Commodities Research Analyst - Amrita Sen

Investment Banks have the most extraordinary number of jobs within them - it can be completely mind-boggling. Every time we went near one, we found a whole new department or group of people that did something we’d never heard of. This seems to be due to the immense specialisation within banks, where it can be quite possible to sit next to someone but have no idea what they do.

There are a couple of major distinctions worth highlighting. Investment Banking or ‘IBD’ tends to be the department which most people imagine when thinking about an investment bank. They are the ones doing huge M&A deals, putting in incredibly long hours (14 hours plus each day - including weekends, for months at a time - is not uncommon) and schmoozing with business leaders. Work/life balance is not easily found, but on the flipside the work you do will likely be high-profile and give you an enormous breadth of business and finance experience. This means that if you want to leave London or Investment Banking at some point you shouldn’t have a problem, as the skills gained are very transferable. We've met ex-bankers in companies ranging from renewable energy start-ups to large pharmaceuticals.

Capital Markets is where you’ll find the traders, salespeople and research analysts. They’re market-based and are the ones you see on TV shouting down phones and pacing frantically in front of five flickering computer screens. They’re monitoring market activity and reacting immediately to any changes. It’s noisier and a bit more adrenalin-fuelled than IBD. One of the big perks of Capital Markets (other than the actual job), is that the hours tend to reflect those of the market. That means early starts, with most people in the office by 6.30am, but it also means you tend to be out by six in the evening - and there is almost never weekend work. So if you’re an early riser the work/life balance is pretty good, especially compared to IBD. One limiting factor is that you’re in a highly specialised, role usually in a very specific market area, so there’s not much in the way of transferable skills. If you’re an FX institutional salesperson it’s not that easy to move into another product area, and you’re going to be tied to working in London (or another major financial centre).

Beyond these two areas you have a massive range of middle and back office functions. There’s Technology, Operations, Legal, Finance, Marketing and HR for a start. So if banking interests you then it’s definitely worth looking at the breadth of what’s on offer. The other thing that struck us about banks was just how diverse they were. Without doubt, they had the most mixed workforces we saw, with every member of a team often from a different country. While this makes for a really dynamic and interesting work environment, it does mean that when you’re applying for a job, you’re not just up against your peers in this country but across the whole world - so that application form had better stand out!

Who are you and what do you do?

What is Investment Banking?

I would break it down into two separate groups. I would say Corporate Finance, that is the investment banks most people know about; so you’ve got mergers and acquisitions, debt financing, mezzanine financing, all very technical terms. Basically what they do is they are the ones who raise finance - for corporate, for government, for everybody. So that is investment banking, that is the IBD people know about, that it the very rich flashy people who are out there with their Ferrari; so that is one side. My side of investment banking is to do with markets, so we are on the trading floor monitoring prices, activities across the world - anything that is causing movements. It’s shorter hours compared to what those guys, do but that is the investment side, that is real-world linked, so to speak, because you’re literally out there trying to understand what is happening every day in the real world. So you’ve two very different groups and I think together they make up investment bank.

What attracted you to this career?

I wanted to go into a relatively academic job within investment banking, which is why I chose not to step into the investment banking division itself, which deals more with mergers, acquisitions and corporate side of things. Also, I wanted to be involved in something very dynamic where I could see life prices, day-to-day movements, minute movements of prices and products - one decision and then the whole floor really just starts screaming because it’s not inline with their expectations or it is inline. So I wanted to be in an environment in an interesting way, so that’s why I chose to come into research. I obviously applied to other banks, as well, including Barclays Capital, then within Barclays I was chosen into Commodities research - I didn’t apply into Commodities in particular.

What does your job involve?

