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McCombs Alumni Divulge the Ins
and Outs of Wall Street
By Sandie Taylor
Wandering among the throngs of fast-walking, navy-suited, uberambitious workers in New York’s financial capital, it’s easy to
assume that Wall Street is a cutthroat environment in which only the
strong survive.
The reality is that while the center of the American financial world
definitely has a unique culture, companies on Wall Street offer as much
variety as there are numbers on the big board.
According to several McCombs MBA graduates, Wall Street really is the
harried place depicted in the media—but it also offers a wide range of
experiences, lifestyles and areas of expertise, depending on the
industry and company.
We’ve invited seven McCombs alumni to tell us about their careers in New
York’s Financial District and share their perspectives on what it takes
to succeed on The Street.
A World of Ideas
In this client-intensive environment, you need to be able to develop ideas for multistrategy and multi-need companies, says Thomas Ward, MBA ’81 and senior managing director at Bear, Stearns & Co. In his role working with hedge fund relations, Ward spends a good part of his day talking to the top 200 hedge fund CEOs and CFOs about their companies’ business plans and the future of the hedge fund industry.“Wall Street is a world of ideas,” Ward says. Anyone working in the financial industry should cultivate their curiosity and be interested in learning about an array of different products and companies. “You can’t just be a stock guy anymore,” he says. “You need to be able to see the big picture.”
During his 13-year stint as an equity salesperson at Merrill Lynch, Ward helped bring the first public companies out of China, India and Peru. He considers his role on the front lines of the globalization of Wall Street among his greatest accomplishments. “The world is incredibly small,” he says. “What happens to a company in Hong Kong really can affect what happens to companies here within hours.”
In addition to keeping up with global trends and new ideas, Ward emphasizes the importance of having quantitative skills. “I never would have thought I’d have to call on that worthless calculus class I had to take,” he jokes, “but it’s playing a bigger and bigger role. If you’re not mathematically comfortable, it will be hard to succeed in the next 20 years.”
Joining the Club
New York’s financial industry has traditionally been comprised of East Coast–born Harvard and Wharton graduates whose parents worked on Wall Street a generation earlier. People who do not fit this description generally have to work a little harder to break into the field.“Being from Texas requires you to be more proactive,” explains Laura Rose, BBA ’92, MBA ’99 and an investor relations associate at Taconic Capital Advisors LLC. “Be smarter, quicker and cuttingedge,” she recommends.
During her time in the McCombs fulltime MBA program, Rose set herself apart by becoming an MBA Investment Fund manager. She also visited New York several times before looking for a job and encourages students to take advantage of the New York Investment Banking Trek to meet other McCombs graduates who work in finance. “You need to understand the beat of New York,” she advises.
The current generation of McCombs MBAs may enjoy more opportunities on Wall Street than past classes. The number of finance recruiters coming to McCombs has doubled this year, and Rose thinks this increase in recruitment is allowing more Texans to make their way to Wall Street. “I think New Yorkers are intrigued by Texans,” Rose says. “We bring a different background and perspective that people appreciate.”
In her position at Taconic, Rose markets investment products and spends most of her time educating investors about the funds her firm manages. When she’s not in front of clients, Rose is usually talking to the analysts at her firm about their investment decisions, identifying potential investors, and updating marketing materials and reports. While her job requires her to give up many things most Texans rely on—relaxation time, cars, spacious homes and a yard—Laura promises, “It’s more challenging, but it’s well worth it.”
Best and Brightest
Holly Goodrich, MBA ’04 and leader of the McCombs MBA Alumni (MMA) Network New York chapter, is also a marketing associate at one of the nation’s premiere hedge fund firms, Pequot Capital Management. Goodrich, who founded the MBA Hedge Fund Association at McCombs, shares many of the same responsibilities as Rose, but spends much of her time on the road (rather than in the office) educating prospective investors.
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Working for an older, more established firm like Pequot—which has a
portfolio of about $7 billion in assets under management—Goodrich
assists the marketing efforts throughout the United States, mainly
focusing on Texas and the South.
While her days usually last from 7:30 a.m. to 8 p.m., Goodrich says the
people she encounters every day make her career rewarding. “The caliber
of the people I work with motivates me,” says Goodrich. “I get to meet
interesting new people, and I’m proud I get to work with the best and
the brightest.” This is a sentiment echoed by most of the other alumni
who say the job wouldn’t be nearly as exciting if they weren’t
surrounded by and learning from “the most ambitious and sharpest people
on the planet.”
Pressure to Perform
Of course, this quick-witted environment increases the pressure to perform. “You have to be a multitasking self-starter who can do it all at once,” says Joe Cothron, MBA ’98 and director of U.S. fixed-income derivatives for Citigroup Private Bank. “When a client wants to trade, you have to be ready for it. There’s no lunch break unless you have a client meeting.”His advice on how to survive? Don’t take it all too seriously—despite the enormous amounts of money often at stake.
“You deal with so many zeroes that if you make one mistake, it can be a very big one,” he explains. “The environment can be very harsh and the firms can’t afford mistakes, so the managers emphasize them when you make them.” Learning to cope means taking criticism well. “You take a breath and realize it’s just a job,” says Cothron. “It’s not all of my life.”
