'Vault Guide To The Top 25 Investment Management Employers

The medias watching Vault! Heres a sampling of our coverage.
For those hoping to climb the ladder of success, [Vaults] insights are priceless. Money magazine The best place on the web to prepare for a job search. Fortune [Vault guides] make for excellent starting points for job hunters and should be purchased by academic libraries for their career sections [and] university career centers. Library Journal The granddaddy of worker sites. US News and World Report A killer app. The New York Times One of Forbes 33 Favorite Sites Forbes To get the unvarnished scoop, check out Vault. SmartMoney Magazine Vault has a wealth of information about major employers and jobsearching strategies as well as comments from workers about their experiences at specific companies. The Washington Post A key reference for those who want to know what it takes to get hired by a law firm and what to expect once they get there. New York Law Journal Vault [provides] the skinny on working conditions at all kinds of companies from current and former employees. USA Today
Customized for: ratik dayal ([email protected]) Boston University School of Management Online Career Library
TOP
25
VAULT GUIDE TO THE
Top 25
INVESTMENT MANAGEMENT
E M P L OY E R S
2009 EDITION
2008 Vault.com Inc.
TOP
25
VAULT GUIDE TO THE
Top 25
E M P L OY E R S
2009 EDITION
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. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Vault.com Inc. Vault, the Vault logo, and The Most Trusted Name in Career InformationTM are trademarks of Vault.com Inc. For information about permission to reproduce selections from this book, contact Vault.com 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 1
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
Visit the Vault Finance Career Channel at www.vault.com/finance with insider firm profiles, message boards, the Vault Finance Job Board and more.
CAREER LIBRARY
ix
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
444
CAREER LIBRARY
xi
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.
CAREER LIBRARY
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
CAREER LIBRARY
2008 Vault.com Inc.
TOP
INTRODUCTION
25
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
CAREER LIBRARY
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.
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
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 promote the sale of its funds, resulting in more than 60 broker-dealers receiving
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
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
CAREER LIBRARY
10
2008 Vault.com Inc.
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.
CAREER LIBRARY
11
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
12
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
13
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
14
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
15
TOP
PRESTIGE RANKINGS
25
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.
CAREER LIBRARY
19
The Vault 25 2009

[ The 25 most prestigious investment management firms ]
RANK
1 2 3 4 5 6 Customized for: ratik dayal ([email protected]) Boston University School of Management Online Career Library 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
FIRM
Goldman Sachs BlackRock The Blackstone Group Barclays Global Investors, N.A. *Lehman Brothers JPMorgan Asset Management **PIMCO D. E. Shaw & Co. Wellington Management Co., LLP
+
SCORE
U.S. HEADQUARTERS/ LARGEST OFFICE
8.354 7.489 7.485 6.848 6.804 6.802 6.725 6.578 6.565 6.509 6.464 6.462 6.398 6.315 6.176 6.162 6.101 6.065 6.046 6.000 5.872 5.847 5.839 5.830 5.782
New York, NY New York, NY New York, NY San Francisco, CA New York, NY New York, NY Newport Beach, CA New York, NY Boston, MA New York, NY New York, NY New York, NY Boston, MA New York, NY New York, NY New York, NY Sacramento, CA New York, NY Valley Forge, PA Prospect Heights, IL Baltimore, MD Stamford, CT San Mateo, CA Westport CT Atlanta, GA
Deutsche Bank
Merrill Lynch
Morgan Stanley
Fidelity Investments Lazard Asset Management UBS
Credit Suisse
CalPERS AllianceBernstein The Vanguard Group HSBC North America Holdings T. Rowe Price GE Asset Management Pequot Capital Management ING Investment Management
Franklin Resources
*Lehman BrothersInvestment Management Division **Pacific Investment Management Co. +Deustche Bank Private Clients and Asset Management Franklin Resources, Inc. (Franklin Templeton Investments)
Merrill LynchGlobal Wealth Management Morgan Stanley Investment Management Credit Suisses Asset Management Business
20
CAREER LIBRARY
2008 Vault.com Inc.
TOP
PROFILES
25
V A U L T
PRESTIGE RANKING
1 Goldman Sachs
KEY COMPETITORS
Barclays Global Investors BlackRock JPMorgan Lehman Brothers Morgan Stanley
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
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

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* www.gs.com/careers
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
22
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
23
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
24
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
25
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.
26
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
27
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.
28
CAREER LIBRARY
2008 Vault.com Inc.
Even at the most senior level, people are approachable and respectful.
Goldman Sachs insider
CAREER LIBRARY
29
V A U L T
2
PRESTIGE RANKING
BlackRock
KEY COMPETITORS
Dreyfus Federated Investors Legg Mason State Street
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
UPPERS
Intelligent people
DOWNERS
Location and commuting
THE STATS
Employer Type: Public Company Ticker Symbol: BLK (NYSE) Chairman & CEO: Laurence D. Fink Revenue: $4.8 billion (FYE 12/07) Net Income: $995.2 million No. of Employees: 5,952
EMPLOYMENT CONTACT
See the careers section of www.blackrock.com
THE BUZZ

The place to be Macho Fixed income powerhouse Clouded by Merrill Portfolio managers are second to none
30
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition BlackRock
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
CAREER LIBRARY
31
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
32
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
33
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
34
CAREER LIBRARY
2008 Vault.com Inc.
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 [email protected].) 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
CAREER LIBRARY
35
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
36
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
37
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.
38
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
39
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.
40
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
41
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
42
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
43
V A U L T
3
PRESTIGE RANKING
The Blackstone Group

KEY COMPETITORS
Bain Capital Carlyle Group KKR
345 Park Avenue New York, NY 10154 Phone: (212) 583-5000 Fax: (212) 583-5712 www.blackstone.com
DEPARTMENTS
Financial Advisory Services Marketable Alternative Investments Private Equity Real Estate
UPPERS
Good compensation and perks Very prestigious
DOWNERS
Training programs need improvement Long hours
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
EMPLOYMENT CONTACT
www.blackstone.com/careers
THE BUZZ
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
44
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition The Blackstone Group
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
CAREER LIBRARY
45
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.
46
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
47
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
48
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
49
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
50
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
51
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
52
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
53
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.
54
CAREER LIBRARY
2008 Vault.com Inc.
Theyre aggressive on the outside, very demanding on the inside and a bit old school as compared to the bigger firms.
Blackstone insider
CAREER LIBRARY
55
V A U L T
4
PRESTIGE RANKING
Barclays Global Investors, N.A.