When I come in the morning the first thing I do is go through the price movements - so that is like day-to-day, what has happened with oil, what has happened in corn or what has happened in copper, and then I will analyse them. So has there been a strike in a mine that has caused the prices to go up, has there been some sort or militant attacks in Nigeria that has shot up oil prices, or has there been any data coming out? Because there is some big macro data that comes out at set times that give you numbers; demand and supply numbers. We, of course, have our demand and supply models for all these products, and that is how we come up with our price targets or our forecast for where we think each should be heading in the short term, which is a year and the medium term which is five years. Then based on that we see our day-to-day numbers that come out and the price movements and we reconcile that with our bigger picture - where does that fit in? Then my job is to analyse that. We have a daily publication that goes out about that, it goes out to the traders and the salespeople and to all our clients as well, because it helps them understand what has happened in the market overnight. So that is a more day-to-day event, and on a more monthly and weekly basis we have a lot of publications go out to lots of clients, and also internally. And there we try and assess trends to the more macro, more bigger picture investment field within Commodities - where is the money flowing in? You’ve obviously got the producers and consumers of all these metals and energy markets, but you also have got speculators who just want to make money; they just come in, pile in the money and then get out and make money out of that. So we have to make sure we cover each and every aspect of every market. So we do analysis on that and publish reports - we’ve also got monthly and quarterly reports. The quarterly one is the biggest one, and that summarises across the board and balances the views on all these markets like copper, and whatever we cover. So that would be my role too - a lot of analysis, a lot of Excel work, a lot of PowerPoint, a lot of presentations.

What do you do on a typical day?

On the computer whenever I am at my desk, and that is most of my time. I am staring at a lot of computer screens and computers would be the main technical equipment that I use. Phones a lot as well, because we obviously have to talk to clients because clients obviously want our view on where the market is going, so they will position themselves in the market accordingly. So if it’s a producer, say a copper producer, and they want to know whether copper prices are going to continue rising, or will they fall? If we think they are going to fall, they have to hedge, that is what we advise on. We also have a lot of communication with the media - Bloomberg, FT and all of this, so journalists will call and say ‘Why has this happened?’ and we have to tell them and they report ‘Barclays Capital Analyst says …etcetera.’ Also lots of conferences that my seniors attend - I have just joined so I have attended one so far. There is a lot of travelling involved but when you’re at your desk it’s always computer screens.

Who do you liaise with on a daily basis?

In my job I liaise with everybody in my team, literally everyday. I think in most jobs it depends where you’re put - if you’re trading you will liaise with other traders in the bank and also traders in other banks. I think the key person is your line manager, so you would liaise a lot with that person. It’s role specific, so I speak with everybody - all the metals handlers because I cover all the Commodities that Barclays Capital covers. Within my team we have specialists, so we have one person just looking at precious metals, so gold, silver etc; one person only looking at oil, one person looking at sand-based metals, one person looking at agricultural. So because I am cross-Commodities I have to liaise with all of them, but obviously the base metals person doesn’t need to liaise with the agricultural person on a day-to-day basis.

What are the specialisms within your industry?

In most of them, not just Commodities, you will have four different groups of people. You have the traders, the sales, the structurers and the research people. So we do the fundamental analysis - where the market stands, why it stands here; and, going forward, what we think could happen.

The traders, they trade the commodities, or bonds, and they are the ones who make the big money because they are the ones who are taking the risk and they can obviously go longer or short - those are the technical terms. But they are basically managing the books of the bank and obviously their clients’ books as well, depending on whether the client is a producer or consumer or an investor.

The salespeople are basically there to maintain relationships with the clients. If a client wants a job done in any particular way they always go through the salespeople. Sales are the contact people of the bank. Then obviously Sales come and tell us that this is what they want, and they go and tell the trader this is what they want to manage.

The structuring team we work very closely with, because they do a lot of work with investors. So just general investors, say if they want to get a return of 5% over the next five years, so it’s up to the structurers to structure a product to meet these requirements. So it’s a kind of sophisticated version of when we first opened bank accounts and we asked ‘So what is your risk appetite like, are you willing to take risks, can I invest your money in this kind of a bond or this kind of equity?’ This is a much more sophisticated version of what they do, they will structure very complex notes and products with different Commodities, different baskets, and they are going to try and achieve what the client wants, so say a 5% return over five years.

More or less, this is the big four - obviously within these there are small ones, so within Sales you’ve Hedge Funds, Corporates, so within sales the teams are divided into smaller categories and they deal only with those specific clients.

What are the best bits about your job?

