'ICEF pushes the boundaries of understanding the scope of opportunities in front of you'
Ekaterina Chegayeva completed ICEF BSc Programme in 2017 to continue her studies at master’s level at Princeton. A Master in Finance, she's currently employed by USA's J.P. Morgan, where she is working on the details of retirement savings system as part of Asset Management team. In this interview Ekaterina shares how ICEF enlarges the horizons for its students, how to choose among the programmes allowing to work in the US without getting a work visa first, why American employers seek quantitative finance majors, and how J.P. Morgan makes retirees well-off and happy.
In your previous interview you referred to ICEF as a good launching pad for further studies and employment abroad. What makes you think so?
The motive behind my choice of ICEF was to do a master’s degree abroad. The very choice of Economics as a major was driven by my intention to work abroad. I wanted a chance to take a broader look at the world and throw myself into an environment totally different from the one I grew up in. What ICEF is really good at is giving its students the understanding that anything is possible. The education that it offers is international, so sounds only logical that graduate studies should be pursued abroad. With double degree opportunities and instruction in English, ICEF excels all other faculties in instilling in its students the thinking that studying and working abroad is doable.
ICEF maintains a perfect balance between theory and practice. I can’t agree with those who think that the learning process here is a way too much academic-oriented. Aren’t bachelor's programmes designed to teach us how to learn, in the first place? BSc is not about hands-on skills, it’s about cultivating the ability to perceive the information, adapt to the changing competitive environment and set the bar high for yourself. It is definitely not about mere swotting of, say, Corporate Finance, to end somewhere in the IT industry. ICEF pushes the boundaries of understanding the scope of opportunities in front of you. This is what I meant by referring to it as a launching pad that gives skills and resources to choose among multiple paths.
The learning process, was it hard at ICEF compared to Princeton?
It was. But, hard as it was, my master’s studies have proven even harder. I mean, what could be harder than four strenuous examination sessions, each having you read for five exams to be taken over the course of seven days, with classes and home assignments following their regular schedule? The break you have from studies was actually not a break, and the whole bachelor’s studies turned out pretty much one big nonstop effort, which keeps one toned in a way. Had my education not continued, I’d have probably kept on thinking that ICEF was the most difficult thing ever.
Princeton operates a system where five exams are spread over 3 to 4 weeks and there are take-home exams. What proved really challenging was, however, something else. At ICEF I couldn’t remember myself spending 10 hours on home assignments, except in my third year when I was coping with assignments from Alla A. Friedman, which is, however, a normal practice at Princeton and hence the learning process proves to be much harder.
What do you think was a key factor in your decision to enroll in a master’s programme?
Human element, I think. ICEF maintains a very well-tuned interaction with its alumni and those of them who chose to study abroad. Our meetings with them were a chance for us, students, to learn about particular degree programmes, their requirements and who might find them a good match. The alumni helped us see ourselves better, as if they were the image of future us. Concurrently, my work on graduation thesis helped me to realize I didn’t want to be in corporate finance. I was more into quantitative finance. It was my thesis supervisor, Sergey V. Gelman, who helped me grope my way towards master’s studies.
ICEF students benefit from their alma mater through:
scholarships for study at universities such as MIT, LSE, LBS, Princeton University, EDHEC, HEC Paris;
best PhD programmes. These were first made available in 2003. As of 2019, PhD studies have been undertaken and competed by a total of 60 graduate students (27 of them enrolled right after ICEF BSc Programme); and
employment offers. Those of ICEF graduates who stepped into the world of academia receive them from such leading schools as Stanford, Georgetown, Lausanne, Vienna, Florida State, London Business School, NES, to name a few.
Click here for more about career opportunities for graduates.