KEY COMPETITORS
Citi Goldman Sachs State Street
45 Fremont St. San Francisco, CA 94105 Phone: (415) 597-2000 Fax: (415) 597-2171 www.barclaysglobal.com
DEPARTMENTS
Active Strategies Alternatives/Hedge Funds Capital Markets Exchange Traded Funds Index Strategies Target Date Retirement Funds
EMPLOYMENT CONTACT
Sign in to www.barclaysglobal.com as a job candidate.
THE STATS
Employer Type: Subsidiary of Barclays PLC Chairman: Robert E. Diamond Jr. CEO: Blake R. Grossman No. of Employees: 3,000+
THE BUZZ

Outstanding; top of the line Passive Very very smart Not a US player Rapidly expanding
56
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Barclays Global Investors, N.A.
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
CAREER LIBRARY
57
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.
58
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
59
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.
60
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
61
V A U L T
5
PRESTIGE RANKING
Lehman BrothersInvestment Management Division

KEY COMPETITORS
Goldman Sachs Merrill Lynch Morgan Stanley
399 Park Avenue New York, NY 10022 Phone: (212) 526-7000 www.lehman.com
DEPARTMENTS
Asset Management Private Equity Private Investment Management
UPPERS
"Best culture on Wall Street" Great mentoring There are nights when I go to bed so excited for specific meetings
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
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

"Fixed income geniuses" "Sorority/fraternity" "Fantastic to work for" "Somewhere between the intensity of Goldman and UBS"
62
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Lehman BrothersInvestment Management Division
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
CAREER LIBRARY
63
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.
64
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
65
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
66
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
67
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
68
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
69
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.
70
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
71
V A U L T
PRESTIGE RANKING
Asset 6 JPMorgan Management

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+
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
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

Some degree of bureaucracy Could use some system upgrades Not a lot of perks
"Tops" "Probably past its prime, but still intense" "Outstanding private bank" "Nothing exemplary"
EMPLOYMENT CONTACT
jpmorgan.com/careers
72
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
73
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
74
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
75
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
76
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
77
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
78
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
79
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.
80
CAREER LIBRARY
2008 Vault.com Inc.
The general consensus is that this is the best line of business to work for at JPMorgan Chase.
JPMorgan Asset Management insider
CAREER LIBRARY
81
V A U L T
7
PRESTIGE RANKING
Pacific Investment Management Company LLC (PIMCO)

KEY COMPETITORS
BlackRock Bridgewater Associates Fidelity Goldman Sachs Legg Mason
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
UPPERS
Very competitive salaries and bonuses Stimulating and rewarding work Very collaborative environment
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
DOWNERS
Work can be overwhelming Too much focus on external talent You are always required to be on
EMPLOYMENT CONTACT
See career information section of www.pimco.com
THE BUZZ

Bond kings Massive Excellent macro research team Some good funds Fixed income powerhouse
82
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Pacific Investment Management Co.(PIMCO)
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
CAREER LIBRARY
83
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.
84
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
85
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
86
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
87
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
88
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
89
V A U L T
8
PRESTIGE RANKING
D. E. Shaw & Co.

KEY COMPETITORS
Carlyle Group Citadel Investment E*TRADE FINANCIAL Fidelity Fortress Investment Group Merrill Lynch
120 West 45th Street 39th Floor, Tower 45 New York, NY 10036 Phone: (212) 478-0000 Fax: (212) 478-0100 www.deshaw.com
DEPARTMENTS
Brokerage Investment Advisory
UPPERS
Interact with and work among people of highest caliber Great compensationD.E. Shaw is known to be a pay master
THE STATS
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
Incredibly brainy, very competitive, great compensation Sweatshop Very strong firm Quant shop
90
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
CAREER LIBRARY
91
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.
92
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
93
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 [email protected] with any questions they have about the hiring process.
94
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
95
V A U L T
9
PRESTIGE RANKING
Wellington Management Co., LLP

KEY COMPETITORS
Barclays Global Investors BlackRock Morgan Stanley
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
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
The benchmark for institutional asset managementexcellent managers of money Second tier Fantastic in fixed income Professional, demanding Well respected, old school
96
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
97
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,
98
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
99
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.
100
CAREER LIBRARY
2008 Vault.com Inc.
Despite the starchy bluesuit exterior, the firm is a warm and very congenial place to work.
Wellington Management insider
CAREER LIBRARY
101
V A U L T
10
PRESTIGE RANKING
Deutsche BankPrivate Clients and Asset Management

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
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
KEY COMPETITORS
Citi Dresdner Bank UBS
UPPERS
Laid-back, collegial, professional atmosphere
DOWNERS
Mixed reviews on diversity
EMPLOYMENT CONTACT THE BUZZ

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
102
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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,
CAREER LIBRARY
103
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.
104
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
105
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,
106
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
107
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.
108
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
109
V A U L T
11
PRESTIGE RANKING
Merrill LynchGlobal Wealth Management

KEY COMPETITORS
Citi Credit Suisse Goldman Sachs JPMorgan Lehman Brothers Morgan Stanley
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
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
The Big Dog On its way down after the credit crisis Recovering Overly self-important Hugethe standard for US wealth management
110
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Merrill LynchGlobal Wealth Management
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.
CAREER LIBRARY
111
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,
112
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
113
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 named former Bear Stearns star banker Fares D. Noujaim to the newly114
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
115
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.
116
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
117
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
118
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
119
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.
120
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
121
V A U L T
12
PRESTIGE RANKING
Morgan Stanley Investment Management

UPPERS
Good management Friendly culture
1585 Broadway New York, NY 10036 Phone: (212) 761-4000 Fax: (212) 762-0575 www.morganstanley.com
DOWNERS DEPARTMENTS*
Global Wealth Management Institutional Securities Investment Management
Better trajectory needed for employees to advance Diversity needs improvement