Generally if you’re on the trading floor the adrenalin just keeps you going and I think that is fantastic. If you weren’t in this world - if you were walking down the street - you wouldn’t have a clue of what one interest rate decision can do to the most civilised of people on the trading floor. People just go completely mad - they throw phones at each other, they are yelling at each other, they don’t consider whether you’re the junior or the senior, they are just trying to make money and not lose. Also, for me, the best thing is that everything is so new, so you come in everyday and there is some kind of news story that has never happened before. And I think that is quite important in a job where you spend so many hours; if it starts getting mundane the days start getting longer. In my job the days just go by, so that is the best thing about my job.

What are the worst bits about your job?

I would say investment banking can be hard for the hours. Very long hours, even in my job I get here at seven and leave about eight or nine, ten even, so they are very long hours. Most people on the trading floor are not required to work weekends because obviously the markets are closed, but I have come in on a couple of weekends because of a backlog of work. But for instance, on the Corporate Finance side of investment bank, they work until three or four a.m. and come in at weekends. So the hours can be very long and you don’t have a social life outside work, so obviously that is a bad thing because you need to have a social life.

What has been your greatest achievement?

Personally speaking, given that I’ve only just stated, I would say the fact that I’m very new to the industry and still getting a grasp of things, I think a couple of weeks ago I wrote an article, a front page, and it was quoted on Bloomberg with my name. And I think a couple of months before that there was an article and it was in the FT, I think those are personal milestones. But a lot of my colleagues are always on TV and so for them it’s not a big deal. But for me, given the few months that I have been here, the recognition I have received - not just from my team but also externally - has been very good.

Any regrets?

Given the job I am in currently, probably not, but I am in Commodities, which is in the trading area. Obviously people might want to go into a different kind of role, if you want to be a Quantitative Analyst rather than a Commodities Analyst. If I were to do that I would choose my degree differently. I did economics, a Bachelors and a Masters. I’d probably do a maths degree, but because I am new I don’t have the experience in my job to say I would do something differently. But yes, at university level I would do stuff differently if you have a career goal.

What is the pay like and are there any perks?

Pay is good, but also because of the hours you work the pay can’t be bad because you wouldn’t be able to keep going. So definitely the pay is good and that is across investment banking. Perks – you’ve obviously got the perks, especially if you’re on the Sales desk you get to go out with clients a lot, even in my desk but it’s comparably less. But Sales is the most client-facing job so they get lots of dinners and parties and I know a friend of mine yesterday went to a charity ball, organised by a client of hers. For us it’s more formal - you don’t get the balls, you get more dinners, more presentations, more client meetings - but the perks are that you do get to go out to very good restaurants. Apart from that as you go higher up the ladder I expect the perks increase, but in general Barclays Capital the perks are good, you have health insurance and all the other pension schemes, but I am sure across other banks it’s similar.

How long is a working day and do you have to work out of hours?

If I was on holiday, I wouldn’t be on call on my BlackBerry thanks to my team. Generally speaking, investment banking is very team specific, I do know of other colleagues of mine, not in my team but in other teams, and they are on call whether they are on holiday or not. So it’s very team dependent and I am very lucky to work in the team I am, so I wouldn’t take my case to be the general case. But apart from that the hours are long - most people on the trading floor are six-thirty to seven a.m. to start and your days are going to be action-packed, literally, the traders would finish around six or six-thirty. My job, I work longer hours and am definitely in until seven or eight most days, and there are days when I am working until nine or ten as well. As I said I’m not required at weekends - my boss doesn’t expect me to come in on weekends but I do occasionally as the backlog increases, or you wouldn’t get your job done. But as I said, most of the trading floor is empty at weekends - but if you go out to the Corporate Finance guys they are always there.

Is there much in the way of travel?

My role, yes, you get to travel a lot. I have just started and I have just been to a conference in Barcelona. For instance, my manager travels nine months out of twelve and he goes to all sorts of places. I think just two months back he went to Australia for a week then went to Chile for a week, then to Milan for a couple of days, Venice, US; he is just constantly travelling because it’s a global thing. So we are the headquarters in London and we’re a very global team so we cover markets, and Commodities generally is a global market. So you will have to go to conferences in these countries to meet clients based in these countrie, there is a lot of travel involved.

