisitions.
Santanders and Grupo Bapros pension and annuity businesses in Argentina
had more than 2.4 million customers and 1,761 employees and sales
personnel at the end of June 2007. As of June 2007, the business had $6.5
billion in assets under management and after tax profits of $37 million.

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Word on the CitiStreet


In May 2008, ING acquired U.S. retirement manager CitiStreet for a cash
payment of $900 million. CitiStreet, which is jointly owned by Citigroup and
State Street Corp., was created in 2000 and had $262 billion in assets under
management as of March 2008. The deal, which is expected to close in the
third quarter of 2008, will also encompass a U.S. health and welfare business
unit and an Australian retirement services business. The chief executive of
ING Americas expressed optimism about the transaction, saying that
CitiStreets impressive scale and exceptional reputation in the mid and largecorporate markets complements INGs focus on the small and mid-corporate,
government and education markets.

GETTING HIRED

Can-do mentality with international flair


ING Investment Management welcomes both starters and experienced
professionals who are looking for career opportunities in a dynamic,
international work environment. ING also offers trainee programs and
internships for recent graduates. Trainee programs are offered worldwide,
and are designed to develop technical and business skills while strengthening
leadership qualities. Participants are expected to hit the ground running; the
firm looks for people who will take charge and generate business. Internships
are available to new graduates who are looking for an opportunity to
experience ING on a trial basis.

No finance background, no problem


Job seekers need not worry if they dont have extensive experience in finance.
According to the firm, it has a wide range of career opportunities for
different kinds of backgrounds, and although a background in finance
and/or economics is preferable, a can-do spirit with a passion for teamwork
and a focus on results are vital as well. Whether youre a recent graduate
or an experienced professional, you can check out www.ing.jobs/careers to
learn more about opportunities close to you. Prospective applicants will be
directed to the proper country site, some of which (including the U.S. site)
require registration to get access to all opportunities.

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Insiders say ING is a place where educational background is irrelevant and


experience and know-how are important. One source says the interview
process for INGs global rotational program consisted of an interview on
campus followed up by a daylong interview with senior leaders in Atlanta.
Another contact says she had one phone interview with an HR person, one
in-person interview with HR, and then one interview with the manager of the
department.

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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

Could be more innovative

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Aggressive and professional


Not a US player
Respectable
Occasionally disjointed

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THE SCOOP

Road from Berlin to Newport Beach


German company Allianz does most of its U.S. business through its asset
management subsidiary Allianz Global Investors of America (formerly
Allianz Dresdner Asset Management of America), based in Newport Beach,
Calif. Alliance Global Investors of America offers separate account
management, financial advice and mutual funds, including the PIMCO funds,
to a client list that includes more than half of the 100-largest corporations in
America. Worldwide, Allianz Global Investors manages more than $1 trillion
in assets.
Founded in Berlin in 1890, Allianz Group is one of the worlds largest
insurers and financial services providers, with more than 181,000 employees
working from roughly 70 countries. The firm provides a range of services in
the areas of property and casualty insurance, life and health insurance, asset
management and banking.

Getting on the U.S. map


Allianz purchased fixed income giant PIMCO in 2000, the same year it made
its debut on the New York Stock Exchangea move that overseas firms often
make to finance further U.S. acquisitions. In 2001, the company took over
Dresdner Bank, creating the fourth-largest financial services firm in the
world. Along with that purchase came asset manager RCM, as well as RCM
subsidiary Caywood Scholl, a high-yield bond shop. Also in 2001, Allianz
purchased Nicholas-Applegate Capital Management, which increased the
firms exposure to both the institutional and retail investment markets. The
acquisitions of PIMCO and Nicholas-Applegate came after the firm made
money management a core business in 1998. Prior to that, the firm had a
relatively small presence in the U.S. financial services business.

Improved status in Europe


Allianzs most defining deal yet, however, may be its merger with its Italian
group member Riunione Adriatica di Sicurta (RAS), announced in September
2005 and officially completed in October 2006, when Allianz converted to SE
(Societas Europaea) status. The deal, valued at close to $7 billion, involved
hefty restructuring and cost-cutting measures, including layoffs and a
separation of the sales organization from the insurers. In a press release
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announcing the completion of the deal, CEO Diekmann said, By fully


integrating RAS into Allianz, we simplify our operating structure in Europe,
and this in turn means that we are better positioned to capture the long-term
business opportunities in Europe.
The merger with RAS is one of the main reasons Allianz changed its status to
that of a European company, a legal structure created in October 2004 by
which a company does not have to adopt different forms in each jurisdiction
in the European Union. The European country status allowed Allianz to
reorganize its Italian activities, and brought its other European activities in
countries such as Spain and Austria directly into one holding company.

Bad timing for PIMCO


Allianz Global Investors, like many financial services firms, has run afoul in
recent years of state and federal regulators for some of the practices in its
mutual fund businesses. In 2004, the companys PEA Capital unit settled
market-timing charges with the SEC for $50 million, and with New Jersey
securities regulators for $18 million. In addition, PEA Capital, PA Fund
Management and PA Distributorsall tied to PIMCO and owned by Allianz
SEsettled with the SEC to the tune of $20 million for neglecting to disclose
payments made to brokers for promoting PIMCO fund shares. Those units
have since ceased all directed-brokerage securities trades and have also
undertaken other internal reforms as part of the settlement with regulators.

Retail and institutional investor businesses join


In October 2006, Allianz Global Investors announced that it would merge two
investment units to form a new fund company. Deutscher Investment-Trust
Gesellschaft fr Wertpapieranlagen (dit) and Dresdnerbank Investment
Management Kapitalanlagegesellschaft (dbi) merged to form a new fund
company called Allianz Global Investors Kapitalanlagegesellschaft. The goal
was for Allianz Global Investors retail and institutional investor businesses
to be combined under a single roof. The move was designed to strengthen
Allianz Global Investors position in the fund business, particularly against
the background of increasing convergence between mutual funds and
institutional fund business.
Markus Riess, chairman of Allianz Global Investors, explained in a press
release that the streamlined units would result in the following benefits: less
complexity, thanks to clearer and optimized structures in terms of contact
persons, support and internal processes; reduced brand complexity will free
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up more scope for investment, with concomitant benefits for customers; a


more consistent portfolio of products and services, able to transcend customer
groupings; and more flexible transfer of specialized investment strategies for
institutional customers into mutual funds.

Wanted: hedge fund specialists


In April 2007, Allianzs investment bank, Dresdner Kleinwort, said it would
double the number of hedge fund specialists over the next three years at the
bank. The firm capped off a number of high-profile hires with that of
Citigroups Roberto Morelli, appointed to head equity sales to hedge funds in
Europe.
The same month, The New York Times reported that Martin Newson, who was
hired in November 2006 to set up Dresdners hedge fund solutions group,
said the bank was aiming to increase hedge fund sales from 10 to 15 percent
of fees and commissions to 25 percent within three years. Hedge funds are
an important and growing client base for all investment banks and we want to
ensure that we are in a position to offer them the best possible service,
Newsom told the Times.

New identity in France


Following the repurchase of AGF's minority shareholdings by Allianz in July
2007, AGF Asset Management was officially integrated into Allianz Global
Investors in November 2007. Representing Allianz Global Investors in
France, Allianz Global Investors (France) SA will continue to pursue two
main activities as part of the multi-boutique model of Allianz Global
Investors: the design and development of its own management skills, chiefly
concentrated on asset categories and the euro zone, diversified management
and alternative multi-management; and the promotion in France of its
expertise as well as that of Allianz Global Investors, to its direct, corporate,
institutional and partner clients as well as to the AGF networks.
In July 2007, AGF Alternative Asset Management changed its name to
Allianz Alternative Asset Management, and as of January 2008, AGF Asset
Management SA became Allianz Global Investors (France) SA. The new
name is designed to bring the strength of a brand known on international
markets and, in particular, by its direct clients. It also recognizes the
management expertise that the firm has been developing in Paris.

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Setting records in a rough year


Despite its Dresdner unit having to write-down 1.5 billion during 2007,
Allianz booked record results for the year, as net income rose 13.5 percent to
7.97 billion. The firms life and health insurance unit had a particularly
strong year, offsetting a tough year in banking, while the asset management
unit also had a decent year, as operating profit increased by 5.3 percent to
1.36 billion.

GETTING HIRED

Put yourself out there


Meet your potential co-workers via video testimonials, learn about Allianzs
international companies, or just find your dream job in the career section of
www.allianz.com. The firms careers section is itself divided into two
parts: Hot Jobs America and Hot Jobs Europe. According to the firm,
Allianz is always looking for people with the right qualifications and the
right juicethat is, people who are passionate about their careers and
their input. Underscoring its commitment to its employees growth, the firm
adds that in order to develop their careers, staffers must grow by acquiring
and passing on knowledge and experience, accepting and mastering new
skills and challenges, building confidence, constant learning and
bringing passion to [their] work.
Expect at least two rounds when it comes to interviewing. One insider
living in Europe describes two rounds with the CEO of Belgium and one
with a headhunter. And finally, the contact had a conversation with a
member of the board of directors in Paris prior to getting hired.

OUR SURVEY SAYS

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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American Century Investments


4500 Main Street
Kansas City, MO 64111
Phone: (816) 531-5575
Fax: (816) 340-7962
www.americancentury.com

KEY COMPETITORS

DEPARTMENTS

UPPERS

College Savings Plans


Individual Investors
Institutional Investors &
Consultants
Investors Using Advisors or other
Third Party Intermediaries
Small & Mid-sized Businesses

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

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.

Spreading its wings


In the mid-1980s, the firm broadened its mutual fund distribution beyond its
traditional retail direct-marketed business. American Century built a thirdparty sales force to serve financial intermediaries such as banks, insurance
firms, investment advisors and broker-dealers. According to the firm, the
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move was prompted by the realization that investorsconfused by the


proliferation of new investment choicesneeded the type of hand-holding
normally not associated with the services provided by no-load companies.
The 1990s were a decade of growth for American Century. In 1991, the firm
launched its first international portfolio. Following the rollout of additional
value-oriented offerings in the early 1990s, the company added to its bond
sector and quantitative equity fund lineup through the Benham acquisition in
1995.
After the turn of the new millennium, American Century made a push into the
institutional marketplace, the part of its business that sells and services
customized investment strategies directly to institutional investors, which
include corporate and government retirement plans, endowments and
foundations. The basic product offerings include institutional class mutual
funds, commingled trusts, separate accounts, college savings plans and subadvisory arrangements.

Growing their funds


American Century continued growing its assets in 2007 when it acquired the
retail mutual fund assets of Kopp Investment Advisors, a Minnesota-based
firm that manages approximately $1.5 billion. The acquisition included
assets totaling approximately $225 million in mutual funds. These assets
came from the small cap Kopp Emerging Growth Fund and large-cap Kopp
Total Quality Management Fund and were added to American Centurys New
Opportunities II Fund and Equity Growth Fund.
The acquisition of Kopps funds helped American Century grow its assets in
order to lower fees for their shareholders and make funds more tax efficient.
Many smaller firms like American Century are feeling the pressure to
increase their assets in the wake of stricter regulatory requirements. In a
statement on the deal, Senior Vice President of Development David Tucker
said, The additional assets enable us to reach a fee breakpoint on one of our
key strategies, New Opportunities II, which will directly translate to lower
fees for shareholders.

Put Your Lance Face On


In early 2006, American Century Investments collaborated with Tour de
France champ Lance Armstrong to motivate investors to take a more active
role in planning their financial futures. Via a multifaceted campaign featuring

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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.

Intern your way to the top


If you do get the chance to take on an internship with the firm, grab it. The
company has a tendency to hire interns and promote current employees
within the company, so if youre new to the firm, you may be bracing for a
tough road, some insiders say. The difficult part of trying to get hired at
American Century is the lack of available positions, offers one source.
American Century is not looking to hire a class of MBAs to train, but
rather fill spots within funds when they open up. Indeed, the company might
be harder than most to break into. During the past few years, American
Century has filled more than 50 percent of all job openings with current staff.
The firm does offer summer internships, and one insider explains the
interview process for those positions: I did a phone interview first and was
then asked to fly to Kansas City where I met with three portfolio managers.
The interviews were not so much question followed by question, but rather
45-minute discussions regarding my investment philosophy, stocks I
recommended and why. They also covered how my prior experience was
relevant to a career in asset management. Sources say American Century
mainly recruits at Wharton, University of Chicago, UT-Austin and
Wisconsin. But resumes are accepted from every school, says a current
insider.

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OUR SURVEY SAYS

Make your neighbor look good


We succeed by making others successful, explains one insider. Others call
the culture a win-win atmosphere that has values and integrity and
emphasizes doing the right thing even when its not the easy thing. The
firm is a great place to work, says a contact, and others call the atmosphere
very Midwestern, high on ethics, doing the right thing and having
mutually beneficial relationships. Other sources call the firms culture very
positive, collegial and team-oriented. Managers receive high marks
from their subordinates. One insider calls managers very respectful, but
notes that some of the East Coast type managers can be harsher and not so
focused on quality of life. Maybe some of it has to do with being in Kansas
City where people are generally more laid-back and friendly, says another,
but nonetheless, the level of respect, both professionally and personally,
among managers and subordinates is quite unique. Another contact notes
that I had some difficult managers to begin with, but ended with a wonderful
person leading our department.
Compensation receives an average rating from contacts, as do the firms
bonuses. Bonus structure is 100 percent objective, explains a source. It
is entirely based on fund performance, which gives team members incentive
to work together for one common goal. Another source says that the
requirements/goals of job changed frequently, creating difficulties in
knowing what exactly we were to do as well as trying to learn brand new
skills to get the bonuses about every six months.

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
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meet sources expectations. All investment analysts are provided with an


office, says a current insider. The working conditions are very favorable.
Dress in the office is casual always, except for client contact, though one
insider notes that I wear business dress always when with clients, which is
my primary job. Another contact reports that corporate headquarters is
business casual.

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

Employer Type: Public Company


Ticker Symbol: AMP (NYSE)
Chairman & CEO: James M.
Cracchiolo
Revenue: $8.7 billion (FYE 12/07)
Net Income: $814 million
No. of Employees: 8,750
No. of Offices: 3,600*

Pay system is confusing


Lack of communication between
franchise owners
Too much overhead

*Advisor offices

EMPLOYMENT CONTACT
See careers section of
www.ameriprise.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Main Street wealth managers


Growing
Too big, will hire anyone

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Ameriprise Financial

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.

Branding for life


Ameriprise Financial did some adjusting and consolidating of companies in
the early months of 2007, taking five of its insurance subsidiaries and
combining them into two branded entities. American Partners Life Insurance
Company and American Enterprise Life Insurance Company merged into IDS
Life Insurance Company, which was subsequently renamed RiverSource Life
Insurance Company. American Centurion Life Assurance Company has
merged into IDS Life Insurance Company of New York, which was renamed
RiverSource Life Insurance Co. of New York. The company to streamline the
business of the five life insurance companies, and increase awareness of the
RiverSource brand.
RiverSource already has an impressive reputation in the life insurance
business, ranking No. 1 in variable universal life insurance sales in selected
quarters of 2005 and 2006. Now, with the new entities under its belt,

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RiverSource is among the top-10 variable annuity providers in the U.S.,


according to the Morningstar Annuity Research Center. In October 2007, the
company reported that RiverSource funds had increased sales of long-term
mutual funds by 84 percent since the previous year. And at the end of 2007,
the Threadneedle group of companies had more than $137 billion in assets
under management.
In March 2008, Ameriprise Financial rebranded four RiverSource funds
under the Threadneedle name. In a press release, it said that the name change
helps differentiate funds managed solely by RiverSource from those that are
subadvised by Threadneedle International Limited and other partners.

Threadneedle expands its reach


Threadneedle Investments acquired a holding of its own in 2007 to help the
firms growing hedge fund business. It bought Convivo Capital
Management, an emerging markets hedge fund, in August 2007, expanding
its assets under management by $476 million. Threadneedle Chairman
Simon Davies said in a press release that acquiring Convivo was part of a plan
to increase emerging market and hedge fund exposure. He plans to grow the
firms hedge fund business from $2.5 to $10 billion in the next five years.

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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GETTING HIRED

Looking for experience


College students can visit ameriprise.com for an up-to-date list of campus
events. Typically, the firm annually sends reps to approximately 50 public
and private schools across the country. Students whose schools arent on the
list are invited to submit their resumes online. However, one source at the
firm says overall campus hiring is down because even bright young people
have too little real-life experience to be credible before older and more
experienced clients. That means the company is doing more recruiting
from other brokerages and banks, as well as for entrepreneurial types who
want to set up their own practice. Ameriprise Financial also turns to
professional career fairs for experienced hires.
Financial advisors at Ameriprise can choose to work as employees or as
independent franchisees. According to the firm, new employee advisor hires
receive a base salary in their first months of work, so they can build a client
list and increase sales. Regional field offices coordinate training,
professional education and marketing support for local advisors. The mix of
corporate assistance and entrepreneurialism is what attracts some employees
to Ameriprise Financial. I am my own boss, from office decor to staffing,
says one advisor. Its all in my hands, which is what I like.

New objectives, new recruiting goals


Ameriprise Financial employee advisors offer a wide range of opinions about
the companys selectivity, perhaps because hiring standards are changing.
Historically, it has been relatively easy to be hired at Ameriprise, one
source explains. But 2008 objectives have changed the selectivity of our
recruiting and have made it considerably harder to get hired with our firm.
A financial advisor estimates that only one in 200 who apply wind up being
hired and lasting at least five years, which means the screening process is
appropriately tough. Another source agrees that the firm is pretty
selective, but adds that in some cases it depends on the job.
Most positions at Ameriprise Financial require a four- or five-step recruiting
process, which may include an intro meeting, psych/social exam, interview
with field vice president or training manager and a role-playing exercise.
Another source recalls having a math test, interview, orientation, callback
for second-round interview, a cold call phone test and a third-round
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interview. Yet another insider says candidates might undergo a career


assessment, especially if theyre experienced. The financial advisor hiring
process concludes with an offer, or not, from the field vice president.

OUR SURVEY SAYS

More freedom than friends


Freedom and flexibility are the two words Ameriprise financial advisors use
most often when describing their jobs. I can decide somewhat how my time
is spent during each day, a source says. Another concurs, saying, I set my
own hours based on my own needs and expectations. Other than the usual
compliance foolishness, I am allowed to be what I want to be, says a
financial advisor. That means I reflect what my clients are comfortable with
and what I am comfortable with, both in dcor, dress style and client
appreciation events. If I wanted to be a button-down banker typewhich I
dontthen I could be. I guess that spells freedom.
As far as those compliance requirements go, most financial advisors agree
that the firm has improved training and provides the support they need to
stay up to date, even though regulatory issues can seem overwhelming at
times. Our compliance officers work with us to make sure were doing the
right thing, rather than being the police and giving us a hard time for hard
times sake, says an advisor.
Although some feel Ameriprise Financial employee advisors have a
positive, upbeat attitude about where the company is going, others say that
the extremely high turnover proves otherwise. For all its personal freedom,
the Ameriprise culture can be very impersonal, says a source. Everyone
is on their own to succeed, agrees another. The high turnover makes the
rest of the employees hesitant about becoming friends with new employees.

Work more, earn more


Ameriprise Financial franchisee advisors are responsible for their own
business expenses, including renting office space, buying basic supplies and
hiring support staff. In return, they receive higher pay than standard
Ameriprise Financial employee advisors who receive more support from the
company. Besides receiving base salaries, financial advisors who reach their
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performance goals are able to participate in Ameriprises stock equity


program and profit sharing. My salary is driven by new activity, i.e., sales
and fees, says a franchisee. However, there is no real bonus program. As
one advisor puts it, If I want a bonus I produce more. Another complaint
about Ameriprises pay system is the fact that its hard for some advisors to
understand and predict. Not even the managers can explain how you get
paid, a source says.
Firm benefits are available on the first day of employment, and insiders say
that after a year you have a lot of vacation time. Several Ameriprise
respondents who work in company offices report new digs. We currently
have great offices but we are moving to a new location, says a source in San
Antonio. In 2007, a new office build-out wrapped in Dublin, Ohio.

Hours may vary


Independent franchisee advisors, in particular, have significant control over
their hoursbut sometimes the demands of the job call for weekend work.
Still, most Ameriprise sources say theyre able to keep their time to 40 or 50
hours a week, with exceptions. I choose my hours, says an advisor, and
will work weekends to accommodate a client. Another says, Saturdays are
optional. I choose to have client meetings on Saturday mornings.
Compliance is another factor in gauging Ameriprises workload. My hours
are driven by the required compliance issues more than anything else, one
advisor reports. Ditto my expenses.
Another advisor who says he takes on 25 to 30 new clients each year
explains that as a franchisee I am required to meet certain compliance and
performance issues, but, more importantly, I am responsible for my own
office rent, staff, payroll and so forth. I am also not required to do an 8 a.m.
to 5 p.m. gig five days a week.

Polish those spurs


The dress code at Ameriprise can vary by region and individual, but some say
theres a tendency to err on the side of formal. One advisor offers this
summation: Suits Monday through Friday, no tie on Friday if theres no
client meeting. Business casual on Saturdays. Initial client meetings are
always coat and tie, unless the meeting is held on the clients turf. In that
case, advisors are instructed to wear clothes that reflect the lifestyle of the
client. In cowboy country or at the beach we dont wear coats and ties, for
example, adds an advisor.
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Managers at Ameriprise Financial get high marks from most respondents.


