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Structuring and Quants
- Thread starter Kenny L
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- 6/18/10
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structuring is similar to sales - you deal with clients, market structures and deals and price them. Structurers keep up with the market and in general structuring is very very far from quant world.
Structurers will talk to clients, price deals and suggest new deals to clients. They don't develop or do heavy quant stuff. But they may bring structures that require new pricing methods and engage the quants.
These days structurers are being fired - especially if you are in credit. An MBA is sufficient for structuring
Structurers will talk to clients, price deals and suggest new deals to clients. They don't develop or do heavy quant stuff. But they may bring structures that require new pricing methods and engage the quants.
These days structurers are being fired - especially if you are in credit. An MBA is sufficient for structuring
- Joined
- 6/19/11
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Does it apply to every desk?
In general, what're the minimum math/stat/programming background required for an entry level structurer? Is a master degree strictly required?
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no masters not required. very little programming required. you should be familiar with basic option pricing and strategies. most structurers spend time on keeping up with markets and talking to clients suggesting new deals and structures. quants and researchers help them with pricing and modelling issues. many structurers are MBAs or just bachelor degree holders
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Then why structurers are needed? Seems all their work can be done by sales/quants/researchers.
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then why are sales people needed or for that matter traders. if quants can do everything. honestly.
structuring is a viable front office business line. sales people do not develop and market new products. quants do not engage with clients and do deals. Albertho you need to talk to a structurer as Andy suggests.
structuring is a viable front office business line. sales people do not develop and market new products. quants do not engage with clients and do deals. Albertho you need to talk to a structurer as Andy suggests.
Joy Pathak
Swaptionz
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I think we are confusing securitization with structuring.
DominiConnor
Quant Headhunter
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Structuring does not currently seem the place to be, but it is not going away as an activity and over time I expect it to grow back most of what it is currently losing.
Sales intersect with structuring as does quant work, but there's a different mix of skills. Sales includes activities like bugging people to buy your stuff which the average quant is both bad at and hates doing. Structurers are to an extent passive sales people, they find out what people want and try to give it to them or adapt what they have on the shelf to customer requirements.
Sales intersect with structuring as does quant work, but there's a different mix of skills. Sales includes activities like bugging people to buy your stuff which the average quant is both bad at and hates doing. Structurers are to an extent passive sales people, they find out what people want and try to give it to them or adapt what they have on the shelf to customer requirements.
- Joined
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How quantitative is a structurer's work in general?
Do structurers need to have deep understanding about the market? (i.e. fundamentals which drive the market)
Do they have to form their own views regarding where the market is going? Or do they just have to structure deals which suit clients' need?
DominiConnor
Quant Headhunter
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Do structurers need to have deep understanding about the market?
Some do, certainly they should, but it's not so much about the market as the customer's perception of the market.
Do they have to form their own views regarding where the market is going?
Yes, but they then have to ignore them.
Customers have a "view" of the market and more precisely they have a view about how that will affect them.
Thus a structurer is possibly the only person in the market who makes money from knowing what it has done, rather than than estimating what it will do.
For instance the Euro is not well and the banks are suffering as a result, these are current events, ie what you can see has happened.
A customer may feel that banks have been pushed down harder than they deserve (or not enough) and want some exposure to what he thinks will happen ,but to have a boundary to cap his losses if he's wrong. Also he may want a currency overlay since his reporting currency may move significantly relative to the Euro.
What would you sell him ?
To this we must add a dollop of agency theory, something missing from most MFEs.
The customer is maximising utility, which for a fund manager is not the same as being on some sort of efficient frontier.
The most simplistic artifact of this is that he looks bad if he loses money when other increase even if his average return is better. He has to look good to both his bosses and the people whose money he manages so there is asymmetry in his utility for returns.
Also to make it more interesting he has reporting horizons and wants to look good on certain dates.
Of course some actual structurers will read this and not recognise a close approaximation to their work since structuring is a very wide range of roles.
Some do, certainly they should, but it's not so much about the market as the customer's perception of the market.
Do they have to form their own views regarding where the market is going?
Yes, but they then have to ignore them.
Customers have a "view" of the market and more precisely they have a view about how that will affect them.
Thus a structurer is possibly the only person in the market who makes money from knowing what it has done, rather than than estimating what it will do.
For instance the Euro is not well and the banks are suffering as a result, these are current events, ie what you can see has happened.
A customer may feel that banks have been pushed down harder than they deserve (or not enough) and want some exposure to what he thinks will happen ,but to have a boundary to cap his losses if he's wrong. Also he may want a currency overlay since his reporting currency may move significantly relative to the Euro.
What would you sell him ?
To this we must add a dollop of agency theory, something missing from most MFEs.
The customer is maximising utility, which for a fund manager is not the same as being on some sort of efficient frontier.
The most simplistic artifact of this is that he looks bad if he loses money when other increase even if his average return is better. He has to look good to both his bosses and the people whose money he manages so there is asymmetry in his utility for returns.
Also to make it more interesting he has reporting horizons and wants to look good on certain dates.
Of course some actual structurers will read this and not recognise a close approaximation to their work since structuring is a very wide range of roles.
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