Do you have to be based anywhere in particular?

I wouldn’t know because our team is global but the biggest part of it is in London, we have got a smaller three-person team in the US and one person in Singapore. So it goes two ways, because Barclays Capital is a global name that’s why you’d be doing similar sort of work in US or Singapore where the other team members are, but in the US it’s a more restricted to the US only; the Asian member is more restricted to Asia only. So because we are a big City bank and are based here I think that is why it’s more global, on a smaller scale it wouldn’t work.

What is the working environment like?

My team are very different to the other teams who I sit around so I wouldn’t take that as the general norm. I think in my team we have ten people and three young men, the rest are all women, so I am very lucky. In general, investment banking is a male-dominated industry but I think in general Barclays Capital is very good with the whole women ratio, because you see a lot of women on the trading floor, but I am not so sure about other banks. Corporate Finance is very much male dominated if you look around you will see more guys than girls.

It’s formal, really, you have to always come in suits and not in jeans. I heard when I joined that you have casual Fridays and you come in jeans - but not really, because you’re always client facing, so you have to be well dressed.

Generally the environment is fantastic, I work with fantastic people. It’s formal when you’re working but when you’re not working everybody cracks jokes and everything is relaxed and you talk about sports and football and there are team rivalries. The team surrounding us as well, in Commodities, we all sit together, so obviously I know them very well, we always try and help each other out so the dynamics are very good.

How did you get into your job?

I applied to investment banking in general. My particular background, I did an economics Bachelor in Warwick and then my Masters in economics in Cambridge, but as far as I know Barclays Capital doesn’t require that you have to come from a particular university as long as you’ve got a strong academic background and you want to achieve something. You will get recruited if you stand out. Also, I had a First from both of those degrees but again that is not a requirement, it doesn’t specify on the website that you have to have a 2:1 or a First. That is Barclays Capital’s job, to find out if you’re suitable for the job, and then they will take you on.

What's the application process like?

This is Barclays Capital in particular, and most of the other investment banks, there are a couple of rounds you have to go through. The first round is usually tests online, so verbal and numeric; and for Barclays the first round was questions and answers on the phone, so a phone interview, where you’re asked a set of standard questions, and I think it’s HR that organise that. You give the answers and then are selected for the next round. Most of the other banks you would have a similar one or two interviews, on the first round you would again not have in-depth knowledge but your personality and whether you fit into this bank and what your views are, and then generally some maths questions to see how you think. Then the second round is the assessment centre and then you just spend a whole day doing things and are judged accordingly and get the job offer or not.

What are the key skills required for your job?

I would go for a numeric person or someday with decent numeric skills because you’re doing a lot of number work. And Excel is very important and PowerPoint is very important but again that is across all investment banks, these two Microsoft skills are very important. Apart from that, people skills, because we are very client-facing, we are always talking to clients - so general politeness and what to say and what not to say and representing Barclays’ views correctly, even if you were to disagree with them. So generally, a people person, and apart from that I think you need to have the patience or the perseverance to work the long hours, because sometimes it can get frustrating when things aren’t going the way you want them to be; for instance data isn’t working, you have software problems all the time. And when you’re in for such long hours you have to be patient, you have to have the perseverance to have to say ‘I will see this through and it will be a success.’

What's your top tip for breaking into your industry?

Personality is one of the key things, I would say – you have to work much longer if you’re on the Corporate side, so if you’re the sort of person who is very hard-working, dedicated and with attention to detail, I would go with Corporate Finance. Not necessarily because that is the only place you will succeed, but you’re very likely to succeed in that job. If you want to have more of a personal life then markets would be good, you do get your weekends more often than not. Also academically, if you come from a business school and brought those skills, if you’re good at accountancy, if you’re good in finance marketing, you’re much more likely to succeed in Corporate Finance because you require those skills, you’re required to go through lots of balance sheets of companies, and when you’re obviously doing mergers and acquisitions it’s very number-crunching. So if you’ve got those skills and you’ve got the interest, then definitely, Corporate Finance is for you. If you want a very dynamic environment where things are changing all the time, then go for Markets. The life/work balance is better in Markets, there are no two ways about it, but obviously the perks are slightly more biased towards the Corporate Finance side because of the longer hours.