The two managers I have had have been outstanding in terms of being
hardworking themselves and so tactful and understanding, an experienced
source says. Another raves, I have been immensely impressed with the high
level of interest and respect my go-to people give me. However, one
advisor complains that even though managers have weekly meetings with
each employee, all the questions and topics are standardized so there is no
personal connection.

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

Global Consumer & Small Business


Banking
Global Corporate & Investment
Banking
Global Wealth & Investment
Management

Collegial and friendly

Citi
Wachovia
Wells Fargo

DOWNERS
Pretty conservative

EMPLOYMENT CONTACT
THE STATS

www.bankofamerica.com/careers

Employer Type: Public Company


Ticker Symbol: BAC (NYSE)
Chairman & CEO: Kenneth D.
Lewis
Revenue: $119 billion (FYE 12/07)
Net Income: $14.9 billion
No. of Employees: 209,718
No. of Offices: 6,149

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Potential threat
Not strong in this area
Hungry for ultra-wealthy
customers
Struggling

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Bank of America

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.

Gaining Chucks Trust


Bank of America added to its private wealth management business in 2007 by
purchasing U.S. Trust from Charles Schwab for $3.3 billion in cash. Schwab
had bought U.S. Trust in 2000 for $2 billion, but found quickly that the wealth
management's high-net-worth investors didnt have a place in Schwabs
otherwise discount brokerage. At the time of the sale, U.S. Trust was the
fourth-largest wealth management company in the U.S., and Bank of America
was the second largest. When the two companies joined forces, they firmly
took over first place, with total client assets of $346 billion. The merger
drove U.S. Trust, Bank of America Private Wealth Management net revenue

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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.

The latest statement


Bank of Americas first quarter 2008 net income dropped to $1.21 billion,
versus the $5.26 billion it booked for the 2007 first quarter. Net revenue,
meanwhile, was equally pallid, decreasing 6.3 percent to $17 billion from the
same period in 2007. (The results also involved $1.47 billion in securities
write-downs.) Credit costs were largely to blame for the shaky results, Bank
of America said in the earnings release, adding that the costs are expected to
continue to plague the bank throughout the year.

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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.

OUR SURVEY SAYS

Love it, mean it


I love the culture of the bank, enthuses one insider, who adds that the
environment is very conducive to high performance. Others seem to agree with
this assessment, calling it a nice, collegial and friendly (yet pretty
conservative) culture that makes for a good working environment. Its also a
team environment where colleagues acquire skills from others and improve
their knowledge day by day. And its an excellent place to start your career.
The bank doesnt have a formal dress code. Dress depends on the office and
ranges from formal to business casual, depending on the group youre

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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.

Look it up if you dont believe us


As a rule, Bank of America is a very diverse organization. One insider dares
prospective employees to check any diversity ranking and you will see the bank
in the top 10, if not the top five. (Indeed, for 19 years, the bank has been ranked
by Working Mother magazine as one of the top companies for working mothers.
For three years in a row, Black Enterprise has listed it as one of the 40 Best
Companies for Diversity. And in 2008, DiversityMBA named it No. 1 for hiring
diverse MBA grads.) BofA seems to be so focused on diversity that one contact
says its obsessed with hiring women and non-white individuals. Overall,
sources agree that the bank has a good diversity, and one insider points out, I
have never seen any discrimination in the workplace.

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The Bank of New York Mellon


One Wall Street
New York, NY 10286
Phone: (212) 495-1784
Fax: (212) 495-2546
www.bnymellon.com

KEY COMPETITORS

DEPARTMENTS

UPPERS

Asset Management
Asset Servicing
Broker-Dealer & Advisory Services
Issuer Services
Treasury Services
Wealth Management

Fair paychecks and good benefit


package

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Large custodian
Sharks in suits
Private wealth shop
Second tier

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THE SCOOP

Number one on Wall Street


Established in July 2007 from the $17.6 billion merger of Mellon Financial
Corporation and The Bank of New York Company, The Bank of New York
Mellon is an asset management and securities services company with over
42,000 employees operating across 34 countries. Headquartered in New York
City, at the enviable address of One Wall Street, The Bank of New York
Mellon has about $21 trillion in assets under custody or administration and
more than $1 trillion under management.
The firm services some of the worlds leading corporations, governments,
unions, foundations, endowments, mutual funds and high-net-worth
individuals through six main business units asset management, asset
servicing, wealth management, issuer services, treasury services, and brokerdealer and advisory services. The Bank of New York Mellon offers asset
management services through 15 wholly owned and three partially owned
subsidiaries.

Back to Alexander Hamiltons time


Founded in 1784, the Bank of New York can honestly claim to be the oldest
bank in the United States. Chartered by a group of New Yorkers (including
Alexander Hamilton), was the first corporate stock to be traded on the New
York Stock Exchange, which opened in 1792. The bank played a major role
in financing industrial and economic growth in New York City, building its
assets through the 1800s and into the 1900s. In 1922, BNY gained a trust
business by acquiring the New York Life Insurance and Trust Company; it
survived the stock market crash of 1929 and went on to acquire the Fifth
Avenue Bank and the Empire Trust Company. In the 1960s BNY went where
it had never gone beforeoutside New York, by opening a London office and
purchasing National Community Banks in New Jersey and the Putnam Trust
Company in Connecticut. The 1988 acquisition of the Irving Bank
Corporation created what was then the 10th-largest bank in the U.S.
In 1869, Judge Thomas Mellon founded the T. Mellon and Sons Bank in
Pittsburgh. His sons took control of the bank and, in the late 1800s, set up
Fidelity Title and Trust and Union Trust Company. T. Mellon and Sons
became Mellon National Bank in 1902. Subsequently, the bank helped
finance several large corporations, including Alcoa, Westinghouse,
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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.

Subsidiary names new chief


One of The Bank of New York Mellons many subsidiaries, Dreyfus
Corporation, appointed a new CEO in February 2008. Jon Baum, vice chair
of distribution, was named to the post, while vice chair J. Charles Cardona
was named president. The two men take over for retiring Tom Eggers, who
held both titles
Growing U.S. intermediary business through Dreyfus is one of BNY Mellon
Asset Managements most important strategic objectives, said Jon Little,
chairman of The Dreyfus Corporation, in a press release. Jon Baums
distribution expertise, industry reputation and proven sales leadership have
revitalized Dreyfus distribution activities, allowing the firm to better
intensify its focus on intermediary clients.
Baum joined Dreyfus in 2006 as the companys vice chair of distribution,
overseeing distribution to intermediaries of all financial products,
relationship management with intermediary partners, field management,
retirement and separate account specialists and internal wholesalers. Prior to
Dreyfus, Baum was COO at Scudder Investments and CEO of its distribution
company. Cardona is a 27-year Dreyfus veteran, most recently serving as
vice chair of the corporation, responsible for overseeing the institutional
selling efforts of approximately 25 investment sales professionals responsible
for the growth and maintenance of approximately $175 billion in client assets.
The Dreyfus Corporation, established in 1951, became part of the BNY
Mellon Asset Management family through Mellons 1994 acquisition of the
firm for $1.87 billion. Today, the firm manages more than $260 billion in
mutual funds and institutional portfolios.

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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Management group. And in April 2004, Mellon acquired Seattle-based


Safeco Trust Company, an investment, financial and estate planning services
firm with more than $1 million in assets. In August 2004, Mellon completed
the acquisition of Evaluation Associates Capital Markets, a Connecticutbased asset manager, adding $4.6 billion in assets under management. In
September 2004, Mellon acquired Paragon Asset Management Company, a
privately held, Las Vegas-based investment management firm, specializing in
meeting the needs of high-net-worth individuals, corporations and local
municipalities. And later that year, it bought Rhode Island-based Providence
Group Investment Advisory Company, a privately held investment
management firm serving high-net-worth individuals and families in Rhode
Island.
Mellon bought again in February 2005, when it completed the purchase of
DPM, a Somerset, New Jersey-based hedge fund administrator that serves 91
clients with assets of approximately $30 billion. And in October 2005,
Mellon announced that it had reached a definitive agreement to acquire City
Capital, a privately held, Atlanta-based investment management firm
specializing in meeting the investment needs of high-net-worth individuals
and institutions. City Capital added over $800 million in client assets to
Mellon, bringing the companys total Georgia-based private client assets to
more than $2 billion.
Mellons acquisition of Walter Scott & Partners, completed in October 2006,
was paid for in a combination of cash, Mellon stock and loan notes. An exact
price was not disclosed, but in buying the Edinburgh, Scotland-based equity
investment firm, Mellon got approximately $900 billion in assets under
management. Walter Scott & Partners retained its independence, but became
part of Mellons multi-boutique asset management model. In explaining the
acquisition, CEO Robert Kelly told Financial News, Asset management is
Mellons largest and fastest-growing business, and the acquisition of Walter
Scott & Partners adds significant global investing capabilities to our already
formidable strengths.

New York-style deals


Mellon wasnt the only one doing important deals before tying the knot. In
2006, The Bank of New York made two major changes to its structure and
business. Its first step was acquiring JPMorgan Chases corporate trust
business, selling Chase its retail and regional middle-market banking
business in exchange. The sale, which was completed in October 2006, let
The Bank of New York swap a lagging business unit for a high-growth unit,

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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.

Up to its old tricks


Shortly into its marriage, The Bank of New York Mellon was acquiring
companies as a combined entity. In December 2007, the firm bought ABN
AMRO Mellon Global Securities Services B.V., a 50/50 joint venture
company established by Mellon Bank N.A. and ABN AMRO in 2003 to
provide global custody and related services to institutions outside North
America. The firm will now be known as BNY Mellon Asset Servicing B.V.
and becomes a part of the asset servicing division of The Bank of New York
Mellon. The bank continues to be headquartered in Amsterdam and regulated
by De Nederlandsche Bank. Existing ABN AMRO Mellon clients will
remain contracted to BNY Mellon Asset Servicing B.V., as will ABN AMRO
Mellon staff at the companys operational centers around the world. In
conjunction with the deal, ABN AMRO Mellon CEO Nadine Chakar took up
a new position as chair of the supervisory board of BNY Mellon Asset
Servicing B.V., and Pim Nederpel, ABN AMRO Mellons CFO, was
appointed CEO.
The Bank of New York Mellon made another international purchase in
January 2008, when it completed the acquisition of ARX Capital
Management, an independent asset management business headquartered in
Rio de Janeiro, Brazil. ARX specializes in Brazilian multi-strategy,
long/short and long only investment strategies, and has more than $2.8 billion
in assets under management. The acquisition of ARX Capital Management
significantly enhances our capabilities in the region and will add a strong
product offering to help drive the development of our business
internationally, said Jonathan Little, vice chairman of BNY Mellon Asset
Management, in a statement. Moreover, it fits with our strategic objective
of growing our footprint in developing markets.

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Happy New Year, from Barrons


Bank of New York Mellon closed out 2007 with a word of encouragement
from Barrons, which, in a year-end article, called the firm an elegantly
assembled financial company. The publication noted Bank of New York
Mellons limited exposure to the subprime markets, and said, With unrivaled
technological scale, significant cost-saving opportunities and energized
management, BNY Mellon is an attractive play on expanding global wealth
and the development of securities markets around the world. Barrons also
believed investors were undervaluing Bank of New York Mellon in
comparison to its competitors, but were likely to come around as they begin
to appreciate the virtues of BNY Mellons scale and efficiency initiatives.
CEO Robert Kelly agreed, telling Barrons that the rapid growth of the
companys asset management and non-U.S. profits didnt seem to be reflected
in the stock price. In five years we could be closer to 50 percent asset
management and close to 50 percent international, Kelly said. There is
$140 trillion of fixed income and equity assets on the planet, and we have $21
trillion of it.
The bottom line, according to Barrons, was this: BNY Mellons privileged
place in the center of a fast-expanding pie of global institutional investment
assets should deliver sweet returns for its shareholders.

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.

OUR SURVEY SAYS

Finance, American style


By and large, Bank of New York Mellon is a great company thats very
attractive to people who want to find a stable environment and fair paycheck
as well as a good benefit package. The corporate culture is described as
traditional American style in the sense that people need to work hard and
over the average level of the financial banking industry. But since the
company has grown up very quickly in recent years, the financial payoff
may finally match the hard workrevenue and performance is better than
the average of the industry. Working and playing as a team seems to be
promoted by the bankone insider says there are many culture-related
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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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Also, employees overall pay situation may improve throughout 2008after


the dust from the Mellon merger has fully settled. Going forward, BNY
Mellon will be a stronger company offering highly competitive pay to new
employees around mid-2008, although one insider reports they are
currently laying off every nonproductive, lazy employee and plan to
implement a serious pay for performance system in order to retain and attract
the best talent.

On the path to something better?


One insider admits that theres sort of a limitation to advancement in
management for minorities but theres also room for diversity in the
employee pool. Another says, There appears to be more women than men
in the firm, but theres a low number of African-Americans and an even
smaller number of Hispanics. Its possible that the situation is on its way to
improving. The insider continues, I did see diversity in management, which
was good.

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The Capital Group Companies


333 S. Hope Street, 53rd Floor
Los Angeles, CA 90071
Phone: (213) 486-9200
Fax: (213) 486-9217
www.capgroup.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Industry giant
Past its prime
High quality
Who?
Strong fund performance and
flows

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THE SCOOP

After the crash


Following the stock market crash of 1929, things looked monetarily grim for
much of America. But Jonathan Bell Lovelace, who had spent much of the
1920s cultivating novel investment techniques at an investment banking firm
in Detroit, had a plan. In 1931, Lovelace started the earliest incarnation of
the Capital Group companiesCapital Research and Management
Companywith nothing but a couple of colleagues from his investment
banker days and a few consultants. From there, the company expanded
domestically and internationally, opening a New York office in 1947. And in
1953, the firm made its first investment outside of the U.S. (and became one
of the first American firms to do so). The Capital Group continued to
increase its international presence, and became one of the first Statesidebased investment firms to have an office abroad when they opened a Geneva
branch in 1962.
Today, the firm is one of the biggest mutual fund companies in the U.S.,
managing more than $1 trillion in assets under its American Funds division.
And the organization continues its Lovelace-cultivated investment techniques
to this day, dividing portfolio assets among its managers, who autonomously
make investment choices. In 2007, the Capital Group was No. 21 on Forbes
Top 25 Biggest Private Companies.

Funds for all


The Capital Group offers mutual funds and investment management for both
individuals and institutional investors. In the U.S., the firm offers the
American Funds, which are available exclusively through financial advisors.
In Europe and Canada, the groups mutual fund coverage is offered through
the Capital International Funds and Capital International Funds Canada. In
2007, for the first time ever, Capital began offering investment management
for individuals living in Japan through its already established subsidiary
Capital International K.K., which had previously only served institutional
investors. In the private banking sector, the company has a personal
investment management unit that services high-net-worth investors,
nonprofits and private foundations.
The Capital Groups institutional business is also done through Capital
International in Europe, Africa, the Middle East, and the Asia-Pacific region,
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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.

Socially responsible investing


Although American Funds does not categorize any of its funds as socially
responsible, the company announced in October 2007 that it does consider
the possible impact that social issues may have on its long-term successes.
Specifically, the organization said it will use its status as a shareholder in
companies doing business in Sudan to support calls for meaningful, enduring
change. Among other things, the firm has urged the managers of these
companies to press the Sudanese government to take actions to end the
countrys genocide.

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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.

OUR SURVEY SAYS

An awesome place to work


Insiders call working at Capital Group an awesome, great experience
with nice people, high ethics and room to grow and try new things.
Contacts say that while its definitely corporate, its also comfortable.
Its also a very feedback-driven environment that has regular monthly
meetings with a supervisor to make sure youre on track and can express
concerns.
The firm offers an above-average benefits package. Each year, the Capital
Group contributes an amount equal to 15 percent of each associates annual
compensation into a master retirement plan. Associates are eligible for two
performance-based bonuses annually, and they can accrue more than three
weeks vacation in their first year on the job. Health care benefits, which
insiders call great, begin on the first day of employment. Other interesting

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employee perks include a $400 health and wellness reimbursement program


that covers health club membership fees, weight management programs, golf
lessons, yoga and Pilates classes and the purchase of exercise equipment,
among other items. Dress is business casual with denim Fridays.
One insider calls the firm very loyal to both their employees and their
shareholders, and it shows via very low employee turnover. Benefits may
account in part for the low turnover. In addition to the standard health and
401(k) benefits given by most companies, Capital associates receive
reimbursements for approved educational programs, same-sex partner health
benefits and free tickets to many local sporting and entertainment venues.

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Growing, strong platform


Past its prime
Fantastic technology
Bottom of the barrel

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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.

Buying up the block


The investment management arm of Charles Schwab recently made a
significant real estate investment acquisition, when it purchased a fellow San
Francisco investment research and consulting firm, Global Real Analytics
(GRA) in January 2007. The buy was an attempt to extend the companys
ability to offer real estate based investments to its clients after Charles
Schwab announced plans to open a Global Real Estate Fund in December
2006. GRA and Charles Schwab also plan to work together to develop and

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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.

CFO makes good


In a surprising move, Charles Schwabs CFO Christopher Dodds made the
announcement that he was retiring in January 2007, at the ripe old age of
47. Dodds 20 years at the company apparently earned him enough money to
kick back and make a few personal investments in his ample golden years. In
a statement to the press, Dodds said, I am extremely fortunate to have
reached a point in my life where I now have the flexibility to be able to devote
more time and attention to my family and my community. Dodd had been
the CFO since 1999, seeing the company through its lean and mean times.
After Dodds departure in May 2007, senior vice president and treasurer
Joseph Martinetto took over his position as executive vice president and CFO.

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.

One for the record books


Schwab had the best first quarter in its history in 2008. The firm booked $305
million in net income, surpassing the previous first quarter record of $284
million it booked in 2000 and up from the $273 million it recorded in the first
quarter of 2007. Revenue also shot up, jumping 13 percent to $1.31 billion.
The excellent results were partially due to the firm opening more new accounts
(246,000) during the three-month period than it had in a quarter in almost seven
years. This helped flow more than $41 billion into the firms accounts, the
second-highest inflows during any quarter except the first of 2000.

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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OUR SURVEY SAYS

Put on your corporate cap


Charles Schwab is a very strong company and a great place to work. The
culture is very diversified with good ethics, although its also called very
corporate and driven by the bottom line by insiders. Indeed, when it comes
to the culture, not everyone feels the same way. Schwab used to be an awesome
place to work, bemoans one insider, but now its just like any other financial
firm thats very corporate."
The dress code is business casual unless meeting with a client, in which case
formal business dress is required. The formal rule also probably applies when
Charles Schwab himself shows up (quarterly, at least) and speaks to anyone
who comes up to him at the meeting receptions. Another source says of the
daily look in the office, The young folks look like they stepped out of Banana
Republic, while the older folks look like the Macys Dockers catalog.
Hours worked during the week depend largely on your location. One insider
says, I could not leave early and make up the hours the next day without getting
into daily overtime rates. And hours were staggered to cover the hours from
8 a.m. through 5 p.m. Do your time, though, and youre likely to be rewarded.
Advancement opportunities are fairly good, and certain groups are growing
very quickly. Although one insider reports that those seeking to advance should
be aware that theres practically no incentive for advancement for fear of
getting laid off and newly advanced employees seem to always be the most at
risk. The contact suggests that a multilayer approach that allows you to move
up in pay when excelling at your work is needed, rather than being forced to
get a promotion that might not fit. Another insider reports that opportunities for
advancement are available only for those who work directly with clients.

Perks and pluses


Perks are pretty good, with quarterly bonuses offered along with stock
options and a 401(k) match up to 4 percent. However, a big plus is a fourweek sabbatical after five yearsif you can last that long. The company also
offers generous maternity and paternity leaves for non-administrative staff.
Perceptions of the firms diversity efforts seem to ride largely on geography.
One Ohio insider notes that the facility is fairly limited in terms of racial and
gender diversity, though women are more visible than minorities here. In
the San Francisco office, however, Schwabs diverse workforce is impressive
and deserves all of the accolades awarded to it by the press.
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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

Allegheny Energy Solutions


Citadel Energy Products
Constellation
Dominion Energy
Goldman Sachs
JPMorgan
Morgan Stanley
Saracen
TBC Consolidated Fuels

THE STATS

UPPERS

Employer Type: Private Company


CEO & Managing Director:
Dean Wilde
No. of Employees: 50
No. of Offices: 1

Extremely smart people


Excellent compensation
Work is stimulating and rewarding

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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to its consulting, including booking a cumulative profit improvement of $20


billion. Its investment arm is just as imposing, with an average return of 30
percent on investments. Serving both Fortune 500 Companies and smaller
startups, Dean & Co. has overseen more than 500 mergers and acquisitions.
It also has a partnership with private equity fund Lindsay Goldberg (formerly
Lindsay Goldberg & Bessemer), which has direct investments of $2 billion.
In addition, Dean Ventures was added as an equity investment firm in 2007;
Dean shares offices with DC Energy in Northern Virginia.

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.

GETTING HIRED

Better muster up a lot of energy


Despite its rapid growth, DC Energy still only accepts the best of the best
when it comes to hiring. DC Energy is looking to grow its analyst and
associate ranks substantially but continues to set a very high analytic bar for
hiring, according to one insider, who adds, Successful candidates typically
have a very strong undergraduate record, good on-the-fly problem-solving
skills and strong communication skills as well. Expect a tough screening

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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.