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

Innovative, smart people Falling apart Coming back; on the upswing What a way to kill a brand Will be top soon
122
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Morgan Stanley Investment Management
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
CAREER LIBRARY
123
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.)
124
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
125
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
126
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
127
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
128
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
129
V A U L T
13
PRESTIGE RANKING
Fidelity Investments
KEY COMPETITORS
BlackRock Charles Schwab The Vanguard Group
82 Devonshire Street Boston, MA 02109 Phone: (617) 563-7000 Fax: (617) 476-6150 www.fidelity.com
DEPARTMENTS
Fidelity Brokerage Services Fidelity Management & Research Company Financial Advising Retirement Services
UPPERS
Colleagues are intelligent, motivated and team players
DOWNERS
Culture can be corporatea lot of HR rules around promotions and raises
THE STATS
Employer Type: Private Company Chairman & CEO: Edward C. Johnson III No. of Employees: 46,400
EMPLOYMENT CONTACT
See the careers section of www.fidelity.com
THE BUZZ
Great place, top quality Great history but past its prime; losing good people to hedge funds Improving slowly Big and boring
130
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Fidelity Investments
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.
CAREER LIBRARY
131
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.
132
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
133
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.
134
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
135
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.
136
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
137
V A U L T
14
PRESTIGE RANKING
Lazard Asset Management

KEY COMPETITORS
Fidelity Goldman Sachs Legg Mason Merrill Lynch Morgan Stanley Neuberger Berman UBS
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
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

Outstanding private bank Snobby Managed accounts guru Demanding Great Euro funds
138
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Lazard Asset Management
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
CAREER LIBRARY
139
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.
CAREER LIBRARY
140
2008 Vault.com Inc.
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
CAREER LIBRARY
141
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 [email protected]. Those interested in asset management jobs in Paris can send their information to [email protected]. 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.
142
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
143
V A U L T
PRESTIGE RANKING
15 UBS
UPPERS
Management is supportive and accessible The ability to be involved in major projects Exclusive access to cultural events in NYC
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
SUBSIDIARIES*
Corporate Center Global Asset Management Global Wealth Management & Business Banking Investment Bank *UBS AG
DOWNERS
They dont pay us enough The lack of guidance The office isnt the best
EMPLOYMENT CONTACT
See career candidates at www.ubs.com
THE STATS
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
THE BUZZ
Top of the line Hurting lately Strong international reputation, improving domestic business Whos left? Great private bank
144
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
145
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.
146
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
147
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.
148
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
149
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
150
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
151
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.
152
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
153
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.
154
CAREER LIBRARY
2008 Vault.com Inc.
Many managers will even try to informally mentor subordinates.

UBS insider
CAREER LIBRARY
155
V A U L T
16
PRESTIGE RANKING
Credit Suisses Asset Management Business

KEY COMPETITORS
Citi Deutsche Bank UBS
11 Madison Avenue New York, NY 10010 Phone: (212) 325-2000 Fax: (212) 538-3395 www.credit-suisse.com/us/en
THE STATS
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
UPPERS
Access to world-class professionals Lateral mobility Global perspective with local presence
DOWNERS
Not enough technology Need to remove barriers between departments Some resistance to change
EMPLOYMENT CONTACT
See the careers section of www.credit-suisse.com/careers
THE BUZZ

Extremely competitive Lack of focus Solid products Conceited
156
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Credit Suisses Asset Management Business
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.
CAREER LIBRARY
157
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.
158
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
159
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
160
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
161
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.
162
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
163
V A U L T
17
PRESTIGE RANKING
CalPERS
KEY COMPETITORS
Fidelity Principal Financial TIAA-CREF
Lincoln Plaza, 400 P Street Sacramento, CA 95814 Phone: (916) 795-3829 Fax: (916) 795-4001 www.calpers.ca.gov
DEPARTMENTS
Actuarial & Employer Services Branch Audit Services Benefit Services Fiscal Services Government Affairs Health Benefit Services Investments Member Services
UPPER
Good diversity efforts
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

King of pension plans Archaic Responsible, intelligent Not as sharp as perceived Activist investors, massive
164
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition CalPERS
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
CAREER LIBRARY
165
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
166
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
167
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?
168
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
169
V A U L T
18
PRESTIGE RANKING
AllianceBernstein
KEY COMPETITORS
Fidelity Franklin Resources ING Merrill Lynch UBS
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
UPPERS
Good pay and perks
DOWNERS
Uneven management
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
EMPLOYMENT CONTACT
See careers section of www.alliancebernstein.com
THE BUZZ

Rising Star Bland Strong Research Macho Great Reputation
170
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition AllianceBernstein
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
CAREER LIBRARY
171
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.
172
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
173
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.
174
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
175
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.
176
CAREER LIBRARY
2008 Vault.com Inc.
There is a lot of room for advancement.

AllianceBernstein insider
CAREER LIBRARY
177
V A U L T
19
PRESTIGE RANKING
The Vanguard Group

UPPERS
The company is doing great competitively speaking People are very nice
100 Vanguard Boulevard Valley Forge, PA 19355 Phone: (610) 648-6000 Fax: (610) 669-6605 www.vanguard.com
DIVISIONS
Client Relationship Group Financial Fixed Income Group Human Resources Information Technology International Investment Programs & Services Legal Planning & Development Quantitative Equity Group
DOWNERS
Formal business attire Culture perhaps too laid-back at lower levels
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

Mutual fund king Too self-righteous Well respected Good, but getting watered down
178
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition The Vanguard Group
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.
CAREER LIBRARY
179
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.
180
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
181
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.
182
CAREER LIBRARY
2008 Vault.com Inc.
It is quickly gaining on its largest competitors and will be No. 1 in the industry in a few years.
Vanguard insider
CAREER LIBRARY
183
V A U L T
20
PRESTIGE RANKING
HSBC North America Holdings

KEY COMPETITORS
Bank of America Citi JPMorgan
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
UPPERS
Stable company with strong financial reserves Reasonable hours
DOWNERS
Staid, conservative Some bureaucracy
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
EMPLOYMENT CONTACT
See careers section of www.hsbcusa.com
THE BUZZ

