Getting into IBD from public accounting

Is the job with Grant Thornton audits of PE portfolio companies? (trying to gain clarification)

Auditors are a dime a dozen. Anyone can do it, but few want to. It would be extremely difficult to break into a reputable IB shop without TAS or DD experience.

Sure, you'd love to switch right over. But, guess what? There are far more people trying to break into or stay in IB right now than there are IB spots. So, you might as well put in some time and get some TAS experience. If you can't move from TAS to IB, then go get your MBA first.

May not be the answer you wanted to hear, but if you don't do this right, you will never break in.

That's a perfectly good answer and I am well aware of all of those aspects. Until I get there, though, what looks better as my resume progresses? I guess my biggest concern is the trade-off between doing valuation work on portfolio companies vs. having that Big 4 name on my resume. I know I will probably go to TAS within the next 1-2 years as its my best transition point into IB, but I also know I need to be mindful of where I go now in case an IB opportunity presents itself in the next six months or something. Does that make sense?

Valuation on portfolio companies (if it is actual valuation... be careful b/c some of that will be purchase price allocations, not standard valuation as you would relate to IB) is preferable. Assuming you are going to the fifth largest (Grant Thornton) or the 6th out in Cali (McGladrey), either will provide a good enough name and exposure to help break into IB. I would take that gig and try to build connections w/the PE shops and PE employees that you will be working with. They can help introduce you for job openings and give you some leverage in your interviews.

Thanks for the tip. It's where my heart is going (its at McGladrey) but I assume my only connections at the PE funds will be with back-office people, not any PE employees. Just out of curiosity, what makes you think their name is good enough and I won't need Big 4 on the resume?

I am only curious because saying no to Big 4 is pretty difficult to do for most people so I want to make sure it's the best decision.

I would go with the valuations position, despite not being a Big 4. Once you learn all the technical valuation tools, you'll have 10x the valuation skills as most bankers that went the typical route. I had a similar issue where I got into a valuation group at a Big 4 with the intention to exit to an inv. bank after gaining experience. It worked for me and two others in my former group--we're all doing M&A at boutique banks now. Two years of valuation experience plus a CFA level 1 or 2 should get you in. That's my take. Even better, perhaps explore a valuation position at a Big 4.

I don't know if an MBA would be a good option for you. Given what you described, the good programs would be asking similar questions: "you went to what school..."

I have an almost identical background to you and was recently contemplating making the same switch as you are now. Luckily, I landed a position at boutique before I had to make the decision to go to a bigger firm. In the end…auditing is auditing, but take the job where you would get exposure to valuation work.

Have you talked to either firm about a possible switch to their TAS group in the near future? I know they use those groups as a hanging carrot to get people to stay in audit for longer but you should definitely try to assess how viable the switch would be at either firm.

PM me if you have any questions.

EyeBeeWannabe:

Thanks for the tip. It's where my heart is going (its at McGladrey) but I assume my only connections at the PE funds will be with back-office people, not any PE employees. Just out of curiosity, what makes you think their name is good enough and I won't need Big 4 on the resume?

I am only curious because saying no to Big 4 is pretty difficult to do for most people so I want to make sure it's the best decision.

Because I work in the MM space. If you are ok with the MM then McGladrey is suitable. They are well-known on the DD/TAS side and used to have a Cap Markets group themselves that ran some transactions (recently sold to DA Davidson).

DD isn't solely going to be with "back office" people. Associates and analysts will be working on the deal still. Those are the guys you want to be in front of anyway. Some MD or MP isn't going to be as impressed or be willing to give the time.

Well thanks a lot for the advice. I also called up a few head hunters I have talked to in the past and they gave me mixed advice, too.

I ended up accepting the Big 4 offer. I think Big 4 TAS will be an easier sell to IB'ers in the long run, and moving from Big 4 audit to Big 4 TAS won't really appear like a change in employment on my resume. I really dont want my resume to read MM firm - 1yr, MM firm - 1yr, Big 4 TAS - 1 yr.. and I've been told by a lot of people that if i try to move to Big 4 later on from another non-Big 4 firm, they knock you down one year of experience, which I also don't want to deal with.

All in all, a tough decision but an easy one at the same time since both options are good ones.

I plan to work in audit for a year and start networking my way into switching to TAS in the early summer of next year.

Thanks again everyone.

Good luck man.

focus on getting a 730+ GMAT

i think its very hard to be done, but def possible. You have to know the right people and you would start as a first year analyst without a doubt. just my 2 cents

that have done it did it through networking, but they were all told that their knowledge or financial statements and how accounting can affect transactions gave them a big leg up. BUT, you WILL go in as a first yr analyst, no doubt (these were for Canadian banks, where the CA designation may be more highly valued).

There's a perception issue that if a candidate comes from a Big 4 as an accountant that they might not adjust well upon transition to IB be it on account of lifestle, expectations etc.

Also, it depends on what you're exactly doing at DT. Accounting for accounting sake is fine and good, however... how do I say this... sometimes accountants just aren't good at the targeted skill set required in IB.

