Salestrader : From the perspective of Bart Lips (Van Lanschot Kempen)
In 2011, De Telegraaf published an article regarding the increasing number of student investors. The student that was interviewed was Bart Lips, who was in his board year at the Financial Study association Rotterdam (FSR). He was approached by the company Van Lanschot Kempen who were looking for talented students. They offered him an internship which he undertook alongside his Masters degree. Once he had completed his internship he was offered a permanent position at the company where he is still currently working. In this article, Bart explains what it’s like to work at Van Lanschot Kempen. Having rotated in different roles in the company, he gives a short explanation of what each position and field looks like. He then continues briefly to describe the working life and company culture at Van Lanschot Kempen.
“In this specialism, Van Lanschot Kempen operates as a so-called high-touch broker, which means that they give advice about shares, execute orders, and everything in between.”
Van Lanschot Kempen’s brokerage specialists actively look for trades that are too large for the market and help their clients buy and sell their shares. In this specialism, Van Lanschot Kempen operates as a so-called high-touch broker, which means that they give advice about shares, execute orders, and everything in between. They are specialized in the niche fields of life science, infrastructure, and real estate within Europe. To achieve their operational goals they have three roles within the brokerage department: research analyst, trader and sales trader.
The research analysts are the ones who work on longer-term forecasts of different companies’ financial performance. They study the annual reports of the company and its competitors and analyze them to eventually give a buy or sell recommendation. They are usually quantitatively very strong and often have a finance or accounting background. However, due to Van Lanschot Kempen’s focus on niche branches, there are also niche specialists who for instance have a biomedical background.
The ones who operate more short-term and execute the orders work at the trading desk. They must quickly and efficiently decide to buy or sell positions, while keeping an eye out on the other stocks that they are following. Hence, the traders must be able to do multiple things at once and make quick decisions. Qualities that are of importance here are a high stress tolerance and to have confidence in their choices.
In between the roles of research analyst and trader is the sales/sales-trading desk. Their task is to sell the reports written by the research analysts to other companies and in turn execute their orders. To understand what these people do, Bart explains this using an analogy of a vegetable stand on an open market. “If it is busy at the market, we are working on executing all the orders of the people who have come to the stand. If it is not, we have to make noise to get people to come to our stand”, says Bart. “We can approach a passer-by and tell them we have a lot of apples to offer for a good price. The passer-by tells us they are not looking for apples but for bananas, which we unfortunately do not have. We quickly called our supplier to say that we want to buy bananas. Directly afterwards we approach the passer-by again and discuss the price for those bananas”. Instead of bananas, their trades consist of tens of thousands of stocks.
“Hence, if you perform well, you will immediately be known to the whole company.”
Bart mentions that every client has their own ways of placing an order. The clients with whom he has formed a trusting relationship might disclose everything about the size and price of their order. If the sales-trader states to the market that they are a big seller, this will directly influence the market, as everyone is in anticipation of the big sale. This phenomenon is called leakage and can negatively influence the selling client. Hence, clients with whom the relationship is more fragile might choose not to disclose all the information about the size and price to prevent leakage. The sales trader will then contact the buyers and will discuss what they expect from the seller in terms of size and price. This initiates a back-and-forth game of disclosing more and more information until they reach a deal.
Finally, Bart touches upon what differentiates Van Lanschot Kempen from other banks. He says that what makes it interesting to him is that they are relatively small. They are focused on their niches and therefore concentrate their attention to that specifically which makes them a big player in those markets in Europe. Their size also ensures that there is little anonymity within the company. Hence, if you perform well, you will immediately be known to the whole company. This means that they do not have a steep hierarchy, resulting in more autonomy. The disadvantage of a smaller bank is that they are not as well-known. Finally, he states, Van Lanschot Kempen is always looking for talented people who have affinity with investing and says that those students can always reach out and get into contact with the company.