Only good test takers need apply


For on-campus candidates, DC Energy does two rounds of interviews, both
using a consulting-like case interview format. For alumni or candidates at
schools where we dont visit the campus, candidates may have a phone
interview, an online problem-solving test, and an in-office visit. One insider
says candidates will endure a minimum of three business case interviews,
including at least one with a director or managing director. Agreed, recalls
a colleague, I had a campus interview, and an on-site interview. They both
involved multiple cases presented by a variety of DC Energy employees.
Typically, the first round is one case interview and the second round is
usually two or three case interviews. We only do resume interviews for offcampus candidates.

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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.

OUR SURVEY SAYS

The young and brilliant quant heads


The crew at DC Energy is a happy one. I love the challenge, the
compensation and the schedule flexibility that this job provides for me, says
one insider. The work is stimulating and rewarding (for more than just the
pay) and the work environment is always enjoyable. Employees enjoy
interesting work, bright people and lots of upside opportunity in terms of
corporate growth, ability to take on new responsibilities and individual
compensation.
Most agree there is no shortage of talent at DC Energy. One insider says the
firms employees are young and brilliant, adding, A high number of
science/engineering undergrads and PhDs speak to the dual expectation of
individual and team-based, problem-solving skills. Among the managing
directors, all but onethe owner of the companyare in their 30s. One
insider calls the firms culture somewhat nerdy, but interesting and
tolerable. Were professional without taking ourselves too seriously, says
a colleague. Generally speaking, Office behavior is laid-back and friendly.
The firm takes a fact-based approach to problems. One source points out,
Our quantitative approach often requires a great deal of independence, and
the firm could be more social. Yet another insider says, The best part of my
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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.

Life in the energy markets


Most insiders agree that DC Energy is a heck of a gig. One source calls the
firms culture supportive and fun, and explains, Energy markets are
fascinating, volatile, and require deep and rigorous analysis. New employees
can experience rapid growth in breadth and depth of responsibilities,
promotion opportunities and sharing in the success of the firm via
compensation. This overall portfolio of positive attributes is unusually
attractive for what is for many employees their first real job. Firm retention
rates generally reflect this. According to one insider, For those who choose
to leave the firm, it is easy to find good opportunities outside of trading
especially law, business, grad school or other financial sector work.
However, there is some risk of specialization by way of the narrowness of
the types of investment products involved. One source adds that its very
hard to communicate with friends and family what exactly you do, and what
the role is that DC Energy plays in market development.

Hardworkingbut well-paidproblem solvers


Hours at DC Energy are very flexible, but there can occasionally be too
many of them. One source says, Our markets are driven by deadlines.
Some teams have hourly trades, but most revolve around monthly auctions.
The time spent at work varies drastically depending on workload, though

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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.

Respect all around


At DC Energy, there is easy access to senior management, and doors are
always open. Management is very committed to giving the employees
what they need to operate at the peak of their abilities and to stay happy.
Insiders say treatment by managers is generally positive, but one source
notes, There used to be more direct interaction, but as the firm has grown,
there is less of an opportunity for that. Another says, I feel that they value
my opinions and are willing to listen to what I have to say. They are truly
brilliant, so sometimes talking to them can be humbling, but they never try to
put you down.
Put another way, Our highly meritocratic environment means that
relationships between managers and subordinates are frank, straightforward
and productive. Individual managers vary in style and expectations, but
generally a team member and his or her manager are able to maintain a
positive working relationship. Senior management of the firm is very active
in decision-making and maintains close contact with employees at all levels.
One insider complains of a sense that management is never fully satisfied
with your work. Indeed, Everyone is treated fairly, though expectations run
high.

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Mostly on-the-job training


New employees at DC Energy get three solid weeks of training, followed
by extensive on-the-job learning. An insider explains, The first several
weeks are spent gaining an introduction to energy markets and working with
our systems, then the new employee transitions directly to working on an
investment team, where he or she is mentored and trained on-the-job by a
team lead and colleagues. You learn so much on the job through unique
challenges that its not necessarily worth it to have a longer training period,
says one source. Database training is very formalized; most other training
is on the job.
One source says, We have three weeks of training from the get go, then once
you are placed on a team, your manager will work with you to develop skills
that may not be your strong suit. Regardless of skill set, you are expected
to pick up a lot of knowledge as you develop.

Doing time in the suburbs


DC Energy insiders have just a few things to complain about, and the firms
office location is one of them. The location in Tysons Corner, Va., is
somewhat inconvenient for commute and living purposes. Location is too
far from D.C. and traffic is horrendous. A contact says, The office is in
suburbia so its not your typical proprietary trading firm. There are very
limited happy hour options. A happier camper says, After just one year
with the firm, I had a window office with one office mate. I dont know how
many other companies afford their employees such luxuries at an early stage
in their career. Another source points out, People work in offices rather
than cubicles or on a trading floor, which is nice. Even so, the contact adds,
The building is in the suburbs and is a pain to commute to. An optimistic
source adds, Traffic in D.C. metro area is to some extent a concern, but is
usually addressed effectively by learning alternate routes and/or coming and
going outside of rush hour.
Dcor is all high class in DC Energys offices. However, Space is growing
more constricted as we hire more, so all but senior employees share an
office. One contact says, The only downfall is that I share an office, but my
office is as nice as I could ask for after working for only one year. DC
Energys office is not a typical trading floor setuppeople work in offices
of one-to-three persons, usually in general proximity to teammates working
on similar projects. The offices are well appointed, with a nice lobby,
furnishings and lighting.

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Not a tie-wearing crowd


The dress code at DC Energy is business casual. Attire specifics range
depending on your own personal style. One insider says, Khakis and a polo
or button-down shirt do the trick. A colleague agrees, For men, khakis or
dress pants, and polo or button-down shirt is the norm. But employees
shouldnt get too comfy in those suits. According to one source, Whenever
anyone, including a managing director, has on a tie, its pointed out and joked
about. That usually only happens when representing the firm at regulatory
meetings or in discussions with corporate partners.

The first step to recovery is admitting you have


a problem
DC Energy only has five women on its current staff (the firm only has 50
employees in total). That number is set to rise substantially in the coming
months, as we have already hired five women into our incoming class,
according to one insider. Another says, In truth, we dont have a lot of
women at our firm. However, we have made tremendous efforts to increase
our appeal to women. We did see our number of female hires this year
increase dramatically. The current male-to-female ratio is quite high.
However, it was much more equal at the beginning of our brief history, and
we are already well on our way to rebalancing things.
DC Energy recognizes the problem of too few women and has aggressively
recruited during the fall, says a contact, who notes, That approach has paid
off, since approximately half of our starting cohorts for 2008 are women.
The gender balance at DC Energy has been weak but is improving markedly.
With respect to those women who do apply and work at DC Energy, treatment
is equal on all dimensions. Unlike the stereotypical trading environment, our
culture is inclusive, respectful and professional.
Ethnic minorities at the firm are limited as well. The company seems
receptive to minorities, but few apply, which limits the number hired, says
one insider. I would say the company is mostly Caucasian, but I truly feel
that is a result of coincidence, desire to work in the industry and
qualifications. Ethnic background is not a factor in hiring, insists one
source. DC Energy has employees of a variety of backgrounds, with
demographics that are reasonably reflective of the schools at which we
recruit. However, The firms small size means that not every group is
necessarily represented at any given time.

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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

Flexible work hours

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Solid brand; kinder, gentler


place
Just another mutual fund firm
Gaining importance
Not well known
Hardworking, productive

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THE SCOOP

In the investment jungle


Dreyfus Corporation doesnt exactly own the lions share of Wall Streets
investment business, but it does have a mean growl. The New York-based
firm, which is well known for its lion logo, was founded in 1951 and in 1994
merged with the much larger Mellon Financial Corporation. In 2007, Mellon
Financial became Bank of New York Mellon, in a massive merger that made
Dreyfus part of new financial network that holds more than $1 trillion of
assets under management.
As of April 2008, Dreyfus manages more than $280 billion in more than 200
mutual fund portfolios and is ranked the 14th-largest mutual fund company in
the country, seventh-largest institutional money fund provider and 14thlargest provider of separate accounts in terms of assets under management.
The firm also invests in equities and corporate, municipal and government
debt and offers variable and fixed annuities, IRAs, cash-management tools
and separate account management sold through broker-dealers, financial
advisors, fund supermarkets, banks and other distribution channels.

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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high-net-worth clients, who possess a wealth pool of approximately $60


billion. Gaining the trust of high-net-worth investors is a highly competitive
game, and with the combination of Mellons accounts and Bank of Americas
accounts, it now has an even stronger hold on this elite clientele. When the
merger was publicly announced, Ronald OHanley, CEO of Mellon Asset
Management, said, Were already a leader in the high-net-worth area. But
weve struggled in New York. Thats one of their strengths. So this merger
will really help us build our presence in that key market.

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.

Ascending to the top


In February 2008, Dreyfus named a new chief to lead it into the final years of
the decade, as Thomas Eggers, who had held the chief executive position
since April 2005, decided to retire. In Eggers place, the firm named Jon
Baum, its vice chair of distribution, as the new CEO. At the same time,
Dreyfus also named J. Charles Cardona, vice chair and 27-year veteran of the
firm, its new president.
Baum, who officially took over CEO duties in April 2008, has been with
Dreyfus since 2006. Prior to that, he was the chief operating officer at
Scudder Investments and CEO of its distribution company. Previously, he
had worked as a financial advisor for UBS Paine Webber.

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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services, institutional, investment management, legal, Lion Account,


marketing and advertising, and Mellon Advisors). The site details each
positions job duties, as well as the experience, skills and education
requirements. In addition, the site describes employee benefits and lists
upcoming recruiting events.
An insider in sales says the firm is very selective when it comes to hiring and
the first pick for any job usually comes from the existing workforce.
Sources also say to expect three visits to the firms offices before getting
hired. I met with seven different people, says one insider, and the decision
was made within two weeks.
On the site, potential interns can also browse open positions and specific job.
To qualify for an internship with Dreyfus, a candidate should be a college
junior or senior with a GPA of at least a 2.8. Ideally, the right applicant will
also possess strong leadership, analytical and problem-solving skills, and
be able to work in a team environment as well independently. As an intern,
you can expect to have your hands in a lot of different proverbial pots,
researching, taking on a variety of projects and working closely with
supervisors in order to fully develop your skill set.

OUR SURVEY SAYS

Take your pick


Dreyfus offers employees an assortment of benefit options that staffers can
mix and match. According to the firm, the plan provides the essential
building blocks for a comprehensive benefits package. Perks are plentiful,
and include medical plans, dental plans, life insurance, tuition assistance,
long- and short-term disability, a 401(k), stock options [on Mellon stock] and
a stock purchase plan, which one source says, Stinks now. However,
another raves about the extras, saying, Employees get complimentary days
off and rewards or prizes for superior performance. And theres real
opportunity for advancement at Dreyfus. The contact adds that some
people who were once client associates are now vice presidents, and others
have been at Dreyfus for over 17 years.

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Bright but bureaucratic


Insiders rave that Dreyfus is filled with very bright people. But sources
also say theres lots of politics at the firm. One contact says, Dreyfus cant
make up its mind as to whether it wants to be an institutional or retail
organization. The respondent gives his recommendation: Retail has
brought in the cash over the years. Speaking of cash, compensation gets
average marks from sources, while hours receive high marks, especially from
one source who works from home most of the time. The contact does say,
however, that he works on the weekends about once a month. Indeed,
hours are one big benefit here, as another source notes, Flexible work hours
and part-time working arrangements are good for many who have children
and need to schedule their hours differently. Dreyfus also has a nursery as
well as a parking facility available for workers who drive.
The aesthetics arent bad, either. A contact in the Uniondale, N.J., outpost
calls that building very nice, adding that it has an indoor atrium and a
modern cafeteria. The source goes on to say, Lunches can be expensive but
the food is acceptable. The Dreyfus dress code is casual always, except for
client contact.

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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

Unlimited earning potential


You run your own practice
Clients come first

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Good; solid regional firm


Extremely retail ... the Wal-Mart
of finance firms
Old line, recognizable
Thought of as third-tier
brokerage firm

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THE SCOOP

Keeping up with the Joneses


Ranked No. 4 on Fortune magazines latest Best Companies to Work For
survey, Edward Jones is a tough act to follow. A subsidiary of the Jones
Financial Companies, the St. Louis-based company has more offices than any
other investment firm in the country. The firm serves more than seven
million clients in the U.S., and in affiliates in Canada and the U.K. All clients
are individual investors and small-business owners in rural communities,
suburbs or metropolitan areas. Its product offerings include stocks, bonds,
mutual funds, life insurance, credits cards, CDs and home loans. As of the
end of February 2007, the company had $486 billion assets under
management.
Dubbed the Wal-Mart of Wall Street, Edward Jones prides itself on its selfdescribed long-term, buy-and-hold approach to investing that centers on
financial advisors one-on-one relationships with Edward Jones clients.
Those relationships and the fact that the company consistently reaps rewards
for its investors, has made Edward Jones the top-ranked firm in J.D. Power
and Associates survey of customer satisfaction among full-service brokerage
firms for the second year in a row. Also in 2006 and 2007, Edward Jones was
ranked one of the Best Places to Work in Colorado, Ohio, Oklahoma, Indiana,
Illinois, New Jersey, Rhode Island, Kentucky, Hawaii, Texas, Maine,
Mississippi and Connecticut.
And in addition to ranking in the top tiers of Fortunes Best Companies to
Work For survey for the past nine years (in 2002 and 2003, the firm ranked
No. 1), Edward Jones has been No. 1 on Registered Reps Top Brokerage
Firms list for 15 years in a row and appeared on Computerworlds most recent
Best Places to Work in IT list.

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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investment firm in the U.S., Edward Jones is the fourth-largest in terms of


brokers and total employees.

The luxury lifestyle


Though Edward Jones may see itself as a small-town Missouri firm, lately it
has attracted the attention of some of the big power players in the industry.
In August 2007, it received the highest ranking in the Luxury Institutes
survey of full service retail brokerages among affluent clients. The firm
placed No. 1 in a survey that polled 1,650 wealthy customers on the
performance of six different brokerage companies. The Luxury Institute also
gave high marks to the firms web site, which earned the top spot in an April
2007 study comparing the web sites of 14 national brokerages.
Despite this recognition that the firm is a valued partner of the affluent,
Edward Jones Managing Partner James Weddle shrugged off the Luxury
Institute award in an October 2007 interview with OnWallStreet.com, saying,
We dont target or even define our clients by net worth. We define our target
client as the individual investor. That can be someone who is very successful
and wealthy, but it also includes people at the very beginning of their
investment careers.

Expanding the gateway


Edward Jones is firmly rooted in the Midwest, with three offices in St. Louis,
the gateway to the West. Recently, the firm rolled out plans to expand its
presence near its headquarters in Des Peres, opening yet another office to the
campus areas already there. Due to town restrictions, the company had to
scale back its expansion plans slightly, but construction is now scheduled for
a six-story building with a four-story parking garage. The growth of the
companys offices is in preparation for a planned staff augmentation, in which
it hopes to add 6,900 financial advisors within the next five years, adding
employees at a rate of 9 to 10 percent each year. Besides the additional staff
in Des Peres, Edward Jones also plans to beef up its Tempe, Ariz., office as
well as its international offices in Canada and the U.K. The total cost of the
current development is priced at about $260 million.

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GETTING HIRED

Get in the door


Having a referral from a current Edward Jones financial advisor is a big
help in landing a job, sources say. The company strives for slightly aboveaverage selectivity, though one financial advisor reckons that Edward Jones
only accepts about 1 percent of those who apply. When it comes to
experienced hires, recruiters are looking for motivated people who have
some success in any industry. Campus candidates can get their start with an
internship at corporate offices in St. Louis, Mo., and Tempe, Ariz. Students
can also do a branch internship, working one-on-one with an independent
financial advisor.
Information about internships is posted at
careers.edwardjones.com, but the firm does not have a centralized process for
placing interns at branch offices. Instead, candidates are encouraged to
contact a local financial advisor directly.
Recent graduates can get their start in the financial advisor training program
or in the headquarters rotational development program (RDP). This yearlong
training program, which is offered in St. Louis and Tempe, allows selected
candidates to rotate through one or more firm divisions before deciding on a
final placement.

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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Yet another source started with an initial fact-finding, face-to-face


interview followed by several telephone interviews and another face-toface interview, plus a personality profile test and some market research
test. One experienced hire who got a job after two phone interviews and one
in-person interview remembers being asked questions on things I had done
for the betterment of my company.

OUR SURVEY SAYS

That family feeling


Edward Jones is all about family, partnership and doing the right thing for
the client, sources say. These aspects of the culture were established by Ted
Jones, the founders only son, early on in the firms history. Respondents
notice cultural influences that come from working for a privately held
company, like an emphasis on work/life balance. The bottom line? Do
what is right for the client, run an ethical and profitable office, and enjoy your
family.
Financial advisors are the heart of Edward Jones. Were considered the
profit centers, says one. That said, there is a disconnect between the
advisors and the home office. Another complaint is that the companys
product and service offerings are not as good as other firms, especially
advisory services and mutual funds.
One high point for many insiders is the top-notch Edward Jones training
program, which, they boast, is the best available in the industry. There is
constant and ongoing training, an insider says. Especially in the early years as
you are formulating your own business. Overall, another concludes, Although
the firm has certain areas of weakness, I am extremely satisfied with my decision
to work at Edward Jones. The flexibility is what I like the most.

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

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.

What's and ETGAM?


E*TRADEs Global Asset Manager (ETGAM) is a private asset manager that
manages E*TRADEs worldwide bank portfolio. This division comes under
the managerial arm of E*TRADE Capital markets, a global brokerage firm
which also runs E*TRADE Capital Markets, LLC, E*TRADE Capital
MarketsExecution Services, LLC, E*TRADE Securities Limited,
E*TRADE Canada Securities Corp. and E*TRADE Securities (Hong Kong)
Limited. Celent Analysis recognized this branch of E*TRADE in February

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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.

Rising up in the ranks


Before it was E*TRADE FINANCIAL, the firm was called Trade Plus, a
company that served as an electronic service bureau for Wall Streets
stockbrokers. By 1983, Trade Plus processed the worlds first online trade,
which less than 10 years later (in1992), transformed into E*Trade Securities
and began offering investing services through Netscape. In 1996, the
company launched its web site, www.etrade.com, and that same year
E*TRADE went public.
E*TRADE would soon take a ride on the dot-com roller coaster, reaching the
heights of earning peaks in 1999 and then experiencing a sharp decline
shortly after the bubble burst. But E*TRADE was one of the few online
brokerages to weather the storm, and emerged from the dot-com days
virtually unscathed. In 2000, the acquisition of Versus Technologies led to a
new electronic trading platform that would make trades even easier for its
customers worldwide, and the company was back on track for success.

A home in the non-virtual world


In 2001, it began opening bricks-and-mortar financial centers in New York
City, Beverly Hills, San Francisco, Denver and Boston, so investors could
interact face-to-face with its licensed relationship managers and financial
advisors, providing personalized service and support for high-net-worth
customers. The centers, according to the firm, provide a facility where
investors can access investing, trading, banking and lending products and
services to help them reach their financial goals. E*TRADE also began
offering its customers a number of financial services to lure investors,
including its E*TRADE Pro trading platform for its most active customers
and its E*TRADE Financial Advisor offering, which integrated electronic
and personal advice.

Expanding their global presence


In August 2007, the company expanded its global reach even further by
launching operations in Singapore. The companys newest branded web site
in Singapore will be managed by Michael Fong, Senior Director of
E*TRADE Securities (Hong Kong) Limited. The investment in Singapore
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expands an increased interest in the Asian market, where E*TRADE already


has operations in Hong Kong as well as a significant investment in a full
service broker in India. The new web site will offer Singapore investors
access to the U.S. stock markets through the E*TRADE retail trading
platform.

Falling into the credit sinkhole


More recently, E*TRADE hit an unexpected snag in 2007, proving that even
discount brokerages would feel the pain from the years precipitous turns in
the market. E*TRADE was one of several firms to suffer losses from loans
and collateralized debts, announcing in September that it would have to take
almost $440 million in charges and loan loss provisions. At the same time,
E*TRADE announced that it would have to cut projected earnings for 2007
by 30 percent.
In October 2007, the company announced its third quarter results, which
came in at a net loss of $0.14 per share compared to the previous years $0.35
per share earnings. In a conference call, reporting on these losses, then-CEO
Mitchell Caplan admitted publicly that the company was not pleased with the
downturn, saying, While we are extremely pleased with the continued
growth trends we are generating throughout the retail business, we are clearly
disappointed with the overall company performance as a result of the severe
volatility in the credit markets.
Another piece of bad news came during October 2007, as a class-action
lawsuit on behalf of shareholders was brought against the company by the
law firm Schiffrin Barroway Topaz & Kessler, which seeks damages as a
result of the unforeseen mortgage losses.

The darkening forecast


In November 2007, the firm became the subject of an investigation by the
SEC focused on the companys capital markets operations, which were run by
Dennis E. Webb. Webbs division was accused of trading ahead of
customers without their knowledge. The SEC also began investigating
matters relating to the companies loans and securities portfolio.
Webbs employment was terminated in November 2007, after word of the
SEC investigation hit the media. Following the announcement of the SEC
investigations, E*TRADE took a sharp hit in the markets. Analysts
forecasted that it would be a rough road ahead for the embattled online

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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.

