Investment Banking vs. Capital Markets - How different are they?

How different are they exactly? I know in IBD you work like a dog and you're in the office from anywhere between 80-140 hours/wk, and traders do about 50-60, but how much do capital markets ppl do? Do they work similar hours to IBD? Any difference in compensation? I still don't get what capital markets guys do. Monkey Business describes them as "the illegitimate bastard child between a banker and a trader" but what the hell does that mean? Do they like sit there and just say "the markets are good" or something like that? How are the exit opps (esp into top PE firms/top bschools)? Just curious.

Thanks!

Capital Markets Job Description

Investment banking and capital markets go hand in hand. Each plays a role in the advisory and capital raising function of "investment banking."

Coverage / sector banking / corporate finance focus on a particular industry (TMT, Healthcare, etc).

Capital markets generally consists of equity capital markets, debt capital markets, and leveraged finance. These bankers focus on their respective products and know the markets for these products inside and out.

Source: https://www.slideshare.net/Human_WSO/unofficial-g…

@ke18sb" says:

The investment banking division makes the product (the model) and the deck. Equity Capital Markets sells the product to investors (the syndicate).

@darthtony" explains that:

At Citigroup, Capital Markets Structuring & Originiation is one of the major groups within the Corporate and Investment Bank. It has two parts, Equity Capital Market (ECM) and Fixed Income Capital Markets (FICM). ECM bankers work very closely with IBD and play a major role in pricing the securities. FICM is consisted of many product groups such as Global Structured Credit Derivatives, Global Structured Credit Products (US CDOs), Domestic Liabilities Management, Financial Institutions, Asset-backed Finance Group, Global structured Solutions, Corporate Derivatives Solutions Group, and so forth.

@TireKicker" says:

ECM is the Chinese Wall (insofar as equity offerings are concerned--just to use that as an example). ECM is the liaison between the industry group (coverage group) and the sales and trading desk. When you are pitching equity to a client, ECM will often accompany the industry group bankers on the roadshow, and their role is to comment on the state of the markets, how receptive investors will be to the company's story, likely pricing (although 95% of the valuation is done by the industry group), etc.

It is "investment banking," but not in the sense that most people understand IB. ECM isn’t doing valuation work, models, huge pitch books, etc. They may contribute a few generic pages to a larger pitch done by somebody else.

What do people in capital markets do?

User "JustAnotherBanker" explains that:

"Desirable" work includes being constantly aware of the equity markets (if that's your thing), and there is limited pitch work."Undesirable" work includes being called upon frequently to create detailed trading-related reports for sector bankers (e.g. detailed ownership breakdowns and calculations of major shareholders' cost basis).

Capital Markets in the IPO Lifecycle

User "JustAnotherBanker" describes the stage division between the coverage team and the ECM team in an IPO process.

  • Source the deal (coverage): Find client. Convince client that an IPO (by your bank) is a good idea. Involves pitchbooks, golf, and booze.
  • Take the deal to committee (coverage): Make sure your bank is willing to take the risk (underwriting is risky).
  • Negotiate fees (coverage): Set an underwriting/bookrunning fee (~7%). Set the "economics" (the fraction of fees paid to each bank on the deal), haggle over how expenses will be shared, and set provisions such as the Green Shoe (an over-allotment option that helps the underwriter to stabilize the stock price following the IPO).
  • Set a target valuation and range (coverage): Come up with a valuation using dcf, benchmarking, and public peers. The client wants a high range, the bank wants a low range.
  • Refine roadshow presentation (coverage and ECM): Help management put forth the best possible pitch to institutional investors. Involves re-tooling powerpoint presentations and coaching management.
  • Create prospectus (coverage and lawyers): Write up a huge document about the business, its management, its market, the risks involved, and a million other things.
  • Due diligence (coverage and lawyers): Make sure the company is legit. Make sure those "factories in Taiwan" actually exist.
  • Create internal offering memoranda (coverage or ECM): Turn the information in the prospectus (if there's extra, don't let the SEC find out) into the banking equivalent of Cliff Notes for the sales/salestraders in S&T so that they can stabilize the offering when it finally hits the market (days/weeks later).
  • Roadshow (coverage and ECM): Fly around for two weeks with the client, making the same presentation 3 times per day to various institutional investors. Sector bankers prep the client for tough questions and occasionally answer the really ridiculous ones. Sector bankers schmooze the investors and introduce the client. ECM (someone at the VP+ level) provides frequent market updates. ECM "builds the book" -- they take orders from the investors.
  • Pricing (ECM): The team in syndicate (a cap markets function) arrives at a final price for the IPO shares based on the order book.

Capital Markets Worklife

@InvestorMA" says:

I know someone in ECM, and he works 6 days a week routinely, often till 12. A really busy week would be 80+ hours. He does no valuation work except in the macro view.

