What do FIG bankers do?

Reaching out to an FIG banker at a BB. If a "why FIG?" question is asked would it be intelligent to answer by saying something along the following lines:

"FIG is a group that has good deal flow most of the times. In bear markets ==> restructuring, and in bull markets ==> new products, IPOs etc. Also newer, more stringent regulations mean that banks will change the way they finance their operations which may affect their BS."

Does any of what I said make sense?? Do FIG bankers undertake restructuring for failing financial institutions? or do they only do capital raising and M&A??

Could someone kindly give me better answer or tell me what different sorts of deals do FIG bankers undertake?

Thanks in advance.

 

I hate these "Tell me how to answer this question" posts. If you need to come to a forum to get people to tell you why you like something, then you clearly don't like it enough to do it for a living for several years.

 

No one can really answer "why" fit-type question. There is no such thing as a cookie-cutter answer on this. You need to ask yourself that.

"I am the hero of the story. I don't need to be saved."
 
Best Response
bsmonkey:
"FIG is a group that has good deal flow most of the times. In bear markets ==> restructuring, and in bull markets ==> new products, IPOs etc. Also newer, more stringent regulations mean that banks will change the way they finance their operations which may affect their BS."

Does any of what I said make sense?? Do FIG bankers undertake restructuring for failing financial institutions? or do they only do capital raising and M&A??

FIG consistently represents the biggest revenue producers at all top investment banks. At bulge bracket banks, FIG generate around 30% of investment banking fees. Furthermore, the FIG practice tends the be the most complicated, complex and technical - so many people find it intellectually-stimulating. And a FIG banker will always be busy. Very busy in good markets with M&A; even busier in bad markets with capital raisings. Also, FIG is a great training ground if you want to stay in finance. A lot of leadership in investment banks and other financial institutions have FIG backgrounds.

One thing to note, FIG has some very distinct verticals, consisting of asset managers, insurance companies, banks / depositors, financial technology firms, and specialty finance companies. Some firms like JP Morgan also have a governments vertical as well. If someone asks you "Why FIG? - they will most certainly also ask you "Which vertical are your interested in?"

 
Vancouver Canucks 2011:
bsmonkey:
"FIG is a group that has good deal flow most of the times. In bear markets ==> restructuring, and in bull markets ==> new products, IPOs etc. Also newer, more stringent regulations mean that banks will change the way they finance their operations which may affect their BS."

Does any of what I said make sense?? Do FIG bankers undertake restructuring for failing financial institutions? or do they only do capital raising and M&A??

FIG consistently represents the biggest revenue producers at all top investment banks. At bulge bracket banks, FIG generate around 30% of investment banking fees. Furthermore, the FIG practice tends the be the most complicated, complex and technical - so many people find it intellectually-stimulating. And a FIG banker will always be busy. Very busy in good markets with M&A; even busier in bad markets with capital raisings. Also, FIG is a great training ground if you want to stay in finance. A lot of leadership in investment banks and other financial institutions have FIG backgrounds.

One thing to note, FIG has some very distinct verticals, consisting of asset managers, insurance companies, banks / depositors, financial technology firms, and specialty finance companies. Some firms like JP Morgan also have a governments vertical as well. If someone asks you "Why FIG? - they will most certainly also ask you "Which vertical are your interested in?"

bravo. excellently done.

 

The experience you get in a FIG group is interesting.

FIG financials are typically the most complex, with balance sheets and income statements that differ significantly from the widget companies you deal with in school. In that regard, you become good at analyzing complex financial structures, but at the same time, placing into a traditional PE can be slightly more difficult because the companies they invest in (traditional bread and butter firms) will not require the same type of financial statement analysis that a FIG company does. However, placement into FIG-specific PE firms such as JC Flowers is strong.

If this is a SA consideration, the FIG space will provide a strong learning experience because all FIG companies are currently in need of capital, and consolidation is a key factor in the industry. These trends contribute to high deal flow, especially within the top FIG groups you mentioned, which is key to a fulfilling internship.