Donald to the rescue


In March 2008, E*TRADE named Donald Layton, a former JPMorgan Chase
vice chairman, as its new CEO. Layton had joined E*TRADEs board of
directors in November 2007, when the firm let go of Mitchell Caplan as its
chief executive.
According to Bloomberg, Layton said in an interview that he will focus on
regaining assets that were withdrawn in November to fuel growth this year.
He said he isnt seeking to sell the company or its roughly $11.6 billion in
home-equity loans because demand has dried up for such debt.
Layton, who retired from JPMorgan in 2004 after 29 years, is set to receive
$1 million in salary for his work for E*TRADE, as well as $15.4 million in
options and restricted stock that vest through 2009.

Down but not out


Following a disappointing fiscal 2007, when the firm reported a $1.44 billion
loss and its stock was the worst performer of the S&P 500 Index, E*TRADE
reported a loss of $91.2 million for the first quarter of 2008. This was quite
a change from the same period one year earlier when the firm reported a net
income of $169.4 million. However, E*TRADE was still in business and its
client accounts were still increasingduring the quarter, net new customers
increased by 62,000, the largest rise since the fourth quarter of 2005.

GETTING HIRED

Dynamos should apply


E*Trade says it is ideally looking for dynamic, highly energized risktakers. If you think youre up to the challenge, log to its jobs site, located at
careers.etrade.com, and find hundreds of jobs in all of the companys groups,
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ranging from finance and business development to IT and customer service.


When it comes to hiring, insiders rate E*TRADEs selectivity about average
compared to the rest of the financial services industry. There are a lot of
opportunities to get your foot in the door, says one contact. The company
doesnt require numerous rounds of interviewing, but does carefully look at
the background checks, licensing, experience, and relevant skills and
qualities.
Another insider says the firm values those skills as much as education. For
that reason, youre unlikely to see E*TRADE recruiters trolling business
school campuses. Rather, the firm tends to post its job openings on popular
career web sites. And if youre looking for a firm that doesnt ignore those
parts of the country that dont happen to be a major metropolis, youre in
luckthe firm has a variety of openings available from Sandy, Utah to Jersey
City, NJ.

Become a people person


During your interview, expect to meet people at all levels and be prepared to
field all kinds of questions. The firm may skip the on-campus portion of
interviewing, but it takes its time once candidates are brought in for on-site
interviews. I met with about eight people, on about five to six different
occasions, says one respondent. Another says she had a headhunter
meeting, then one with a manager and the division VP. And the types of
interviewers run the gamut, ranging from some engineers in technology to
several key procurement/finance professionals. In marketing, initial
interviews tend to be with direct managers, followed by interviews with
the CMO and VPs of marketing.
Applicants should be prepared for group interviews with high-ranking
managers. I had one interview by four people, two directors and one vice
president, plus the recruiter, says a source. Interviewers are less interested
in hearing about where you went to school, and more about experience. One
insider recalls, They asked me about the tasks I had done, and if I was
accustomed to structure or could I handle an unstructured environment. A
manager sums it up, saying, We look for problem-solving skills,
commitment to deadlines and willingness to adapt.

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OUR SURVEY SAYS

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.

Working, playing and cashing in


The vibrant culture at E*TRADE is a good thing, since hours at the firm tend
to be long. Most put in long hours during the week and frequently or
often work on weekends. According to one insider, there are too few
resources and too much to do. Another calls the hours excessive.
BlackBerrys are essential, as everyone within the firm is checking e-mail
over the weekends. Almost all E*TRADErs work from cubicles, with the
exception of VPs and above. Most people are in cubicles with high
walls. The lack of windows tends to be depressing at times, says one
cube-bound trader. Another concludes, Space issues abound. At least
E*TRADErs are comfortable while working those long hours in windowless
workspaces. The dress code is casual always, except for client contact. Its
rare to see suits, says a respondent.
Its also rare to hear people at E*TRADE complaining about their salaries.
Most at the firm feel well compensated, with many one- and two-year
veterans making well over $100,000 annually, plus about $20,000 in
additional perks (bonuses, stock options, discounted trades, etc.).

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More training for all


It would be helpful to have more investment in training/professional
development for managers at all levels, one insider notes. But generally,
treatment by managers receives high marks. Senior management rewards
hard work and has a serious interest ensuring people are in the right functions
and enjoying their work. Indeed, there is a culture of fairness and respect
at the firm. Its up to the individual to soak up this atmosphere, however, as
time does not permit one-on-one meetings with managers. Another insider
agrees, noting that more structure and fairness in dealing with upper
management is needed. Staffers are left to their own devices when it comes
to training as well. Its usually learn as you go, says one. Another points
out, product knowledge training could be improved across the firm, as reps
are frequently asking for more training on this subject. The formal training
programs that do exist at E*TRADE are almost all online classes.

Get with the program


One source would like to see a decent mentoring program established at
E*TRADE that would pair women/minorities with the mostly male members
of the senior team. Another adds that E*TRADE is largely male
dominated, with relatively few women in the upper echelon of
management. Despite a lack of diversity, the firm is cognizant of being
an equal opportunity employer, and openly gay staff members seem to be
well regarded and accepted in the workplace. But other than equal
opportunity employment, the firm doesnt have any programs to promote or
mentor gays and lesbians.

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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

Flexible working arrangements are


available
Good relationships with managers

DOWNERS
Dress code is suit-and-tie
professional
Minority diversity could be improved

EMPLOYMENT CONTACT
See the careers section of
FederatedInvestors.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Money market expertise


Not competitive on comp
Good mid-cap funds
Good firm, but not well known

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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.

The dominant Donahue family


Donahue, Fisher and Donnelly got their start more than 50 years ago selling
savings plans and mutual funds. They made enough money peddling their
wares among their fellow Pittsburghers to go public four years later in 1959.
Within a few years, Federated was making waves, introducing one of the first
exchange funds, one of the first government bond funds, one of the first highyield bond funds in the investment market. By the mid-1970s, Federated
Investors was selling money market funds, mostly to bank trust departments,
and, by 1977, it reached $1 billion in assets under management.
In 1982, Federated Investors was bought by insurance giant Aetna for $256
million. In the seven years under Aetnas watch, Federated Investors grew its
mutual funds business by marketing them through broker and dealer affiliates
of commercial banks and started offering administrative services to banks
through proprietary private-label mutual funds. But in 1989, John F.
Donahue reacquired the company from Aetna, buying back all the remaining
shares over a seven-year period.

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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.

Mergers and acquisitions, Pittsburgh-style


Since going public in 1998, the company has been growing at a rapid rate,
adding nearly $150 billion dollars in assets over a nine-year period. This
growth has been mainly due to a series of strategic acquisitions, which gave
the company a strong hold on the market.
Since the early 1990s, the firm has opened doors in offices around the world.
In 2001, Federated acquired the $3.2 billion Kaufmann Fund for
approximately $400 million. That same year, Federated bought $148 million
in managed assets from Rightime Funds. The following year, it bought $250
million in assets from FirstMerit Funds. In 2003, Federated added another
$465 million in assets from Riggs Funds, and in 2004, it acquired $265
million in additional assets from Banknorth Investment Advisors Funds.
In 2005, Federated managed to get tangled up in legal proceedings with the
SEC and former New York Attorney General Eliot Spitzer (and now former
New York state governor). They charged Federated with late trading and
market timing (late trading means buying or selling funds after the markets
close in order to take advantage of price discrepancies; market timing
involves allowing preferred investors to move quickly into and out of funds
in order to get ahead of market trends).
Federated was the 14th firm to face such charges since Spitzer began
investigating the mutual fund industry in August 2003. As a result of the
inquiry, Federated agreed to pay $100 million, including $20 million in fee
reductions, in November 2005 to settle the charges.
More recently, Federated added $19.3 billion in money market fund assets
from Alliance Capital Management and $142 million in mutual fund assets
from three Vintage equity mutual funds, managed by Amcore Financial. In
March 2006, the company announced another $376 million in acquired equity
assets, and in July 2006, it completed its acquisition of Cambridge, Mass.based MDT Advisers, which oversees $6.7 billion in managed assets.

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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.

Thriving in tough times


Federated had a solid third quarter in 2007, proving that there were
companies out there who were still prospering despite the overall markets
poor health. Its year-to-date earnings per share were up $0.31 (or 19 percent)
versus the same period in the previous year, coming in at $1.60. Assets under
management skyrocketed an amazing $53.5 billion. Federated paid a
dividend to shareholders of $0.21 per share in November 2007.
All three divisions of Federateds managed assets posted high returns in the
third quarter. Revenue increased by 17 percent to a record total of $286
million during the third quarter. The revenue generated by money market
funds increased by $28.3 million, and the increases in average equity
managed assets rounded out to about $16.2 million. CEO J. Christopher
Donahue explains how the firm dodged the credit bullet, saying, The longterm credit and risk management strength of Federateds money market
franchise positioned our products well for the unsettled credit markets of the
third quarter. As a result, we were able to substantially grow our money
market mutual fund assets.
The good news kept coming in the fourth quarter, and for the full year 2007,
Federated reported $217.47 million in net income, a 10 percent rise from the
$197.73 million it booked in 2006. Revenue, meanwhile, rose 15 percent to
$1.128 billion from $978.9 million. And total assets under management at
year end were $301.6 billion, up 27 percent from $237.4 at the end of 2006.

GETTING HIRED

Coming from everywhere


The firm recruits on college campuses, job fairs and using management
recruiting services. Or, you can cut out the middleman and go online. On
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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.

OUR SURVEY SAYS

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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GAMCO Investors, Inc.


One Corporate Center
Rye, NY 10580-1422
Phone: (914) 921-5100
Fax: (914) 921-5392
www.gabelli.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Solid reputation
A little loose with the law
Aggressive
Small boutique, great
performance

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THE SCOOP

Value in the underdogs


As of August 2005, the firm formerly known as Gabelli Asset Management
became GAMCO Investors. Company executives said the new name is a
more inclusive parent company name, and more appropriately represents the
various investment strategies and asset management brands contributing to
the continued growth of our company. Operating under a new moniker,
GAMCOs strategy stayed the same: perform intensive research to find and
then invest in undervalued companies that are likely to reach their intrinsic
value over time.
With $31 billion in assets under management as of March 2008, GAMCO
provides advisory services to more than 30 mutual funds, over 1,800 private
wealth clients, pensions, trusts and profit-sharing plans. The company
operates principally through three subsidiaries: GAMCO Asset Management
Inc., which manages private advisory accounts; Gabelli Funds, which handles
mutual funds and closed-end funds; and Gabelli Securities, Inc., through
which the company serves as a general partner or investment manager in a
number of limited partnerships with varying investment objectives.
In addition to the value-oriented investment strategy, GAMCO has developed
a diversified product mix to serve the financial objectives of a broad range of
investors. The companys investment services are primarily offered through
its subsidiary, GAMCO Asset Management Inc., which manages separate
accounts for high-net-worth individuals, institutions and qualified pension
plans, as well as through the companys role as advisor to a family of mutual
funds.

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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business in the high-net worth management. One of the strongest performers


was GAMCOs U.S. Treasury Money Market Fund, which placed No. 1
among 83 U.S. Treasury money market funds for the 12 months ending in
September 2007 in a Lipper, Inc. study. Open-equity funds were also steadily
increasing in value, with The Gabelli Equity Income Fund and the Gabelli
Small Cap Growth Fund both topping $1 billion in assets under management.

Sharing the wealth


GAMCO has stated that one of its major goals is to pay stockholders 40
percent of their earnings in the form of stock buybacks and dividends, and in
the last three years, the firm has made good on their promises. In July 2007,
it announced a $1 per share dividend to all GBL Class A and Class B
shareholders. Quarterly dividends have been paid out to shareholders since
June 2004, totally approximately $90 million or $3.08 per share in dividends.
The firm also recently spun off the 42 percent of shares it owns in Gabelli
Advisors Inc., the investment manager which handles the GAMCO
Westwood Funds, which had $443 million in assets. The shares GAMCO
owns in Gabelli Advisors were paid out to shareholders, and Gabelli Advisors
was renamed Teton Advisors, Inc.

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.

Marios power punch


Though Marios reputation may have been slightly bruised due to his run-ins
with the government, he proved in October 2007 that he still has the power to
wield a mighty blow. Mario was largely responsible for putting the brakes on
a planned buyout of Cablevision Systems by the Dolan family, claiming that
the $10.6 billion they offered to take the company private was far too low. It
was the largest-ever rejection of a buyout bid, outdoing the previous largest
rejected offer by more than $8 billion.
Gabelli teamed up one of Cablevisions largest shareholders, ClearBridge
Advisors, to put up a united front against the buyout. He also used
intimidation tactics, such as threatening to use his shareholder appraisal rights
to challenge the settlement, which would inevitably spark off a long and
protracted legal battle. Cablevision currently owns Madison Square Garden,
Radio City Music Hall, the New York Knicks and the New York Rangers.
The Dolan family has been in negotiations to take it private for over two
years. GAMCO is Cablevisions largest institutional investor.

GETTING HIRED

Stretch out and wait


If youre an entry-level candidate, odds are that GAMCO will come to you.
The firm recruits primarily from major business school MBA programs, in
particular from Columbia and Wharton. Your interviewing process with the
firm may varyand could be very short. One insider describes his meeting
as consisting of one interview with the firms chief investment officer.
If youd like to take job matters into your own hands, you can just go to
www.gabelli.com/corporate/jobs.html and check out the posted listings. If
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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.

OUR SURVEY SAYS

Take your chances


Reports of the nature of companys culture vary from insider to insider. Some
contacts call GAMCO a challenging, great learning environment with
no office politics, but others warn of nastiness, negativism and
unprofessional treatment of people. Still, some say youll be given the
ability to accomplish as much as you wantand possibly make as much as
you want. Compensation and hours receive high ratings. A contact in sales
with just two years experience in the industry reports banking $110,000 in
base salary plus a $20,000 bonus, and he says he rarely works weekends.
Still, theres always room for improvement. One insider says, There is too
much pressure to cover more stockseven though quality of research
coverage declines when analysts are spread too thin. The firm could also
advance its promotion policies and foster a more professional working
environment. It would also help if there were more efforts toward
recruitment and mentoring, admits one insider. Additionally, casual dressers
should beware: GAMCO's dress code is formal always.

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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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

World-class organization
Not well known
Well respected
Small, family-friendly

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GMO

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.

Keeping it conservative in 2008


In interviews with a variety of business publications, Grantham, the public
face of GMO, asserted a bearish outlook for 2008, telling The Financial
Times in October 2007 that he believes the global economy is in the middle
of a slow-motion train crash. He told BusinessWeek that GMO has taken
its most conservative investing approach ever in its 30-year history, and
forecast to The Wall Street Journal that he expected a major bank to fail
within the next five years (Bear Stearns, anyone?), and said up to half of

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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.

Down under defectors


In September 2007, Australian equities head Max Cappetta and equities
research head Anthony Corr left GMO to develop their own quant boutique
firm Continuum Capital Management with former coworker Brett McElwee.
GMO has since replaced Capetta with Boston-based partner Rick Suvak.
In January 2008, Jack Gray, who had been commuting between Sydney and
the GMO office in Boston, resigned from his position has head of strategy.
Gray had been with GMO for nine years.

Investing in emerging markets


The firms flagship emerging markets fund has gained more than 13 percent
per year since its formation in 1993 by Arjun Divecha, a former aeronautic
engineer, and recent years have seen it increase at more than three times that
rate. GMO has focused on emerging markets growth as protection against
economic problems in the west. In December 2007, partner and board
member Divecha, who runs the fund from GMOs Berkeley, Calif., office,
said he saw particular opportunities in Taiwan, Thailand, Brazil and Korea.
Like its other funds, the emerging market fund makes heavy use of
quantitative research, using a computer-driven process that selects countries
with the best outlook and lowest stock prices, and then selects the best stocks
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in those countries. The practice of selecting the countries prior to selecting


the stocksusually at smaller companiessets the fund apart from a lot of
its competitors. Divecha has said he prefers countries with recovering
economies and cheap stocks.

Seeing the forest for the trees


GMO differentiates itself from many other investment management firms by
investing a lot in timber and forestry through its GMO Renewable Resources
Division. The division invests in profitable, sustainable tree farms and
forests, treating the harvested timber as a growth commodity and an
important way for the firm to diversify in a bear market.

GETTING HIRED

Dont call them, theyll call you


Feel free to browse the firms site at www.gmo.com all you want, just as long
as you recognize that the job postings you might be frantically searching for
will ultimately prove to be elusive. Though GMO might be interested in you
if youre one of the bright, passionate, self-directed workers, there arent
any listings. But fear not. If you think you measure up to GMOs standards,
with the proper background, experience and interests, you can pass on your
resume to resume@gmo.com. And if you impress GMO, the firm says it will
be in touch.

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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

Employer Type: Public Company


Ticker Symbol: IVZ (NYSE)
President, CEO & Director: Martin
L. Flanagan
Revenue: $3.9 billion (FYE
12/07)
Net Income: $673.6 million
No. of Employees: 5,475
No. of Offices: 40

Company culture is realizing an


increasing degree of centralization
and associated bureaucracy
Underpaid versus what peers at
firms of our size are getting paid for
the exact same job

BlackRock
Franklin Resources
T. Rowe Price

EMPLOYMENT CONTACT
www.invesco.com/about

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Known for bonds


Failed technology funds
Silly decisions

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Invesco Ltd.

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.

Officially over the pond


Invesco bolstered its U.S. stature in November 2007 when shareholders
approved moving the firms primary listing from the London Stock Exchange
to the New York Stock Exchange. We are gratified that Invescos
shareholders have overwhelmingly approved board recommendations
allowing the move of our primary stock listing to the New York Stock
Exchange, said Invesco CEO Martin Flanagan in a press release. A U.S.
listing will again place Invesco under the supervision of a single primary
regulator while also increasing visibility and coverage of the company within
a peer group of large, global investment management companies.
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Piecing together a giant


The companies that would eventually become Invesco formed separately in
the late 1970s. In 1978, Charles Brady, along with eight associates,
purchased the pension management department of the Atlanta bank at which
they were employed, and launched Invesco. Through several acquisitions
over the next 20 years, along with a merger with the 100-year-old Britannia
Arrow in 1988, which give the firm its listing on the London Stock Exchange,
Invesco gained prominence worldwide. At around the same time Invesco was
launched, Ted Bauer, Robert Graham and Gary Crum left the asset
management department of the insurance firm at which they were working
and opened a mutual fund company called AIM. Soon after, they began a
rash of acquisitions that would make AIM a household name. By 1993, the
company would rank among the top-25 U.S. mutual fund managers by total
assets.
Both companiesInvesco and AIMcontinued to grow rapidly and
simultaneously, in large part through strategic acquisitions in the 1990s. In
February 1997, through the merging of the two companies, AMVESCAP was
born, creating a truly global firm with $200 billion in funds under
management. In 2001, the company established the third of its three major
areas of investment distribution with the acquisition of Boston-based Pell
Rudman, which offered products and services to the high-net-worth channel.
It later rebranded the business as Atlantic Trust and made two additional
acquisitions: New York-based Whitehall Asset Management in 2002, and
Chicago-based Stein Roe Investment Counsel in 2004. In retrospect, some
have said that the firm overpaid for many of its recent acquisitions,
particularly given the floundering equity markets.
In June 2003, one of the firms U.S. mutual fund businesses, Invesco Funds
Group, announced that it would close down 21 portfolios and fold them into
other ones in an effort to cut costs. AIM said that seven of its funds and 14
Invesco funds, with an approximate value of $4.5 billion, would be
eliminated as a result of the merged portfolios. At the same time, the firm
decided to use the AIM brand for all of its U.S. retail funds, effectively
shutting down Invesco Funds Group, leaving Invesco as an institutional brand
in the U.S.
The company suffered another blow in 2003, when it was one of many U.S.
mutual fund firms charged by the SEC with allowing several unauthorized
trades in some of its funds. As part of an industrywide crackdown, the firms
Invesco Funds Group in Denver was accused of being involved in a massive
mutual fund scheme by allowing privileged clients to trade in and out of
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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.

Not just lip service


Four AIM fundsAIM Energy Fund, AIM European Small Company Fund,
AIM Global Equity Fund and the AIM International Small Company Fund
were recipients of five prestigious 2007 Lipper Fund Awards. The firm was
among only 14 fund families to earn five or more 2007 Lipper Awards. The
Lipper Fund Awards program highlights funds that have excelled in
delivering consistently strong risk-adjusted performance, relative to peers.
The awards are given to funds in 21 countries in Asia, Europe and the U.S.

New sales chief comes from inside


After conducting a thorough search, AIM Investments appointed one of its
own to lead its U.S. sales division. In September 2007, John Cooper was
named to lead the department. Cooper, who now reports directly to CEO Phil
Taylor, had been AIMs director of business development and national
accounts. Cooper joined AIM in 2000 from Putnam Investments
international division, where he served as vice president of sales
administration and client development since 1998, working with distribution
partners and institutional clients from around the world.

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.

OUR SURVEY SAYS

Protecting their reputation


Sources at the firm generally describe Invesco as cultivating a casual feeling
in a professional atmosphere. Although some laud the environment, one
insider notes that the firm might not be demanding enough on employees

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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.