@MonkeyBusiness" explained that:

Supposedly you're supposed to be in by 7AM and accounted for no later than 7:30AM in capital markets so said all my interviewers. Than the higher the rank, the earlier you leave. Usually around 7-8PM on good days. Bad days you can be like the IBD bankers.

Similarly, user "JustAnotherBanker" cited:

Hours are typically shorter than in coverage groups but days usually begin earlier (~8am in ECM vs. ~9-9:30 in sector).

Capital Markets Exit Opporunties

When comparing Investment Banking and Capital Markets, the exit opportunities do not compare. Capital markets backgrounds are not as attractive to the traditional exit opp recruiters (PE, HF).

@rat4100" explains that:

Aside from leveraged finance, stay away from ECM/DCM for the purposes of exit opportunities.”

@1styearBanker" commented saying:

I work at a bulge bracket (BAML, UBS, CS) and I know quite a few capital markets people. In my view, capital markets has 0 exit ops.

Summary

In a detailed response @Monkey_Island" explains:

At its most basic level, the difference between capital markets and "investment banking (coverage)" is this:

  • Capital markets is focused on PRODUCT knowledge.
  • Investment banking is focused on INDUSTRY knowledge.

In general, it's pretty difficult for any banker to know everything about everything. To make things simpler and to really provide good insight regarding industries and products that most people won't have, investment banks utilize the services of different types of "experts." Some of these "experts" will focus on learning and covering the healthcare or software or whatever industry, while others will focus on learning and covering the convertibles market, the equities market, or the high yield bond market. Thus, just as you have "specialists" for different industries, you have "specialists" for different products.

How this all ties together is a function of individual banks. at some banks, product experts merely contribute pages regarding the market for the product, potential pricing for the product/product comps, and the capital raising process/procedure as it pertains to that product in order to assist the investment banker/relationship manager with execution.
At other banks, the relationship manager will simply hand off the execution process entirely to the DCM/ECM banker since that banker is the "expert" on the process and the product. At the end of the days, all of these people are doctors just as ALL ECM/DCM people are bankers.

Any analyst who's ever been to a pitch where different products are being put on the table or where different capital raising ideas are being presented will realize that ECM/DCM is front-office advisory position. You may not being advising on pure M&A, but you are providing advice on financing alternatives since most acquisitions are not financed 100% with cash on hand.

Thus, in case of a product such as loans or bonds, industry guys would work with DCM to structure the appropriate loan/bond package, which would then be parceled off to the trading floor where institutional sales guys would find suitable investors. Traders would then come in to play by managing liquidity on the secondary market on behalf of clients who wanted to either a) get some of their purchased securities off their books or b) buy in or buy more.

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Well obviously IBD analysts VERY RARELY work 140 hours...it's just an extremely high end of the range just like 80 is a low end of the range.

Auschwitz Securities LLC. LOL

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-
 

At Citigroup, Capital Markets Structuring & Originiation is one of the major groups within the Corporate and Investment Bank. It has two parts, Equity Capital Market (ECM) and Fixed Income Capital Markets (FICM). ECM bankers work very closely with IBD and play a major role in pricing the securities. FICM is consisted of many product groups such as Global Structured Credit Derivatives, Global Structured Credit Products (US CDOs), Domestic Liabilities Management, Financial Institutions, Asset-backed Finance Group, Global structured Solutions, Corporate Derivatives Solutions Group, and so forth.

 

You guys ever heard of the "Chinese Wall?"

ECM is the Chinese Wall (insofar as equity offerings are concerned--just to use that as an example). ECM is the liason between the industry group (whomever within Corp Fin) and the sales/trading desk. When you are pitching equity to a client, ECM will often accompany the industry group bankers, and their role is to comment on the state of the markets, how receptive investors will be to the company's story, likely pricing (although 95% of the valuation is done by the industry group), etc.

It is "investment banking," but not in the sense that most people understand IB. ECM guys aren't doing valuation work, models, huge pitch books, etc. They may contribute a few generic pages to a larger pitch done by somebody else.

So essentially, the Monkey Business idea is correct...

 
TireKicker:
You guys ever heard of the "Chinese Wall?"

It is "investment banking," but not in the sense that most people understand IB. ECM guys aren't doing valuation work, models, huge pitch books, etc. They may contribute a few generic pages to a larger pitch done by somebody else.

This statement above makes me wonder what traditional IB is. Go back 50years ago, wasn't traditional investment banking more concerned with capital raisings than M&A which only came into its own since the 1980s...

Monkeyisland, great post. It will definately shut some misinformed people up...

 

ECM/DCM is jack-you-off middle office. What the fuck is going on here? It is not in IBD. It is a liason between the markets and the IBD. They are not bankers. They do not advise corporations or underwrite securities.

 

Well, leveraged finance falls within DCM/FICM in some banks and that's a great area to be in (very interesting work, great exit opps). But otherwise, I'd stay away from DCM/ECM.

One thing to note, though, is that project finance generally falls within DCM, and that is interesting/challenging work.