One benefit of working on the sales and trading side of Wall Street is that one
can only work when the market is open. “I’m at work at 7 a.m. and out of here by 5:30,” he points out. “On a per-hour
basis, I think we make more than investment bankers.” As one of two directors on the trading floor’s fixed-income desk, Cothron is responsible for clients in his region (New York plus the Northeast and Southeast), finding out their needs and objectives and then calling the trader to execute the trade. His “office” is positioned between several rows of other desks where he sits elbowto-elbow with his colleagues. “This doesn’t leave much room for privacy,” he admits. “Being on the floor takes some getting used to.” But Cothron has adjusted to the crowded conditions. “I was sitting in an office last week, and I felt like I was in a morgue.”
Into the Fire
Recent graduate Lance Loeffler, BBA ’99 and MBA ’04, is experiencing what it’s like to work as a second-year associate director in investment banking at UBS Investment Bank. “The learning curve is pretty steep the first year out of business school. They really throw you into the fire,” he says.However, he didn’t land on Wall Street unprepared. Loeffler says that each of his MBA classes is applicable to what he’s doing now. And while it’s expected that you graduate understanding advanced accounting and financial modeling, Loeffler believes companies are very interested in whether an applicant is hardworking and driven.
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“This first summer was extremely busy, even in August when Wall Street
expects to take its first deep breath,” Loeffler recalls.
“The good part is that now with a full year of experience, things feel
like they move a little slower, and I’m not just trying to get to the
next deadline.”
His company, UBS, is an established European firm working on becoming a
major U.S. investment bank by building its franchise. “It’s a very
entrepreneurial culture,” he says. “Sometimes it’s okay not to be at the
top of the mountain—but to have others worried about you catching up
with them. That challenge motivates our bankers.”
Loeffler’s main role is to help companies in the health care industry
find money to grow internally. A big portion of his day is spent on the
phone, coordinating with clients and personnel across the bank to make
sure transactions are running as they should.
“Things tend to snowball, so allnighters are not unheard of,” he
explains. “If I’m home before midnight my wife is pretty happy.” But
even with such a hectic and exhausting schedule, Loeffler says he feels
fortunate to be working on Wall Street, learning the ins and outs of
finance in the pinnacle of the financial world.
Dynamic Teams
Ted Wang, MBA ’96 and managing director at Goldman Sachs, has moved up the ranks at Goldman Sachs since he left business school. In his current role, he manages a 75-person team on the trading floor and is jointly responsible for the company’s U.S. shares, convertibles and single stock options trading. In the near future, Wang projects he will be sent overseas to run a Goldman Sachs business for a few years.While half of his time is allocated to setting the direction and strategy of his group, the other half goes toward managing day-to-day trading operations.
“Teamwork is essential,” he says. In this business, a project can’t be carried out by just one person. “You need to excel individually while contributing to the team,” he says. “You have to learn on the job, want to affect change and be able to motivate people.”
Wang is also part of a team of alumni committed to raising the profile of McCombs on Wall Street. In addition to hosting 25 finance professors at Goldman Sachs for a “day with a banker” workshop, Wang also helps educate prospective students working in New York about the benefits of a McCombs MBA degree. He and Thomas Ward both helped host the Analyst Reception last November, which introduced New York analysts to McCombs.
“I just love the school,” he says. “It’s a service to give back.”
Jacks of All Trades
“You never get to a point where you feel like you’ve mastered a subject,” says second-year Merrill Lynch associate Mark Whatley, MBA ’04. While each associate in investment banking has a product or industry specialization,Whatley says you learn a little bit about everything, which allows associates to build a diverse knowledge base.
The company cultures on Wall Street are diverse, too. According to Whatley, Merrill Lynch is a lean organization, a structure that allows junior-level associates to assume a lot of responsibility early on. While he says other company cultures are more “white shoe” and super-competitive, Merrill Lynch is more of a laid-back melting pot.
In just his first year-and-a-half working in the division of gaming, leisure and transportation, Whatley has had a hand in several major deals. He worked on the US Airways and America West merger, where Merrill Lynch “took a bankrupt legacy airline and combined it with a much smaller, low-cost airline to create one healthy low cost company.” Whatley also got his feet wet helping with the initial public offering of Seaspan Corporation, which was recently rewarded the U.S. Maritime Public Equity Deal of the Year by Marine Company magazine.
Investment banking these days requires more creativity to realize profit as aspects of the industry become more commoditized, he says. “You have to come up with more innovative, value-added services for clients.”
Increased responsibility and access to high-profile deals requires Whatley to put in the hours. “Seven days of vacation is a personal achievement for me,” he says, “but I believe it would be difficult to get this kind of work experience outside of the investment banking environment.”
Powered by McCombs
Despite the long hours and high-stress environment typical in Wall Street jobs, these McCombs alumni say they are actually able to have a social life. Though many of them run into each other during the work day, these Longhorns make a point to get together with other McCombs alumni to catch a UT football game or attend an alumni reception every couple months. And as the McCombs network in New York continues to grow, the easier it will be for McCombs students and alumni to build stronger ties in the workplace.“I’d like to see more McCombs students in New York,” Whatley says. “My feeling is that trend is going to steadily increase.”
Back at McCombs, things seem to be moving that way. Last year, 18 percent of full-time MBA students went into investment banking after graduation. In addition, the industry has boosted salaries for MBA grads to about $95,000, with a $30,000 signing bonus and a $30,000 end-of-year bonus.
But when choosing a career like this one, it can’t just be the money that motivates. Whether you’re on the banking side or the trading side, you have to love being in the middle of the action. In short, you’ve got to be Wall Street material.