Providing for all?


Though the firm asserts that it provides equal opportunity in its employment
and promotion practices, some sources at Invesco assert that the firms
diversity could be improved. We have a large number of minorities
employed but only in certain areas, such as payroll and accounts payable. We
dont have a broad base that would allow for a number of minorities to
advance to managementtheyre all in the same pool, competing for the
same one or two management level positions. With respect to hiring
women, one female notes, Im treated with absolute respect. However, she
admits, There are few women in the global partnership. Another source
gives the firm high marks with respect to diversity, saying, I think Invesco
does a good job of hiring and promoting individuals regardless of sex, race or
sexual orientation.

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Janus Capital Group


151 Detroit Street
Denver, CO 80206
Phone: (303) 333-3863
Fax: (303) 336-7497
www.janus.com

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

Better diversity practices needed

EMPLOYMENT CONTACT
Follow the careers link on
www.janus.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

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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Climbing through rocky times


Denver-based Janus Capital was founded in 1969, and its first fund opened in
1970 with $500,000 in assets and 30 investors. Founder Tom Bailey named
his firm after the Roman god of new beginnings, adopting the traditional
image of a face looking both forward and backward. Bailey felt this was the
perfect symbol to describe his business philosophy: that the best way to judge
a companys future potential was by understanding its past. This approach is
still in action at Janus, where research is a major part of investment
management.
Janus rose to national prominence in the 1990s, thanks to its red-hot
technology funds. In the post-tech boom era, however, the firm has worked
hard to build a new, more stable identity for itself. Its also had to recover
from big losses in the economic slumps of 2000-2002, and it suffered from
bad bets on now-infamous companies like Enron and Tyco. Then, in 2004, it
had to pay $100 million in SEC fines stemming from allegations of illegal
market-timing operationsa scandal that led to the departure of CEO Mark
Whiston.

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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counsel of Janus Capital Management. In April 2007, veteran bond specialist


Ron Speaker decamped after 20 years with Janus, where he had managed the
$757 million Janus Flexible Bond Fund since 1992. The fund was reassigned
to Gibson Smith, one of Janus two chief investment officers.
The turnover was thought to be due to a larger role that the company has
taken in recent years in fund management that was meant to boost
performance. Some in the industry feel that the additional reins on managers
might feel stifling to those who had unlimited say in the past. In November
2007, CEO Gary Black told Kiplingers, I hope we dont have additional
turnover. Just days after this statement, Janus announced that Minyoung
Sohn, a portfolio manager of more than $8 billion in assets, was leaving the
company.

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.

Down but not out


Given the market declines and ongoing credit crisis, the first quarter of 2008
wasnt a great one for most investment management firmsand Janus was no
exception. Net outflows for the quarter were $2.1 billion and its funds
depreciated by $17 billion. Assets under management fell from $206.7
billion at the end of 2007 to $187.6 billion at the end of March 2008.
Earnings, though, saw a slight rise, as the firms net income increased to $39
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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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OUR SURVEY SAYS

Yup, its great


In terms of culture, insiders more or less agreeJanus is a great place to
work where everyone works as a team. One contact notes that employees
get to do a little bit of everything here, and your job description grows just
as fast as the company does. Its a high-commitment place, and the people
are unbelievably dedicated to the companys success, says a respondent.
Its fast-paced and intense by Denver standards, but would hardly be
considered intense by New York standards. Janus has a casual, open
environment, says another source, adding, It is becoming more corporate.
A former insider is less enthusiastic. Janus can seem like a pretty casual
place on the surface, but underneath its just as bottom-line-focused as any
other company. The contact adds, The cushy environs, and friendly laidback Denver attitude can be confusing in what can still be a pretty intense
work environment. As for the recent trials and tribulations, one source says,
Were headed in the right direction, but still not there yet, and budgets are
still a little tight. The contact adds, New leadership is very strong and most
people here expect the company to turn around and be very successful again.
Insiders say that managers treat their juniors well, and give the firm good
grades for compensation. Bonuses in the good times were generous, says
a former staffer. The firm also offers amazing benefits. They have a very
strong benefits package, says a source. Theres little, if any cost, for
medical, dental and vision. Family coverage is also extremely reasonable.
Janus offers a 3 percent match on its 401(k) and tuition reimbursement, an
on-site gym at one location, discounted tickets to events and a companywide holiday party and a summer event. Another contact says the firm offers
amazing benefits, including free soda and bottled water in the office. A
former insider says, Vacation time was the best part about Janus. Salaried
employees start off with 21 days of vacation/sick time; hourly employees
start off with 16 days. They encourage you to take these vacation days,
adds the respondent. If you dont, you lose them.
As far as typical hours, one source says she works 50 to 55 hours per week
and will put in about a half-day on the weekend once a month or so. There
are also great training programs available, and one insider says that
improvement has been a concerted effort by the company. New leadership
has made a strong commitment to add back resources for training that were
cut in the last few years.

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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

Excellent access to senior


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

Pays less than New York-based firms

EMPLOYMENT CONTACT
Follow the careers link at
leggmason.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Very well regarded


Integration troubles
Great funds
Rocky performance
Good money managers

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Legg Mason

THE SCOOP

Trillion dollar baby


Legg Mason is a global asset management firm that has climbed its way to
become the second-largest publicly traded mutual fund company in the U.S.
The numbers are impressive: In 2007, it realized the formidable goal of $1
trillion in assets under management. Even so, in recent years, the firm has
faltered somewhat and is currently struggling to retain its place of dominance
in the industry.
Legg Mason offers asset management services to individuals, institutions,
endowments, foundations, governments and high-net worth investors around
the world. The firms divisions include institutional, wealth management and
mutual funds/managed services. Its asset management subsidiaries include
Batterymarch, Brandywine Global, Clear Bridge Advisors, Legg Mason
Capital Management, Legg Mason International Equities, Legg Mason
Canada and Western Asset. The wealth management division also boasts an
impressive roster, including Barrett Associates, Inc., Bartlett & Co., Legg
Mason Investment Counsel & Trust Company, The Permal Group, Private
Capital Management and The Seifert Group at Barrett Association.

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.

Bills tough adventure


Often referred to as Americas best stock picker, legendary Legg Mason
fund manager Bill Miller has been in a slump for the past couple of years, and
things hit rock bottom for Miller during Legg Masons fourth quarter of fiscal
2008 (ending March 31st). With equity markets on the decline, Millers Legg
Mason Value Trust fund experienced its largest quarterly decline since it
opened 26 years earlier. (Until 2006, Miller was on a 15-year streak of
beating the S&P 500 Index every single quarter.)
According to Morningstar, the $12.2 billion fund dropped 20 percent and
trailed all but four of its 660 or so competitor funds. Bets on duds such as
Sprint Nextel and Bear Stearns contributed to the poor numbers, which
werent much better than they were in 2007 when Millers fund took a 6.7
percent dive, versus the industry average of a rise of 6.2 percent.
The good news is on the heels of Millers roughest quarter ever, he went on
record saying that he believed the worst of the market decline was over.

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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.

OUR SURVEY SAYS

Friends and family


Legg Mason has sustained a relaxed, family-friendly culture that has helped
to make it successful over the years. Insiders describe the firm as
entrepreneurial and ethical, and say that work can be a lot of fun.
Sources have a common mission and are proud to be part of a firm that isnt
bureaucratic and is generally friendly. The firm also has a team
atmosphere and is integrity-conscious. Legg Mason is an excellent
alternative to NYC-based firms, with some compensation sacrifice in return
for superior quality of life. According to some sources, The corporate
culture totally depends on the manager.
Insiders note that there is a very good working relationship with managers.
One states that there is excellent access to senior management. Another
notes that managers are the best people I know. Theyre like family. One
contact even says that managers are open to conversation with interns and
entry-level employees and also try hard to highlight outstanding
performance in the workplace.

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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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MFC Global Investment


Management LLC
101 Huntington Avenue, H-6
Boston, MA 02199
Phone: (888) 332-7132
www.mfcglobal.com

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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MFC Global Investment Management LLC

THE SCOOP

Theyre managing for Manulife


MFC Global serves as the investment management arm of Manulife Financial
Corporation, supervising investments that include corporate and government
bonds, equities, private placements, mortgages and more. The subsidiary also
makes sure it covers its bases globally, with offices around the world and
approximately $240 billion in assets under management as of December 31,
2007. It claims to manage one of the broadest ranges of investments in the
industry. And indeed, the firm has investment offices not only in North
America, but also throughout Europe as well as in Japan, Hong Kong,
Taiwan, China, Malaysia and Indonesia.
Although MFC Global has had approximately a century of experience
managing assets of the Manufacturers Life Insurance Company, the firm only
recently took a turn for true Goliath status in the industry in April 2004, when
it grew almost twofold following the merger of Manulife Financial and John
Hancock Financial Services. MFC seems to show no sign of losing steam,
either. MFC Global brought in $8.4 billion in net inflows in 2007, a 50
percent upsurge from 2006.

Meet the parent


Parent company Manulife, meanwhile, also continues to impress. It brought
in C$35.5 billion in revenue in 2007 (up from C$34.19 billion in 2006) and
C$3.23 billion in net income (up from C$3.17 billion). Manulife also
continues to garner a number of annual awards, such as winning the title of
Canadas Most Admired Corporate Cultures in 2006, 2007 and 2008. And in
April 2008, Manulifes Monthly High Income Fund received a Lipper Fund
Award for excellence in the investment industry.
On the whole, Manulife was looking a little pallid in the first quarter of 2008.
Manulifes revenue came in at C$8 billion, a 7.7 percent decrease from the
first quarter of 2007. Net income, meanwhile, came in at C$869 million, a
drop from the C$1.14 billion that the first quarter of 2007 brought in. The
firms president and CEO Dominic DAlessandro said that the shaky results
were due in part to a decline in equity marketsand soon after, he dropped
a bomb of his own, announcing at the annual shareholder meeting that he
would resign his role effective May 2009. Manulifes chairman, Arthur

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Sawchuk, said the board was aware of the possibility of DAlessandros


resignation and expected to announce his successor prior to the end of 2008.

Coming from the competition


In recent years, MFC Global has been busy bringing in new faces to add to
its management team. In October 2007, the firm hired William M. Sheehan
on as a managing director from Ironside Capital Group. Sheehan will work
largely in sales and business development capacities and report to MFC
Globals U.S. president, Barry Evans.
In April 2008, MFC Global
announced that former State Street advisor Frank Saeli would be taking over
as head of institutional sales and relationship management. Saeli reports to
MFC Global President and COO J.F. Courville.
Also in April 2008, the firm announced that Executive Vice President
Timothy Keefe would be leaving the organization and would be replaced by
Senior Vice President Timothy Malloy, who will also assume the
responsibilities of leading the Intrinsic Value Team, which oversees the
Manulife Global Opportunities Class, Manulife Global Real Estate Fund and
the Manulife Global Natural Resources Fund.

Going against the grain


In spring 2008, MFC Global released its annual U.S. economic outlook
report, releasing its predictions for the upcoming months. Even though MFC
reported that it revised its growth forecast downward due to further financial
turmoil, higher energy prices, a softening job market and weaker data
on nonresidential fixed investment, its overall predictions for the industry
are decidedly rosier. MFC said economic stimulus checks, rate cuts and
stabilization of and a drop in government spending will ultimately rescue the
economy from sliding into a recession. The firm also observed that though
its possible that the housing market could still take another nosedive, policymakers are more likely to recognize this scenario now and take preventative
measures.

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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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MFS Investment Management


500 Boylston Street
Boston, MA 02116
Phone: (617) 954-5000
www.mfs.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Creative and thoughtful


Very political
Reputable, top quality
Cult-like
Successful player

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THE SCOOP

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.

Exploring the alternatives


Since its introduction of the first mutual fund in 1924, MFS has pretty much
stuck to its core strategy: putting its money into traditional investment
avenues. But in September 2007, it revealed plans to branch out into the
growing field of alternative investments, announcing its intention to launch
Four Pillars Capital, which would provide seed money to hedge fund
managers. The decision to move into the hedge fund business came from an
increased interest from MFSs clients, who wanted to diversify their
portfolios and cash in on this burgeoning industry.
Four Pillars Capital will be run by Thomas A. Knott, an investment industry
professional who co-founded K Capital Partners, a successful hedge fund, in
1998. Eric Lass, who worked with Knott as managing director and portfolio
manager at K Capitals Credit Opportunities Fund, serves as chief investment
officer of the new company. MFS will provide key operations, marketing
and distribution support to Four Pillars, although the two will not share
investment resources.
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Getting ready for the golden years


In June 2006, MFS introduced the MFS Diversified Income Fund, which has
assets designed to generate income and shield investors from the ill effects of
inflation. The Diversified Income Fund invests in five asset classes and is
designed for maximum stabilitya feature MFS said was aimed at investors
nearing retirement and facing longer life spans (and thus the need for greater
continued income).
Continuing its examination of Americans retirement and savings plans, soon
after the debut of its new fund, MFS released a survey that revealed that only
half of affluent Americans nearing retirement have formal retirement income
plans. The study also found that one in three affluent retirees have no plan at
all, even if they had already begun spending their nest egg. Even more
disturbingly, MFS reported that peoples expectations about retirement and
income were greatly out of synch with what retirees actually experienced
once they left the workforce, both in terms of when they began retirement and
how much income they had for living expenses.

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.

The long and short of things


In July 2007, MFS announced that it would be employing a 130/30
investment portfolio that would take long or short positions on stocks based
on the companys research analysis. A domestic portfolio of the same kind
launched in September 2006, but the firm expanded its 130/30 coverage into
the global market in the second half of 2007. The 130/30 investment strategy
takes 30 percent of a portfolio and invests it in short term stocks, and then
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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.

GETTING HIRED

Put your thinking cap on


Get ready to gear up for a challenge. The firm is not only highly selective
but has low attrition, as employees prefer to stay for their entire career. So
naturally, getting a gig at MFS Investment Management can be quite a feat.
The best way is to know someone here or star as an intern, suggests one
insider. Indeed, internships are a stellar way to sneak into full-time firm life.
One intern-turned-full-timer says her tasks as an intern were very basic, but
she always asked for more stuff to do as soon as [she] was finished. She
adds, Seeing the environment during my internship helped me to decide to
stay.
The full-time job interview process is very thorough, and involves speaking
with peers as well as managers in order to make sure theres a good match
with the culture. One contact says he went through approximately six
interviews, including meetings with the department head, other direct
reports to the department head and members of the management committee
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that oversee the department. Anticipate questions about background,


goals, your attitude toward working with a team and relevant past
experience.

OUR SURVEY SAYS

Hold your horses, superstar


The environment at MFS is incredible, very collaborative, non-superstar
oriented, like nothing available elsewhere in the corporate world, and
internally cooperative yet externally competitive. It strives to provide
excellent performance and service. The firm also tries to maintain a
positive work environment in which everybody is listened to and valued for
their input. One analyst confesses that the firm has changed a lot,
explaining, My department is getting too big. However, the contact adds,
I still think it has a good environment and is a teamwork-oriented firm.
There are a few aspects of firm life that could stand a little improvement.
Salaries are average or are lower at MFS than at other firms, say insiders.
Others say that benefits are not as great as they used to be, but are still highly
competitive within the industry. And bonus tiers are higher than average,
insiders report. One contact says his annual bonus is around 8 to 10 percent
of my annual wage. Its possible that the ho-hum salaries are a trade-off for
what seems to be mostly light hours. Sources say weekend work happens
rarely or never and that a 35-hour workweek is common. I think I can
work very well in eight hours per day, declares one insider, adding that she
works one day per week from home and always finishes assigned tasks
on time.

Theyll cheer you on


Extensive employee encouragement from management seems to be big at
MFS. Insiders say managers are great, very supportive, value their
employees, operate with the highest integrity and are employee-oriented.
For the most part, offices are modern, comfortable and impressive,
though they could have more space and light. Training could be better,
too. The firm offers a program called Open Doors as an option to train
online, but basically, the training is immediate on-the-job experience. One

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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.

Leveling the playing field


In terms of diversity, MFS does not discriminate, say insiders. The firm
has many employees of different ethnic backgrounds and insiders havent
really noted any glass ceiling for women. One full-time, working mother
who occasionally works from home says the firm has helped me to balance
family and work well, though any improvement on this issue will be more
than welcome. However, continues the contact, Id love to have a part-time
position here. MFSs treatment of working mothers is fairly progressive, say
insiders. One notes, I love the fact that I have the mothers room to pump
milk when I was nursing my baby.
By and large, it seems that respondents plan on sticking with the firm as long
as they possibly can. I adore working for MFS and would be a lifer if they
allow it, professes one insider.

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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.)

They want to help you reach your


goals

DOWNERS
Salaries could be better

EMPLOYMENT CONTACT
E-mail: recruiting@morgankeegan.com
See career opportunities at
www.morgankeegan.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Boutique
Second tier
Small player in the South

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THE SCOOP

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.

Changes at the top


In February 2008, Morgan Keegan made a couple of major management
changes, naming a new CEO and president. Coincidentally, the changes
came on the same day that it was revealed that the SEC had asked for
information regarding two of Morgan Keegans mutual funds, which
contained subprime mortgage-related investments and had recently lost more
than 70 percent of their value. According to Morgan Keegan, the
management changes and the SECs request were unrelated.
John Carson, the firms president of fixed income capital markets, was named
CEO, while R. Patrick Kruczek, the chief administration officer, was named
president. In April 2008, it replaced Doug Edwards, Morgan Keegans
former chief and president, who announced his retirement after 30 years with
the firm.
Carson is a 25-year veteran of Morgan Keegan. He joined the firm in 1994
as president of fixed income capital markets and as an executive managing
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director. Previously, he worked for Chase Manhattan Bank, Morgan Stanley


and Security Pacific. Kruczek is also a Morgan Keegan veteran. He joined
the firm in 1993 as an investment banker. Since, he has held several positions
in the equity capital markets division, including institutional sales manager,
co-director of the syndicate department, and chief operating officer and
director of equity research. In 2006, he was named the firms chief
administrative officer.

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.

Southern charm, nationwide


Though Morgan Keegan considers itself a regional brokerage, it has spent
recent years expanding its presence in the Northeast and Midwest. In 2007,
it expanded its branch in St. Louis, Mo., to include public finance services.
The firm hired Jennifer Sieve and Richard Murray, two veteran investment
banking professionals from A.G. Edwards with expertise in multifamily and
single family financing, to run the office. Morgan Keegan hopes to build
long-term relationships with the local authorities in St. Louis to expand into
the housing sector there, an area in which Sieve and Murray have extensive
experience. Morgan Keegan is a leading underwriter for state and local

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Housing Finance Authorities, and was recently ranked No. 4 as an


underwriter of single-family bonds by Thomson Financial.
Besides opening the new office in St. Louis, Morgan Keegan has also
expanded its offices in New York City. In June 2007, it acquired Shattuck
Hammond, LLC, an independent investment banking and financial advisory
firm which services health care clients throughout the nation through offices
in New York, Chicago, Atlanta and San Francisco. Already dominant in
municipal bond underwriter in the South Central U.S. (for the past 15 years,
it was the top underwriter in the region), Morgan Keegan hopes to break into
the top 10 in the national rankings by expanding throughout the country. In
2007, it came very close, ranking No. 11. Currently, Morgan Keegan has 27
offices that provide underwriting services in14 different states.

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.

Latest financials arent too bad


Parent Regions Financial saw a slight increase in its first quarter 2008 net
income versus the same period in 2007, booking $336.7 million, a 1.1 percent
rise compared to the $333 million it recorded a year earlier. Morgan
Keegans net income, meanwhile, was $31 million for the 2008 first quarter,
down from the $45.5 million it booked in the same period a year earlier, but
still better than expected due to the difficult market environment and its legal
battles. Revenue for the first quarter of 2008 rose 12.2 percent to $339
million from $302 million. Asset management accounted for 12.3 percent of
the latest revenue, while private client accounted for 23.3 percent. Both units
saw declines in revenue versus the 2007 first quarter due to lower asset
valuations and lower demand for retail products.

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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.

GETTING HIRED

Suit up for battle


Its no piece of cake snagging a job at Morgan Keegan, insiders say. Still, you
can check out the firms open positions at www.morgankeegan.com/MK/
CareerOpp, which are separated by location (headquarters or elsewhere) and
division. Candidates for senior positions at Morgan Keegan should expect to
go through a very difficult hiring process with up to four interviews. A
senior financial planner notes that when she was hired years ago, it was a
very easy interviewing process. But now its a much longer procedure. You
meet with all management and department employees.
Although they can be arduous, Morgan Keegan interviews are generally
informal and are reported to consist primarily of questions about
experience. One insider reports questions such as Why would you be good
in this field? I met with professionals from trading, sales and research,
says one contact, while another says, No one really interviews. Its a who
you know thing at Morgan Keegan. Interested candidates can apply for
desired openings through an online application process.
Certain departments at Morgan Keegan, such as investment banking, equity
capital markets and fixed income, like to recruit from the top MBA schools
in the country, says a source, but its possible to get a job without that
credential. If youre sharp and have a good rapport with management, you
can get hired. Another contact says that Morgan Keegan mainly recruits by
word of mouth, but notes that the firm usually swings by the campuses of
Duke, the University of North Carolina, the University of Virginia,
Vanderbilt, Washington University and the University of Texas on a quest for
new analysts and associates.