 

You think that the OP would listen to a college kid who poses as an investment banker on an online message board? Yeah, you've got a real lot of credibility. You're a joke and are far worse than aspiringmonkey.

Also, i never said or implied that the OP would want to listen to me, because like you, i'm still in uni (though i am interning at Goldman this summer).

 

sure you go to yale, but you must be a dork with thick glasses, and have nothing else in life to look forward to other than banking and prestige you have ......all kidding aside, enjoy your last year of college, go out, drink lot, meet girls, wahtever.....do the things that you won't be able to do once you start banking

 
Dan Bush Back In Action:
Who the fuck posts a tire picture on an ib board?

You're too unintelligent to think of a comeback so you come up with this? Wow, i always knew that you weren't the sharpest tool in the shed but this is utterly pathetic.

Anyway, if you aren't able to recognise that rim, you obviously know very little about cars (then again, i'd be an idiot to expect any different from a geek like yourself).

 

I know someone in ECM, and he works 6 days a week routinely, often till 12. A really busy week would be 80+ hours. Pay is fairly decent. Over 100k this year total comp. About 30k-80k bonus range this year. 65k base. No valuation work, except in the macro view. This is a top-tier BB company though, I have no idea about MMs.

 

Is there a link to rankings (2000-20006) on the web that state which are the best firms regarding sales, trading and which are the best in IBD?

Just heard that MS is not that "good" reagarding S&T, is that true?

 
fist inc:
Is there a link to rankings (2000-20006) on the web that state which are the best firms regarding sales, trading and which are the best in IBD?

Just heard that MS is not that "good" reagarding S&T, is that true?

Look there aren't clear cut tables for that and even then, rankings aren't all what they're cut out to be.

You do have some general sayings that go around such as Lehman and Bear Stearns having two of the best Fixed Income desks, UBS has the largest floor in the world in Stamford and is pretty much the leader in Eurobonds and Goldman FICC is a force to be reckoned with.

 

yeah makes sense, that already helped a lot.

What about structured credit? In which field is DB leading?

Friend of mine turned down GS(M&A) for Lazard, what do you think about that?

 

The GS for Lazard is not all that bad an idea. Lazard is focused solely on M&A and restructuring so in essence, they are EXTREMELY prestigious in the M&A side since its their bread and butter business. Not to mention the fact that they are EXTREMELY selective.

I'm not familiar with structured credit but I know someone who's in the industry and said that DB is strong in Europe but its still not a full force in North America.

Obviously its strengths are supposed to lie in German and European industries.

 
Best Response

is almost staggering.

at its most basic level, the difference between capital markets and "investment banking" is this:

capital markets is focused on PRODUCT knowledge

investment banking is focused on INDUSTRY knowledge

in general, it's pretty damn difficult for any banker to know everything about everything. thus, to make things simpler and to really provide good insight regarding industries and products that most people won't have, investment banks utilize the services of different types of "experts." some of these "experts" will focus on learning and covering the healthcare or software or whatever industry, while others will focus on learning and covering the convertibles market, the equities market, or the high yield bond market.

thus, just as you have "specialists" for different industries, you have "specialists" for different products.

how this all ties together is a function of individual banks. at some banks, product experts merely contribute pages regarding the market for the product, potential pricing for the product/product comps, and the capital raising process/procedure as pertains to that product in order to assist the invesment banker/relationship manager with execution. at other banks, the relationship manager will simply hand off the execution process entirely to the dcm/ecm guy since that guy is the "expert" on the process and the product.

at the end of the day, this is really no different from how things are set up at consulting firms, accounting firms, or even in medicine. you need people who can manage the relationship (what most industry bankers do) and you need people that know about particular products/services (i.e. what product bankers do).

take medicine for instance--you have a general practioner or family doctor that serves as your "relationship manager" w/ regard to medicine. however, does this family doctor know everything there is to know about medicine? no, he doesn't. thus, should more specialized needs evolve, your family doctor would pull in the approproate specialists--maybe a cardiologist to evaluate heart conditions, an oncologist to evalute/treat cancer, surgeons to perform more technical procedures, etc. however, at the end of the days, all of these people are doctors just as ALL ECM/DCM people are bankers.

the difference as i've mentioned earlier is industry focused banking as opposed to product focused banking.

and by the way, dan bush, you're dead wrong regarding your "jack you off middle office" comment, as you've either a) never been in banking, or b) are a such a low ranked analyst that no senior banker will give you any real responsibility.

any analyst who's ever been to a pitch where different products are being put on the table or where different capital raising ideas are being presented will realize that ecm/dcm is front-office advisory position. you may not being advising on pure m&a, but you are providing advice on financing alternatives.

and before you say something else that's dumb, there's no way you can challenge my credentials on this issue. i've not only been a bb industry analyst, but i've also been a corporate development guy at a top f50. when "industry bankers" come to make pitches regarding acquisitions, guess who come along?

that's right--the ecm/dcm guys. in the dream world of college ib-wannabes, m&a advisory is separate and off its own bubble. however, in the real world, most companies can't finance acquisitions with 100% cash on hand. thus, in order to do an acquisition, someone's got to finance it and with various ways of doing this (loans, bonds, converts, equity, etc.) you need people who know the individual products and product markets to give you the best advice on which product is best for your financing needs.

thus, in case of a product such as loans or bonds, industry guys would work with dcm to structure the appropriate loan/bond package, which would then be parceled off to the trading floor where institutional sales guys would find suitable investors. traders would then come in to play by managing liquidity on the secondary market on behalf of clients who wanted to either a) get some of their purchased securities off their books or b) buy in or buy more.