Great global firm European-focused Expanding in US Could be a big player but arent
184
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition HSBC North America Holdings
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.
CAREER LIBRARY
185
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
186
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
187
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
188
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
189
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.
190
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
191
V A U L T
21
PRESTIGE RANKING
T. Rowe Price
KEY COMPETITORS
American Century Fidelity The Vanguard Group
100 E. Pratt Street Baltimore, MD 21202 Phone: (410) 345-2000 Fax: (410) 345-2394 www.troweprice.com
DEPARTMENTS
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
UPPERS
Highly ethical culture
DOWNERS
Mediocre salaries (places greater weight on benefits than salary)
EMPLOYMENT CONTACT
www.troweprice.com/careers
THE STATS
Employer Type: Public Company Ticker Symbol: TROW (NASDAQ) Chairman: Brian C. Rogers CEO & President: James A.C. Kennedy Revenue: $2.23 billion (FYE 12/07) Net Income: $671 million No. of Employees: 5,203 No. of Offices: 20
THE BUZZ

High quality Bunch of old guys investing Strong brand Second tier Staying true to its roots
192
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition T. Rowe Price
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
CAREER LIBRARY
193
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.
194
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
195
$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.
196
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
197
V A U L T
22
PRESTIGE RANKING
GE Asset Management
KEY COMPETITORS
Barclays Global Investors SEI Investments State Street
3001 Summer Street PO Box 7900 Stamford, CT 06904-7900 Phone: (203) 326-2300 www.geam.com
DEPARTMENTS
Alternative Investments Fixed Income U.S. & International Equities
UPPERS
Seeks out the best in the field
DOWNERS
Household name, but not in asset management
THE STATS
Employer Type: Subsidiary of GE President & CEO: Jay Ireland No. of Employees: 450
EMPLOYMENT CONTACT
See careers section of www.ge.com
THE BUZZ

Solid name, good on a resume Recent stumbles High quality Too cautious
198
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
199
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
200
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
201
V A U L T
23
PRESTIGE RANKING
Franklin Resources, Inc. (Franklin Templeton Investments)

KEY COMPETITORS
BlackRock Fidelity The Vanguard Group
1 Franklin Parkway Building 970, 1st Floor San Mateo, CA 94403 Phone: (650) 312-2000 Fax: (650) 312 5606 www.franklintempleton.com
UPPERS DEPARTMENTS
High Net Worth Institutional Investment Advisory Retail Investment Advisory
Global company with a familyowned feel Benefits and amenities are generous, and the stock purchase plan is top notch
THE STATS
Employer Type: Public Company Ticker Symbol: BEN (NYSE) Chairman: Charles B. Johnson CEO & President:Gregory E. Johnson Revenue: $6.2 billion (FYE 9/07) Net Income: $1.77 billion No. of Employees: 8,875 No. of Offices: Offices in more than 29 countries
DOWNERS
Compensation is usually in the middle of the pack Diverse at the lower ranks, but upper-level managers are mostly middle-aged white men
THE BUZZ

Top quality Short-term minded Strong individual funds Needs new energy Good brand recognition
202
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
203
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.
204
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
205
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.
206
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
207
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.
208
CAREER LIBRARY
2008 Vault.com Inc.
The company offers flexible schedules for employees who need to pick up kids from day care or that sort of thing.
Franklin Resources insider
CAREER LIBRARY
209
V A U L T
PRESTIGE RANKING
Capital 24 Pequot Management

KEY COMPETITORS
AllianceBernstein Andor Capital Management State Street
500 Nyala Farm Road Westport, CT 06880 Phone: (203) 429-2200 Fax: (203) 429-2400 www.pequotcap.com
DEPARTMENTS
Institutional Investments Private Equity Private Wealth Management Venture Capital
UPPERS
Intelligent and likeable colleagues Extremely competitive compensation
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

Great reputation Very mediocre Great fund Who?
210
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
CAREER LIBRARY
211
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.
212
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
213
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 [email protected]. 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 ([email protected]). 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.
214
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
215
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.
216
CAREER LIBRARY
2008 Vault.com Inc.
Extremely competitive compensation means that people seldom leave voluntarily.

Pequot Capital insider
CAREER LIBRARY
217
V A U L T
25
PRESTIGE RANKING
ING Investment Management

KEY COMPETITORS
Allianz AXA Citi
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
EMPLOYMENT CONTACT
See careers section of www.ingim.com
DEPARTMENTS
Asset Management Banking Insurance
THE STATS
Employer Type: Subsidiary of ING CEO, ING Investment Management: Gilbert Van Hassel CEO, ING Investment Management Americas: Robert Leary No. of Employees: 2,500
THE BUZZ

Great company Losing luster Good specialty sector funds People are good, cultures not so good Quirky firm with potential
218
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
CAREER LIBRARY
219
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
220
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
221
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
222
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
223
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.
224
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
225
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.
226
CAREER LIBRARY
2008 Vault.com Inc.
TOP
BEST OF THE REST
25
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

Aggressive and professional Not a US player Respectable Occasionally disjointed
228
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Allianz Group
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
CAREER LIBRARY
229
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
230
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
231
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,
CAREER LIBRARY
232
2008 Vault.com Inc.
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.
CAREER LIBRARY
233
American Century Investments

4500 Main Street Kansas City, MO 64111 Phone: (816) 531-5575 Fax: (816) 340-7962 www.americancentury.com
KEY COMPETITORS
Fidelity T. Rowe Price The Vanguard Group
DEPARTMENTS
College Savings Plans Individual Investors Institutional Investors & Consultants Investors Using Advisors or other Third Party Intermediaries Small & Mid-sized Businesses
UPPERS
Generous pay Great retirement program
DOWNERS
More female-related initiatives needed Hard to initially get in the firm
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
EMPLOYMENT CONTACT
www.americancentury.com/careers
THE BUZZ
Losing momentum Solid research and portfolio management, good large value funds Confused Always in top quartile with respect to performance
234
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition American Century Investments
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
CAREER LIBRARY
235
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
236
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
237
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.
238
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
239
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.
240
CAREER LIBRARY
2008 Vault.com Inc.
Ameriprise Financial
707 2nd Avenue South Minneapolis, MN 55402 Phone: (612) 671-3131 www.ameriprise.com
KEY COMPETITORS
Edward Jones Fidelity Hartford Merrill Lynch Principal Financial Wachovia
SERVICES
Asset Management Banking Financial Planning Income Generation Insurance Personal Trust Services Retail Brokerage
UPPERS
Opportunity is endless We are unparalleled in the industry Freedom
THE STATS
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*
*Advisor offices
DOWNERS
Pay system is confusing Lack of communication between franchise owners Too much overhead
EMPLOYMENT CONTACT
See careers section of www.ameriprise.com
THE BUZZ
Main Street wealth managers Growing Too big, will hire anyone
Visit the Vault Finance Career Channel at www.vault.com/finance with insider firm profiles, message boards, the Vault Finance Job Board and more
CAREER LIBRARY
241
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
242
CAREER LIBRARY
2008 Vault.com Inc.
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,
CAREER LIBRARY
243
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.
244
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
245
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
246
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
247
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.
248
CAREER LIBRARY
2008 Vault.com Inc.
Bank of America
Bank of America Corporate Center 100 N. Tryon Street Charlotte, NC 28255 Phone: (800) 900-9000 www.bankofamerica.com
KEY COMPETITORS
Citi Wachovia Wells Fargo
DEPARTMENTS
Global Consumer & Small Business Banking Global Corporate & Investment Banking Global Wealth & Investment Management
UPPERS
Collegial and friendly
DOWNERS
Pretty conservative