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OUR SURVEY SAYS

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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Natixis Global Asset


Management
399 Boylston Street
Boston MA 02116
Phone: (617) 449-2100
Fax: (627) 247-1447
www.globalam.natixis.com

KEY COMPETITORS

AFFILIATES

UPPERS

Absolute Asia Asset Management


AEW Capital Management
AEW Europe
Alpha Simplex
Hansberger Global Investors
Harris Alternatives
Loomis, Sayles & Company
Natixis Caspian Capital
Management
Natixis Global Associates
Natixis Multimanager
Reich & Tang Capital Management
Vaughan Nelson
Westpeak Global Advisors

Fun, innovative and


entrepreneurial culture

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

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Boutique doing well


Large
Not well known

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THE SCOOP

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.

OUR SURVEY SAYS

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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Northern Trust Corporation


50 South LaSalle Street
Chicago, IL 60603
Phone: (312) 630-6000
Fax: (312) 630-1512
www.northerntrust.com

UPPERS

BUSINESSES

DOWNERS

Corporate & Institutional Services


Personal Financial Services

Some disgruntled employees


Only a few senior women

THE STATS

EMPLOYMENT CONTACT

Employer Type: Public Company


Ticker Symbol: NTRS (NASDAQ)
Chairman & CEO: William A.
Osborn
Revenue: $3.57 billion (FYE 12/07)
Net Income: $728 million
No. of Employees: 10,918
No. of Offices: 96

Follow the "careers" link on ntrs.com.

Everyone is willing to lend a helping


hand
Employees rarely work weekends

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Coveted client base


Very conservative
Regional, but good firm
Old
Custody shop

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THE SCOOP

Built on big shoulders


Northern Trust began in Chicago in 1889, founded as a trust company for
wealthy individuals and the businesses that were booming in the city of Big
Shoulders. While many banks and financial services companies went bust
during the Great Depression, Northern Trust held onand continued to grow
during World War II and afterward. In 1969, it opened shop across the
Atlantic in London, becoming the first Illinois bank to expand overseas. In
1974, Northern Trust developed services to address new standards set out in
the Employees Retirement and Income Security Act.
Today, Northern Trust invests in 90 countries and has clients in 39 nations. It
has 84 offices in the U.S. and 12 offices abroad. As of December 31, 2007,
it had $4.1 trillion in assets under custody and $757 billion in assets under
management.

Great assets, global reach


Northern Trust divides its business into two sectors. Personal financial
services offers personal trust, estate administration, private banking,
residential real estate mortgage lending, securities brokerage and investment
management services to individuals, families and small businesses. This
group also offers wealth advisory services, portfolio management, mutual
funds, securities custody and investment services. Brokerage services are
managed through Northerns wholly owned brokerage business, Northern
Trust Securities Inc.
The second arm of Northerns business, corporate and institutional services,
provides trust, global custody, investment, retirement, commercial banking
and treasury management services to clients in 39 countries. These clients
run the gamut from corporations to private foundations to endowments,
government entities and other financial institutions. Its investment
management business is dubbed Northern Trust Global Investments, and
includes portfolio management, research and trading.

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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management firms have found themselves in the midst of mergers and


business unit swaps, Northern has kept to itselfundiluted by merger, as
the firms mission statement brags. Perhaps the Northern approach pays off
in terms of earnings and growth. In 2007, the firm brought in $728 million
in net income, up from $664 million in 2006. Revenue, meanwhile, rose to
$3.57 billion in 2007 from $3.06 billion in 2006.

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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readings and discussions with Pulitzer Prize-winning authors from the


Midwest and beyond. Past Heartland guests have included Chicago legends
like Studs Terkel, Gwendolyn Brooks and Philip Caputo, plus visitors like
Doris Kearns Goodwin, Richard Russo and Jeffrey Eugenides.

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.

GETTING HIRED

Do you work well in small groups?


Given the small size of the firm, Northern Trust is very selective about who
they hire. Candidates have to be well rounded and fit in with a small team.
Although the firm also recruits internally, a recommendation from the
inside may not always suffice. I have submitted more than one resume and
not once was considered for hire, says one source. In addition to tapping its
own people for hire recommendations, the firm looks to temp agencies and
other external sources.
For those who get to the interview stage, most have between two and four
interviews. One source says, I had two interviews and met the team I
currently work for. Others have as many as four interviews, and may meet
with the head of the department you are interviewing for, as well as the
managing director of that location. Candidates are asked about their skills,

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certifications and knowledge of software systems. You should also come


prepared to discuss what your goals are.

OUR SURVEY SAYS

Growth presents opportunities


Northern Trust is a client-orientated, results-driven firm, where people
work as a team and treat everyone like family. Everyone is willing to lend
a helping hand. Sources say this hardworking firm is still growing,
which presents many opportunities. According to a contact, Opportunities
for furthering my career are available in both my current location and at other
locations in the company. Northern Trust looks after its employees and
their interests very well. Like at all firms, there are some disgruntled
people who are leaving, which can create a negative mood. But overall,
insiders speak of a friendly environment at Northern Trust, a firm that
encourages learning. I am experiencing a massive learning curve and have
never experienced such an emphasis on training at a company before, reports
one source.

Well taken care of


Insiders give decent marks to compensation and hours worked at the firm.
The norm is a 40-hour week, with a number of paid overtime hours at
month-end, quarter end and year end, when additional client reporting is
needed. Employees enjoy flexibility because the firm does not bill
clients by hours worked. Most Northern Trusters say they work between 40
and 50 hours per week, and rarely or never work weekends.
Time spent at the office tends to be pleasant, with managers that treat all
staff equally and with respect. One insider says of the firms management,
We all lunch together, and there are no cliques in the office. Some say
management can be very spotty, with some in the upper ranks spending
their time managing up, not down.

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Opinions vary about digs


The dress code at Northern Trust is business casual except for when meeting
with clients. But certain departments are formal all the time. The firm has
a series of dress down days, but they are random. Summers are sometimes
casual. During the year, the office operates a business casual dress code, and
in the summer, the dress code is casual, apart from client contact.
Insiders describe Northern Trusts office spaces as modern, spacious and
bright with natural sunlight provided by large floor-to-ceiling windows.
Some sources say the space is mostly cubicle-based with little room and
poor lighting. The firms Luxembourg office is reasonably central, on a
number of bus routes and close to amenities such as shops, restaurants and
chemists.

Opening its arms wider


Insiders give high marks to Northern Trusts diversity efforts. The firm
encourages diversity and teamwork. A contact says Northern Trust
experienced a quiet revolution in the last decade, as it transformed from a
U.S.-oriented, personal trust business to a world-class, global financial
services institution. Of course, not everyone agrees that this transformation
improved things in the diversity department. Some say that when it comes to
gender equality, the bank talks a big game, claiming that there are only a
few senior women and they tend to get all the attention. Still, says one
respondent, Northern works on bringing on a diverse workforce.

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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

Good products and a solid


reputation
Family-friendly

THE STATS

DOWNERS

Employer Type: Subsidiary of


Madison Dearborn Partners LLC
CEO & Director: John P. Amboian
Net Revenue: $825.1 million (FYE
12/07)
No. of Employees: 743
No. of Offices: 7

Average salaries
Diversity could be better

Black Rock
Fidelity
PIMCO

EMPLOYMENT CONTACT
See careers section of
www.nuveen.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Outstanding brand, investments


and people
Very mediocre
Innovative
Lesser known, old firm
Good bonds

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THE SCOOP

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.

Hedge funds and high-net worth


During the past few years, Nuveen has broadened its scope by acquiring a
hedge fund operator and two equity management companies. The companys
share of revenue from account management services to high-net-worth
customers has also increased. In 2002, Nuveen acquired value-focused stock
investor NWQ Investment Management and purchased hedge fund manager
Symphony, giving Nuveen a significant presence in stock investing and
breaking it from its current counter-cycle.
In 2005, Nuveen paid $50 million for Santa Barbara Asset Management, a
manager of growth stock portfolios for institutions and high-net-worth
investors. With approximately $3 billion in assets under management, Santa
Barbara has doubled its assets since. Founded in 1988, its long-term track
record ranks in the top quartile of its competitors for the past one, three, five
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and 10 years. Santa Barbaras research and investment team continues to


operate independently.

Living the private life


The strength of these brand name products and the growth of Nuveens highnet-worth and institutional investment branches brought the attention of some
of the biggest players in the market. This prompted a major shift in 2007 that
brought Nuveen into the increasingly crowded field of former public asset
managers that have been bought out by private-equity companies.
The purchase of Nuveen Investments by Madison Dearborn Partners, LLC in
November 2007 was one of the biggest deals of the year. Madison Dearborn
bought the firm for $5.65 billion, with distribution to stockholders fixed at
$65 per share. Nuveen stopped publicly trading on the NYSE on November
13, 2007. At the time of the buyout, Chicago-based Madison Dearborn
Partners had $14 billion in capital under management and had invested in
more than 100 different companies.
Nuveen announced the buyout in June 2007 and spent the summer and early
fall finalizing details, including regulatory reviews and achieving shareholder
approval. Several other private equity branches of major firmsincluding
Merrill Lynch Global Private Equity, Wachovia Capital Partners, Citi, DB
InvestmentPartners and Credit Suisse/DLJ Merchant Bankingalso
participated in the buyout.

Third quarter earnings


The buyout came shortly after Nuveen announced their third quarter earnings
for 2007, which were slightly less rosy than previous numbers. The firms
assets under management actually decreased about $1.6 billion from their
second quarter, and gross sales were down 23 percent from 2006. Earnings
were down 9 percent from the prior year, coming in at $0.51 per diluted share.
The company attempted to hedge these numbers by claiming that it was due
to expenses from the buyout and readjusted the numbers of their company
web site to allow for these contingencies. The adjusted number showed a 12
percent increase in income from the previous year.
Nuveen couldnt hide the dip in gross sales for the quarter, which was driven
by the precipitous drop in the market during that time period. Equity and
fixed income mutual funds, retail managed accounts and institutional equity

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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.

A walk in the HydePark


Also in April 2007, Nuveen announced plans to acquire HydePark Investment
Strategies, which specializes in investment management. The purchase,
whose financial terms were not disclosed, will also include the acquisition of
Richards & Tierney Inc., which offers services to institutional investors.
In September 2007, Nuveen announced it was combining its equity index and
benchmark-based investment management activities into a new division
called the Nuveen HydePark Group. This was part of the firms attempt to
expand its equity capabilities to institutional investors. Nuveen Asset
Management put Rob Guttschow and John Gambla, two of its top portfolio
managers, on the Nuveen HydePark team in order to bolster the new group.

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Quarter four gets mixed reviews


By the end of the fourth quarter 2007, assets under management had dipped
to $164.3 billion, decreasing by $2.2 billion during the quarter. But net
operating revenue increased versus the third quarter of 2006, rising to $209.7
million from $195.6 million. Full-year net revenue also rose versus 2006,
increasing to $825.1 million from $709.8 million. Profit went up as well, as
EBITDA (earnings before interest, taxes, depreciation and amortization) rose
to $456.5 million in 2007 versus $410.3 million in 2006.

GETTING HIRED

Think youre special?


Better bring your expertise to the tableNuveen Investments calls its
investment teams highly specialized and looks for candidates who are up to
the challenge. Get the lowdown on specific job listings along with
responsibilities, qualifications, locations and benefits at the careers section
of www.nuveen.com. Nuveen hires staff for its home office located in
Chicago, and for its other offices in New York; Radnor, Penn.; and Irvine, Los
Angeles and San Francisco, Calif. The company hires for sales, accounting,
finance, information services, marketing and management units. You can
send in your resume to HumanResources@nuveen.com if a listing piques
your interest. Or, if you prefer, you can pass it along to any of the physical
addresses the company lists on its site.
Sources note that Nuveen mainly recruits near Chicago, most notably at
schools like Northwestern, the University of Chicago and the University of
Michigan. According to the firm, Training is provided, and employees are
encouraged to pursue continual professional development and education. If
chosen to interview with the firm, expect the process to include several
interviews with management.

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OUR SURVEY SAYS

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

Good range of benefits

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Great funds
Not well known
High aspirations
Old line mutual funds

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THE SCOOP

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.

Major management moves


In January 2007, Osbert Hood, the head of Pioneer Investments U.S.
division, left the firm, not long after UniCredits failed attempt to acquire
rival firm Putnam Investments. Daniel K. Kingsbury replaced Hood,
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becoming Pioneers third chief executive officer in six years. Kingsbury


previously served as chief executive officer of the new markets division of
Pioneer Investments where he oversaw Pioneers Central Europe and Asian
operations. Under Kingsburys direction, the new markets division was
Pioneer Investments fastest-growing division, with assets under management
increasing from about $470 million in 2000 to $10.9 billion in January 2007.
During that time, the new markets division expanded from two countries
(Poland and the Czech Republic) to more than 10 countries.
Kingsbury is a member of the Pioneer Investments global management
committee, which he joined at its launch in 2001. He is also a member of the
board of directors of Pioneer Global Asset Management. Prior to joining
Pioneer Investments in 1999, Kingsbury served as chief executive officer of
Renaissance Capital Asset Management, in Moscow, from 1997 to 1999.
From 1988 to 1997, he worked with American International Group, where he
oversaw international business development, focusing on Spain, Ireland,
Taiwan, the Philippines and Russia.
Another high-profile departure came in March 2007, when Margaret Patel,
one of the industrys most well-known fund managers, left Pioneer to join
another crosstown rival, Evergreen Investments. Patel managed $64 million
Equity Opportunity Fund, the $4.8 billion Pioneer High Yield Fund. Andrew
Feltus replaced Patel at Pioneer High Yield Fund, and Timothy Horan took
over management responsibilities at the Equity Opportunity Fund.
The firm has hired several new analysts and managers to bolster its fixed
income and equity teams. In 2008, the firm hired Jack OConnor as head of
its U.S. institutional business, an area in which the company is seeking to
expand. OConnor was previously senior vice president and director of North
American sales and consultant relations at MFS Investment Management in
Boston.

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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may also receive equity based on the performance of UniCredit.

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.

GETTING HIRED

Have the skills


Explore the career opportunities link at www.pioneerinvestments.com to
read detailed descriptions of positions, and learn about the experience and
background the firm requires from its employees. On the site you can also
find out the ideal competencies a candidate will bring to the table (strong
analytical skills, the ability to deliver to tight timescales, attention to
detail, excellent interpersonal skills, and strong business and product
knowledge are a good start, according to the firm). You can apply for
positions online, and save your resume and cover letter on the firms server
to use again later.
In addition, information regarding internship opportunities is available on the
site. Through the program, interns have the opportunity to get experience by
working side by side with experts in the business and applying theoretical
knowledge to real-life business problems in a cutting-edge, global
environment, according to the firm.
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OUR SURVEY SAYS

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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Principal Global Investors


801 Grand Avenue
Des Moines, IA 50392
Phone: (800) 533-1390
Fax: (866) 850-4024
www.principalglobal.com

KEY COMPETITORS

DEPARTMENTS

EMPLOYMENT CONTACT

Active Risk Management


Asset Management
Equity
Fixed Income Investment
Real Estate Investment

See careers section of


www.principalglobal.com

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Excellent performance history


Largely retirement-focused
401(k) specialists
Commonly known name

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Principal Global Investors

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.

Parent is one of the Best to Work For


Parent company Principal Financial Group, which had $306 billion in assets
under management as of January 2008, offers a wide array of financial
products, including retirement and investment services, life and health
insurance, and banking services. The firm serves clients internationally
through subsidiaries in the U.S., Asia, Australia, Europe and Latin America.
In 2008, Principal Financial Group ranked No. 21 on Forbes magazine's
annual list of the 100 Best Companies to Work For. It was the sixth
consecutive year the firm made the list. The magazine recognized the firm
the only business in Iowa to make the listfor its high number of women in
the workforce, including those at senior leadership levels. Women comprise
nearly two-thirds of the companys U.S.-based employees and hold half of the
most senior positions. Also, five of its 14 directors are female.
Additionally, in October 2007, Principal Financial Group ranked No. 9 on
AARPs annual list of the nations 50-best companies for workers over 50. It

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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.

Going for growth


In September 2007, Principal Global Investors announced an objective of
reaching $500 billion in assets under management within five years. The firm
said it plans to ramp up its headcount by 25 percent in the same period. The
announcement follows rapid growth. Principal Global Investors had just $8
billion in third-party assets at the end of 2001, when it decided to pour
resources into building its asset management unit so it could handle more
than just assets from its parent firm. In January 2008, the firm remained
about halfway to its goal.

Expanding through acquisition


In May 2007, Principal Global Investors purchased Portland, Ore.-based
Morley Financial Services from Nationwide Mutual Insurance Company for
$75 million. Morley Financial Services, through its wholly owned subsidiary
Morley Capital Management, manages more than $14 billion in institutional
stable value assets. Morley continues under the management of Jill Cuniff,
its managing director and chief investment officer for the past six years.
The buy was one of many acquisitions that Principal Global Investors has
made since 2001. Others have included Spectrum Asset Management, Post
Advisory Group and Columbus Circle Investors. Principal has allowed these
firms to keep their name and culture, while providing financial and backoffice guidance and support. Those acquisitions have tripled the assets under
management at Principal Global investors.

Latin American outreach


In September 2007, the firm announced that Ignacio Cerezo would lead the
companys efforts to explore management opportunities in the Latin
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American region, with an early focus on Brazil. Cerezo, based in So Paulo,


Brazil, will hold the title of managing director, institutional advisory services.
Beyond Brazil, the company is focusing on Chile and Mexico.

GETTING HIRED

Youll want to get called into this Principals


office
Point your browser to the careers link at www.principalglobal.com, where
youll find U.S. and international opportunities, along with what the firm
brags are competitive pay and benefits for workers. Principal also lists
open positions, college recruitment calendars and extensive information
regarding the firms VIP (or Valued Intern Program). Principal also has
a Life at The Principal section, which touts life at its offices in Des Moines
and describes what you can expect on your first day of work.
As far as applying goes, the site also has a job application help center to
assist candidates who have any questions about the process. And if thats not
enough, Principal even has a regularly updated advice column on the site
thats geared toward new employees.

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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

Employer Type: Subsidiary of


Great-West Lifeco Inc.
President & CEO: Charles E.
Haldeman Jr.
No. of Employees: 2,600
No. of Offices: 5

The days are long

EMPLOYMENT CONTACT
www.putnam.com/careers

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

High quality
Performing poorly, not growing
Well known
Should look for a new image

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Putnam Investments

THE SCOOP

Bean town shop gets new parent


With $168 billion in assets under management, Boston-based Putnam
Investments is one of the largest mutual fund managers in the world. It
provides investment management for institutional and individual clients,
offering 77 mutual funds, as well as 401(k) and IRA services and alternative
investments. The company has more than eight million shareholder accounts
and 180 institutional clients. In addition to its Boston headquarters, the firm
has offices in Andover and Franklin, Mass., and in Tokyo and London.
Putnam offers its funds through independent brokers, dealers, financial planners,
banks and other institutional accounts. Until August 2007, Putnam had been a
wholly owned subsidiary of Marsh & McLennan Companies, a global
professional services firm with more than $12 billion in revenue. Earlier that
year, in February, Marsh & McLennan agreed to sell Putnam for $3.9 billion to
Great-West Lifeco, Inc., a subsidiary of Canadian financial behemoth Power
Financial Corporation. Putnam retained its name, as well as its senior leaders
and employees. The deal, which was the biggest in its industry by acquired
assets this year, came after some of the lowest points in Putnams history.

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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Putting faith in Haldeman


The firms low period began back in October 2003, when the state of
Massachusetts and the SEC charged Putnam and two of its investment managers
with fraud, accusing them of market timing in funds they managed. Following
this, between October 31, 2003 and November 7, 2003, institutional and individual
investors withdrew an incredible $14 billion, roughly 5 percent of Putnams assets.
And by the end of 2003, investors had pulled more than $3 billion out of the
Putnam fund family, more than at any other major fund group, even as the firm had
begun to improve its results. The situation came to a head in November 2003,
when then-CEO Lawrence Lasser stepped down. As one of the highest paid
executives at the time, Lasser went down in history as the first high-profile CEO
to lose his job in connection with questionable trading practices plaguing the
industry. Putnam appointed Charles E. Haldeman Jr. to the top post.
In April 2004, the same month that Putnam agreed to pay $110 million to
settle its market-timing lawsuits with the SEC and the state of Massachusetts,
BusinessWeek asked the question, Can This Man Save Putnam? referring to
CEO Haldeman, who first joined Putnam in 2002 as senior managing director
and co-head of investments. According to BusinessWeek, the answer was yes.
Haldeman certainly had a tough job; he not only had to resuscitate a severely
damaged business, but he also had to restore faith in the shareholders and
investors who felt they had been betrayed by the firm.
In addition to assets, the firm lost a lot of employees, as headcount was cut
from 5,700 at the end of 2003 to 3,500 in February 2005. And in March 2005,
Putnam agreed to pay an additional $83.5 million to current and former fund
shareholders to resolve improper trading allegations. By August 2005, some
were still hopeful. That month, The Boston Globe interviewed CEO
Haldeman in an article entitled, After two years of turmoil, Putnam chief
weathers the storm. According to the Globe, the worst seems to be over
for Putnam, noting that the firm has been getting attention for its investment
performance and that parent Marsh & McLennan would not be selling
Putnam. Further, Haldeman told the Globe that all the external distractions
were behind Putnam, and the management of the company and leadership
of the investment group had been totally changed.