 

Yes, Monkeyisland's post is much more exhaustive than mine and largely correct. Briefly though, in my own defense, what I meant by putting "investment banking" in quotes above to refer to the Capital Markets guys is this:

The industry groups are by and large the relationship managers and focused on general corporate advisory, because, obviously, those bankers are specialists (for lack of a better term) in whatever their clients do. The guy with the relationship is virtually always an industry group banker. The industry groups are the ones who are constantly going out and pitching different products depending on market environment, a company's needs, and every other consideration you can think of (products being equity and debt...and every permutation thereof--I'm putting M&A in a different bucket, though it's technically still a "product"), and while the product guys certainly attend these meetings sometimes, they're not the day-to-day, year-to-year client contacts.

Product groups don't do valuation, they don't understand a client's business inside and out, and they may not know a single thing about the other products at the bank. They know their product first and foremost, and they execute.

That is what I meant. It is still investment banking, but not in the "traditional" corporate advisory sense. Which is what most people understand investment banking to be.

 
bostonchica7:
normal work hours in DCM/ECM (for an analyst) would be 8am-10pm/11pm/12am

8-10 sounds like the right number of hours...but shift by 1 hr...

Supposedly you're supposed to be in by 7AM and accounted for no later than 7:30AM in capital markets so said all my interviewers. Than the higher the rank, the earlier you leave. Usually around 7-8PM on good days. Bad days you can be like the IBD guys.

 

I've heard that a work in CM related to research or structuring is about being concentrated on a particular product while a work in IB consists of a broader range of tasks and analytical stuff. So it makes people more universal. Moreover, some people say that you're likely to play minor role in comparison to traders or sales. But on the other hand, there is an opinion that junior positions in IB imply a lot of grind.

Does anyone have any ideas about it? What job is more interesting in terms of brainwork and career development?

 

differs from bank to bank. They certainly work with the markets and therefore have shorter hours. Job functions vary in DCM from derivates, high yield bonds to vanilla corporates

 

What would someone who does Corporate Finance Advisory work (valuations, modeling, pitchbooks, proposals) for a large investment bank for IPOs, private placements (and some M&A) be called in the States? That's what I do, but in Asia; modelling, valuation and pitching primarily. Don't work at all on selling the issue as part of the syndicate or sales. Would that be called IB or ECM in the States, assuming that the bulk of my work is still IPOs?

 

The extent to which equity/debt execution tasks are split between the product groups and sector groups varies by bank and by group. I think that the posts above are seeking answers to two questions:

  1. What tasks are associated with capital markets transactions and which group is expected to perform each of these tasks?
  2. How is this relevant to a typical analyst in one of these groups?

I'll try to move this discussion along by breaking down an IPO into sample tasks and listing the group most likely to handle it. These tasks aren't in order, nor are they comprehensive, but maybe some will find this useful.

  • Source the deal (sector): Find client. Convince client that an IPO (by your bank) is a good idea. Involves pitchbooks, golf, and booze.

  • Take the deal to committee (sector): Make sure your bank is willing to take the risk (underwriting is risky).

  • Negotiate fees (sector): Set an underwriting/bookrunning fee (~7%). Set the "economics" (the fraction of fees paid to each bank on the deal), haggle over how expenses will be shared, and set provisions such as the Green Shoe (an over-allotment option that helps the underwriter to stabilize the stock price following the IPO).

  • Set a target valuation and range (sector): Come up with a valuation using dcf, benchmarking, and public peers. The client wants a high range, the bank wants a low range.

  • Refine roadshow presentation (sector and ECM): Help management put forth the best possible pitch to institutional investors. Involves re-tooling powerpoint presentations and coaching management.

  • Create prospectus (sector and lawyers): Write up a huge document about the business, its management, its market, the risks involved, and a million other things.

  • Due diligence (sector and lawyers): Make sure the company is legit. Make sure those "factories in Taiwan" actually exist.

  • Create internal offering memoranda (sector or ECM): Turn the information in the prospectus (if there's extra, don't let the SEC find out) into the banking equivalent of Cliff Notes for the sales/salestraders in S&T so that they can stabilize the offering when it finally hits the market (days/weeks later).

