Students who work in investment banking will probably had a good understanding of what it’s like to work in mergers and acquisitions or sales and trading. However, the role of a structuring professional is harder to understand and frankly more complex.
For a start, that’s because the work they do is typically done on a confidential basis with clients. They work behind the scenes on bespoke transactions, often on a one-off basis. However, if you like solving complex problems and want a career that is one of the most versatile in finance, then structuring could be for you.
What do structurers in banks do exactly?
“A structurer saturates themselves with content and attempts to solve problems," says Steve Wollman, managing director and head of U.S. structuring at Deutsche Bank. "At the most basic level we endeavour to figure out solutions and design products or exposures that meet our clients’ needs.”
Wollman says structurers focus on ‘the what, the why and the how'. "The ‘what’ is often simple. The client wants a hedge. The client is seeking yield enhancement. The client wants to borrow money. The ‘why’ can be simple but some time it takes effort to figure it out precisely. The ‘how’ can be most complicated and where we spend most of our time. There could be tax, accounting or cross-border considerations. There could be competitive or regulatory considerations.”
Structurers get involved when the ‘off-the-shelf’ product does not exist. “For example, you could be a client business in Asia Pacific with a range of foreign currency exposures doing business all around the world. That means there are a host of legal, regulatory and tax implications to think about when designing a financing or cashflow hedging programme. Not everyone can arrange a transaction against a backdrop of those kinds of constraints while also providing the desired level of flexibility,” says Wollman.
Which skills do structurers require?
A computer science graduate, Wollman began his banking career in 2000. At the time computer science was a less popular major. “Growing up kids learning coding at school were the exception not the rule. I always knew I wanted to do something in finance but I wanted to have a technical educational underpinning and I thought computer science offered that combination of the theoretical and practical: logic, math and programming. I liked the way it forced you to think about problems and issues and I wanted to apply those skills to financial services.”
Wollman started his career at Morgan Stanley working in a structured finance role within the securitization team. “I was drawn to that desk because it allowed me to combine financial concepts, build new products, and do some amount of programming as well.”
Although Wollman’s degree was in computer science he says it’s not necessarily essential. “In terms of talent we don’t discriminate – we just want smart people. When I look around at some of the people doing structuring many of us have technical backgrounds in maths, computer science, economics or engineering. But we’re looking for a mindset rather than a skill-set. You have to be serious, hard-working and comfortable in a role that is not necessarily clearly defined. Your job description will assuredly change over your career.”
Versatility is an essential quality and the innovative nature of the role means there’s no ‘manual’ as such. The job involves finding solutions to problems which evolve with changing markets. “In other disciplines in banking, your manager will generally have done your job before you,” says Wollman. “In structuring that’s not necessarily the case. I can provide my teams with guidance in terms of problem-solving or approach but the specific transaction is not something I necessarily would have seen or done before. That gives everyone on a team the opportunity to add value.”
Where should you work as a structurer?
Because of the bespoke nature of structuring, no two banks structuring teams are the same and because of the expertise required, not all firms have a full offering.
Deutsche bank is distinctive in that its structuring teams cover all asset classes but is integrated as a business vertical. “We have structurers focused on credit, core rates, foreign exchange, emerging markets and fund-linked products and platforms,” says Wollman.
“The structuring role at Deutsche Bank provides versatility – client interaction, product development, problem-solving, analytical work and principal risk-taking. We have structuring roles in all our main products – FX, rates, emerging markets and credit - and a management team that facilitates working across products and regions. I think that’s what contributes to a powerful and unique experience, and many structurers at DB have become leaders throughout the Firm.”
SocGen is also known for its structuring prowess. But since the financial crisis, credit funds such as Blackstone have expanded aggressively and provide a career option. So why choose an investment bank rather than a fund? “Well in an IB you can get well-rounded training giving you exposure to myriad clients, products and teachers.”
What are the career paths in structuring?
“Structuring prepares you for any role in financial services," says Wollman. "The training is invaluable and very transferable across businesses and asset class. For instance there are aspects of credit that can be applied to rates, or products in developed markets that port to emerging markets. As a result you can move from product to product and even from sell-side to buy-side. It forces you to solve problems with greater constraints than might exist in the outside world, because of the regulated nature of banking. So if you can solve a problem with the constraints imposed by banking you can surely solve problems in almost any other field.”
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