Q&A with CompBanker, Part 1
Today, I have a very special treat for monkeys that frequent WSO. This weekend, I had the pleasure of interviewing one of WSO’s finest. Some say he’s part Saint, part Guru, but If you have posted on the forums seeking some good ol’ fashion advice, you probably know the name CompBanker.
He comes from a non-target, but after some serious hustling, CompBanker managed to break into a middle market investment bank. I encourage you to read his post, “How I got into Banking,” prior to reading this Q&A. Regardless, below is part one of a two part series (see part two here ) dedicated to getting to know the man, the myth, the legend, CompBanker.
MF: Let us start off by talking about your path to your current position in PE.
CompBanker: My path to Private Equity was very traditional. I did two years of sell-side mergers & acquisitions at a Middle Market investment bank, followed by two years of MM PE in a pre-MBA associate role, and then secured my current role as a post-MBA (without an MBA). I certainly didn’t plan it this way; I didn’t even know what Private Equity was when I started in banking.
MF: What were some of your highest highs and what were some of the bumps in the road?
CompBanker: My career has been full of highs and lows, but the worst had to be when the recession hit in 2008. I was an IB analyst and things went from roaring to dead literally overnight. Banks started failing, deals stopped getting done, and no one could say what was going on. Layoffs started happening everywhere and all of a sudden nothing was certain. At the junior ranks, you have no control over decisions that will impact your entire career, which makes coming to work each day quite scary.
MF: What were your favorite tasks or specific positions that you enjoyed?
CompBanker: On the flip side, I’ve been incredibly fortunate to be given some deals and projects that remind me why I love my job. I’m an international travel enthusiast, so I’ll take any chance I can to leave the U.S. As an IB analyst, I was sent to the U.K. to facilitate client meetings. As a PE associate, I spent a couple of weeks in Asia assisting a portfolio company. While uncommon, being able to get these types of experiences in my early 20s is part of what makes IB and PE great.
MF: Do you miss anything about being an analyst?
CompBanker: While I certainly don’t miss the analyst lifestyle, I will miss my analyst class. Over the course of two years, it is almost impossible not to bond with the other analysts. My class scattered throughout the country after we all finished IB, but we still visit each other every now and then.
MF: What initially enticed you into banking?
CompBanker: I received my degree in MIS, but I quickly realized that I didn’t want to be in that field. The problem with technology is that if you don’t truly love programming, you’ll never be as good as the guy who spends his weekends developing software in his parent’s basement. I recognized this and decided to give banking a shot, even though I didn’t really know what it was. Banking offered an avenue to kick-start my career and to learn a ton about business. I have a self-diagnosed case of insomnia, so I figured that I’d be able to handle long hours.
MF: What motivates you today?
CompBanker: Fast-forward to today and my responsibilities and motivations have changed dramatically. I’m now valued for my ability to manage process execution and document creation rather than my Microsoft office skills. Guiding the development of more junior employees can be incredibly rewarding but is one of the most difficult tasks I’ve encountered in my career. Furthermore, learning about new businesses is more fun as my job is to evaluate its merits/shortfalls rather than write a memorandum. Lastly, I see deals in a different light now that my own money is riding on the outcome. Having an ownership interest in the fund definitely encourages me to care about the performance of the companies in the portfolio and think twice before supporting an acquisition.
The reality of high finance, as well as any other job, is that you need to really enjoy what you do in order to be successful. As an IB analyst or pre-MBA associate, there is always a light at the end of the tunnel that you’re working towards. Once you cross that point, you’re in it for the long haul and all you have to look forward to is retirement. There will obviously be promotions along the way, but the difference between VP/SVP/Director is more a matter of pay grade than job function.
MF: In your initial “breaking into banking” story, you talked about how being in the Middle Market allowed for a more meaningful learning experience. Do you feel as if you received that opportunity to learn in a more hands-on-fashion than say at a Bulge Bracket?
CompBanker: I’ve worked in the middle market M&A my entire career and I view it as a completely unique world compared to that of the bulge brackets. The concept of MM analysts getting significant senior/client level interaction is not a myth and at the junior levels, the middle market is infinitely more hands on. You are judged for your interpersonal skills as much as you are for your Microsoft skills, while modeling is not emphasized. These same skills are utilized heavily in MM PE shops, while modeling skills are needed at the large cap PE funds and the megafunds. For this reason I see the MM as a different career path with very different players and responsibilities than the BB career path.
I’ve had the opportunity to interview a large number of analysts for pre-MBA associate jobs at MM PE firms. One of the questions that I always ask is: “If I were to pick up the phone and call the management team of the deals listed on your resume, would they know who you are?” The BB analysts always say no and the MM analysts almost always say yes. To me, this illustrates the difference between the middle market and the bulge bracket experiences.