Ask the Expert: Do London banks want macro prop traders?

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A. You're not asking for much, are you! Carte blanche to trade what you want in a large house, reporting to a senior director only and taking 10% of profits. Dream on.

As you yourself have pointed out, the kind of job you were doing at your Kuwaiti fund really belonged to a different era and prop traders today are expected to specialise. In a large house, moreover, you would have to fit into a team, pursue company policy and generally toe the line.

Although large houses in London are recruiting proprietary traders - because they keep losing their best people to hedge funds - from the way you have described your career to date, you may well not be cut out for that conventional big bank life. A hedge fund may, therefore, be a better bet, but even this will not be easy to achieve, given your generalist background.

You will have to network hard to get yourself in to see the right people, if you are to have any chance of finding a suitable job. Given your unconventional background, agencies are unlikely to be much use to you, so the networking route really is the only feasible one.

In the meantime, why don't you trade on your own account and make an attempt to specialse in a couple of areas to demonstrate your flexibility? You may even find that the lifestyle suits you and that this is a better option for you, if you want to continue as a generalist.

A reader advises...

The larger houses are organised along specific asset lines as the prop teams are attached to specific desks. As your future reporting manager may have very little expertise of other markets the issue becomes one of managing and understanding your risk. The firms with the biggest prop businesses (Deutsche, JP Morgan, Goldman Sachs and CSFB) all have separate prop desks across equities and fixed income, but again cross-over is rare so it is unusual to find a prop trader within those houses having the freedom across all products.

Commerzbank and Dresdner each have prop teams which have the freedom to trade across all asset classes, however the issue at these houses (and others like them) is that they are less adept at accepting risk and traders frequently find the goalposts changed.

Your best bet might be to join a hedge fund which has a specific macro focus. That will allow you to trade in your usual manner, and this is where you will have more leverage and be able to match your previous returns. If you do decide to focus on one area then there is no guarantee that you will be able to replicate your previous performances. You should expect a salary of about 100,000 and a percentage of between 8-14% typically in a prop house and more like 10-15% within a hedge fund.

Graham Smith, consultant at New Millennium Group specialising in prop trading roles

Next week's question: I work for a medium-sized German asset manager managing large portfolios for institutional clients. After 13 years with German institutions I feel that I cannot achieve my full potential in this position, nor are my achievements appropriately rewarded. This is due to an investment process that focuses on consensualism, resulting in middle-of-the-road "decisions" and German financial socialism, where the difference between a "good" and a "bad" bonus is in the low thousands. The performance of my portfolios is okay but not what I could achieve given the right environment. My performance is not public, so there is no visible track record and I do not talk to the media, and only little to the sell-side, so I am not known by search firms or competitors. How do I get into a more meritocratic, anglo-saxon-type environment?

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