Boutique Associates to MD?
Serious question, but it seems that people view Elite Boutiques as a place where the BB MD comes to retire/get away from the compliance of BBs later in their career. So this has led to many arguing that associates have a more difficult time making it to the MD stage as the revolving door is usually filled with former BB MDs.
Anyone have any insight as to how often EB associates make it to the MD level and if this is a trend that we should be noting? Trying to get a feel for what new associates should expect.
Thanks.
Purely speculating here, but I'd guess that most of the EBs are young enough where a significant amount of associates just have not had the chance to work their way all the way up to MD. If it takes 10 years on average to go from A1 to MD, that means that most EBs have had 10 or fewer (for some, significantly fewer) classes come through. Of course that also excludes the impact of attrition, which (anecdotally speaking) can be significant.
All that said, I would expect an increasing percentage of new MDs at EBs to come internally as the firms age.
Food for thought from @"mergersandacquisitions78" in this thread: http://www.wallstreetoasis.com/forums/trends-in-cross-offers#cid-1236309
Not saying anything about this particular advice but this is another thread by @mergersandacquisitions78
http://www.wallstreetoasis.com/forums/we-will-fight-like-cornered-tigers
Thought it was pretty funny.
Maybe a more direct question is how have associates at LAZ/EVR/GHL (all of which are more than 10 years old) fared? Is it as bad as mergers makes it out to be? I know Moelis has made comments on developing internal talent and the consensus here is so does Centerview...but they are too young to really give any insight.
I left my account open on a public computer and that was posted by some random individual as a prank.
I believe my views here are pretty clear. There are multiple reasons why it is extraordinarily difficult to become an MD internally at a Moelis, Centerview, PWP, Greenhill, Evercore, PJT, etc. Much of it comes down to the fact that at a boutique the model is to be intensely focused on fewer things, while at a BB,senior bankers have the resources and expectation to be less deep on more things.
A senior banker at any of those firms does considerably fewer transactions in a year than their bulge bracket counterpart. A senior MD at a BB's revenue target is $50mm, a senior MD at a boutique's revenue target is $10mm, and the expectation is there (and the platform is there) for the former to do many more deals. When you are an aspiring Director / MD, the more deals you do, the more clients you meet and the bigger your relationship network becomes.
An MD at a BB covers considerably more clients than an MD at a boutique. When you're developing your reputation as a senior banker, it is important to know everyone that matters in a given sector or geography. Otherwise, who will hire you on a sellside M&A deal where you need to know all the buyers? Or a buyside where you need to know what the competition is thinking? A BB gives you a platform to do that. It is much harder at a boutique to do that when you are building your career.
The benefit that junior bankers get at a boutique is a lean deal team and exposure to seniors. As a director or a young MD building a business, the last thing you want is a lean deal team. You want as many resources as you can get to originate and prosecute the greatest deal flow. That's possible at a BB. Boutiques are much more resource constrained, and the best resources go to the established rainmakers, not the directors / young MDs.
What is the most effective use of Ken Moelis's Blair Effron's resources? To go out and win new clients or to execute Ken or Blair's deal flow, which is huge and much more profitable than sending a young MD to chase marginal business.
And the empirical evidence is that the graveyards of wall street are littered with talented execution bankers at those firms who are making $1mm or so, being the buttboy for some former BB group head is making 5x that. That is the reality of internal promotion at boutiques.
Thanks this helps. Just opened up more questions as to why many are flocking to EBs as of late, are they not realizing the LT benefits of the BB model? Or are they comfortable with the fact that they may not be in banking for the long-term and this is a good compromise?
Would love other views as well, hopefully someone with a contrarian pov and support as to why.
I think EBs are great as analysts / associates and again as Sr. MDs. Its that mid level where they are really tough. I would absolutely endorse someone starting their career (and finishing their career) at one of those firms. I just think they are very difficult for VPs / Directors / Jr. MDs, and if you start there, you may want to think about lateraling at the VP1 / VP2 level to a bulge.
Hey thanks so much. Your posts have been extremely helpful for someone who is considering doing banking long-term.
How difficult is it to lateral as an Analyst/Associate from an EB to a VP position at a full service firm?
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