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.

Face the future


In July 2007, Putnam launched a new interactive retirement education
program that helps investors to customize their retirement plans, devise
savings schemes and reach their ultimate financial goals. The pioneering
program, done through a special web site, includes retirement tips, quizzes,
stories from other plan participants, and other ideas and tools to aid in
planning. Putnam hopes that the highly customized and interactive site will
encourage investors to take more of an active role in planning their futures.
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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.

Rounds and rounds


Candidates can expect to meet with several Putnam staffers in several rounds
of interviews. There are many rounds of interviews for each position, says
an insider. Expect to meet with at least six individual interviewers.
Another, who went through many rounds of interviews, says, I had to
interview for several positions and let the managers decide which position
they would grant me. That contact interviewed with at least 12 people
and, in some cases, came back to see the same person for a second round.
The source admits that the process wasnt that organized. What almost
made me reject the job was that they made me an offer without telling me
which office I would work at and which position I was accepted for.

OUR SURVEY SAYS

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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corporate culture is intense at Putnam. Many people complain about the


environment, but those who work hard usually do succeed. Another source
says, Putnam Investments is an excellent company to work for if youre given
the opportunity to work under a manager or supervisor who is respectable,
honest and provides appropriate coaching prior to taking disciplinary action.
The contact adds, The days are long, the pay is mediocre at best, but in most
instances, your contributions will be rewarded. The management of my
team is very people-oriented, says another source, and they strive to help
their employees balance work and life. Despite recent turmoil, Putnam is
still one of the most conservative companies to invest with, and I would
strongly recommend Putnam as a safe place to invest for your future.
Advancement opportunities are varied, say insiders. Some are frustrated that there
is little upward mobility available. The promotions seem to be based less on a
persons ability but more on politics, says a staffer. Another, who admits that
opportunities for advancement became almost obsolete due the companys
performance, adds, Management still did their best to reward those who still
worked hard.
The dress code is indicative of the company, complains a contact. Casual
dress is frowned upon, and for so-called casual day on Fridays, its little more
than the removing of a tie. There is a long list of items that are forbidden.

The diversity question


One insider says the firm doesnt have a fair playing field for women, adding,
I worked hard and long hours for Putnam, and I was rewarded with a fair
salary, but the option of moving up as a woman is not an option. The contact
warns females looking for a career in management that Putnam is not the
place to be, and that women are consistently overworked and overlooked
when it comes time for promotions.
Outside the companys main office, Putnam has a fairly diverse staff. A contact
who works in one of three old factory buildings that the company operates says,
In these locations, racial diversity is fairly well mixed. There are a substantial
number of Indians, blacks, Latinos and other minorities. However, he adds,
On the few trips I have made to Boston, the crowd is mainly white.

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Raymond James Financial


880 Carillon Parkway
St. Petersburg, FL 33716
Phone: (727) 567-1000
Fax: (727) 567-5529
www.raymondjames.com

KEY COMPETITORS
Edward Jones
Morgan Keegan

UPPERS
DEPARTMENTS

People are extremely helpful

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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Committed
Small player in the South
Staying the course
Regional fund pushers

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THE SCOOP

Who needs New York?


Raymond James Financial, a holding company that manages $215 billion in
assets (over $37 billion are managed by the firms asset managing
subsidiaries), has stayed true to its roots, escaping the New York rat race by
keeping its headquarters in its original location in St. Petersburg, Fla. The
firm provides financial services to individuals, corporations and
municipalities in asset management, banking, capital markets and private
client services. Raymond James does operate elsewhere around the globe,
through its network of 2,200 offices and 4,750 financial advisors.
Respect for this Southern standout is on the rise. In January 2008, the firm
led all other broker-dealers on Registered Rep.s Top 50 Independent
Advisors list. The national list, which included 15 Raymond James advisors,
ranks financial advisors by assets under management. The firm also topped
Bank Investment Consultant magazines 2008 list of Top 50 Bank Reps; 15
Raymond James advisors made the list, the most by any firm, and five placed
in the top 10.
Previously, in July 2007, Raymond James financial advisors Judith McGee,
Sheryl Stephens and Margaret Starner were named among Barrons Top 100
Women Financial Advisors. The list weighs factors such as client satisfaction
as well as total assets under management. And in August 2007, 20 Raymond
James advisors were featured on Registered Rep.s top-100 list of
independent financial advisors. The year before, Kanbay Research Institute
said Raymond James was one of the top-10 financial service companies in the
U.S. among those favored by U.S. consumers.
RJFs Raymond James & Associates (RJA) subsidiary, also based down
South, serves as the firms investment and financial planning arm. Its 986
financial advisors provide securities brokerage, investment banking and
financial advisory services to clients in the business, industrial, energy,
financial services, health care, real estate, technology and
telecommunications sectors.

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).

Keeping its independence


There has been some recent speculation on Wall Street that the financial
giants will start buying up smaller, regional companies. After it was
announced in May 2007 that Wachovia would snatch up A.G. Edwards for
nearly $7 billion, analysts considered that companies like Merrill Lynch or
Bank of America might create a trend by acquiring midsized brokers of their
own.
Theres going to be a natural consolidation in the financial services
business, one anonymous broker told TheStreet.com in May. In the end,
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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.

Making Florida proud


For years now, Raymond James has been a household name in Florida. In
addition to being a financial powerhouse, the firm is also a big supporter of
local sports and arts venues in the surrounding community. In fact, the NFL's
Tampa Bay Buccaneers call Raymond James Stadium home. In recent years,
those in the NFL Players Associated rated Raymond James Stadium as the
Best NFL Playing Field. Held in such high regard, the stadium has been
chosen to host the Super Bowl XLIII in 2009. And recently, Raymond James
extended its naming rights with the stadium through 2016.
The firm takes its commitment to the community and sports even further by
helping out local students. Through a joint engagement between the
Buccaneers and Raymond James, students can participate in the Tackle Math
with the Buccaneers program. Students are able to learn about math and
data analysis through a fun interactive program that combines facets of
Raymond James Stadium and Buccaneers football. The firm also encourages
philanthropic activities, such as sponsoring a fall food drive, better known as
the Sack Hunger program, for the Bay area.

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.

OUR SURVEY SAYS

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.

Room for improvement


The training offered by Raymond James doesnt receive quite as high of
praise from contacts. One insider calls training and development
nonexistent but admits that such things are highly variable, dependent
upon your department. One thing that doesnt seem variable is the firms
future outlook, which contacts describe as great and positive. The
company is now getting more known, although big giants like Goldman
Sachs and JPMorgan dont even regard the company as a competitor.

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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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Large custodian
Sharks in suits
Second tier

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Russell Investments

THE SCOOP

The index firm


Russell Investments is a global investment management firm providing
services to individuals and institutions in 44 countries. A pioneer in multimanager investing and the creator of the respected Russell Indexes, Russell
managed more than $213 billion in assets as of March 2008.
Local businessman Frank Russell started Frank Russell Company as a small
brokerage in Tacoma, Wash., in 1936. His grandson, George Russell, joined
the firm in 1958, taking over as chairman, president and chief executive
officer when the elder Russell died six months later. (At this point the firm
had two employees: George Russell and his assistant.) Russell steered the
firm into strategic pension fund consulting, and in the 1960s and 1970s, he
began to snag large clients like J.C. Penney, AT&T and General Motors.
The investment management business began in 1980 in response to a
customer demand, and the firm created two investment management
subsidiaries: Frank Russell Trust Company and Frank Russell Investment
Management Company. In 1984, the firm introduced the Russell 1000,
Russell 2000 and Russell 3000 Indexes as objective benchmarks for
evaluating manager performance. The indexes also help investors assemble
and evaluate a portfolio using benchmarks that reflect particular market
segments based on objective criteria such as market capitalization and
tradable shares.
The Russell family of indexes rank as the most widely used set of U.S. equity
benchmarks in the U.S. among institutional investment products, accounting
for 58.5 percent of the benchmarks in funds used by corporate pension plans
and other institutional investment organization.
Over the next 20 years, the firm expanded both its geographic presence and
its product offerings. In 1999, life insurance provider Northwestern Mutual
acquired Russell, but the latter firm retained its name, management, office
locations and investment approach. In 2003, the firm changed its name from
Frank Russell Company to the Russell Investment Group in an effort to build
brand awareness.
In January 2004, George Russell stepped down as CEO, ceding the title to
Craig Ueland, who continues to hold it. The firm has principal offices in
Amsterdam, Auckland, Hong Kong, Johannesburg, London, Melbourne, New
York, Paris, San Francisco, Singapore, Sydney, Tokyo and Toronto.
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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.

Making the list


In January 2008, Russell Investments appeared on Fortune magazines
annual list of the 100 Best Companies to Work For in the U.S. as well as its
Best Small-Sized Company list. Russell has appeared on this list for each of
the past seven years. Russell joins only 21 other companies on the list that
pay 100 percent of associates health care premiums and 18 companies that
offer associates paid sabbaticals.

Going Global with indexes


In January 2007, Russell launched a fully integrated family of global stock
indexes to provide investors worldwide the benchmarks it has promoted
domestically for 20 years. The Russell Global Index uses the broad-market
Russell 3000 Index as its U.S. component, dividing it into 300 core indexes,
covering 22 regions, 63 countries, developed and emerging markets, various
sectors, and capitalization tiers of small, mid and large. Russells globalrelative design aims to eliminate the gaps and overlaps created by other index
providers, and help investors avoid sampling bias inherent in indexes that
only include selected stocks in specific countries and regions.

Top transition manager


Russell Investments won Best in Class awards in 16 categories and 65 total
awards in the Plan Sponsor transition management survey. The awards
included Best in Class in number and expertise of personnel,
confidential/lack of information leakage, interaction with transition and
stakeholders, timeliness of responses to inquiries, communication of
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progress, flexibility to emergent problems, identification of outliers, achieved


expected total transition cost, clarity and comparability of pre-transition
analysis and timeliness of post-transition report.
For the third year in a row, Russell also received Top Marks in every category
in the transition management survey by Global Investor magazine. The
magazine recognized the firm as one of the top three providers of Best Overall
Service.
Through its transition management services, Russell helps clients move their net
investment returns by providing implementation tools to multi-manager
portfolios. Other services include overlay services, commission management,
agency currency execution, return-enhancing derivatives strategies and shortterm investment funds.

GETTING HIRED

Hone your skills


If you have the right background, then getting the attention of Russell
Investments should be easyor at least easier. One insider who had the
skills and experience that few had found the process very easy but
acknowledges that this is not always the case. To see if you may have what
it takes, check out www.russell.com/careers for a list of recruiting events, job
postings, a section detailing what to expect from the interview process and
career development opportunities.
If you are called in, expect a minimum of two interviews and anticipate
presenting yourself to a group of people such as managing directors or
managers. Laterif you pass muster, of courseits likely youll meet
with the team youll be working with.
Internships are another good way to show your stuff. Most internships are
located in the firms Tacoma, Wash., headquarters and run about 10 to 12
weeks, according to the firm. Though you need not be a finance major, the
firm notes that it is particularly interested in people with a passion for the
financial services and investment world.

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OUR SURVEY SAYS

All about the fam


The culture is called a family-oriented one where employees are treated
with respect. One insider adds that this also extends to management, saying
that theres mutual respect across the board. Theres flexible work hours
offered, too. You can take time off in lieu for weekend work, says one
insider, who adds that weekend work can be a semi-frequent occurrence
anyway. As far as compensation, the playing field could definitely be more
consistent. Insiders say the firm needs to make sure there is equity in
compensation across all offices, and it would help for Russell to ensure that
people are recognized for their efforts all the timenot just at bonus time.
Dress, which is casual always, except for client contact, mostly receives a
warm reception from insiders. Dress is fairly relaxed, but I dress formally
most of the time as I have a high degree of client contact, says one insider.
The training offered by the firm, however, could be better. One insider notes
that its pretty much a matter of being proactive. If you ask, you get, but if
you dont ask, you dont get.

Doesnt hurt to represent


For women and minorities, the firm needs to ensure that industry functions
have a good representation of all kinds of peopleits not easy looking the
odd one out all the time, says one female insider. And theres still few
women in key positions. Nevertheless, there are not a lot of major
complaints from insiders, though its always a good idea for the firm to try a
little harder. I feel that unless you jump up and down, you dont get what
you want, says one insider, who, even so, adds, I have been here more than
10 years and am overall fairly happy with my role and the company.

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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

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Strong UK presence, very strong


internationally
Relatively unknown in the US
Strong sales leadership
Old school

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Schroders plc

THE SCOOP

Respect your elders


For the past 200 years, London-based Schroders has been a household name
in the world of finance. With $276 billion in assets under management, its
also become one of the biggest names in finance. Since its founding in 1804,
Schroders has narrowed its focus and, after selling its investment bank
division to Citigroup Salomon Smith Barney in 2000, is now almost
exclusively concerned with investment management. Through its
subsidiariesa venture capital outfit called Schroder Ventures Limited and a
private banking arm, Schroder Asseily & Co.the venerable firm offers asset
management services to corporations, insurance companies, local and public
authorities, charities, pension funds, high-net-worth individuals and retail
investors.
With a foothold in almost 30 countries and major offices in London, New
York and Zurich, Schroders operates through four major divisions: private
banking, institutional services, private equity and mutual funds. The
founding Schroder family continues to maintain control and owns about 47
percent of the company, which is publicly traded on the London Stock
Exchange. Worldwide, Schroders has a total of 2,900 employees, including
360 portfolio managers and analysts.
Schroder Investment Management North America, an indirect wholly owned
subsidiary of Schroders plc, provides a full range of U.S., international and
global investment management products, including traditional cash
management, equity and fixed income strategies across global developed and
emerging markets. Schroder Investment Management North America has
offices in New York, Philadelphia, So Paulo, Mexico City, Buenos Aires,
Bermuda and Grand Cayman.

A long and storied history


The company that would one day be known as Schroders got its start after two
German brothers opened up a merchant bank in the U.K. in 1804. Fourteen
years after Johann Heinrich Schroder left Germany to join his brother in
London, J. Henry Schroder & Co. was established. A century later, in 1926,
the company was expanded to include an investment management
department. In its first 100 years, the Schroders had introduced the Japanese
governments first foreign loan to the London Market (in 1870) and joined the
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Wall Street crowd, launching the J. Henry Schroder Banking Corporation in


the U.S. in 1923 (at the time, the firm was known as Schrobanco).
In 1957, the Schroder brothers 150-year-old partnership was converted into
a private company, only to be listed publicly on the London Stock Exchange
two years later. For the next 20 years, Schroders focused on attracting new
business around the world, establishing a presence in Hong Kong, Japan,
Singapore, Switzerland and throughout the rest of continental Europe.
Schroders expansion as a global financial player continued into the 1980s. In
1986, the firm paid $100 million for a 50 percent stake in the investment bank
and securities firm Wertheim & Co. In 1994, Schroders acquired the
remaining 50 percent of Wertheimknown for its practice in securities
underwriting and cross-border mergers-and-acquisitions activityand
renamed the company Schroder & Co.
Partial payback for its expansion efforts came in July 2001, when Schroders
was the first foreign firm to win the OK from the government of South Korea
to manage assets for local investors. That year, Schroders launched
Schroders Korea Limited, an investment subsidiary. Two months later, the
company expanded further with the creation of the Schroders Private Equity
Fund of Funds, targeted at institutions and well-off investors, and listed on the
Dublin (Ireland) Stock Exchange. The next year, in July 2002, Schroders
went virtual, setting up a web-based portfolio management system with the
help of Eagle Investment Systems.

Stick with what you know


In the midst of its expansion, Schroders made a big change and knew when to cut
its losses. While it continually counted some of the biggest European blue-chip
companies like French bank Credit Lyonnais and Banco di Roma as its clients,
Schroders could not say the same for its clients in the U.S., while its ability to
underwrite the stock and bond offerings for financing takeovers was faltering. By
2000, the company had fallen to 16th place in the European merger rankings,
down from seventh place in 1998.
So, in 2000, in order to become a niche player in asset management, it sold its
investment banking business to Citigroups Salomon Smith Barney, now
renamed Citigroup Global Markets. The sale, worth $2.21 billion at the time,
marked the end of nearly two centuries of independent investment banking;
Schroders was the last independent investment bank in London. The move was
Schroders best strategic alternative for the companys investment banking
arm, said Sir Win Bischoff, then-chairman of Schroders. Bischoff later went on
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to become chairman of Citigroup Europe and Peter Sedgwick, deputy chairman


of Schroders, took his place as chairman of Schroders asset management
business, with David Salisbury at his side as the companys chief executive.
Since then, the face of Schroders management team has continued to change.
Salisbury left the company not long after the sale of Schroders investmentbanking business, in August 2001. He was succeeded by Michael Dobson in
October of that year. After Sedgwick retired in 2002, Michael Miles assumed the
title of chairman, which he still holds.

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.

Not bad in tough times


The most recent quarter, the first of 2008, saw asset management and private
banking net profits rise 9 percent, to 76.5 million from 70 million in the
2007 first quarter. Private equity net profits, though, plummeted due to the
poor market conditions, falling to 2.4 million from 19.9 million. The firm
was forced to reduce valuations on several assets, taking 36 million in writedowns during the quarter.
Schroders made a significant purchase during the quarter, agreeing to acquire
Swiss Re Asset Managements Funds in March 2008. The acquisition of the

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third-party fund management business of Swiss Re will give Schroders an


additional 900 million in assets under management.

GETTING HIRED

Search the globe


At the firms parents web site, www.schroders.com, candidates can find a career
opportunities link under about us, connecting them to places to search for jobs
worldwide and apply online. Each job listing provides details on key
responsibilities, the profile of the ideal candidate, and experience and education
requirements. According to the firm, it is committed to helping employees
achieve an effective work life balance. The firm also says it subsidizes health
club and gym memberships, offers regular medical health screenings and
encourages employees to participate in community partnership schemes.
But the reality of what benefits and perks are actually offered to employees may
be a little different than what the firm promotes. One New York insider said that
during his interview, he was told about several great benefits, but ultimately
found that these only applied to employees in London.

OUR SURVEY SAYS

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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State Street Corporation


1 Lincoln Street
Boston, MA 02111
Phone: (617) 786-3000
Fax: (617) 664-4299
www.statestreet.com

KEY COMPETITORS
Bank of New York Mellon
Merrill Lynch

UPPERS
DEPARTMENTS
Investment Management
Investment Research & Trading
Investment Servicing

Very laid-back, light and


funculture
Good benefits package

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

Decisions can take a long time to


be made
More training needed
Scrappy

EMPLOYMENT CONTACT
See the careers section of
www.statestreet.com

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Strong research
Going downhill
Nose to the grindstone
Mediocre investment talent

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State Street Corporation

THE SCOOP

State Streets statement


When 200-year-old State Street talks, investors listen. With $15.1 trillion in
assets under custody and $2 trillion assets under management, Bostons State
Street is one of the biggestand oldestproviders of mutual fund and
pension processing and asset-custody services in the U.S. State Street, which
operates under the legal name of State Street Bank and Trust Company, offers
products and services that span investment research, management, trading
services and investment servicing, and are available to large-scale
institutional investors and corporations. The firm ranks as the largest servicer
of U.S. pension plans and investment manager of institutional assets
worldwide, as well as the No. 1 provider of U.S. mutual fund custody and
accounting services.
State Street employs more than 27,000 employees in offices in over 26
countries. Its subsidiary, State Street Global Advisers, performs asset
management services for the company, while Boston Financial Data
Systemsa joint venture with DST Systemsprovides shareholder services
to clients.

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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Princeton Financial Systems for its industry-leading PAM family of portfolio


management and accounting systems, while selling off its retail and
commercial banking services to Citizens Bank a few years later in 1999. In
2003, Deutsche Banks Global Securities Services businesses were acquired
for $1.5 billion. At the time, Deutsche Banks Global Securities Services unit
was the worlds fifth-largest custodian in terms of assets. The acquisition
included not only 3,000 Deutsche Bank employees around the world, but also
a broader global client base and an entryway into high-growth European
markets. Previously, non-U.S. State Street clients held only 12 percent of the
firms assets under custody.

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.

Down a dark Street


As 2008 began, State Street faced a legal challenge from five clients who
claimed to have lost millions of dollars in investments that they said were told
would be low risk. The firm announced that because it had reserved $618
million for the legal fees associated with the case, a $279 million charge will
be taken in the fourth quarter of 2007. In addition to this loss, State Street
also closed several of its funds and laid off some junior employees as a result
of the reserve.
The firms misfortune didnt stop there. On January 3, the chief executive of
State Streets investment unit, William Hunt, stepped down (supplanted by
interim head James Phalen). Though the news brought a pessimistic outlook
from some analysts, the firm insisted that it would continue to fight. CEO
Logue said in a conference call that State Street was prepared to shield itself
from inappropriate claims in future lawsuits, adding that the firm is
confident that we have identified and are managing the known liquidity risks
throughout our company.
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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.

Word on the CitiStreet


In May 2008, Dutch bank ING announced that it would be acquiring
retirement manager CitiStreet, jointly owned by State Street and Citigroup,
for a cash payment of $900 million. Created in 2000, CitiStreet had $262
billion in assets under management as of March 2008. The deal, expected to
close in the third quarter of 2008, will also encompass a U.S. health and
welfare business unit and an Australian retirement services business.