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 www.bankofamerica.com/careers
THE BUZZ
Potential threat Not strong in this area Hungry for ultra-wealthy customers Struggling
CAREER LIBRARY
249
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
250
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
251
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
252
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
253
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
254
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
255
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
Northern Trust SEI Investments State Street
DEPARTMENTS
Asset Management Asset Servicing Broker-Dealer & Advisory Services Issuer Services Treasury Services Wealth Management
UPPERS
Fair paychecks and good benefit package
DOWNERS
More family-friendly policies needed
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
EMPLOYMENT CONTACT
See careers section of www.bnymellon.com
THE BUZZ

Large custodian Sharks in suits Private wealth shop Second tier
256
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition The Bank of New York Mellon
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,
CAREER LIBRARY
257
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.
258
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
259
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,
CAREER LIBRARY
260
2008 Vault.com Inc.
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.
CAREER LIBRARY
261
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
262
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
263
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.
264
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
265
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
KEY COMPETITORS
American Century Fidelity FMR The Vanguard Group
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
UPPERS
Room to grow and try new things
DOWNERS
A definitely corporate environment
EMPLOYMENT CONTACT
www.capgroup.com/careers/index.html
THE STATS
Employer Type: Private Company President: Philip de Toledo No. of Employees: 9,000 No. of Offices: 19
THE BUZZ

Industry giant Past its prime High quality Who? Strong fund performance and flows
266
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition The Capital Group Companies
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,
CAREER LIBRARY
267
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
268
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
269
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
270
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
271
Charles Schwab
101 Montgomery Street San Francisco, CA 94104 Phone: (415) 636-7000 Fax: (415) 636-9820 www.schwab.com
KEY COMPETITORS
E*TRADE FINANCIAL Edward Jones Fidelity Merrill Lynch TD Ameritrade
BUSINESSES
Charles Schwab Bank Schwab Corporate & Retirement Services Schwab Institutional Schwab Investor Services
UPPERS
Many perks
DOWNERS
Corporate culture driven by the bottom line
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
EMPLOYMENT CONTACT
www.aboutschwab.com/careers
THE BUZZ

Growing, strong platform Past its prime Fantastic technology Bottom of the barrel
272
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Charles Schwab
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.
CAREER LIBRARY
273
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
274
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
275
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.
276
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
277
DC Energy
8065 Leeburg Pike Fifth Floor Vienna, VA 22182 Phone: (703) 506-3901 Fax: (703) 506-3905 www.dc-energy.com
KEY COMPETITORS
Allegheny Energy Solutions Citadel Energy Products Constellation Dominion Energy Goldman Sachs JPMorgan Morgan Stanley Saracen TBC Consolidated Fuels
DEPARTMENTS
Asset Management Trading
THE STATS
Employer Type: Private Company CEO & Managing Director: Dean Wilde No. of Employees: 50 No. of Offices: 1
UPPERS
Extremely smart people Excellent compensation Work is stimulating and rewarding
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
278
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition DC Energy
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
CAREER LIBRARY
279
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
CAREER LIBRARY
280
2008 Vault.com Inc.
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.
CAREER LIBRARY
281
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
282
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
283
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.
284
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
285
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.
286
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
287
Dreyfus Corporation
200 Park Avenue New York, NY 10166 Phone: (212) 922-6000 Fax: (212) 922-7533 www.dreyfus.com
KEY COMPETITORS
BlackRock Federated Investors The Vanguard Group
DEPARTMENTS
Asset Management Insurance Mutual Fund Management Retirement & Pension Fund Management
UPPERS
Flexible work hours
DOWNERS
Perks could be improved
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
EMPLOYMENT CONTACT
www.bnymellon.com/careers
THE BUZZ
Solid brand; kinder, gentler place Just another mutual fund firm Gaining importance Not well known Hardworking, productive
288
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Dreyfus Corporation
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
CAREER LIBRARY
289
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.
290
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
291
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.
292
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
293
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
Good; solid regional firm Extremely retail ... the Wal-Mart of finance firms Old line, recognizable Thought of as third-tier brokerage firm
294
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Edward Jones
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.
CAREER LIBRARY
295
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
296
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
297
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.
298
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
299
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!
300
CAREER LIBRARY
2008 Vault.com Inc.
E*TRADE FINANCIAL
135 East 57th Street New York, NY 10022 Phone: (646) 521-4300 www.etrade.com
UPPERS
Young, energetic and vibrant people Very entrepreneurial and relatively flat hierarchically
DEPARTMENTS
Banking Services Futures & Options Mutual Funds, Exchange-Traded Funds & Bonds Online Money Management Research Retirement Trading & Portfolios
DOWNERS
Long hours Going through tough times
KEY COMPETITORS
Charles Schwab Fidelity TD Ameritrade
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
EMPLOYMENT CONTACT
See the careers section of www.etrade.com
THE BUZZ

Online king A total mess Cool brokerage firm Mortgage portfolio troubles; takeover candidate
CAREER LIBRARY
301
Vault Guide to the Top 25 Investment Management Employers 2009 Edition E*TRADE FINANCIAL
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
302
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
303
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
304
CAREER LIBRARY
2008 Vault.com Inc.
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,
CAREER LIBRARY
305
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.
306
CAREER LIBRARY
2008 Vault.com Inc.
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.).
CAREER LIBRARY
307
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.
308
CAREER LIBRARY
2008 Vault.com Inc.
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 Flexible working arrangements are available Good relationships with managers
DOWNERS
Dress code is suit-and-tie professional Minority diversity could be improved
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
EMPLOYMENT CONTACT
See the careers section of FederatedInvestors.com
THE BUZZ

Money market expertise Not competitive on comp Good mid-cap funds Good firm, but not well known
CAREER LIBRARY
309
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Federated Investors
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.
310
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
311
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
312
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
313
GAMCO Investors, Inc.

