How the industry actually works
Almost everyone learns the jobs before they learn the system. You can name a dozen firms and still not be able to say where the money in them came from, who is paying the fee, or which of them carries the risk when something goes wrong.
This is the system, participant by participant: what each one contributes, where its revenue comes from, and what moves between it and everyone else.
The whole thing in one line
Money starts with people who have it, passes through funds paid to allocate it, and ends up with companies that do something with it. Every other participant below is taking a fee, a spread or a view somewhere along that line.
People with money
Savers, pension schemes, insurers and endowments. They hold the capital and almost none of them invest it themselves.
busiest here: 12 connections
Funds that allocate it
Asset managers, hedge funds, private equity, credit and venture. Paid a fee, and sometimes a share of the gains, to decide what to buy.
busiest here: 19 connections
Companies that use it
Listed, private and newly founded. They turn the capital into something that earns, which is where the returns come from.
busiest here: 19 connections
Capital moves along that chain. Returns, and the fees taken on the way, come back down it.
And standing alongside all three
- Banks and brokers stand in the middle of a transaction and take a fee or a spread.
- Advisers sell judgement: what to buy, what it is worth, what the risks are.
- Exchanges, custodians and data make a price exist and keep the record of who owns what.
- Regulators and central banks set what any of them may do, and the rate everything is priced against.
How the system connects
Twelve of the relationships on this page, one of each kind, read in the order the money travels. Every participant below has the rest of its own, and selecting one shows them.
- Capital
Households and saversPension funds·Contributions every month, for a working life.
- Fees
Pension fundsAsset managers·A management fee on assets, and occasionally a performance fee.
- Capital
Pension fundsPrivate equity funds·Commitments drawn down over years, locked up for a decade.
- Capital
Asset managersListed companies·Buying shares and bonds and holding them. New money only reaches the company at issue; after that the holding is what keeps the price supported.
- Advice
Investment banks: advisoryListed companies·What to buy, what to sell, what it is worth and how to get it signed.
- Fees
Listed companiesInvestment banks: advisory·A success fee on completion, and very little before it.
- Risk
Listed companiesInvestment banks: markets·Currency, rate and commodity exposure the company does not want to run.
- Risk
Market makers and trading firmsHedge funds·An immediate price at which the fund can trade. The market maker temporarily takes the other side, then manages or offsets the resulting exposure.
- Information
Sell-side researchAsset managers·Coverage of more names than any buy-side team can follow itself.
- Infrastructure
Exchanges and trading venuesInvestment banks: markets·A place to trade, a live queue of everyone’s bids and offers, and a published price.
- Rules
Financial regulatorsAsset managers·Authorisation, disclosure and what may be sold to whom.
- Products
Cloud providersStartups and scale-ups·The entire stack, rented, so nobody has to buy a server to begin.
Read the chain: a saver funds a pension scheme, the scheme pays a manager to invest it, the manager buys a company’s shares, a bank advises that company and is paid on completion, and risk moves to the participant willing to warehouse, hedge or insure it for a price.
Pick any participant to see what reaches it, what it supplies, and who works inside it.
Where the money starts
The owners of the capital. They have more money than they need now and want more of it later, and almost none of them invest it themselves.
Who decides where it goes
Funds that take other people’s money and choose what to buy with it. The differences between them are liquidity, control and time.
Who stands in the middle
Nobody in this group owns the outcome. They are paid to make a transaction happen, to price it, or to finance somebody who does own it.
Who needs the capital
The other end of every flow on this page. A company raising money, buying another company or funding its own growth is the reason the rest of the system exists.
Who is paid for judgement
Firms that sell an answer rather than a balance sheet. They carry no capital and no risk, which is what makes the fee negotiable and the reputation everything.
Who makes the market work
Venues, records, benchmarks and published opinion. Invisible until one of them fails, and then the only thing anybody is talking about.
Who sets the rules
Authorisation, capital requirements, conduct and, in technology, competition and data. Not participants in the market, but they shape every decision inside it.
Who builds the product
Companies whose output is software people use. The commercial question underneath all of them is who pays: the user, an advertiser or a business.
What it is built on
The layers below the product. Almost every technology company rents most of its stack from the firms in this group.
How it reaches the buyer
Getting software in front of someone is a separate business from writing it, and the people who control that step take a share of the price.
Who buys it
Three buyers with three different purchasing behaviours, and the choice between them shapes the whole company built to serve them.
Follow the fee
The fastest way to understand any firm is to ask who pays it and for what. An adviser paid on completion behaves differently from a fund paid on assets, and both behave differently from a desk paid on a spread. Nearly every cultural difference people describe as a personality clash starts here.
Buy side and sell side
The buy side owns the decision and lives with it. The sell side is paid to make a transaction happen and moves on. That single line explains the hours, the pay structure and why the exit tends to run in one direction rather than the other.
The same shape twice
Finance and technology are not two unrelated worlds. Both have capital at one end, builders in the middle, infrastructure underneath and rules over the top. Venture capital and growth investing sit in both because they genuinely do.
Where the gaps are
Several participants here employ thousands of people in roles the career map does not cover yet, from clearing and custody to wealth management and supervision. Each one says so on its own card rather than pretending the seat does not exist.
You understand the system. Now pick a seat.
This page stops where the career pages begin. What each job involves on an ordinary Tuesday, how people break in, what it pays by level and what is open this week are all answered properly elsewhere, and every participant above links straight into them.