What does a strategist do in an investment bank?


Everyone knows (or thinks they know) what a trader in an investment bank does. Same for the equity researchers who pronounce upon the advisability of particular stock investments, or the fixed income researchers who pronounce upon the integrity of company or government bonds. But what does a strategist do exactly?

We spoke to Anne Karina Asbjorn, an associate and rates strategist for European rates at Nomura. Asbjorn says strategy is exciting.

So, can you say what your job entails?

We’re part of research and work with the economics team. The economics team will look at the underlying economic trends and it’s our job to interpret those trends and to suggest trading and investment strategies that will help our clients to make money. For example, the economics team might say that economic growth is increasing, or inflation is accelerating, or that the European Central Bank is becoming more hawkish and increasing deposit rates. In the latter case, we might suggest clients position for this with steepeners [derivative traders that benefit for growing differences in the yield between two bonds.]

Our role is therefore all about suggesting practicable actions based on the analysis of our colleagues across research. They have a view on the economy and we advise our clients how to position for that. There are elements of economics and of politics – particularly around election times.

Is this a job for someone who likes to sit and think?

We do spend a lot of our day doing deep analysis, building Excel models and analysing numbers and then writing research. Strategy is very project based, which suits my analytical mindset very well. Quite a lot of our reports are one or two pages, but we also put out some bigger reports – for example, our report on the French election was 10 pages long and produced together with the economics and the FX team.

One of good things about strategy is that it has a human element as well. When we’ve written the research we also need to communicate it to the salespeople. If they think it’s particularly interesting then we’ll often go with them to client meetings and discuss our ideas with clients. Communication plays a big part too.

Working in strategy is very different to working in trading. We’re a step away from the markets and have time to sit and think – but we support the salespeople and the traders with our published ideas.

How did you get into strategy?

My background is economics, but I have a masters in financial econometrics. I joined Nomura after a summer internship. Before the internship I was quite sure that I wanted to work in sales and trading, but during the internship I did a project that meant I spent a few weeks working closely with research. After seeing how they worked I felt that it would be a good fit for my skills.

Can you describe a typical day?

We usually get in between 6am and 7am. At 7.10am we have a morning meeting where we look at what happened overnight, which trades we have on at that moment, what our views are and what we should be aware of. At 7.45am we have another meeting where we’ll discuss our views in a bit more detail.

A lot of the rest of the day is spent reaching, writing research, dealing with questions from our salespeople and traders and going to client meetings.

Above all, I probably spend most of my time reading. It’s the first thing I do when I wake up in the morning! I need to get on top of what happened overnight and then I need to stay on top of what’s happening throughout the day. It’s a very important part of the job. You need to be able to filter what’s important and to find the time to read, to develop your opinions and thoughts and to create your own research on the back of them.

I think an 11 hour work day is efficient – not much more. This means that I usually finish around 6pm. I don’t work weekends – although there are always exceptions, like elections when we might work through the night and come in on a Sunday (as with the French election) to cover the results.

What would you say makes a good strategist?

It helps to be able to code and not to be afraid of working with numbers. You need to be able to interpret data in a spreadsheet. You also need to be able to think outside the box: you don’t want to just be in line with consensus all the time.

I interview interns myself now and I’d say the people who stand out are those who are really driven and eager to work and learn. People say doing well in an internship is all about networking, but this isn’t entirely true. You also need to show that you can work independently and that you’ll make a good colleague who will get work done rather than just going around and talking to people!

And how do you succeed in strategy?

I’ve only been at Nomura for 2.5 years, but I think it helps to be responsible for a particular area of research – to be the “go-to” person for a particular issue. Personally, I am developing a specialism in peripheral Europe, where there are a lot of political events influencing the markets. This makes it especially interesting, but also especially complex!

Source : Sarah Butcher, efinancialcareers.com

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