One Corporate Center Rye, NY 10580-1422 Phone: (914) 921-5100 Fax: (914) 921-5392 www.gabelli.com
KEY COMPETITORS
Goldman Sachs Merrill Lynch Morgan Stanley
DEPARTMENTS
Asset Management Financial Advisory Fixed Income Individual Investment Management Investment Partnership Group Institutional Brokerage Institutional Investment Management Mutual Funds Research
UPPERS
Good compensation
DOWNERS
Not well known
EMPLOYMENT CONTACT
Under contact us section of www.gabelli.com, see career opportunities
THE STATS
Employer Type: Public Company Ticker Symbol: GBL (NYSE) Chairman & CEO: Mario J. Gabelli Revenue: $292.4 million (FYE 12/07) Net Income: $79.6 million No. of Employees: 211 No. of Offices: 7
THE BUZZ

Solid reputation A little loose with the law Aggressive Small boutique, great performance
314
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition GAMCO Investors, Inc.
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
CAREER LIBRARY
315
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.
316
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
317
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.
318
CAREER LIBRARY
2008 Vault.com Inc.
GMO
40 Rowes Wharf Boston MA 02110 Phone: (617) 330-7500 www.gmo.com
KEY COMPETITORS
Goldman Sachs Lehman Brothers Morgan Stanley
DEPARTMENTS
Asset Allocation Emerging Equity Forestry Global Fixed Income Global/International Quant Equity International Active Equity U.S. Quant Equity
EMPLOYMENT CONTACT
See the employment opportunities section of www.gmo.com
THE STATS
Employer Type: Private Company Founder & Chairman of the Board: Jeremy Grantham Chief Operating Officer & Executive Committee Chairman: Scott Etson No. of Employees: 400 No. of Offices: 6
THE BUZZ

World-class organization Not well known Well respected Small, family-friendly
CAREER LIBRARY
319
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
320
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
321
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 [email protected]. And if you impress GMO, the firm says it will be in touch.
322
CAREER LIBRARY
2008 Vault.com Inc.
Invesco Ltd.
One Midtown Plaza 1360 Peachtree Street, N.E. Atlanta, GA 30309 Phone: (404) 479-1095 www.invesco.com
KEY COMPETITORS
BlackRock Franklin Resources T. Rowe Price
DEPARTMENTS
Institutional Investment Management Private Wealth Management Retail Mutual Funds
UPPERS
Entrepreneurial culture Does a good job of hiring and promoting individuals regardless of sex, race or sexual orientation.
THE STATS
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
DOWNERS
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
EMPLOYMENT CONTACT
www.invesco.com/about
THE BUZZ
Known for bonds Failed technology funds Silly decisions
CAREER LIBRARY
323
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
324
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
325
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 &
326
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
327
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
328
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
329
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.
330
CAREER LIBRARY
2008 Vault.com Inc.
Janus Capital Group

151 Detroit Street Denver, CO 80206 Phone: (303) 333-3863 Fax: (303) 336-7497 www.janus.com
KEY COMPETITORS
American Century Fidelity T. Rowe Price
BUSINESSES
Investment Management Printing & Fulfillment
UPPERS
Good culture
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

Recovering nicely Losing luster Great value-added programs Occasional blow-ups Growth investing
CAREER LIBRARY
331
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Janus Capital Group
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.
332
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
333
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
334
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
335
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.
336
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
337
Legg Mason
100 Light Street Baltimore, MD 21202-1099 Phone: (877) 534-4627 Fax: (410) 454-4923 www.leggmason.com
KEY COMPETITORS
BlackRock Edward Jones Fidelity
DIVISIONS
Institutional Mutual Funds/Managed Services Wealth Management
UPPERS
Excellent access to senior management
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

Very well regarded Integration troubles Great funds Rocky performance Good money managers
338
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
339
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.
340
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
341
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.
342
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
343
MFC Global Investment Management LLC

101 Huntington Avenue, H-6 Boston, MA 02199 Phone: (888) 332-7132 www.mfcglobal.com
KEY COMPETITORS
Bank of New York Mellon Northern Trust State Street
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
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
344
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
345
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.
346
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
347
MFS Investment Management

500 Boylston Street Boston, MA 02116 Phone: (617) 954-5000 www.mfs.com
KEY COMPETITORS
Fidelity Putnam The Vanguard Group
BUSINESSES
Fundamental Equity & Credit Research Institutional Product Management Portfolio Management Quantitative Research Trading
UPPERS
Very collaborative environment You rarely or never have to work weekends
DOWNERS
Training could be better Average salaries
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
EMPLOYMENT CONTACT
Follow the careers link on mfs.com
THE BUZZ

Creative and thoughtful Very political Reputable, top quality Cult-like Successful player
348
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition MFS Investment Management
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.
CAREER LIBRARY
349
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
350
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
351
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
352
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
353
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 They want to help you reach your goals
DOWNERS
Salaries could be better
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.)
EMPLOYMENT CONTACT
E-mail: [email protected] See career opportunities at www.morgankeegan.com
THE BUZZ
Boutique Second tier Small player in the South
354
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Morgan KeeganWealth Management Division
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
CAREER LIBRARY
355
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
356
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
357
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.
358
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
359
Natixis Global Asset Management

399 Boylston Street Boston MA 02116 Phone: (617) 449-2100 Fax: (627) 247-1447 www.globalam.natixis.com
KEY COMPETITORS
Credit Agricole HSBC Holdings Socit Gnrale
AFFILIATES
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
UPPERS
Fun, innovative and entrepreneurial culture
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
Boutique doing well Large Not well known
360
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition NATIXIS Global Asset Managements
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.
CAREER LIBRARY
361
Vault Guide to the Top 25 Investment Management Employers 2009 Edition NATIXIS Global Asset Management
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
362
CAREER LIBRARY
2008 Vault.com Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition NATIXIS Global Asset Management
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.
CAREER LIBRARY
363
Northern Trust Corporation

