Credit at top 5 bank or Financial Analyst at large company just outside of F500 (end goal is M&A or ER)

I have two offers. One is a credit analyst program at one of the largest banks in the country. It's in an industry-specific group. The other is a Financial Analyst position at a large company (oilfield services not quite F500). I have connections with some executives in the company (this is sounds arrogant but I think it's an important factor as it could help me network in the company and move around). I'm looking for advice as to what would be the most beneficial place to start my career in if my end goal is to get into Oil&Gas M&A in any capacity (industry,banking,etc.) OR equity research. I'm thinking starting at a large prestigious bank is the answer, even if it is in credit. I know neither is ideal, but I didn't land any IB offers.

 

Take the FA position at the F500 company. Adds a ton of legitimacy to your name if you want to get into an Energy group either as a lateral hire analyst or as an associate.

Don't do credit. It's horrific - you're effectively a business prevention unit, so you're not going to win many friends on the banking side. Have definitely seen people jump between credit and banking, but I think your career will get a better boost from working at the F500 energy co.

Credentials: work in a BB lev. fin. group (doing a lot of energy M&A, among a few other sectors) and I would be much more excited to meet a guy that worked at Exxon (don't care if it's a smaller name like Oasis, Sandridge, etc. either - if it's F500 we've probably heard of it) than a guy from credit. The former requires skill; the latter requires doing the minimum amount of work necessary to get underwrites approved and also requires you annoying bankers - which is what you want to be.

 
ccrosb:
Also, this is a naive question but is there any possibility of networking within the bank, meeting someone, and getting a chance to move over to the other side (IB,ER,etc.)?

Im finishing up senior year at UG but have spoken with several people in credit as well as with a couple of BB MDs. Credit does have exit opps for DCM/Lev. Fin and bankers would perfer to hire someone with more relevant experience (valuation > credit > F500 FP&A). Depending on the bank, it might be possible to move to IBD through networking but I would not take any job based on the possibility of being able to lateral internally unless you see it being done all the time. For credit your route might be to either try and lateral internally or to a MM/botique or to go into a top MBA afterwards. Having the credit analyst role on your resume would make a feasible transition based what I have heard.

As for the O&G company, you could attempt to network internally into M&A/corp dev if you are a top performer and build the right connections. It would also be a good experience for selling your story to bankers post-MBA assuming you have the UG background/GMAT score for a top MBA.

 

Credit investing is the shit.

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]
 

Followup: I think what you want to reach out to the Corp. Dev/M&A group at the O&G firm and express your interest in ultimately working in that division. You'd want to find out if they hire internally or externally and how often internal hires have been able to make the transition as well as the type of background they are looking for. Based on that you would have realistic expectations.

 

dont listen to no homo, I have no idea what he is exactly talking about when he says "business prevention unit". Anyways, I will tell you what a credit analyst is. A credit analyst's job is to analyze the strength of an incoming deal. You will be analyzing companies, their balance sheets, their cash flows, etc. In the end, your job is to make sure the bank makes money on the deal.

One last note, please narrow down on what you want to do. ER and M&A are two different areas. Thats essentially someone who says they want to be a trader and an investment banker. What bank is your program with?

Array
 

Teddy has it right on the money. As an analyst your primary roles will be spreading financial statements, monitoring for breach of debt covenants, and writing quarterly/annual memos that describer company's operations, profitability, other performance metrics as well as its compliance with debt covenants.

The next level would be underwriter (after about 2 years) which will involve more execution in terms of the actual deals.

What I personally like about credit roles is you get a solid grounding in financial statement analysis, especially from a credit perspective. There is lots of long term career potential as well as the opportunity to go into different service lines within the bank (if top BB). There are definitely exits into IBD either through lateraling or post-MBA. The other thing you could go into is corporate banking, some of the deals there are very exciting when you talk about loan syndication, acquisition financing, etc. Corporate banking definitely has even stronger exits into IBD.

 

If you choose credit, you need to try and lateral into the corporate banking (or relationship lending) side from day one. I'm assuming since you are in a masters program already this should be for the associate position. I knew some people who were analysts in credit and some were able to successfully lateral into corporate banking or sales and trading. Most of the time it is difficult to make the switch and it would be easier to do MBA (not an option for you I guess) or to network into a boutique shop. Switching to IBD within a BB would be near impossible. Doable, but it will take a lot of luck (massive layoffs, the group needs to find someone pronto, they know you really well and like you, etc.). IMO, credit work is extremely repetitive and boring, but the skill sets can be easily transferable to other leveraged products, such as DCM, maybe even distressed HF.

That said, financial analyst at a F500 firm can also be extremely repetitive and boring, depending on what business unit you're in, say controllers, treasurers, audit, etc. To switch into IBD from there would be difficult unless you do a rotation of some sort into the M&A or corporate development team, where you get valuation experience. My guess is that if you're in a smaller team you may have flexibility to market yourself as someone who has done a lot for the company and maybe even dress up your resume.

 
Best Response

Silly question: what kind of credit? business loans? commercial loans? corporate loans?

I think most industry specific credit jobs will be dealing with syndicated deals. It would be great experience, assuming this is indeed a corporate lending job.

You will get the IBD/ER financial analysis skills, the nice salary, and only work 50hours a week (based on my experience). Exiting will be tougher, unless you want to be a fixed income or credit investor.

If you take the corporate lending job, you will never have the desire nor need to work in IBD again.

Array
 

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