 

this made my day old champ. Hope the 10years since you posted this have treated you with kindness. 

 

A lot of people say FIG is very specialized, and its country specific etc...even the accounting is different. But I agree, there are always going to be banks and insurance companies, so FIG will always have activity.

I know UBS's FIG is a solid group. I've personally met many people there, and they are all round good people. I know the group is pretty well respected on the street too, they did the MBNA deal.

 

Can't hurt, at least you'd know how to look at bank financials, understand the space and whats happening (changes in regs, who the players are, etc.). I'd imagine you would take less time to get up to speed on the industry as someone with no FIG exposure

Array
 

Have you asked her? I think the two of you will cross paths if you keep up the interest in FIG. I'm pretty interested in the subject myself. Have you ever heard of the American Bankers Association? They have some courses that are online.

Financial Institutions, Markets, and Money by David S. Kidwell, David W. Blackwell, David A. Whidbee and Richard L Peterson

That might be the best bet for you.

 

Insurance companies, bank mergers, ect

"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."
 

In a BB, FIG is a team involved in client coverage, so the team has a list of clients (financial institutions) that is covers, usually done by region.

Can kinda look at it like a GP (similar to FIG) and a specialist (similar to a product team) in medecine. FIG is sometimes the first contact with the client, then it refers the client to a specific product team.

 

Because of how you value FIG companies, using the DDM, it isn't considered a great track for getting into PE or very transferable to other industries. However, there are plenty of FIG bankers that have gone onto top shops. Dealmaking has obviously been incredibly busy so that's always a good thing for junior bankers looking to learn.

 
gomes3pc:
Because of how you value FIG companies, using the DDM, it isn't considered a great track for getting into PE or very transferable to other industries. However, there are plenty of FIG bankers that have gone onto top shops. Dealmaking has obviously been incredibly busy so that's always a good thing for junior bankers looking to learn.

To be honest a DDM in itself is not exactly all that different from a DCF and if you are good at one you can become quite good at the other very quickly. It's not exactly why it's harder to get into PE. The real reason is just that everything you cover is much different to your run of the mill co and your run of the mill PE fund doesn't invest in financials for obvious reasons (how do you lever a bank?). So why take a FIG analyst when you can have one who covered industrials, everything else equal. That said there are a good few specialist PE firms out there, JC Flowers being the most prestigious I guess and then there are also the PE co's that are doing more financial services stuff these days, for example a guy I knew went to one of the mega funds recently.

 

I've worked on a few FIG deals and FIG is for the large part, insufferable in my opinion. Its just incredibly boring shit and very archaic.

So far as exit ops... like others had mentioned its not a very transferable skill-set. You're better off trying to get into a restructuring group(easier said than done), but you'll get plenty of experience across a broad range of industries, including FIG.

 

I don't think it's necessarily the complex BS that may make FIG seem untransferable. It's the metrics and valuation methods that are different. On a broader level, the way banks make money is much different than the way other companies make money, and understanding the different cash flows and drivers is different.

That said, top FIG groups place well in general PE and other non-FIG activities, including other IBD groups. May be more of an uphill battle from 2nd or 3rd tier FIG, but on the other hand, looks to be an active space in the next few years and so experience should be good.

 

It might hold you back if you cover financial institutions only (there's subsectors in FIG resembling services and tech cos). It's not only a balance sheet issue. Valuing/managing FIs is completely different. Simple corporate concepts/metrics like ebitda/margins, operating leverage, working capital, capex, free cash flow, cash flow leverage/coverage are not crucial ... rather you will be focusing on stuff like asset quality/writedowns, book equity (FIG guys LOVE to talk about book value even though its essentially, as the crisis proved, a totally BS concept).

All these "limitations" are meaningless if you end up loving FIG and everything about it.

FIG guys often know they are "pigeonholing their career" (and surrender to the perception that they are). To combat this, they place a massive premium on their specialization, and feign superiority over other industry groups - saying things like the sector is harder to model, more complex, and therefore requiring a higher intellectual capacity.

 

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