At JPM which coverage groups outsource the modeling to M&A and to what extent?
I am particularly curious about technology and industrial being outsourced to M&A. Any insight would be greatly appreciated.
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Based on the WSO Dataset, the practice of outsourcing modeling work to M&A groups varies across different coverage groups within investment banks, including JPM. Specifically, for technology and industrial sectors, the dataset does not provide explicit details on the extent to which these groups outsource their modeling work to M&A. However, it's common in the industry for coverage groups to collaborate with M&A teams on complex transactions that require specialized financial modeling expertise.
In general, coverage groups, including those focused on technology and industrials, may engage M&A teams for several reasons: - Complex Transactions: M&A teams possess deep expertise in structuring deals and financial modeling, making them valuable for complex transactions that require intricate modeling. - Efficiency and Specialization: Outsourcing modeling to M&A allows coverage teams to focus on client relationships and sector-specific strategies, while leveraging the technical skills of M&A professionals. - Deal Execution: For transactions that are particularly execution-heavy, involving detailed financial analysis and valuation, M&A teams often take the lead on modeling to support the deal process.
While the dataset does not specify the exact practices of JPM's technology and industrial groups regarding outsourcing to M&A, it's reasonable to infer that these groups, like others, would utilize M&A expertise for complex and execution-focused transactions. This collaboration ensures that clients receive the best possible advisory service, combining sector-specific insights from coverage teams with the technical financial modeling prowess of M&A specialists.
Sources: JPM Tech Group NY (2023), For those of you who worked at a BB that has a separate modeling group (M&A), do you feel like you gain less technical skills?, Q&A: Current 3rd-Year BB Coverage Analyst, What are the best groups for JPM?, ABCs of M&A/Coverage, Nature of Divestiture/JV Deals
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No insights into JPM... but usually the degree to which groups outsource modeling to M&A depends on the degree of industry knowledge required in a transaction. That being said it depends on the deal. Sure, there are groups where less industry-specific knowledge is required when creating the model (e.g., C&R and Tech) while others often have very complex models that build on lots industry expertise (e.g., Energy and FIG)
Does Healthcare outsource?
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