Professors are powerful determinants of a student’s future. They share their professional and personal experience, shaping, as was my case, student’s vision of their future paths. I can’t say I felt a closeness with my professors at Princeton as intense as at ICEF, unfortunately. I had enjoyed the benefit of having a circle of mentors – ICEF Professor Belianin who supervised my term paper, Professor Gelman who was my thesis supervisor, and Professor Friedman who accepted me into her assistantship. They helped me enroll in my master’s studies by providing reference letters, and as we know reference letters are one of those rare means that help hosting universities to see applicants through the lens of personal traits, nor merely exam grades.
What parameters was your choice guided by and why Princeton?
I was absolutely sure my studies would continue in Great Britain. But later, when my focus shifted more towards quantitative finance, it appeared that the programmes in the USA were a much better match. Also, the USA supports quantitative finance students through a system known as OPT STEM (Optional Practical Training/ Science Tech Engineering Mathematics). Its entitles its participants to work in the United States during a period of three years with a student visa, which is a great thing considering the fact that US work permits are given away through a lottery process: even if you are employed, you stand a 50-50 chance of getting it.
I applied several US schools with programmes in quantitate finance, including MIT and Carnegie Mellon University. I thought my chances of getting enrolled in Princeton were quite slim, for places on its Master of Finance Programme were limited to 25. The amount as small as this adds to programme’s solid reputation among employers, making the employee screening process easier when there is lack of competition. What also spoke in favour of Princeton was the curriculum that allowed for customization based on individual learning needs: of 16 courses, only 5 were compulsory.
Unlike the Russian universities with their limited scope for self-determination, the American ones encourage intentional self-discovery in learning, allowing their students to realize what they want to do in life
Did you know what you wanted to do in life when you were creating your custom learning path? Where did you see yourself and what career path were you preparing yourself for?
One thing I was absolutely certain about at the start of my master’s studies was that I wanted to be in quantitative finance. The thing which was absolutely hard to get a handle on was where exactly in quantitative finance. Trading? Quantitative research? The research sounded more appealing, that’s all. It was whether a course aroused interest in me, as well as student feedback, that guided my choice of courses. I tried to avoid the courses I knew would be challenging for me to complete. I could opt for a few PhD level courses but I didn’t because I was scared of disappointing myself in case I’d give up halfway through. And I didn’t want to be overwhelmed by too much information.
I was looking at courses that offered more hands-on skills than theoretical knowledge. I believe that these are concrete skills, like in programming, that pay off in the end, not the knowledge of concrete financial concepts. Unlike skills, knowledge per se does not translate from one field to another, and this should to be borne in mind when choosing among courses. I think my choice was driven by my perception of studies as a step towards desired occupation and personal growth. These two are prerequisite to finding your place in the job market.
How do Princeton students prepare themselves for industry placement?
It is a specific feature of the American system that internship applications should be filed as early as September, i.e. at the very start of the study programme. Most of the students will know it before December where they’d be working in the summer. Also, Princeton hosts Bootcamp Alumni, which is a week-long event and a chance to learn from the alumni about their companies and how they got employed. Bootcamps give more insight into things like employment opportunities after graduation, specifics of certain occupational domains and how to make it more likely that your resume will get noticed.
One such bootcamp meeting landed me my current job. I volunteered to be interviewed by a lady who, too, completed the Master in Finance Programme and now we are working for the same company. Also, the first three months on campus is the time when companies come to meet students, also because there are programmes at Princeton that meet their needs. There are actually not so many quantitative finance programmes that employers see as fitting their needs, so they try to target precisely the majors they think fit best. Finance majors often find themselves getting a fast-track to many large companies. They are at a huge advantage compared to the Finance majors in Russia, who often have to compete for a position in a bank or a hedge fund with several thousand other applicants, so being fast-tracked seems to be the only way to get a job there.
What would be the jobs that Master in Finance degree holders do?
There are two main options – trading and quantitative research. Or both if your employer is a bank or a hedge fund. I know it from my friends’ experience that trading is undertaken mostly by the dynamic and agile. Staying glued to P&L screen every night does take some nerve and one has to be able to take risks.
