A hedge funder’s journey from ‘library quiet’ to ‘trading floor buzz’

Transcription:

Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Michael Scarchilli (00:05):
Hi everyone and welcome to the Bond Buyer Podcast, your go-to source for everything related to municipal finance. I’m Mike Scarchilli, Editor-in-Chief of The Bond Buyer. And this week we’re going to be discussing topics such as women in finance, hedge funds, the differences between the buy and sell sides and more. Joining us this week to discuss these topics and her career at large is Lindsay Costigan, managing director and head of Western Region Prime Service sales at BNP Paribas, where she’s responsible for sourcing and maintaining financing relationships with hedge funds and asset managers based in the region. She’s also an integral part of BNP Paribas’ overall Global Equities franchise and plays a vital role in the firm’s DEI initiatives driven by her passion in creating the next generation of leaders in finance. Prior to BNP Paribas, Lindsey has worked at Deutsche Bank, Bank of America, Jefferies, and Wells Fargo with experience on both the buy and sell side to the market. With that, let’s dive into the conversation of the week between Lindsay Costigan and The Bond Buyer’s Midwest Regional Reporter Jennifer Shea.

Jennifer Shea (01:15):
So to start off with, can you talk a bit about the early days of your career and what was it like working in the hedge fund space at the peak of the financial crisis?

Lindsay Costigan (01:24):
Absolutely. I first got into hedge funds in September of 2008, if you can believe the timing. I turned in my contract to join Wells Fargo and their ultra affluent group, Wells Fargo Family Wealth on Friday, September 13th. Fast forward two days, leaving goes under. If I had not turned in that contract on that Friday, and if I waited till that Monday, I might not be sitting in the seat today. So I’m so grateful for that exact timing. So some like to say that I found the exact bottom of this industry moving into hedge fund due diligence in that exact moment. It was a very interesting time and the hedge fund industry assets are now four or five times or even more what they were in that moment. It was a little bit like the wild, wild west coming out of the financial crisis, but it was, again, a very interesting time as a more junior person in this business to get into hedge funds.

(02:22):
It was very fast paced. I was at the eye of the storm really with all of the information that was coming from the hedge fund managers I was covering. I had access to some of the brightest minds in our business, and frankly, I felt an extreme amount of job security being the most junior person on the team, probably the cheapest person on the team, and being there on the front lines and hustling to help our underlying clients feel comfortable with their existing hedge fund investments, but also absorbing as much as I could about the industry in that exact moment.

Jennifer Shea (02:54):
Did you encounter many other women in your work then? And what has changed since then?

Lindsay Costigan (02:59):
You know what, there has been some improvement. By improvement, I mean there’s been an increased level or increased numbers of women getting into our business. I’d say largely things have not changed as much as I would’ve hoped or one would’ve hoped from a gender parody perspective in our business. I think going back to 2008, again, it’s a little bit of a different era, a different time. I was pleased actually to see just this week, Quinn, or maybe it was last week, but very recently Quinn put out a study about the number of women in alternative investments and in hedge funds specifically, and looking back to 2020 in hedge funds, we’ve gone up to 25% representation in hedge funds of women up from roughly 20% four years ago. So I think the progress is being made in the most recent half decade I’d say. But if you look back to 15 years ago, there’s not been quite enough progress from my perspective, but we’re definitely making strides in the right direction.

Jennifer Shea (04:00):
Okay, very cool. So can you maybe talk a little bit about how the sell side compares to the buy side in terms of career advancement for women? Are the challenges pretty much the same or are there some differences?

Lindsay Costigan (04:12):
Yeah, great question. So buy-side and sell side are two very different places now. I started my career on the buy side and I spent four, four and a half years on the buy-side in research and long only research and then hedge fund research before moving to the sell side in 2011 when I made the move to prime brokerage. So my data really comes from being a more junior person on the buy side and then now a more senior person on the sell side. And when you think about an analogy between the two, it literally is buy side is you’re working in an office with the door closed a little bit more isolated, a little bit more. It’s more of like a library type environment from my experience. Whereas the sell side really is in the open air of a trading floor. It’s a lot faster paced, there’s a lot more information, there’s a lot more noise and hustle and bustle around you. So they really are very, very different culturally. And also even just aesthetically and just the vibe. The vibe on the floors are very, very different.