  • Roadshow (sector and ECM): Fly around for two weeks with the client, making the same presentation 3 times per day to various institutional investors. Sector bankers prep the client for tough questions and occasionally answer the really ridiculous ones. Sector bankers schmooze the investors and introduce the client. ECM (someone at the VP+ level) provides frequent market updates. ECM "builds the book" -- they take orders from the investors.

  • Pricing (ECM): The team in syndicate (a cap markets function) arrives at a final price for the IPO shares based on the order book.

KEY TAKEAWAYS: For the sector analyst -- "Desirable" work includes the initial valuation, the potential to spend quite a bit of time with the client (e.g. on the road show), and printing the prospectus (the printing offices sometimes have plasma screens, drinks, billiards, and potentially a place to nap).
"Undesirable" work includes writing internal memoranda (time-consuming, last-minute busy work) and revising the prospectus (ditto). An IPO is extremely stressful, and clients justifiably demand some of the most ridiculous services given the enormous fees they pay. Hours are typically longer than ECM (best guess is ~10/wk).
Exit opportunities vary but are generally perceived to be broader than ECM, but this could just be due to confounding by interests.

For the ECM analyst -- "Desirable" work includes being constantly aware of the equity markets (if that's your thing), the lack of pitching. "Undesirable" work includes being called upon frequently to create detailed trading-related reports for sector bankers (e.g. detailed ownership breakdowns and calculations of major shareholders' cost basis).
Hours are typically shorter than in sector groups but days usually begin earlier (~8am in ECM vs. ~9-9:30 in sector).

 

Thanks for that. By 'sector' I assume you mean the industry sector i.e. TMT, Industrial etc. My bank is very prominent in the Middle East but it's IB team isn't big enough to be split into groups like that, so everyone pretty much handles everything (although obviously who leads the transaction is dependent on who's done that sort of work before). But what I took away from that is that I'm definitely not in what people would call ECM in the States, despite the bulk of my work being on IPOs.

 

hours: at worst, you have to be there when the traders arrive in the morning and leave when the bankers leave at night (or morning). at best, 12-15 hrs/day comp: IB probably makes more, though it would depend on the group you're in one thing they do: syndication, pricings exit opps: i've been told that DCM gives better exit opps into PE v. ECM, don't know how much of that is true though

 

ECM - Equity Capital Markets. Think IPOs, convertibles, follow ons, block trades...M&A- mergers and acquisitions, strategic advice. ECM is a product group. You'll be issuing equity and working in the equity markets. M&A is advisory....likely will work with M&A on a transaction if a company is going to fund the acquisiton by issuing more equity but you wont be doing any of the nitty gritty modeling or valuation work for a merger. You'll rely on comps a lot more than valuation models and rely on the markets perception of an assets value as opposed to a possible intrinsic value (vis a vis dcf etc.).

 

at MS, GCM is "Equity Capital Markets, Fixed Income Capital Markets, or Leveraged & Acquisition Finance." take your pick.

ECM exit opps are not that great. but all three of these areas are vastly different, and in fact LevFin is a pretty traditional 'IBD proper' job. don't let the organizational BS confuse you.

_______________________________________ http://www.drmarkklein.blogspot.com/
 

alot of people in general have said that groups like ecm do not have good exit opps. i think that is a poor statement and is largely a matter of perspective. for instance, i could say that m&a has poor exit opps, because it won't teach you how to trade derivatives, or to structure, or to get a market sense for pricing securities, etc etc, and that your only real exit opps are doing just more valuation work at a pe/hf. whereas ECM will give you some sense of valuation skillset, and a very strong sense of equity markets, with exit opps being trading, and then eventually moving to a Citadel/SAC Capital/aqr/etc etc. my point is that all of this is ultimately a matter of perspective; certain tracks are good for certain things. i think if you are disenchanted with banking, but not sure what you want to go into, then capital markets is a great place to be, cause you can trade later on if you think that is your cup of tea (great thing about cap mkts is that they know everyone on the trading floor). this is what i am thinking about doing; i have had great attention from h/f's, but only for doing more valuation work (which is what i do now); i'll never learn to trade properly if i go down that route. it's really just a matter of perspective and what you want.

 

The Capital Markets Group basically helps firms go public or raise more capital. Banking is more advisory based in the sense that you tell them how to go about a certain acquisition etc. capital markets usually involves a lot of traveling, especially for DCM when you go on roadshows trying to raise capital. Banking has longer hours, DCM and ECM involve less modeling, ECM especially. For DCM, you do a lot of market updates for clients, pricing mechanisms for bonds, bond structuring as per client needs and order book allocation. As per bonuses and pay, they are very similar to banking, perhaps a slight bit more if you do more deals than the M&A group in senior levels, but your skill-set isn't as strong. Usually an attempt to raise capital never fails, so fee generation is pretty damn good. The fee is about 50 - 90bps based on deal size, deal type (144A/reg S) etc. You meet a lot of people, and you build very good contacts, possibly better than M&A since most of your investors tend to be hedge funds, asset managers, buy side/private equity and your issuers tend to be government organizations and corporations. People in DCM usually stay in their field but people who get bored of the job end up going to leveraged finance (which is pretty much dead now), trading desks or even banking. If you make strong contacts, you can also end up going to PE or a hedge fund.