Most rookies will have nightmares in the beginning. They fear they could have done something wrong placing the order or selling or buying. They never stop thinking about it
As for quantitative research, it is oriented more on those who are creatively minded, willing to do projects and unwilling to cope with reporting and routine drudgery. I am more into research.
How quickly did you get your job? Where do you work and what are your duties?
I work at J.P. Morgan as a Quantitative Retirement Strategist, which is the official name of my position and is not quite self-explanatory. After my encounter with the bootcamp grad at J.P. Morgan, I decided to take up the offer of internship at J.P. Morgan Asset Management. It is common for students to take up internship offers in the first year of studies. But somehow I am not dealing directly with finance. My work deals for the most part with analytics and surveys in the field of the so-called 401k funds, i.e. private retirement savings plans that need to be systemized and explored for savings patterns.
In the United States, a 401(k) plan is a tax-advantaged retirement account. It is named after a section of the U.S. Internal Revenue Code. In addition to its savings function, a 401(k) retirement plan allows for earnings from investment and hence increase of the account.
In the 1980s, USA’s defined-benefit plans (whereby the employer used to pay pensions to their employees based on the length of employment) were replaced by defined-contribution plans, which had moved the burden on pension allocations to the employee. Once you start work as an employee, a certain percentage of your every salary goes to your retirement account that you won’t be able to draw from before you turn 60. The savings on retirement accounts can be used as investment funds and hence allow for capital gains. My department is dealing exactly with 401k retirement plans of future retirees. Employers seek advice from us as to best-performing sectors to invest their employees’ funds in, which is a normal corporate practice in the USA.
My team are tasked with doing research into this process. The issues we explore encompass the procedure of and the most optimal age for funds withdrawal that could lead to less taxes, and if one should wait longer as savings income grows with years. My other duty is to do data analysis for Chase Bank, which is a J.P. Morgan Chase daughter serving the needs of approximately 60 million American households. We use data transactions analysis to find out more about pre- and post-retirement spending habits and how much money people can be advised to have on their accounts to feel comfortable at a certain age.
The outcomes of your research, do they have an impact on your bank’s pension investment services?
In my department, there is Multi-Asset Solutions unit which is engaged in the development of investment tools to be implemented by the department as part of its retirement plans management. To give you an example, retirement funds cannot be invested entirely in stocks or entirely in bonds. A funds portfolio may be comprised 100% of investment in stocks when the holder is, say, 30. But as they approach retirement age, the risk should be minimized of a situation when their portfolio is 90% shares that are likely to lead to a loss of 30% of the investment, should an event like COVID-19 occur. Therefore, the share of stock should decrease and that of bonds increase as one approaches their retirement.
To take better care of investors’ funds, J.P. Morgan offers Target Date Funds, which is a way to put retirement savings on autopilot. My team is particularly working to find out when and to what extent retirement savings should be increased so that an adequate allocation of income-producing investments could be achieved.
Do you think you will continue working at J.P. Morgan after your three-year student support programme ends?
Frankly, I have applied for and been issued my work visa earlier this year. We hear it on the news every week that green cards and work visas might soon be subject to more limitations. I also hear some people say that the OPT Programme, which allows international students to work in the USA after graduation from an American university, might soon be closed.
I have immersed myself in the study of the US pension system. I am gaining an expertise needed exactly in this field, so pension systems are where I belong professionally
The American systems of taxation and retirement savings are subject to hundreds of rules. I have been working hard and long to upgrade my knowledge of how they operate, while also working on my hands-on skills in programming and data analysis which I know I will be able to translate to other domains in due time.
I went to the US with a strong intention of a long-term stay, but now I realize I am no longer tied to this country. I would love to go to a new place to contribute my experience and expertise to pension systems that are facing their own challenges and in need of proper structuring. And, of course, I’d be willing to contribute to the formation of the pension savings system in Russia, which is still literary absent.