Vancouver is a regular feature in various nice-sounding lists – Most Livable Cities/Best Place to Live/Highest Quality of Life – things that ostensibly do not go hand in hand with investment banking and other financial services.
Despite two large undergraduate business schools close to the city (UBC on the Endowment Lands and SFU on Burnaby Mountain), high quality finance jobs are scarce in Vancouver and the ones that exist come with a large salary discount compared to similar jobs in Toronto and Calgary. Most of these entry-level positions are for treasury analyst and junior analyst at a regional asset manager (Connor, Clark and Lunn, Leith Wheeler, or RBC’s PH&N).
That said, a small number of Investment Banking and Sales & Trading jobs exist in Vancouver, and they come with a unique value proposition.
No Bulge Brackets have capital markets operations in Vancouver other than Morgan Stanley, which runs an electricity trading shop with traders poached from Crown Corporation BC Hydro’s energy marketing division.
The Big 5 dominate all sizable capital markets activity in Vancouver and act as full service relationship managers from credit to advisory, but firms are generally not large enough to warrant bulge bracket coverage.
Major firms such as TELUS, Teck Resources and Goldcorp will be primarily managed by a Toronto banker for Telecom and Mining, respectively (although Silver primary coverage is often out of Vancouver). Vancouver primary coverage is for silver and regional junior miners, forestry and diversified industries for firms like Cactus Club, Jim Pattison, Finning and HY Louie (London Drugs).
Each Big 5, Macquarie (although the quality group, Infrastructure has been moved back to New York), and National Bank hires an analyst in investment banking and sales every year. This means maybe 10 spots for approximately 1,000 combined regional undergraduate business students.
For IB, getting a spot usually means that you have an 83%+ average from UBC or 88%+ from SFU (85%+ for RBC Capital Markets) and are involved in the Finance Club. The cutoff is a little lower for sales and trading (although still in the A- range), but the interview process is much less structured and better at weeding people out. Both interviews will have a focus on “why Vancouver?”. Better sushi and weather are not good answers.
Once in one of these roles, the delta between the banker’s experience and any school peers is absurd. A student with a 90%+ average from UBC often lands at KPMG for ~$38,000 a year while the investment banker will make $130,000 all-in. We might discuss these compensation dynamics and asset prices in Vancouver in a future post.
The finance community in Vancouver is extremely small, so everyone in the industry will be in the same social circle (of maybe 30 bankers) and a lot of time will be spent in the Terminal City Club and the Vancouver Club.
Sales & trading is even more interesting because the “floor” (maybe a quarter of a floor) operates on Eastern time, which means waking up at 3AM and getting to work at 4 AM – markets close at 1 PM and it’s off to happy hour. After happy hour, the gym and after the gym, bed.
Equity research is understandably small in Vancouver and generally operations are there because a prominent coverage analyst chooses to reside in Vancouver while the industry is actually in Calgary or Toronto.