Jennifer Shea (05:07):
You seem to have sort of thrived in both environments. Which one do you like better or is it just apples and oranges?

Lindsay Costigan (05:13):
It’s apples and oranges. And I think the same common themes are what will get you promoted on both, in both buy side and sell side, not just as a woman but as anybody. So putting your head down, doing the work. And as one of my favorite mentors said to me early on, he said, Lindsay, do what gets you paid. And sometimes that means working 60, 70, 80 hour weeks. Sometimes that means not necessarily speaking out and being super vocal about something that you might disagree with. A process to get from point A to point B. Just literally putting your head down, doing the work and remembering that you’re doing what gets you paid. And of course being a good person in the meantime as well and doing what’s right for the clients, what’s right for the firm, and really maintaining that sort of client-centric firm focus approach is what gets you promoted on both sides.

(06:05):
I’d say the sell side is it’s faster paced and you have to learn how to block out some of those distractions. And I think the trading floor analogy is a perfect one. You really have to figure out a way to close the door around you so you can focus on projects. Even being in the midst of hundreds of people around you with the hoop going and loud noises and TVs going, I mean, there’s just so much chaos on a trading floor and being able to find that space to actually focus and do work I think is one of the biggest challenges that you have to face, especially early on. I think also the relationship building’s different on the buy side, there are fewer larger decisions that have to be made on the sell side. There are many small decisions made every single day along the path and helping clients on their journey and also helping come figure out solutions for clients internally as well with your internal counterparts. So it almost feels like Las Vegas some days being on the trading floor, just the amount of noise and transactions happening, whereas you’re very much more in a library setting on the buy side, for lack of better analogy. So forgive me,

Jennifer Shea (07:08):
But yeah, no worries. That’s very interesting though. So speaking of your career trajectory, your mother was a bit of a pioneer in her own career, right? And what did you learn from her in terms of your career?

Lindsay Costigan (07:22):
Yeah, so my mother, she’s been a trailblazer. Absolutely. She, she’s now in her late seventies, she’s still working. She says she’s working, but that’s not true. She works five days a week. She began her own RIA number of years back probably, oh goodness, 40 years ago and sold her own RIA two different occasions and started her career back in the late sixties working at ISI in equity research. And she was one of the first female CFA charter holders. She’s at the very low CFA charter holder number. I think she was in the thousands. It’s quite cool. And then she also got her MBA from Haas at Berkeley and was one of very few women who achieved her MBA in that time period as well. It’s been a real honor to be able to witness her career progression over my last 40 years of life. And just to see her continue to thrive and strive in her role today has been very, very interesting.

(08:18):
I actually asked her that question in preparation for our conversation today, and she shared with me, Lindsay, it’s amazing for how many years have passed that we’ve not come further as women, that we’ve not progressed more, that we’re not further along in this journey with everything from gender representation to pay equity. So for her, she scratches her head a little bit because she’s been fighting the same fight as the rest of us senior women in banking and in finance to really reach gender parity, pay parity to have our representation. She’s like, goodness, two steps forward, one step back, this is a long haul. This is a long road. We’re pushing a boulder up the hill, but we can do it together. So despite how little progress she believes that’s been made, she also is optimistic for the future as long as there’s women like her and like me and my colleagues and counterparts that keep striving for more. But the challenges are absolutely largely the same. There’s a different mask on them or a different representation of them, but there definitely are still some of the same challenges.

Jennifer Shea (09:27):
Okay. Women’s equality is sort now under the umbrella of diversity, equity, and inclusion efforts to advance other marginalized groups as well. So I was wondering if you could talk a little bit about whether the pandemic set DEI back in some ways, and if so, what?