Latest results get mixed reviews


For the first quarter of 2008, State Street recorded $530 million in net income,
a 69 percent increase versus the previous years first quarter. The firm also
saw a 54 percent rise in revenue to $2.6 billion. With such large increases
versus the previous year, it would seem as if the firm had a lot to celebrate.
However, at a closer glance, the numbers werent as impressive. Thomas
McCrohan, an analyst at Janney Montgomery Scott, told Forbes, When you
peel the onion you see that [State Streets] core business is suffering, and the
asset management arm is being affected by reputation issues. Forbes added
that the companys capital levels are being eroded by the global credit
crunch that arose from the U.S. subprime crisis. Indeed, in April 2008, State
Street Chief Financial Officer Ed Resch said in an earnings conference call
that the firm had suffered a loss of $3.2 billion on its portfolio and a $2.5
billion loss on conduits.

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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.

OUR SURVEY SAYS

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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relationships is really the key to advancing in this organization, though you


need to back it up with a good reputation.
State Street sources consider their compensation average compared with
others in their industry. Benefits, however, are viewed more favorably. The
company considers employee benefits high in importance, says a contact.
For perks outside of salary, there is a web site with discounts to major
retailers, discounted gym membership and subsidized cafeterias are at
most locations. Flex-time is granted to those who need it as an additional
benefit. State Street's retirement plan is excellent, going from 4.5 percent to
11 percent based on time at the company, plus a matching plan.
Despite not being overly thrilled with their salaries, staffers at State Street
dont complain about the long hours they put in. One says there is lots of
work during non-office hours, but not unpleasant work. Another says,
While I do have a flexible work arrangement, I am in the office far more
hours on the days Im scheduled to be here. However, I love my job and find
that I also have flexibility. One respondent spends many hours at the
office, but doesnt mind because hes pleased with the productivity of my
efforts. And a division manager, who puts in an hour each night from home
doing busywork, like e-mails, and often works one weekend day on special
projects, isnt whining either, saying, I expect that level of workload.
Overall, the mentality about hours at State Street is just to get the job done.
There is no pressure to bill, but more of a focus on quality and timeliness
of work. One source says that office time depends on the department you
work for and that some departments hours are flexible while others are
not. Another contact admits that we are required to work 37.5 hours per
week, although we do not put in actual time to our timekeeping system,
adding that when traveling, we work moreusually around 50 hours per
week.

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.

Figure out the pecking order


One insider says that while theres a fairly hierarchical structure within the
company, its easy to get promoted. State Street managers are very
respectful of their subordinates. There is an air of respect, professionalism
and maturity to superiors, says a contact. Another has always had a very
positive experience with direct managers, who are terrific mentors and
provide guidance. State Streets open-minded management team,
according to a respondent, is supportive of my requests as they relate to the
budget and support requirements. Another contact says that the firm
revolves around its fund administration and custody services, which are big
departments of many entry-level employees, who are often treated like
factory workers. However, the other departments that support those
services are higher level and great to move up the ranks, and a source adds
that managers have conflicting goals.
Thoughts regarding training depend on who you ask. There has been very
little training, reports one insider. I was invited to one presentation skills
course, and that was only because someone else cancelled their time slot,
says a disconcerted contact. The training offered is state of the art, but its
difficult to schedule it during business hours. Another says State Streeters
need much more training, particularly in presentation and management
skills. While some say, Training is always available and encouraged, most
agree it is currently lacking and additional resources should be spent on
training. Some sense that the company has begun to make a significant
investment in this area. Still, another insider gives the firm high marks in
this area, noting that State Street will pay for off-site training as well.

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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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The TCW Group


865 South Figueroa Street
Los Angeles, CA 90017
Phone: (213) 244-0000
Fax: (213) 244-0755
www.tcw.com

KEY COMPETITORS

DEPARTMENTS

EMPLOYMENT CONTACT

Concentrated Core Equities


Mezzanine Investing
Mortgage-Backed Securities

See careers under about TCW


section of www.tcw.com

Bank of New York Mellon


Barclays Global Investors
BlackRock

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

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Good money management firm


Second tier
Pretty cool shop on the West
Coast
Strong fixed income flows

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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.

A turn down Buchanan Street


In October 2007, TCW acquired a majority interest in Buchanan Street
Partners, a national real estate investment manager and advisor. The stake
will give TCW clients direct access to the real estate asset class. Buchanan
Street provides real estate capital and advisory services to owners and
developers through offices in California, Chicago and Atlanta. The firm
manages more than $1 billion in committed capital across several funds on
behalf of large institutional clients and high-net-worth individuals and
executed more than $3.8 billion in transaction activity in 2006. Buchanan
Street will continue to operate autonomously, under its own management
team, from its headquarters in Newport Beach, Calif.
This strategic investment provides TCW with a first-class partner in the real
estate investment sector, said TCWs CEO, Robert Beyer, in a statement.
Buchanan Street has a solid track record for delivering innovative
investment opportunities for their clients and is managed by a strong team,
dedicated to investment excellence.

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

More diversity needed

Employer Type: Private Company


Chairman, President & CEO:
Herbert M. Allison, Jr.
No. of Employees: 6,500

EMPLOYMENT CONTACT
See the careers section of
www.tiaa-cref.org

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

"Unstoppable in the education


market"
"Internal disarray"
"Do-gooders"
"Frightfully boring"

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THE SCOOP

A standout report card


From the ivory tower to the operating room, TIAA-CREF has been serving
its clients for nearly 90 years. Together, the Teachers Insurance and Annuity
Association of America, a New York-based life insurance company, and the
College Retirement Equities Fund, an open-end investment company, make
up a financial services group serving more than three million members in the
academic, medical, cultural and research fields at 15,000 institutions across
the U.S. As of March 31, 2007, the firm had $414 billion in assets under
management, making it one of the worlds largest retirement systems.
TIAA-CREFs three primary business areas are institutional client services,
individual client services and asset management. TIAA-CREFs core offerings
include objective, non-commission financial advice, investment information,
retirement accounts, pensions, annuities, individual life and disability insurance,
tuition financing with its 529 college-savings plans and trust services, and
planned giving via its subsidiaries, the TIAA-CREF Trust Company and
Kaspick & Company. It also manages a variety of mutual funds. Beyond these
services, the firm is also one of the largest institutional real estate investor in the
U.S. with a global portfolio of direct or indirect investments of $60 billion.
In 2007, TIAA-CREF ranked No. 80 on the Fortune 500 and is one of only a
handful of life insurance companies to receive the highest-possible ratings
from all four major independent rating agencies: Moodys Investors Service,
A.M. Best, Standard & Poors and Fitch. In February 2008, it also ranked No.
9 out of 67 fund families in the Lipper/Barrons Mutual Fund Family Survey.

In Carnegies hall of fame


Legendary New York City philanthropist and steel magnate Andrew Carnegie
established the Teachers Insurance and Annuity Association (TIAA) through
his Carnegie Foundation in 1918 as a fully funded system of pensions for
professors. It was first funded by a combination of grants from the
foundation and the Carnegie Corporation of New York, which contributed an
initial gift of $1 million, along with contributions from participating
institutions and individuals. The association was incorporated in New York
state as a life insurance company led by Henry S. Pritchett, former president
of the Massachusetts Institute of Technology. By the end of its first year, 30
public and private institutions became part of the TIAA network.
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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.

Surfing the web


Who says that retirees arent internet savvy? In this high tech age, the idea
of web-challenged pensioners has long gone by the wayside. TIAA-CREF
has proven recently that its hip to the change by launching an online forum
for its clients called myretirement.org, where they can interact with other
retirees about their concerns and experiences during their golden years. In
order to join myretirement.org you must be 50 years of age or older and have
an account with the company. Once logged on, clients can talk about a
variety of topics including health and fitness, volunteering and social
activism, education and travel, money and work, family and friends, and
more.
Jamie dePeau, TIAA-CREFs senior vice president of marketing, said of the
site, We have learned from our participants that, for them, retirement means
much more than just the financial side of planning. This community belongs
to our participants, and is a place where they can explore a reservoir of
interests and pursuits, and offer them a place to gain knowledge from trusted
sources, share information, expand their network and communicate with each
other about things that matter to them in their everyday lives.
Myretirement.org launched in February 2008.

The power of nonprofit


TIAA-CREF likes to emphasize to its clients and the world that its a dot-org, not
a dot-com, and that means it serves its clients with the heart of a nonprofit
instead of a heartless corporation. Thats why in August 2007, the company
augmented its For the Greater Good advertising campaign with a new campaign
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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

Find your path


On its site, www.tiaa-cref.org, the firm invites candidates to search our job
list, letting applicants specify keywords and finding jobs that match their
profiles and background. The site also focuses on specific ways that
employees can develop a career path. But when it comes to hiring, one
insider says TIAA-CREF is not very selective. He adds, If you know
someone at the firm or if you send the resume to HR, you will get a shot.
However, if you apply and dont immediately hear back, fear not. One contact
describes getting called in for an interview almost four months after I had applied
for the position. Once they do ask you in, be aware that TIAA-CREFs interview
process has at least two rounds. The questions asked during the process tend to
be pretty basic. One insider says, It seemed like the interviewer just wanted to
get to know you and find out a little bit more than what was on paper.

OUR SURVEY SAYS

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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positive thingis the training program, which is three-and-a-half months


long and is an extremely rigorous program.
And if youre hoping to climb the corporate ladder, never fearopportunities
for advancement are there and TIAA likes to hire from within, say insiders.
Just dont anticipate an astronomical salary. Remember that TIAA-CREF is a
nonprofit company, says one insider, adding, Do not expect above-average
compensation packages. And, contacts say, bonuses are based on yearly
performance reviews, and there are no signing bonuses, either. On the other
hand, the benefits package offered is a comprehensive one, with more
benefits and options than almost any other employer I've ever worked for.
TIAA-CREF even provides employees with a choice of a retirement annuity
that is completely funded by the company, or a more traditional 401(k) plan.
There are also about 20 paid days off per year, with additional personal days
and medical days, too.

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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Victory Capital Management


127 Public Square
Cleveland, OH 44114
Phone: (877) 660-4400
www.victoryconnect.com

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

The key to Victory


Victory Capital Management is the asset management subsidiary of
Cleveland-based financial services company Keycorp. The firms 213
employees are spread out over five offices in Ohio, California, New York and
Colorado. Victory may be on the smaller side as far as personnel, but when
its size is measured in assets the firm is living large. In fact, in terms of assets
under management, Victory is one of the largest 100 investment management
firms in the country. As of December 31, 2007, Victory Capital Management
had an impressive $62.2 billion in assets under management.
Victory Capital offers investment management for both institutions and
individual investors in a wide range of strategies. The company offers equity
investments including deep value equity, intrinsic value equity, diversified
core equity, large-cap growth equity, mid-cap core, mid-cap value, small-cap
value and international, as well as fixed income, hybrid and structured cash
strategies. Victory pulls its institutional clients from four major sources:
public plans, Taft-Hartley plans, corporations, and endowments and
foundations.

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.

The other Robert Wagner


The Robert Wagner of Victory Capital Management shares only a name with
the actor who married Natalie Wood and played Number Two in the Austin
Powers movies. The firms chairman and CEO is no actor; hes strictly a
businessman whos been in top executive positions for the majority of his
career. Before Wagner joined Victory Capital, he was the president and CEO
of Gartmore Emerging Managers. Prior to his tenure at Gartner, Wagner held
the chief executive position at a venture-backed enterprise funded by JMI
Equity Fund. Wagner climbed the ladder to the top spot at Victory Capital
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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.

Gradison gone, employees remain


Victorys parent company KeyCorp made a strategic move in February 2007
when it sold one of its subsidiaries McDonald Investments to the banking
giant UBS. It was a big blow for Cincinnati, where Gradison Investments,
one of McDonalds asset management subsidiaries, was based. The Gradison
team was neighbors and colleagues with the Victory Capital team, and two of

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Victorys key playerstraders Gary Miller and Greg Connorswere former


Gradison employees. Some speculated that these players would leave Victory
after the sale of their old company, but the two quickly put those fears to rest
in an interview with the Cincinnati Business Courier. Were staying here,
Miller told the paper in March. Weve hired two new people and well look
to add more people in the next year.

Branching out pays off


KeyCorp may have acquired Texas-based Austin Capital way back in 2006,
but it seems that the buy is just recently paying off. Buying Austin helped
Victory to diversify its investment products, notably in the area of hedge
funds. Victory saw its assets under management in hedge funds grow to $1.5
billion in 2007. Another area in which the firm was able to expand after
buying Austin Capital was international, small and middle capitalization
stocks, which contributed $580 million assets under management to Victorys
portfolio.

GETTING HIRED

Bring the passion


If you consider yourself to be someone who can demonstrate a passion for
both the business and serving clients and understand and appreciate the
benefit of working as team, you may want to consider yourself a candidate
for employment at Victory Capital. The firm lists jobs on its site at the
career opportunities link at www.victoryconnect.com, job postings funnel
you to www.key.com/careers. There, you can fill out a career profile and a
recruitment team will contact you. In addition, if you find anything that
tickles your asset management fancy, just shoot your resume to
VictoryJobs@VictoryConnect.com.

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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

THE BUZZ

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

Best customer experience; great


to work for
Too little too late
Up and comer, improving
OK funds

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THE SCOOP

Sweet home Carolina


Wachovia Corporation is the fourth-largest bank holding company in the
U.S., with $808.9 billion in total assets. In 2007, it also became the thirdlargest full-service brokerage firm in the U.S. based on client assets, as a
result of a key merger with A.G. Edwards, which gave the two companies
combined assets under management of $1.1 trillion.
Headquartered in Charlotte, N.C., Wachovia offers commercial banking
services under the Wachovia name, wealth management through Wachovia
Wealth Management, investment management through Evergreen
Investments, and investment banking and retail brokerage services under the
Wachovia Securities moniker.
Wachovia serves clients through
approximately 3,300 bank branches and more than 1,500 retail brokerage
offices in 21 states, from Connecticut to Florida and west to Texas and
California.
The unusual name, Wachovia, is the Latin form of the German place name
Wachauin 1753, Moravian settlers in North Carolina named their new
home after a valley along the Danube known as Der Wachau. Wachau was
near the present town of Winston, where Wachovia National Bank first
opened in 1879. The former Wachovia and First Union (founded in 1908 in
Charlotte, N.C.) merged on September 1, 2001, to create Wachovia
Corporation.

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.

Into the woods


Wachovias asset management affiliate, Evergreen Investments, has dual
headquarters in Boston and Charlotte. The unit has 1,032 total employees,
including more than 350 investment professionals, and $258.7 billion in
assets under management (as of March 2008). In addition to offering 93
mutual funds, Evergreen provides a full line of investment management
services to over 2.8 million mutual fund shareholders, 61,910 high-net-worth
individuals and more than 1,400 institutional clients. Its among the 25
largest asset management companies in the U.S., and one of the largest 32 in
the world.
In January 2007, Evergreen Investments announced plans to purchase a
majority interest in the fixed income investment management firm European
Credit Management Ltd., which had $28.7 billion in assets under
management as of March 2008. The transaction closed in the first quarter of
2007.

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.

Shouldering the blame?


In June 2008, Wachovia announced that it would be casting out CEO
Kennedy Thompson, a 32-year veteran of the firm, after dismal recent losses,
and what chairman and newly-appointed interim CEO Lanty Smith called a
series of previously disclosed disappointments and setbacks. These included
failing to successfully integrate A.G. Edwards, buying mortgage lender
Golden West not long before the subprime mess and the mess itself. As a
result, Wachovias share price had dropped by more than 50 percent from
June 2007 to June 2008, and it was forced to report its first quarterly loss
since 2001. In addition, by the first quarter of 2008, Wachovia had racked up
$23.9 billion in outstanding construction loans, much of which were related
to subprime housing woes.

GETTING HIRED

Do you fit in?


Wachovia/Evergreen Investments has a very selective hiring process to
ensure intellectual and cultural fit. According to one inside source,
Compared to what Ive seen in other companies, we have strict hiring
policies that cause us to look at all qualified applicants. However, its not
completely easy to get hired because the company is large and sometimes our
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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.

Depends on the position


One insider recalls, I came in for one interview and met with two people, my
immediate manager and her manager who heads up the organization.
Another contact remembers two rounds of interviews with peers, team
members and managers. Another had a phone interview first, then came
in and met with around six people and was offered the job. Yet another
source describes the process like this: First interview is by phone with
recruiter, then you have an in-person meeting with the recruiter. This is
followed by two one-on-one interviews, and sometimes a third with members
of management. No matter who you interview with, Wachovia interviews
are largely behavioral-based, say insiders.

Everywhere and anywhere


Wachovia recruits all over the world. It recruits from the best firms in the
industry across the country, and students from the top colleges in the U.S.
who must have a minimum of a 3.0 GPA. The company also uses search
firms, industry networks and the CFA Career Site to find qualified
candidates. Youll also find Wachovia recruiters at industry-specific events
and job fairs.
We do a lot of college recruiting activities in the Boston area, explains one
contact, but for senior-level positions, we focus on the East Coast. Another
insider says, Recruiting is done throughout the U.S. and abroad, based on
where candidates are located. At the more senior positions, recruiting is
targeted towards skill sets rather than schools or locations.
The firm sometimes hires paid interns, depending on the need. One insider
says, My team hires co-op students, where they go to school full time and
work part time.

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OUR SURVEY SAYS

The nicer side of Wall Street


Although were one of the largest banks in the world, says an insider, it
still feels like were a small bank with Southern values. People are very
polite and enjoy coming to work every day. Based on feedback from
insiders, that appears to be true. One contact is thrilled with our leadership,
the direction in which we are headed, the people I work with on a daily basis
(at least the grand majority of them), our marketing and branding efforts, and
the image our firm has and will have in the industry. The source adds, We
are placed in an enviable position to explode in 2008 and beyond, and Im
honored to have this opportunity to be a part of such an amazing team.
Another satisfied insider says, I would describe our culture as one of
excellence where integrity is at the root of all we do. Furthermore, we have
an emphasis on execution and accountability. We are collaborative,
competitive in a healthy way and somewhat familial.
This teamwork-focused, results-oriented company likes to operate as a firm
and not a bank. The atmosphere is described as forward-focused,
entrepreneurial and very friendly. One contact says, The firm strives to
encourage cross functional and departmental collaboration, with regard to work
issues as well as in reaching out to the communities in which we live giving
back is strongly encouraged. Another insider says, Despite challenging
economic and market conditions, I still enjoy coming to work each day, which
tells me how much I enjoy working here. One source also appreciates the
flexibility to deliver great results to our clients. Employees are focused on the
client first and concentrate on making sure their needs are met.
However, some insiders say budgets and technology are not to the level
they should be, and others complain of administrative demands. One
contact shares some other gripes, saying several areas are substandard,
including the space in which we work; the fact that we do not take the time
to celebrate our success enough; the expense policy, which is more in line
with that of a bank and not that of an asset management firm; and the
remaining silos, which have diminished significantly over the past two
years. Another contact adds, Corporate bureaucracy gets in the way of
providing services to clients.

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You win some, you lose some


Wachovia insiders have few complaints about the number of hours they work.
Our roles are not measured by the amount of time we spend in the office, but
rather by our ability to execute, says one source. The hours we keep
depend on our ability to accomplish what needs to be done. Indeed,
employees are encouraged to maintain a healthy work/life balance. Work
can also be flexible and carried out from home, the road or the office,
based on personal, firm and client requirements. One insider says, I
usually work my 40 hours and go home, but if I need to stay later, I dont
mind, since it doesnt happen often. Most sources say its also rare to work
on weekends, and if weekend time is required, it can be done at home. One
contact says, I try very hard to dedicate the weekend to my husband and our
personal life, not to my career. It is extremely rare, as in maybe four times
per year, that I work on the weekends.
Insiders give average marks to compensation, and some mention it as a
downside to working at the firm. We should start acting like the top bank
we are, and stop acting like a local bank when it comes to compensation,
suggests a source. And we should offer 401(k) investment from day one of
employment, find better ways to manage those employees steadily working
over 40 hours and be willing to hire someone other than contractors to reduce
the workload. Another notes, I feel as though the cost of everything is
going up and what little raise I receive, they takeand then some. One
source does point out that paid time off and the family care time is an
upside to working at Wachovia.

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.

Offices could use some sprucing


Wachovia insiders are less enthused about their office space. One source
complains, Being owned by a large financial institution has numerous
benefits. Unfortunately, world-class facilities are not one of them. And to be
honest, Im embarrassed by the space we occupy, specifically when clients or
interview candidates are on site.
The dress code at Wachovia is casual always except for client meetings, with
casual Fridays and casual summer. One insider explains, Four years ago
we were business casual, which had different interpretations for just about
every person. We have, thankfully, changed that and have business dress
throughout the week with the exception of Fridays. Another source says,
Dress is professional at the discretion of the individual. Suits and business
casual attire comfortably coexist.

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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About the Editor


Derek Loosvelt has a BS in economics from the Wharton School at the
University of Pennsylvania and an MFA in creative writing from The New
School. He is a writer and editor, and has worked for Brills Content and
Inside.com. Previously, he worked in investment banking at CIBC and Duff
& Phelps.

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insider firm profiles, message boards, the Vault Finance Job Board and more.

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