 

i worked FIG/DCM at lehman last summer and the question came up frequently. here's what i learned-

  • you will do zero traditional modeling
  • you will still do plenty of analysis, but it largely relates to spotting trends and capital structure (as opposed to cashflows, business model, synergies etc etc)
  • hours tend to be slightly shorter (possible to leave at 7-8pm sometimes), though not as much as you might think; the days can easily hit 16hrs as an intern/1st year only they are skewed to the earlier part of the day (get in at 6:45am vs 9am)
  • definitely worked every weekend, 1st year analysts and sometimes associates where in there with me too. weekends were more laid back since the urgency of an open market wasn't there
  • exits to PE/HF not so great, but possible; also possible are treasury roles in industry

senior members of the group with experience in both IBD proper and DCM told me they preferred DCM - because the hours were more predictable; true especially as you get more senior - you close deals more frequently, read: instant gratification (less laboring on a model for a year only to have it get thrown out the window) - faster pace appeals to market junkies, you spend alot of time watching markets (closer to the ground as it were)

I will be returning to (BB?) IBD FT, not sure which group specifically. PM me for more info, hope this is helpful.

best

 

It makes more sense to start with a bigger name on your resume (BAML, UBS, CS) than it does a smaller shop, especially one that's middle market. Starting your career with a bulge bracket is definitely better than starting at a smaller shop. The only reason I'd urge you to reconsider is if you had an IBD offer at a top boutique (Evercore, Lazard, Macquarie, etc.)

I think this is a no-brainer. Go bulge bracket.

 

Listen, guys from BBs (IBD, not Capital Markets) would obviously have an easier time getting PE jobs after 2 yrs as an analyst. Jefferies is a decent bank and there have been people that have gone there and ended up at good PE shops. Capital Markets will not get you there. I don't buy the argument of the name being important in this case. Even guys in ops can put GS on their resume, does that equal pedigree? No. Relevant experience is more important.

If you want any chance of getting into PE, take the IB position. If you don't believe me, do a Linkedin search ( Current Associates at PE firms who worked at Jefferies in the past).

If you take the Capital Markets Group, you may never break into PE. If PE is the end-goal, going to the BB would be a big mistake.

Hope you make the right decision. Congrats on the offers!

 

Ignore bracelet. Rofl at him including Macqurie in there, he probably works there. Macq is a piece of crap (excuse my language) to the "elite boutiques" listed. The only 'no-brainer' is the fact that this kid is a complete retard.

Second of all, Advisory is right. Pick MM IBD over BB capital markets. Capital markets has 0 exit ops. At least MM IBD can get you into MM PE or lateral into BB IBD.

 
1styearBanker:
Capital markets has 0 exit ops.

You idiots keep saying this over and over, and it's untrue. If I remember correctly, you work at a lower-tier bank (Citi or something) so maybe the fact that all the analysts at your firm have 0 exit ops is informing your view.

To the OP - you should probably take the MM IBD since IBD is your main interest. The BBs you mentioned aren't all that anyway.

 

^Well then it would be perfect considering that the op is considering capital markets at "BAML, UBS, CS". I happen to work at one of those banks and I know quite a few capital markets people. So yes, this is MY VIEW and it is quite accurate given the context. They do have around 0 exit ops.

Meanwhile, you don't even work yet and you're in S&T, which I consider a lower tier itself since you will be in SALES. Judging from your username you probably got in through affirmative action ms. senorita.

God, the women on the site are insufferable. Enjoy your senior year and enjoy your sales job but leave the banking threads (including banking hybrids like capital markets) to those who actually work in the industry. Advisory pretty much got it right, there is good advice there.

 
1styearBanker:
^Well then it would be perfect considering that the op is considering capital markets at "BAML, UBS, CS". So yes, this is MY VIEW and it is quite accurate given the context. They do have around 0 exit ops.

Meanwhile, you don't even work yet and you're in S&T, which I consider a lower tier itself since you will be in SALES. Judging from your username you probably got in through affirmative action ms. senorita.

God, the women on the site are insufferable. Enjoy your senior year and enjoy your sales job but leave the banking threads (including banking hybrids like capital markets) to those who actually work in the industry. Advisory pretty much got it right, there is good advice there.

Which I'm sure you couldn't master in a dozen lifetimes. I've interned in banking as well, at a top BB (GS/MS) which automatically gives me more credentials than even a 3rd year associate at your lowly firm!

By the way, if the capital markets folks at your firm have "0 exit ops" what do they do? Stay there forever? Kill themselves?

 
1styearBanker:
^Well then it would be perfect considering that the op is considering capital markets at "BAML, UBS, CS". I happen to work at one of those banks and I know quite a few capital markets people. So yes, this is MY VIEW and it is quite accurate given the context. They do have around 0 exit ops.