(ok, I expect a bashing for this)

Thanks for the advice. No bashing incoming :D Out of curiosity, what are the targeted skill sets that are required in IB that accountants wouldnt be good at? (Incase I do try to get into IB after accounting, so I know what areas to improve on and have prepaired for an interview or on the job etc)

Furthermore, I was expecting to come in as an entry-level, first year analyst after 1 year of accounting at DT. Does this improve your chances or are they still slim?

I think you would stand a far better chance after an extra year or two and go do an MBA. I have a relative who went into Consulting post MBA after a stint with the Big 4 and some of her colleagues bolted for I-Banks. But none of them tried to do it straight from the firm when their experience was limited.

With a 700 on your GMAT and doing accounting for 3 years or so, is it somewhat easy to get into a top 10 or top 5 MBA program?? (I really want to get into a top MBA program, but assumed that accounting at DT would make it somewhat difficult to do that. This is one of my motivations for transfering to IB, so I have a better opportunity for Bus School.)

Thanks

In my office (about 700 people) at a Big 4, it seems to me very few want to go to B-School or do other stuff. Most seem to want to stay in accounting. I would assume the larger offices like LA, NY, Chi have more ppl who want to switch careers, but in my experience (Big 4 in Canada), not too many seem to go elsewhere once they in the field.

Alrighty... first let me take a swig of tequila so that I have the courage to say this.

BigMonkey, sometimes accountants who come from accounting jobs at a Big 4 can't adjust to think like an IBer. Rules. They're just too used to following rules and can't think "creatively" around some of the issues IB clients face and the fundamental analysis skills used in IB.

Again, it depends on what your specific experience is within a Big 4. Many folks from Big 4 spend their time solely crunching numbers and don't get the chance to develop and refine their communication skills, particularly if candidates minimally interfaced with clients, C-level executives etc. so then the jump to IB doesn't work out.

There I said it. I need another swig.

(I fear I should go underground.)

on other threads:

i'm one of the few people on this board who have worked on both the sellside (banking) and the buyside (corporate development). in my banking and industry capacities, i've worked with all sorts of accountants ranging from audit to tax to transaction advisory.

in general, aside from the communication comment, i think aadpepsi is dead on (esp. regarding the "creatively" remark).

first, a few points to consider:

1) if there's one field in business (aside from the obvious answer of compliance) where issues are black or white, it's accounting. in general, with the exception of a few specific issues, items in the world of accounting are either GAAP compliant or they aren't. as aadpepsi indicated in other words, they either comply with the rules or they don't.

2) accountants (in general) are backwards looking. they look at what's already happened to a company as opposed to telling you what might happen. i'm sure that some smart accountant will reply with a comment about how accountants do future-facing work by communicating with clients and bringing up how certain internal audit procedures (if implemented) might improve oversight and accuracy of things such as inventory or work in progress, etc., but this generally has litte to do with the forward-facing strategic-type work that falls under the banking/corporate development umbrella. in addition, i can all but guarantee you that no executive will view accounting/audit as a "strategic" function in any sense; rather, all executives will view accounting as a necessary evil or "cost" of doing business. thus, the general approach is to do what you need to do to get your auditors to sign off on your statements.

thus, with these points in mind, what a lot of people tend to forget is that banking/corporate development (unlike accounting) involves a high degree of foward-looking bullshitting. although some people might disagree, my theory regarding the corporate m&a process is that most executives already have a good idea of which deals they'd like to pursue before they even see any numbers or real analysis. as a result, it's a corporate development professional or banker's job to the provide the "analysis" that makes the ideas work.

since models are all pretty much bullshit to begin with, making a model "work" (i.e. beating your company's cost of capital and providing a decent rate of return on paper) requires you to totally fabricate forward-looking numbers. this might require the use of bogus deferred taxes, the isertion of fabricated "synergies," or even the input of the all popular "hockey stick" model that every management team seems to believe in these days. as a result, the bottom line is that all of these model inputs are adjustments that are based on pure "feel" or speculation in which very little framework or guidance is provided. thus, most accountants are poorly equipped for this type of work due to the fact that their experience consists of backward-looking work as opposed to foward-looking work and rule-based work as opposed to guesstimate type work.

however, while i feel that audit/transaction advisory accountants are near damn worthless as far as the deal process goes (even the due diligence reports are total crap aside from verifying that accounting is GAAP compliant--none of them will tell you anything about the company that you won't already know if you're worth a damn as a corporate development guy or if your company has its shit together) i will say that good tax accountants are worth their weight in gold.

because most deals tend to fall apart due to tax consequences, a tax accountant who can come up with a creative structure that offsets, defers, or eliminates taxes can provide more value than just about any one else on the deal team. however, the caveat here (as applies to the original topic of this thread) is that tax (while valuable) is probably a bad way to lateral into banking given that i) it takes YEARS of experience to even begin to know enough to come up with deal saving structures and ii) junior tax associates mostly spend their days filling out schedules as opposed to sitting in on deal structuring meetings.

while i have seen accountants move to investment banking, it's generally been on the big 4 to mba to associate level.

there was one guy i knew of at my old firm who made the transition from big 4 to banking, but he got lucky in terms of being at the right place at the right time. although there are probably other instances of accounting to banking, i would say that it's generally a rare (although not impossible) move at the pre-mba level.