Be honest - because I have had instances from my friends, if you claim to know something you don’t know - people in this industry are very smart and they can catch you out. And apart from that I would say know your stuff, but you don’t have to come specialised, say in Equity Derivatives, and know all about that. Be more flexible, have a general idea about what investment banking is, what the markets do and what the general themes are at the moment, but after that the bank will train you and obviously make you specialised in the area, so that is not your responsibility. Often what happens is people tend to focus on one area and then if they don’t get a job in that area it’s very difficult to switch to something else. So I would say keep it very broad and be aware of what is going on and it should be fine.

What's the career progress and how quickly can you move up the career ladder?

It’s different from bank to bank. Barclays is a very meritocratic and that is another thing I would say about my team, it’s such a flat structure. I work day-to-day with my manager who is a Director, but you wouldn’t know that from when we are conversing, and I think that is very important because if it hierarchical it doesn’t feel as good because you’re made to feel as if you’re junior, and I am never made to feel that. So would be different from bank to bank but for us the first year is the Graduate Programme but then after that the progress is entirely up to you - so if you work hard you’re promoted, and you don’t have to be 28 to become a Manager or you don’t have to have five years’ experience to become an Associate, so if your work is exceptional and if you’ve done well you’re going to get promoted. But I do know other banks have a set criteria, you have a couple of years to become an Analyst and then a couple of years to be an Associate and so on. So I am a lot less client-facing at the moment and that is the key change that is going to come so obviously he manages them and he is going to be responsible if things go wrong from our side so a lot more responsibility in that way. That will change and obviously presentation and a lot more high profile, that comes as you progress.

Where do you see the industry going?

Given all the turmoil we have seen recently, I am in a lucky environment. Commodities are doing so well, oil prices are going up, gold prices we have just seen the higher and higher movements, so Commodities I would say is the hottest at the moment and it has done well, despite Credit and Equities not doing that well. Emerging Markets is another, because of the whole India and China dynamics, that should be resilient to all the rest even if there is a problem elsewhere - so I would definitely read up a lot on Commodities and some on Emerging Markets as well.

Is there scope for movement during or after this career?

I’m sure there are, but I’m not aware of what skills are required in industry, but the skills we are given, through the training programme, are very in depth and if I were to switch to consultancy I have the skills, so I have the Excel skills and PowerPoint skills. I also have the people skills, particularly in my role, because consultancy requires a lot more client-facing roles and I would have the skills to switch, maybe not instantaneously to a less technical role, so if I were to switch to another role it would probably be quite technical in the beginning and then it would be gradually more non-technical.

Then obviously if you don’t want to stick with this one career, from Corporate Finance, it’s probably easier to go into industry - because you’re dealing with, for instance, pharmaceutical companies or oil companies - and you can go into that industry, so you will have a more in-depth knowledge of that. Whereas on the Market side you could start a hedge fund or you could go client-side, so whoever your client is, you could get recruited by them and obviously be working on the other side of the coin basically. So there are benefits to both, but it’s about the kind of person you are and obviously your interests, if you’ve got those skills and you’re dedicated to work long hours and you don’t mind that, then definitely Corporate Finance.

What are the industry resources that someone interested in joining must know about?

Obviously there are websites, but they are very specific websites, so if you’re not in the industry already I wouldn’t say go and read them because you wouldn’t understand them. Apart from that I would say the FT - I think everyone reads the FT, it’s very good, it gives you the flavour of what is going on - and if you want specific websites, I would just Google it and then go to the websites. We have very specific websites that we go to but as I say that is not going to be relevant at all for people who don’t know what the metals are or energy products are.

If you weren't in this career, what would you be doing?

I would probably be doing a PhD at the moment. As I said I did come from a pretty academic background and I would do a PhD and go into a bank or IMF kind of role, so it’s not very different from what I do at the moment because they are still interested in why these prices are going up at the moment. So I would be doing analysis but from a different point of view, so I would be the client in that case and I would be on the other side.