Meanwhile, you don't even work yet and you're in S&T, which I consider a lower tier itself since you will be in SALES. Judging from your username you probably got in through affirmative action ms. senorita.

God, the women on the site are insufferable. Enjoy your senior year and enjoy your sales job but leave the banking threads (including banking hybrids like capital markets) to those who actually work in the industry. Advisory pretty much got it right, there is good advice there.

You sir are a tool, i was really starting to understand your opinion but then you continued,

Signed, A black woman who does IBanking at the top bank on the street

 

Congrats on affirmative action? I will surely cry myself to sleep at your dominance, especially among the latino women in the world.

I've already pm'd the answer to several who have asked but they usually progress within the bank (within capital markets) and/or go to MBA school or exit the industry altogether (consulting, law school, even HR).

Rather than flame me, perhaps next time you could have just asked me as I am more than happy to share information such as where my past peers have gone.

Furthermore, you should at least read the OP's post and keep his interests in mind when responding. Here are some IMPORTANT snippets:

"My main interest is in pure IBD, rather than capital markets, and..." "How hard is it to transition from Capital Markets to IBD? Would it be better to start off at a strong Mid-Market, and try to break into the BB?"

Enjoy.

 
1styearBanker:
Congrats on affirmative action? I will surely cry myself to sleep at your dominance, especially among the latino women in the world.

I've already pm'd the answer to several who have asked but they usually progress within the bank (within capital markets) and/or go to MBA school or exit the industry altogether (consulting, law school, even HR).

Rather than flame me, perhaps next time you could have just asked me as I am more than happy to share information such as where my past peers have gone.

Furthermore, you should at least read the OP's post and keep his interests in mind when responding. Here are some IMPORTANT snippets:

"My main interest is in pure IBD, rather than capital markets, and..." "How hard is it to transition from Capital Markets to IBD? Would it be better to start off at a strong Mid-Market, and try to break into the BB?"

Enjoy.

I should have realized that your views were informed by the second-rate analysts from second-rate schools at your second-rate bank. I know a different set of people so I'll save my opinions for a thread asking about exit ops of a Princeton grad at GS or something like that. Although, you will notice that I recommended to OP to go straight into IBD.

By the way, great job turning to the sexist and racist insults right off the bat. Stay classy there.

 

Senorita: So rather than read the posts you will assume every exit op topic is some "Princeton grad from GS". Gotcha, makes sense. You should go post in the Piper Jaffray threads, give them some false hope too perhaps?

 
1styearBanker:
Senorita: So rather than read the posts you will assume every exit op topic is some "Princeton grad from GS". Gotcha, makes sense. You should go post in the Piper Jaffray threads, give them some false hope too perhaps?

Let's just all agree that 1styearbanker is an idiot. Nobody who is above the age of 14 talks like this.

 

But I try not to inflict narrow-minded views on other people as you and many of the banking-or-die freaks on this board seem to do (S&T is "lower tier" than banking? LMAO). For one thing, OP didn't say where he went to school. We don't know what kind of talent he has. For another, there is a benefit to being a big fish in a small pond vs. small fish in a big pond in terms of exit ops. Just because you happen to know only dumbasses, some of whom are in capital markets, doesn't mean OP falls in the same category.

Why are you arguing with me anyway? Don't you have some fonts to change in a pitchbook? After all, that's what all the smarties in banking are doing. Oh wait, maybe you're taking a break to post racist shit on another message board.

 
nontargetguy:
banker and advisory are right though, do IBD over capital markets since you want to do IBD. do not do capital markets unless u wanna stay there

Dude ... you just posted about not getting any FO offer whatsoever and having to do IT... and you feel qualified to comment on the exit ops of capital markets? Based on what knowledge exactly?

Just another example of the idiots I'm talking about.

 

Global Capital Markets is ECM and DCM. I would not say it is not any easier to get into. A lot of banks group capital markets recruiting with normal IBD recruiting. Even if it is separated, it is still just like a normal IBD internship.

"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."
 

You should be going after the position because the work interests you, not because you think it's easier to get into than S&T or IBD... They are all competitive and all require slightly variant skill sets/interests... do some research and go after what you really want because they aren't all the same thing and if you are expecting them to be and you pick one randomly you could very well find the position to be frustrating/not what you were looking for...

 
rufiolove:
You should be going after the position because the work interests you, not because you think it's easier to get into than S&T or IBD... They are all competitive and all require slightly variant skill sets/interests... do some research and go after what you really want because they aren't all the same thing and if you are expecting them to be and you pick one randomly you could very well find the position to be frustrating/not what you were looking for...

After reading through some of your other posts, rufiolove, it seems like you really like making assumptions. Where did the OP say he was pursuing a GCM role because it's an easier position to obtain than an IBD or S&T role? You come off as condescending.