Monkey_Island, well done. That was a very good post. I could not have explained it as well.

There are some very constructive posts in this thread. Thank you everyone for the great input. So to sum a few things up..

Accounting to IB pre-MBA is simply not that good of an idea, and difficult to do.

Accounting for a few years, then going to a good MBA program, then cracking into IB as an associate is more likely than the aforementioned idea.

My final question is...How difficult is it to get into a top level MBA program if you are coming from a big 4 accounting firm with 3 years of experience?

It was a beeatch. I left at 2 years and am at a boutique firm. It took a lot of scrapping for about 8 months. had the mba though. by the time I left big 4 basically everybody in my office new I was looking for IB jobs which was kind of sketchy. You really have to network your ass off to get in.

A buddy of mine just left EY for a top mba program. it wasn't too hard for him and he had only 1 year, but he had started his own company before hand (which actually made money) and was fluent in a few languages. Only got a 650 on his gmat though. So it's not too hard to do but, everybody at the firm knew he was looking to leave because he always had to go "take care of a personal thing" and leave work for MBA interviews, mixers w/ alums, etc.

Do it sooner than later though. More than a few years of big 4 teaches you skills that aren't really relevant to IB (i.e. memorizing FASB's, blah, blah, blah.)

In the UK this is not so difficult - you need the right credentials though (good university - LSE, Imperial, Oxford or Cambridge) and you need first time passes on your ACA/CA. As for skillset I couldn't be bothered to read all the posts above but I think a qualified accountant (3 years with Big 4 in Audit) has very good financial reporting skills (theoretical grasp of financial statements and should be pretty sharp in understanding links and interaction between primary financial statements and also KPI's etc). Someone with that background should also have good communication skills (but I agree that the context of this communication with the client is not the same) - however you are used to facing clients. Depending on your background you may also have an understanding of the industry grp you are aiming to join in IB - i.e. Big 4 in London will have industry focussed Audit grps - someone from Energy should knw something about the sector that is relevant to IB.

I did 3 yrs at Big 4, few months in their Consultancy arm (Post-merger work) and switched to IB. Usu. this backgrd takes you in as Analyst 2/3.

From the ghetto....

I have an offer from Deloitte for a summer intern position in the FAS valuation group. Do you think that I can spin my experience there to show that I have a taste for IB? Or should I go for another position that is more consulting/travel based and allows for more interaction with clients?

Just found this post "Broke in from the Big Four." Since now I know its possible, how often does this happen?

Audit -----> Transaction Services ------> (MBA) ------> IBD / PE

Pretty much what goblan said. You're trying to find a way to get transactional experience before you move in. Its quite tough to go from Accounting to IBD unless you network hard and get lucky. The longer you stay in accounting, auditing specifically, the tougher your transition will be. If you had stellar grades etc and just did a year or so at a big four then its not as hard, don't put too much hope into getting in a Bulge Bracket with that map though.

Keep in mind that ND has quite a few people on the street, so his connections could have been a big factor.

No it doesn't have any relevance to getting into an IB analyst program. However, I know the switch has been done, just don't try pushing relavent experience b/c its not relevant. You've got a lot to overcome as you're now not only going to have to break into a tough hiring market for a tough industry, but you're going to have to overcome having a stigma as an accountant by nature.

I'm finding it difficult to get interviews for IB analyst programs coming from a non target school (top 20 undergraduate business) with a resume that includes a high GPA and past internships at a big 4. Unfortunately I thought I wanted to be an accountant till my last internship when I realized I didn't like the work and wanted to be an analyst. I'm a graduating senior in May, any advice?

lady_finance5:

Hello WSO

I spent three years auditing nonprofit and government entities at a regional CPA firm in NYC (we did most all all the major foundation, private foundation, and non-profit entities in the tri-state area). I served my time and was a favored senior, got my CPA and made a jump to a large prestigious name family office and since have more time to figure out what I really want to do with my life.

I love investing, investments, studying companies and solving problems, making deals and always was interested in investment banking specifically, could consider Asset Management.

I went to a non target undergrad and partied way too hard my first year leaving me an overall weak GPA of 2.9 but a high-ish finance/accounting GPA of 3.6 making dean's list twice. I have a BBA specialized in accounting. I want to work and go back to school part time. I am confident I would do very well on the GMAT - let's assume for this post that getting in isn't the issue.

But to the point - DO I GO FOR A MBA OR MSF? Given that I want to break into BB investment banking from the background I described. (MSF at Baruch, Other MS at NYU or Fordham, MBA at NYU). I searched this site but couldn't quite find a post that related specifically to such a situation as I'm from financial services but the other side.

Thanks for the advice monkeys :)

If I were you and wanted to maximize my chances of working in front-office BB IBD, I'd bang out a 760+ GMAT and go do a full-time traditional MBA at HBS, Wharton, or Columbia. Part time MSF at Baruch or part-time MBA at NYU won't give you as strong a shot.

^^ Yah, def. just get a 760 and get into Harvard and you'll be good. no problem.