NorthernMonkey:

Can somebody please explain the major differences between these two roles? In particular, is there any difference in working hours?

M&A - depends Coverage - depends

^true story

speed boost blaze
 

As said, it depends. However in general, a NYC M&A group will have worse hours than a NYC Coverage group. Since M&A is more execution based work, the odds of tight deadlines are higher which translates into more late nights.

Again, not to say that M&A always has the worst hours of any group, but definitely up there at most banks based on the nature of the work.

“Success means having the courage, the determination, and the will to become the person you believe you were meant to be”
 

depends group to group.

there are coverage groups will rarely/never let M&A run the modeling, and then there are coverage groups that will let M&A do everything.

also depends on how good the analysts are and how much the vp/d/md trust you with the work.

my group rarely let M&A run models, which translates to more work and more hours. also not just M&A, IE, we run M&A/lbo models internally, so in summary, it all depends

best bet is to reach out to analysts working in the group and get their perspective. should not have a reason to lie to you

 

Sorry if this sounds vague, but would you say that M&A groups have particular characteristics/traits and other differentiating factors for the group? (i.e. how are M&A analysts from a personal and professional standpoint different from the coverage guys?)

I ask this because I personally know people who've interviewed for M&A teams but then were deferred to interviewing for other coverage groups apparently because they'd be a good analyst but "not in M&A" or something like that

 
TheBlueCheese:

Sorry if this sounds vague, but would you say that M&A groups have particular characteristics/traits and other differentiating factors for the group? (i.e. how are M&A analysts from a personal and professional standpoint different from the coverage guys?)

I ask this because I personally know people who've interviewed for M&A teams but then were deferred to interviewing for other coverage groups apparently because they'd be a good analyst but "not in M&A" or something like that

First, there are only a couple of banks left now with outstanding M&A teams. Most have merged M&A within coverage.

Again to address your comment, it really depends on the bank / culture. I know people who have no technical experience but "fits" in well with our M&A team, and gets in. Then on the complete opposite, we have people with extensive M&A experience and not get in the group.

Personal and professional... no difference. just depends on fit

 

I'll speak to the BB M&A groups that I am familiar with- MS, JPM, Citi, and CS (to a lesser extent). Hours in these groups tend to be worse on average than industry groups that outsource their M&A (for example- at MS Mediacomm and a few other groups do M&A internally, not sure how this works at other firms, though most RE and FIG groups do all of their own modeling). Additionally, these groups are bigger than the average industry group and have thus are a bit less close knit. Speaking to the first 3 (not CS because I'm not sure if this holds true), they tend to have a more rigid culture than some of the other groups- people choose these groups because they are considered 'prestigious' and because of this the usual suspects (the most prestige driven of an already prestige oriented group that goes into banking) can be expected. Further, these groups are the most 'technical' of IBD groups, and this comes off in any interview setting- M&A bankers tend to place a lot more emphasis on the technicals than those of other groups (this is from personal experience, but it makes sense, and I'd imagine holds pretty true throughout).

 

The additional hours due to execution and the technical nature of the job not withstanding, would you say that M&A teams are more cutthroat? Also, are M&A bankers just thought of the most intelligent of the bunch within IBD? Further, would you say that M&A bankers are given more respect and credibility in the finance community?

Also, if the technical aspects of various coverage groups are outsourced to M&A, then when do the coverage bankers on the valuations? So let's say for a retail company sell-side pitch - do coverage or M&A teams work on the DCF / LBO / Comparables / Precedents? What about for a buy-side, for instance?

Just some clarification on how the process of work getting 'outsourced' to M&A teams would be appreciated. I've heard some coverage bankers I know complain that the M&A guys sometimes 'steal' the modeling and technical aspects of this job / coverage guys lose out on that experience - never quite understood how that works

 

I can't really speak to much of the latter 2/3 of your post, as I work neither in an M&A group or a group that outsources to an M&A group.