Lindsay Costigan (09:49):
Yeah, and there are studies that have been published on this exact topic, and I’ve dove into a few of them. Lean In has a few interesting reports that I really have appreciated reading some of the data on the issue during the pandemic as I saw it and witnessed it firsthand amongst mine. My peer group and other female cohorts is one of who will stay home and take care of the children and monitor their Zoom school and the rest between historically male female relationship or even male, male, female female who in the dynamic of a two parent household stays home to take care of the children. And historically, typically, and especially during the pandemic, we found that whoever was making less money between the two was the obvious answer, the obvious choice for the person to stay home, to watch the children, and to moderate zoom school and the rest, especially when there’s not resources available to hire outside help.

(10:49):
And frankly, there was a scary moment when you didn’t really want outside help coming in because no one knew the dangers of COVID-19. So during the first call it 18 months of the pandemic, we lost a lot of women to household responsibilities to mine children just so the kids can be taken care of. And what do we attribute that to? Gender pay gap all day long. If you go back far enough, what do we attribute that the gender pay gap to? Frankly, it’s parental leave and it’s just something I’ve been very vocal on. It’s something I feel very, very, very passionate about. All else equal the hiring practices for men versus women. Men will get hired over women most of the time or historically this has been the case because men do not take parental leave. And that really is it. If we find a way to enforce that men take equal parental leave to their female counterparts, we all of a sudden level the playing field.

(11:48):
And that makes a path that blazes a trail for gender pay equity. And I think if we’d already done better and been better and hadn’t been at that place where there was gender pay equity going into the pandemic, there would’ve been equal loss in the workforce between men and women. But it really was the great, so call it the great resignation throughout the pandemic of women through leading the workforce to take care of children because they were making considerably less money than their male counterparts in the home. And that’s what made economic sense for their family.

Jennifer Shea (12:19):
That’s very interesting. And certainly it seems like equal parental leave would benefit men as well, because I’ve certainly talked to men who’ve said that taking parental leave gave them just a priceless opportunity to bond with their children, so it would have that benefit as well. So after the Supreme Court ruling on affirmative action of students for fair admissions versus Harvard, there was some speculation that DEI efforts generally would recede. Are you seeing that in the finance world or is it going strong still?

Lindsay Costigan (12:52):
I think it’s too soon to tell, and this is something my ears have been perked. I’m keeping a keen eye out on this, but I really do think it’s too soon to tell. I had a client make a joke saying, oh, you could hear every white man in their forties and fifties take a deep breath and a sigh of relief when this decision came through because they felt like their job just became slightly more secure in the wake of that. And I was like scratching my head, but also like that’s peculiar, but maybe I could see that. But frankly, we at B and d Paraba have changed nothing as it pertains to our hiring and retention practices. We’re still one for one hiring men for women into the analyst class. We’re very public about everything from gender equity in the workplace within banking, and then also even down to Indian wealth, the tenant tournament.

(13:40):
If anyone was watching this past weekend at the BNP Paribas Open at Indian Wells, Jean-Yves Fillion, our vice president, our vice chair of the board, former CEO of Americas, when he negotiated that contract back in 2008, one of his constraints was that we have equal prize money for men versus women or men and women. And what just an amazing, amazing place, amazing times to meet an amazing company who’s been thinking so much ahead about the gender pay gap from everything from banking to tennis 16 years ago. It’s kind of a cool thing to be part of. And I love that there’s now a lot more data available on that topic as well. I think also the other court case that comes up is the Jerry Brown legislation in California. I know there was similar legislation that passed in New York City where the future employer has to be the one to share the compensation information first.

(14:32):
They can’t base an employee’s future earnings off of what they’re currently making. So I think that the kind of you go first attitude of sharing compensation information where companies are the ones that have to share it first now has also really helped level the playing field in a way that’s directly benefited women. And the legislations that were passed, both California and New York were to help close the gender paying gap because historically underrepresented minorities have been paid less than the majority in the workforce. So I think those things all together have been largely positive. But no, I think being at a company that has really strong values and is focused on gender equity, it’s great. And I think that, I can’t speak for all other organizations. We all saw the news on Goldman Sachs, their issues with retaining women and promoting them to senior roles recently, which really pained my heart to see that. As much as I like David Sullivan, I think he’s great. I think it’s sad that there’s not a clear path to women in the most senior positions at banks. And of course there are some that have gotten to right. For example, Jane Fraser at Citi has done an incredible job, but I think there’s more work to be done there, for sure.