50 South LaSalle Street Chicago, IL 60603 Phone: (312) 630-6000 Fax: (312) 630-1512 www.northerntrust.com
UPPERS
Everyone is willing to lend a helping hand Employees rarely work weekends
BUSINESSES
Corporate & Institutional Services Personal Financial Services
DOWNERS
Some disgruntled employees Only a few senior women
THE STATS
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
EMPLOYMENT CONTACT
Follow the "careers" link on ntrs.com.
THE BUZZ

Coveted client base Very conservative Regional, but good firm Old Custody shop
364
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Northern Trust Corporation
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
CAREER LIBRARY
365
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
366
CAREER LIBRARY
2008 Vault.com Inc.
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,
CAREER LIBRARY
367
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.
368
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
369
Nuveen Investments
333 W. Wacker Drive Chicago, IL 60606 Phone: (312) 917-7700 Fax: (312) 917-8049 www.nuveen.com
KEY COMPETITORS
Black Rock Fidelity PIMCO
DEPARTMENTS
Financial Advisory Individual Investments Institutional Investments
UPPERS
Good products and a solid reputation Family-friendly
THE STATS
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
DOWNERS
Average salaries Diversity could be better
EMPLOYMENT CONTACT
See careers section of www.nuveen.com
THE BUZZ
Outstanding brand, investments and people Very mediocre Innovative Lesser known, old firm Good bonds
370
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Nuveen Investments
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
CAREER LIBRARY
371
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
372
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
373
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 [email protected] 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.
374
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
375
Pioneer Investments
60 State Street Boston MA 02109 Phone: (617) 742-7825 Fax: (617) 422-4231 www.pioneerinvestments.com
KEY COMPETITORS
Eaton Vance Fidelity Putnam
DEPARTMENTS
Alternative Investments Global Asset Management Hedge Funds Mutual Funds Portfolio Management Quantitative Research
UPPERS
Good range of benefits
DOWNERS
Paths to advance within the company should be clearer
THE STATS
Employer Type: Subsidiary of UniCredit Group CEO: Daniel Keith Kingsbury No. of Employees: 2,300 No. of Offices: Locations in 25 countries
EMPLOYMENT CONTACT
See career opportunities at www.pioneerinvestments.com
THE BUZZ

Great funds Not well known High aspirations Old line mutual funds
376
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Pioneer Investments
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,
CAREER LIBRARY
377
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
378
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
379
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.
380
CAREER LIBRARY
2008 Vault.com Inc.
Principal Global Investors

801 Grand Avenue Des Moines, IA 50392 Phone: (800) 533-1390 Fax: (866) 850-4024 www.principalglobal.com
KEY COMPETITORS
AIG Investments Barclays Global Investors Invesco Institutional
DEPARTMENTS
Active Risk Management Asset Management Equity Fixed Income Investment Real Estate Investment
EMPLOYMENT CONTACT
See careers section of www.principalglobal.com
THE STATS
Employer Type: Subsidiary of the Principal Financial Group CEO: Jim McCaughan No. of Employees: 1,422 No. of Offices: 19
THE BUZZ

Excellent performance history Largely retirement-focused 401(k) specialists Commonly known name
CAREER LIBRARY
381
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
382
2008 Vault.com Inc.
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
CAREER LIBRARY
383
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.
384
CAREER LIBRARY
2008 Vault.com Inc.
Putnam Investments
One Post Office Square Boston, MA 02109 Phone: (617) 292-1000 www.putnam.com
KEY COMPETITORS
Fidelity MFS Investment Management The Vanguard Group
DEPARTMENTS
Individual Investments Institutional Investments Retirement Plan Investments
UPPERS
Meritocratic culturethose who work hard succeed
THE STATS
Employer Type: Subsidiary of Great-West Lifeco Inc. President & CEO: Charles E. Haldeman Jr. No. of Employees: 2,600 No. of Offices: 5
DOWNERS
The days are long
EMPLOYMENT CONTACT
www.putnam.com/careers
THE BUZZ

High quality Performing poorly, not growing Well known Should look for a new image
CAREER LIBRARY
385
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
386
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
387
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.
388
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
389
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.
390
CAREER LIBRARY
2008 Vault.com Inc.
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
Asset Management Financial Planning Investment Banking
People are extremely helpful
DOWNERS
Diversity needs improvement
THE STATS
Employer Type: Public Company Ticker Symbol: RJF (NYSE) Chairman & CEO: Thomas A. James Net Revenue: $3.1 billion (FYE 9/07) Net Income: $250.4 million No. of Employees: 5,500 No. of Offices: 2,200
EMPLOYMENT CONTACT
www.raymondjames.com/careers
THE BUZZ

Committed Small player in the South Staying the course Regional fund pushers
CAREER LIBRARY
391
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Raymond James Financial
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
392
CAREER LIBRARY
2008 Vault.com Inc.
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,
CAREER LIBRARY
393
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
394
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
395
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
396
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
397
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.
398
CAREER LIBRARY
2008 Vault.com Inc.
Russell Investments
909 A Street Tacoma WA 98042 Phone: (253) 439-9500 www.russell.com
KEY COMPETITORS
Bank of New York Mellon Barclays Global Investors Northern Trust Standard & Poors State Street
DEPARTMENTS
Alternative Investments Investment Consulting Investment Management & Research Manager & Product Research Russell Implementation Services Russell Retirement Services Russell 20-20
UPPERS
Family-oriented, respectful culture
DOWNERS
Training offerings could be better
THE STATS
Employer Type: Subsidiary of Northwestern Mutual CEO: Craig Ueland No. of Employees: 2,000+ No. of Offices: 20
EMPLOYMENT CONTACT
Visit careers section of www.russell.com
THE BUZZ
Large custodian Sharks in suits Second tier
CAREER LIBRARY
399
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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.
400
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
401
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.
402
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
403
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
Strong UK presence, very strong internationally Relatively unknown in the US Strong sales leadership Old school
404
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
405
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
406
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
407
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
CAREER LIBRARY
408
2008 Vault.com Inc.
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.
CAREER LIBRARY
409
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