I don't think anyone could give you completely accurate answers to your first paragraph, but I'll answer from my own experience, which is the best anyone will be able to do. Are M&A teams more cutthroat- in general I would say yes. At most of these banks (MS, JPM, Citi, CS, BAML, DB(less so)) M&A is the top group or one of the top as far as placement goes. People know this and more often than not choose the group for that reason (at some levels and some firms people join because they have 0 interest in working on financing deals- I think this is much less so the case at BBs and with analysts out of UG). You're therefore attracting the most competitive/prestige driven group of analysts to a group, and most of them think of themselves much more highly than they are thought of by others outside of the group. In this sense, there is a bit of arrogance that I would associate with many in these groups (not everyone). This holds true in any group at any BB, though, just perhaps to a greater extent in M&A.

I don't think there is any greater amount of intelligence between M&A bankers and coverage bankers, or I've not noticed it at least. I will say that more of the M&A bankers tended to come from finance backgrounds and are thus more technically sound then their liberal arts peers, but this is not to say it is impossible to break into an M&A group without a finance background.

As for the question on respect within the finance community, I have no idea how to measure something like that. People prioritize different things- some people will be impressed to hear you're in the M&A group; I doubt most will care.

What I've written applies mainly to the analyst and associate levels and much less to the officers in these groups.

 

isn't this the millionth fucking post on this topic just this week?

btw, nice job on the name. big fan of law & order svu.


The world has changed. And we must change with it.

------------ I'm making it up as I go along.
 

usually product groups where you can get a lot of modeling experience.

it also comes down to what deals you were on and recommendations you received.


The world has changed. And we must change with it.

------------ I'm making it up as I go along.
 

Currently in a coverage group that outsources most of the models to product groups, atleast at the junior level. I have to be more proactive to get modeling experience

 
Best Response

M&A is definitely better for analyst exit opps into PE (modeling intensive, exposure to many industries), tech coverage would be better for VC (more expertise identifying market dynamics, less quantitative by nature). For long-term banking, my opinion is that coverage is always better because execution is a commodity whereas industry expertise and relationships can become very difficult to replace.

 

if you want the BEST chance at P/E, it's through M&A and lev fin (obviously not anymore), so M&A is your best shot. you get the best experience, you do all the modeling and you'll get the most attention from headhunters.

yes, recommendations from MD's and having a good reputation will help when it comes to final decisions for jobs, but hands down M&A analysts will get the most interviews because of their modeling experience. for associate roles at P/E firms, they're not expecting a lot of value add from your overall industry knowledge, so being in a coverage group will only have limited upside. you can focus on an expertise later in your career.

join a group that does their own M&A, not only pitching but execution. that should be one of your first questions when deciding on a group. (obviously this excludes GS b/c they don't have an M&A group since all of their coverage groups do their own M&A)

hope that helps.

 

I think your ranking is correct, and yes, M&A is the best because a) you do a lot more valuation analysis that someone in Sponsors, and b) by becoming industry specific you actually get to know your sector quite well and can actually add value to PE shops. Most PE funds are divided into sector teams as well

 

Just search the forum for a little bit. This is brought up basically every week.

M&A is good for modeling experience, Sponsors for your MDs network, industry groups just depend on the group.

--There are stupid questions, so think first.
 
valuemunkee:

I believe I have a good chance for either Tech M&A or Fin. Sponsors.

What if I'm not interested in a PE exit, and would rather exit to a equity or credit HF-

Seems that Tech M&A places mostly into PE. Would Tech M&A still be better than Financial Sponsors if my exit target is a HF?

Sponsors for HF

 

The fact that a successful analyst is able to dedicate 2 years of consistent 80-hour (minimum) weeks to a task, without fail, whether they liked it or not, will be looked upon favorably by most anyone. What, specifically, is accomplished should, in my opinion, be viewed as nothing more than icing on the cake (certainly that would be quite different for buyside recruiting, etc.)

 
npat92:

In general, a BB Investment Banking analyst experience is looked upon well by MBA business schools">M7 B-Schools, right?

Do they make distinctions between groups though? I.e. Is a candidate who worked in M&A, all else equal, better than one who worked for only a coverage group? What about for an analyst who worked in ECM/DCM - are they at a disadvantage to bankers who worked in more traditional groups in terms of B-School applications?

Distinctions are derived from deal flow and your accomplishments on your resume. So yes, there is some distinction, though maybe not as much as a PE recruiter would make.

 

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