Jennifer Shea (15:49):
Yeah. Excellent points. Yes, in Deb’s article from the Wall Street Journal, worth checking out. By all means, speaking of the career ladder for women, typically as people advance from vice president to director, that’s where most women fall behind. But that wasn’t the case for you. So the lessons can you share for other women in finance from your own experience?

Lindsay Costigan (16:10):
Sure. There’s a quote that I love and I hate. It’s very telling, but it also makes you sound a little bit like you’re bragging and it’s lonely at the top. And I think that applies for men and women both as you excel in your career and you move further along. For me, the biggest thing I’ll attribute my success to is my network. It’s not only my mother, it’s helpful to have a totally badass woman in my household growing up, but the community of women and people and allies and support that I have found in my business. On the sell side and the buy side, there’s a group of us, there’s a group of us senior women, and we’ve stuck together and we bounce ideas off one another. And we’ve all kind of migrated to other parts of Wall Street. We’ve changed banks, we’ve gone to the buy side, we’ve taken a career break, we’ve gone to big asset managers, we’ve come back, but all of us have stayed completely tied to one another and we always can lean on one another for career advice, for propping each other up for mentorship, for helping each other’s children get internships.

(17:25):
I mean all the things. We’re here together. We share pay information, and we’ve shared pay information long before it was in vogue to do that, long before it was allowed to do that. We were behind the scenes saying, do you think I paid fairly here? Here’s my compensation information from this past year. And hey friend, you’re five years more senior than me. Does this seem fair to you? Were you making something comparable five years ago? And just being open about sharing that information and binding together. One of my counterparts at the competitor bank locally about five years ago, came to that same group of us and said, Hey, I believe our parental leave policy is stuck in the dark ages. Here’s what it is, what parental leave policy at your organizations for men and for women? And so it really forced us to ask the questions internally.

(18:11):
And she compiled a report across the entire sell side of what the parental leave policies were across Wall Street, and she was able to get an additional four weeks of paid leave from 12 weeks to 16 weeks, which is just incredible. So I think that’s been the biggest thing. Without this group of women, without this almost like this informal sorority, this club where we all help each other and share information, I would not be where I am today. And of course, we also, a lot of us youth executive coaches, therapists, demystify mental health. There’s all these tools and tricks that we use amongst one another, which especially with the idea sharing where we can really, the reason I’m successful is because of this tribe of amazing humans who all each other’s back at every single moment.

Jennifer Shea (18:58):
Well, that’s excellent. And then in terms of sort of growing that tribe, can you talk a bit about your mentoring work and do you think that women and minorities have to do more mentoring or are those demands about equal for all senior employees?

Lindsay Costigan (19:12):
I love this question. When I was getting promoted from vice president to director about 10 years ago, I had a boss come up to me, actually a woman who was reporting to at the time, and she pulled me aside and she said, Lindsay, because you’re a minority, because you’re a woman, we’re going to need you in order to get the director promotion. We’re going to need you to mentor other women and get involved in the women’s group. And I had a male counterpart who’s up for the same promotion, and I pulled him aside and I said, I’ll use a different name to protect his anonymity here. But I was like, Hey, John, are you also getting the same question? Do you have to participate in any sort of men’s groups or any sort of industry affiliated groups order to get your promotion? And he starts laughing and he was like, no, what are you talking about?

(20:01):
And I shared my story and he’s like, that is really peculiar, really interesting. So both of us actually raised the question being like, is this a prerequisite? Because he thought it was grossly unfair. So having him as an ally to stand up saying, Hey, Lindsay has to do this extra thing, which is probably going to take an extra three to five hours a week over the next six months to get the promotion, whereas I don’t have to do that either. Can you enforce that I do it too, or can we make it not mandatory for her? So having hint and met as an ally in that moment, I stepped forward with me, I think made the argument more powerful as well. So I think that was a tricky moment. So I think it’s push and pull. So for me, I carve out time in my day now to mention the next generation.