MKballer
 
mkballer:
After reading through some of your other posts, rufiolove, it seems like you really like making assumptions. Where did the OP say he was pursuing a GCM role because it's an easier position to obtain than an IBD or S&T role? You come off as condescending.

I'm pretty sure that the advice I gave was not only legitimate but constructive. Of course I should probably rethink my whole approach to responding to questions on this forum now that the guy who just read Monkey Business finds it condescending...

mkballer:
It's about two former DLJ associates and their life during their ~3 years at the firm. They actually wrote the book themselves.

What other conclusion would anyone reading the OP's question logically draw besides the fact that he was trying to evaluate which Division would be easier to break into?

wsib1:
For SA positions, is it easier to get a position in gcm as opposed to s&t and ibd? Or are there less spots in gcm and so the difficulty balances out?

So essentially, my advice was fine and you're an overly defensive douche who just read Monkey Business... Congratulations!

^^^^ Now that was condescending...

 
skdude:
I am currently work at a top tier bb as a sophomore and have the opportunity to transfer to either S&T or IBD for next year. I would not consider myself very quantitatively inclined, but am familiar with the markets and am more then capable of the requisite mental math work (or accounting for finance). I enjoy learning about the markets and staying up on the news/discussing it, but understand that Sales in S&T may be relatively limiting for exit opps

In the same way, I don't know if I want to sacrifice my life for classic IBD and modeling experience does not really appeal to me as it seems to mean you are in excel all day every day playing with numbers. Whether its as an analyst in IBD or an associate in PE, I imagine that would get old.

How do people feel about Capital Markets in that case as sort of a middle ground? I have read many posts on this forum so far, but I am curios how people feel about Lev Fin (non-modeling group), ECM, DCM in terms of pay, exit opps and how interesting the work would be in contrast to more classic IBD or S&T.

Thanks!

Are you generally interested in higher salaries and bonuses or do you want to learn a lot ?

http://www.madhedgefundtrader.com/ http://www.tradersmagazine.com/
 

Personally I think capital markets offer a nice career (emphasis on nice: not great, not terrible) and I like the blend of markets and corporate banking. But to cover yourself only shoot for Lev Fin as the other two pigeon hole.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

Looking to get into FS/LevFin group for PE eventually, possibly a coverage/M&A group. Will work my ass off regardless.

How open should I be with my supervisors after a year or so? Cause they could possibly help and push for me when I try and lateral internally. I could be wrong though and that could ruin things if I am open with them. Thoughts?

 

I would evaluate where you are at around the time of your one year review. If at that time you have been doing good work then you might want to drop that over the next year or so you would like to start to make the transition, that gives them time to recruit someone and you time to see deals through. Anything before that seems a bit presumptuous and gives people the wrong impression of you, right or wrong.

This to all my hatin' folks seeing me getting guac right now..
 

Hi there, I am a currently in a similar situation as yourself (incoming ECM SA) and I want to go into IBD. I will be at a BB next summer in the ECM group, and I am interning at a lower Middle market M&A shop this summer before my junior year of college (non-target). I got a IBD SA offer in at a diff BB but not in NYC, but I turned it down for the BB ECM SA offer in NYC. Do you mind sharing how you made the switch from capital markets to IBD? I'd truly appreciate any tips you could provide. Thanks!!

 

This is actually a question to which there is no 100% correct answer. Some banks categorize ECM/DCM under the Investment Banking Division, which usually also includes research. Some banks, although I think this is becoming more uncommon, categorize them under Sales and Trading. Some banks even categorize ECM under IBD and DCM under S&T (or FIC, or FICC, or whatever).

The difference really is that ECM and DCM are product groups that are close to the capital markets, and therefore it makes more business sense to put them closer to the S&T groups (physically and/or operationally). M&A is a product group, too, but the nature of their work makes it more logical to organize them closer to the industry coverage teams.

They're all "investment bankers" though, in the sense they are client-facing, do high-profile transactions, and make a lot of money.

ECM/DCM is less modelling intensive, more market-focused and a little "softer" in terms of the skill set. M&A is very modelling intensive and analytical, but a lot of guys in it only know how to model and can't see the forest from the trees. M&A tends to be more competitive to get into, but in reality the standards are not that much different.

As far as skillset required to get into M&A versus ECM/DCM: beyond taking an accounting or corporate finance course, it doesn't matter -- you have no skillset right now, nor does any other college sophomore/junior.

 

Capital Markets groups are the actual source of execution with the bank. DCM provides indicative pricing and issues securities. The banking group "covers" a client sector and handles the relationship with clients.

When a client calls the bank, he calls his banker. The banker then reaches out to the various products (M&A, DCM, LevFin, etc.) depending on client need.

Think about a BioTech company wanting to do an M&A transaction but it needs financing via bank loans, investment-grade debt issuance, and maybe a convertible bond transaction. The banker reaches out to his respective product bankers and organizes a deal team.

You won't be getting any valuation skills in a DCM group. Instead you'll be learning how to keep track of the debt capital markets.

 

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