Strong research Going downhill Nose to the grindstone Mediocre investment talent
410
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition 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
CAREER LIBRARY
411
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.
412
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
413
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.
414
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
415
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
416
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
417
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.
CAREER LIBRARY
418
2008 Vault.com Inc.
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.
CAREER LIBRARY
419
The TCW Group

865 South Figueroa Street Los Angeles, CA 90017 Phone: (213) 244-0000 Fax: (213) 244-0755 www.tcw.com
KEY COMPETITORS
Bank of New York Mellon Barclays Global Investors BlackRock
DEPARTMENTS
Concentrated Core Equities Mezzanine Investing Mortgage-Backed Securities
EMPLOYMENT CONTACT
See careers under about TCW section of www.tcw.com
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
Good money management firm Second tier Pretty cool shop on the West Coast Strong fixed income flows
420
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition The TCW Group
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,
CAREER LIBRARY
421
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
422
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
423
TIAA-CREF
730 3rd Avenue New York, NY 10017 Phone: (212) 490-9000 www.tiaa-cref.org
KEY COMPETITORS
AIG Fidelity The Vanguard Group
DEPARTMENTS
Brokerage Services Insurance & Trust Services Retirement & College Savings Plans
UPPERS
Extremely relaxed culture
DOWNERS
THE STATS
Employer Type: Private Company Chairman, President & CEO: Herbert M. Allison, Jr. No. of Employees: 6,500
More diversity needed
EMPLOYMENT CONTACT
See the careers section of www.tiaa-cref.org
THE BUZZ
"Unstoppable in the education market" "Internal disarray" "Do-gooders" "Frightfully boring"
424
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition TIAA-CREF
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.
CAREER LIBRARY
425
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.
426
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
427
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
428
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
429
Victory Capital Management

127 Public Square Cleveland, OH 44114 Phone: (877) 660-4400 www.victoryconnect.com
KEY COMPETITORS
American Century Fidelity T. Rowe Price The Vanguard Group
DEPARTMENTS
Equity Funds Fixed Income Hybrid Funds Money Market Institutional Funds Individual Retirement Accounts Variable Insurance Fund
EMPLOYMENT CONTACT
E-mail: [email protected] www.key.com/careers
THE STATS
Employer Type: Subsidiary of KeyCorp Chairman & CEO: Robert Wagner No. of Employees: 213 No. of Offices: 5
430
CAREER LIBRARY
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Victory Capital Management
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
CAREER LIBRARY
431
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
432
CAREER LIBRARY
2008 Vault.com Inc.
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 [email protected].
CAREER LIBRARY
433
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
KEY COMPETITORS
Bank of America Citi SunTrust
UPPERS
Culture is competitive in a healthy way Great work/life balance Great relations with managers
Evergreen Investments 200 Berkeley Street Boston, MA 02116 www.evergreeninvestments.com
DOWNERS
Corporate bureaucracy Budgets and technology are lacking Unimpressive offices
DEPARTMENTS
Capital Management Group Corporate & Investment Banking General Banking Wealth Management
EMPLOYMENT CONTACT
For Wachovia and Wachovia Securities: www.wachovia.com/careers For Evergreen Investments: See the career opportunities section of www.evergreeninvestments.com
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
THE BUZZ
Best customer experience; great to work for Too little too late Up and comer, improving OK funds
CAREER LIBRARY
434
2008 Vaultcom Inc.
Vault Guide to the Top 25 Investment Management Employers 2009 Edition Wachovia/Evergreen Investments
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
CAREER LIBRARY
435
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
436
CAREER LIBRARY
2008 Vault.com Inc.
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
CAREER LIBRARY
437
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
438
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
439
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.
440
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
441
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
442
CAREER LIBRARY
2008 Vault.com Inc.
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.
CAREER LIBRARY
443
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.
CAREER LIBRARY
444

'Vault Guide To The Top 25 Investment Management Employers

Uploaded by

Copyright:

Available Formats

'Vault Guide To The Top 25 Investment Management Employers

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

'Vault Guide To The Top 25 Investment Management Employers

Uploaded by

Copyright:

Available Formats

The medias watching Vault! Heres a sampling of our coverage.

2008 Vault.com Inc.

2008 Vault.com Inc.

Investment Management Overview . . . . . . . . . . . . . . . . . . . . . . . . .5 History/State of the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

THE VAULT PRESTIGE RANKINGS

Ranking Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 The Vault 25: 2008 Rankings . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

THE BEST OF THE REST

2008 Vault.com Inc.

ABOUT THE EDITOR

A Guide to this Guide

2008 Vault.com Inc.

Investment Management Overview

Buy side vs. sell side

History / State of the Industry

2008 Vault.com Inc.

ERISA, 401(k) plans and specialist firms

The rise of the mutual fund

The year of the mutual fund scandal

Over the hump

2008 Vault.com Inc.

Big changes at the top of the org chart

Acquisitions and spin-offs

2008 Vault.com Inc.

Biggest (and best) in the biz

Enter the credit crisis

Solid as the Rock

2008 Vault.com Inc.

Millionaires and mutual funds

2008 Vault.com Inc.

From banking to management

The Vault 25 2009

U.S. HEADQUARTERS/ LARGEST OFFICE

Fidelity Investments Lazard Asset Management UBS

2008 Vault.com Inc.

85 Broad Street New York, NY 10004 Phone: (212) 902-1000 www.gs.com

EMPLOYMENT CONTACT THE STATS

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

2008 Vault.com Inc.

Two branches, one tree

Still going strong

2008 Vault.com Inc.

Sights on South Korea

Beating analysts expectations again

2008 Vault.com Inc.

OUR SURVEY SAYS

Praise for management

Close, but not completely casual

2008 Vault.com Inc.

WHAT EMPLOYEES AT OTHER FIRMS ARE SAYING

2008 Vault.com Inc.

BigRock means big business

Lessons learned at First Boston

CEO considered for top spot at Merrill Lynch

2008 Vault.com Inc.

New retirement portfolios and web site

IPO nets $2 billion

BlackRock acquires Quellos Group

2008 Vault.com Inc.

Come one, come all