Investment Banker’s Advice After 24 Years In The City!
Investment banker and finance professor Moorad Choudhry talks on Gordon Gekko, networking and what makes a good trader!
Note: this interview took place on 10th January 2013
Breaking into the City is hard enough, but RBS investment banker Moorad Choudhry has combined a 24-year career in financial markets with an MBA, a PhD, and a parallel career as a top finance professor!
We caught up with the hyperactive Choudhry, currently Managing Director in Group Treasury at UK bank RBS, to hear how he made it and his tips for getting into (and surviving!) investment banking.
Choudhry’s career has spanned gilt trading and structured finance as well as Treasury, but he started out working at the London Stock Exchange.
His first inspiration, he is ashamed to admit, was iconic 80s financier Gordon Gekko from the movie Wall Street. Even though Gekko was a bit of a scumbag, he sold the power and excitement of a career in finance, and when Choudhry was an undergrad, “Everyone wanted to work in banks.”
At that stage, he wasn’t interested in any particular area of finance. After graduating with a First in Economics from the University of Westminster (then the Polytechnic of Central London) - “admittedly not a university with the most prestigious reputation, but I enjoyed being there,” says Choudhry – and a Masters from Reading University, he landed a job at the London Stock Exchange.
He quickly realised that the London Stock Exchange was “not where I needed to be”. He wanted to work in front office, and when he was offered a placement at securities trading firm ABN Amro Hoare Govett, he jumped at the chance.
“I would just as happily have worked in equities or corporate finance, but I didn’t get an offer,” says Choudhry. Luckily, being something of a maths genius, the career move worked out well and he rose to senior trader at Hambros Bank in 1997.
What are the characteristics of successful bond trader? According to Choudhry, you need a good understanding of business cycles and of valuation; a mind for mental arithmetic; the ability to grasp the implications of statistical data and announcements as they come out; and the ability to stay calm and logical, and not make decisions “when you’re angry or wound up.”
“The term ‘Trader’ is misused,” says Choudhry. A better term, he thinks, would be “Risk manager.”
“It’s about how financial valuations change with changing market conditions. Changing economic conditions affect the value of your assets. You have to know your risks through the cycle.
“It’s easy to make money in a bull market, it’s in a bear market that you show your skills,” he adds.
Choudhry completed an MBA at Henley Business School in 1998 and a PhD in Financial Economics from Birkbeck, University of London in 2008.
He did the MBA, which was funded by his employer ABN Amro, to add to his marketability: “It was the next step up, to gain all round corporate skills and move out of a narrow area of focus.”
That would still be the main reason to do it, he says, though he thinks in the finance industry a specialised Master’s degree would be more useful these days.
“The cachet of the MBA was definitely hit by the recent financial crash, I mean when one remembers that a couple of chief executives of banks which collapsed had MBAs.” In the City these days it’s more valuable to become an expert in a specific area, says Choudhry, who is an expert on Bank ALM and structured finance.
The PhD was to help Choudhry realise his ambition to join the Bank of England’s Monetary Policy Committee, something he still aspires to. He did the research for the PhD in the evenings, while working as Vice President of Structured Finance at JP Morgan, and later as Head of Treasury at convertible bonds specialist KBC Financial Products.
“The academic work has made my professional work more analytically robust,” says Choudhry. “It’s helped me to think critically and reason.”
Choudhry has published two books on banking and is a visiting professor at Brunel University’s department of Mathematical Sciences. A Google search of “Professor Moorad Choudhry” throws up related searches for gurus of financial theory such as Salih Neftci and Stanford’s Darrell Duffie.
He has been in Treasury at UK bank RBS since 2010, and was offered the role after an interview with the head of Group Treasury, the introduction was via another employee at RBS Group Treasury whom Choudhry had met via the British Bankers Association. Networking as you move up the career ladder is all important, though Choudhry admits, “You also need a bit of luck in life.”
“Networking is not calling someone when you need help,” he says. “I never accept LinkedIn requests from people who don’t bother to write a personal message… If someone gets in touch because they knew me years ago or they’ve read my book and have a comment, then that’s fine but make an effort to write a personal greeting!
“You need to keep your network active,” he adds. “Meet people, go out for lunch…”
The Treasury division is responsible for a bank’s capital, liquidity and balance sheet, ensuring that funding is available for business needs, and that the bank isn’t exposed to excessive risks.
It’s a small but important division. Choudhry is quick to tell us that he isn't hiring anyone at the moment! "My team is full."
People in Treasury middle office roles come from a variety of professional backgrounds, though many of them are accountants by training.
The front office Treasury roles are taken by people from the money markets, like Choudhry. Occasionally a graduate trainee will join the Treasury division, but most people have a few years of experience behind them in other areas of banking.
Hopefuls trying to get into investment banking now should stop thinking of it as “some massive money making exercise,” advises Choudhry. “Come to it because you’re interested in banking and finance and want to do good work. Make customer satisfaction your No.1 priority."
RBS was taken over by the UK government following a bailout in 2008. “The challenge now is to restore banking to something that’s viewed throughout society as worthwhile,” he says.
In an age of fierce competition for banking jobs – Choudhry says an advert placed in the FT will typically receive 2,000 applicants from across the world – candidates need to add “more strings to their bows.”
In Asia, many students earn professional qualifications while doing their Bachelors, he points out, graduating with the CFA or the Chartered Institute for Securities and Investment Diploma already under their belt.
“You need to start early. Try to get an internship, but that’s hard too. Differentiate yourself with a publication, something that demonstrates your interest in finance. And keep applying… apply to every bank in the world.”
Choudhry recently ran a course for senior Treasury people in Singapore, with participants from across the region. “Singapore, Malaysia, Thailand, Taiwan, Indonesia: the banks are recruiting there,” he points out.
So far Choudhry hasn’t been tempted to swap the City for an Asian financial hub or a tax-free salary in the Middle East, though he wouldn’t rule it out. “Every man has his price!” he says.
The UK is home for now. As well as the challenge of working in Treasury at one of the country’s biggest banks and teaching finance, he’s a diehard supporter of football club AFC Wimbledon. He’s sponsored the match programmes since 2005 and can be found hanging out in the Director’s Box on a Saturday afternoon...
His current favourite players are defender Chris Hussey and striker Jack Midson. “ We were big fans of Sam Hatton but they let him go last season. These guys give it 110% whether things are going for them or against them,” says Choudhry. "It’s the classic story of the underdog fighting against the odds. Still the Crazy Gang, except now we play to feet!"