(20:43):
I have a number of analysts who sit in New York City. We have weekly catchups, and I have an open door policy with the next generation coming in because I want them to feel like they can come to me. And it’s a safe space to ask questions that you might not be able to ask out loud on the trading floor, might not have the other or senior representation that you can feel comfortable asking somebody these questions to. I was in New York City a few months back and a VP came up to me, a woman that I’ve been getting to know over the last three years that I’ve been at BNP Parisbas. And she said to me, she’s like, can you come back to New York City more? I was like, well, yeah, of course I’d love to. Currently I’m on a once a quarter schedule with coming to New York City.

(21:23):
She’s like, you be here more. It’s really important for me and the other VPs to see that there are senior women on the floor. She’s like, even just you being here really motivates us and inspires us that there is a path forward to managing director from being a vice president because there aren’t that many female managing directors across Wall Street. And I was taken back because I hadn’t even realized that. I said, yeah, of course I’ll come here as much as I can. So I’ve been trying to make a bigger point to come to New York City and to host informal networking events, gathering speaker series, and just getting the women together so they can feel like there’s a safe space and that they feel supported and that there actually is a path forward within all of Wall Street to go from VP to director or md.

(22:05):
And on the mentoring point too, I recently, about a year ago joined Pepperdine University’s board and as part of my mission of being on the board, and part of my goal is to help bring more women to Wall Street from the west coast. So I started a group on LinkedIn called Waves on Wall Street with another Pepperdine alum who’s now on Wall Street as well. And the two of us are really actively trying to recruit more west coasters to Wall Street, but specifically women West coasters to Wall Street. And so we’ve actually already hired one woman onto the team from Pepperdine in New York City. She’s wonderful. I’ve continued to mentor her, but there’s a path for more so really, really trying to actively reach into universities and get more women into Wall Street. And actually this year I’ve been asked to help with the recruiting for the West Coast schools for our summer internship program. So if anyone here is listening and you’re a current sophomore, we’re currently accepting applications for summer of 2025, and the application deadline is middle of September. So reach out to me on LinkedIn. Are happy to share my email address in the call notes, and I’m happy to guide you in the right direction for applying for summer internships for next summer.

Jennifer Shea (23:17):
Very nice. Okay, stepping back a little bit and looking at the broader picture. You mentioned in another interview that today’s financing landscape is becoming commoditized. I was wondering if you could say a bit more about what you meant by that.

Lindsay Costigan (23:32):
Sure, absolutely. So my role at BNP Paribas is prime brokerage sales. I oversee prime sales in the Western US for us, which really is the person that all of my hedge fund clients go Denver West clients and prospects. They reach out to me, I reach out to them. We have relationship, they come to me for all of their financing needs. And likewise, I also cover allocators, so allocators of capital who invest into hedge funds and help them access my hedge fund clients, but also demystify the hedge fund ecosystem broadly, which is an industry which historically has been a bit opaque. So my role, I get paid at the end of the year based on growing the financing footprint amongst hedge funds in the western region. So we sell balance sheet, we sell financing to hedge funds. That was the point I was making in that interview.

(24:20):
The financing landscape is becoming commoditized with better transparency, better technology. This is across all of Wall Street. My hedge fund clients know that they can go to a handful of different prime brokers for effectively the same thing, which is leverage. So all SQ l with relative information transparency, what it comes down to is you’re selling the relationship. So if you’re selling balance sheet and it’s all priced exactly the same price, all of sql, you want your clients, I want my clients to call me. I want to be their first phone call, and I’ve done my job to the best of my abilities if I’m always their first call when they have an additional financing need. And that’s really what it is. So because of that, it’s actually been great to be different and to be a bit of a minority in Wall Street that I offer something different to these clients just given why unique background as an allocator back 2008 to 2011, and then being both within capital introductions and private broker sales over the last 13 years.

