If you want to build a career at one of the ‘big three’ ratings agencies – Moody’s, Standard & Poor’s and Fitch control 95% of the market – you won’t just need exemplary maths skills and a degree in a quantitative discipline. You will need a strong interest in financial services markets and trends. Enthusiasm for the sector is just as important at a ratings agency as it is at an investment bank.
“We typically favour candidates who can demonstrate a genuine interest in finance. The graduates we hire have often already sat one or more CFA papers and had relevant work experience,” says Alex Griffiths, head of natural resources and commodities EMEA at Fitch Ratings.
Strong technical skills are obviously important in a field which calls on you to make complex assessments of the likelihood of bonds or other products defaulting. You have to build a knowledge of broad credit and financial-analysis principles as well as obtain more specific expertise across a range of financial products – from vanilla corporate and government bonds to more complicated structured arrangements.
Ratings agencies require their analysts to be subject matter experts not only in their particular field, but also in the “possible influences on it from macroeconomics, politics, local and global trends, and technology”, says Griffiths. “Our people need to be able to form strong opinions based on detailed analysis, to defend these internally to help form a consensus view (because ratings are assigned by a committee rather than an individual) and to communicate this view effectively to the outside world,” he adds.
As bonds often come quickly to market you must have the ability to work under pressure and to meet strict deadlines. A good sense of judgment and strong nerves are also required because credit ratings, however much analysis goes into them, are still essentially opinions rather than hard facts.
Data providers such as the two giants Thomson Reuters and Bloomberg require a similar core set of mathematical and analytical skills to the ratings agencies. They also value IT skills, such as Microsoft Excel and Visual Basic, even if the role isn’t related to technology, while desirable degree disciplines include mathematics, finance and economics.
Beyond the graduate ranks, strong sector knowledge in financial services is a must – you will be dealing with clients in the finance sector and you will want to understand exactly what their needs are. Depending on which division you end up working in, you may find yourself requiring skills in specific finance functions – from investment banking and hedge funds to wealth management and Islamic finance.
Interpersonal and problem-solving skills are also important because you’ll not only need to analyse data, you’ll need to communicate it to clients and colleagues. Because data firms provide information and tools to market participants across the world, many of their jobs call for a second language and a willingness to travel.