(25:25):
I have a different and unique perspective coming into this. I also have a Rolodex that’s uniquely focused in the Western region covering approximately 200 different hedge funds and also a similar number of allocators capital and position in a way that clients will come to me. It’s easy early in your career to think that being a minority and being a woman is a disadvantage because you feel alone, you feel isolated, you feel different. And now actually the reframe is that of that as I’ve gotten more and more into my career, more deeply into my career here, is that it’s actually such a great thing to be different. I mean, the reframe really is, I feel like I have access to places within Wall Street that maybe your average 45-year-old white man with a vest wearing Midtown uniform is not going to have the same sort of access.

(26:16):
And maybe it’s just because I’m a little bit more memorable being one of very few of us at conferences around the street. Also, I’d like to think that my humor is pretty good too. If you’ve ever had me on the phone for West Coast Regional overview call or even talking about the first half of the year, which involves a lot of conferences and tennis and eye connections and Milken and all these amazing things, I like to think that I have a unique way of building relationships with clients that sets me apart from some of my peers. And also too in my business, it’s great. There’s space for more counterparties than one. And in a post Lehman world, in a post rate world larger hedge fund clients need minimum two, if not three prime brokerage counterparties. And so making sure that I’m in that mix, bringing something unique to them makes it a lot easier relationship position to sell and to grow the relationship.

(27:09):
So again, being at a European bank, super helpful Now, especially as we’re looking into Basel three end game, potentially Basel four coming up in the next 18 months. There’s a lot of unique things that I bring to the table alongside being part of the unique prime brokerage offering. But yeah, at the end of the day, it really is a relationship business, and we’ve done a good job building out our team through the Deutsche Bank acquisition and our arrangement with Credit Suisse. Along the path, we’ve brought over some really, really cool humans who have great relationships across all of Wall Street, which really helps give us the competitive advantage over our peers, given that our balance sheet has really become quite commoditized across the street. Well, very cool. Thanks

Jennifer Shea (27:53):
For explaining that and some good lessons in there for young people and other newcomers. Right, be yourself.

Lindsay Costigan (28:00):
Yep. I agree with that. Fully bring your whole self to work. I think as Brene Brown has said, vulnerability is a superpower. And I never fully appreciated that until I’d say probably four or five years ago. But clients are just like us. I mean, I’ve met some of the biggest hedge fund managers on the planet. In 2009. I had an hour and a half long sit down with John Paulson, which is one of the most transformative meetings of my career. I can point to a handful of others that were equally as meaningful, but I really remember. But bringing your full self to work and really embodying who you are as you’ve grown into your seniority as a woman, but as anybody, I have found it just been a really, really valuable and useful thing to do.

Michael Scarchilli (28:47):
We hope you enjoyed this episode. A big thank you to Lindsay for joining us and to our own Jennifer Shea for conducting the interview. And let’s review some key takeaways from this conversation.
One, progress in achieving gender parity within the finance industry has been made, but the pace of that progress has been slow, yet steady. The increasing presence of women in hedge funds particularly points to broader industry trends toward diversity and inclusion, which are also critical for fostering an inclusive and innovative working environment and can lead to broader perspectives and a more inclusive industry culture.
Two, there are distinct cultural and operational differences between buy-side and sell-side environments. Lindsay’s insights into working in each of these areas offer valuable lessons for finance professionals across the industry, especially those who often interact with both sides of the market. Understanding these differences can enhance how market participants approach negotiations, manage relationships, and structure deals, potentially leading to better outcomes on a broad range of initiatives.

(29:52):
And three, timing can indeed be everything when it allows preparation to meet opportunity. Lindsay’s fortuitous timing in entering the hedge fund industry. Days before the 2008 financial crisis hit created an opportunity for a career trajectory that may not have otherwise existed, but it also underscored the necessity of being highly adaptive and informed in order to capitalize on those opportunities. While the right timing and good fortune can provide a foot in the door, it is then up to the individual to make the most of those opportunities.
Thanks again for listening to this Bond Buyer podcast. This episode was produced by the Bomb Buyer. If you enjoyed this episode, please hit like and subscribe on your favorite podcast player. And please rate us, review us and subscribe to our content at www.bombbuyer.com/subscribe. Until next time, I’m Mike Scarchilli signing off.