What is the deal with GS ER?

Hi Everyone,

As someone trying to break into ER, I'm really curious to know why GS ER does not target II votes. They have a ton of reputable analysts and pay above the street to my knowledge, so it seems like they would fare very well if they did. Although the process is less than objective, it is still the primary research rankings that people are looking at.

Is it because they are Goldman and they figure they don't need rankings for the buyside to use their research? Or is it out of fear that if they did target votes they would not come out near the top?

I'd definitely be interested to hear people's thoughts on this.


 

Yeah so similar to what has been said, they don't believe II is a fair/objective measure. They instead like to tout Starmine as a better/more objective measure (which, no coincidence, they do well in). Also, they are ultimately much more interested in ranking top 3/5 among their top tier clients than chasing smaller clients for votes.

 

They would not rank anywhere near the top imo. I can only speak for my coverage, but they have not had a good analyst for over three years. They're on their third analyst as guys keep leaving for the buyside. They barely roll out new coverage and then leave, and they basically are adding zero value at that stage vs the guys at JP / Barclays / Evercore ISI / RBC etc that have been covering the same companies for 7-15 years.

Research at GS basically only exists to support banking ops, whereas other firms take their ER product much more seriously.

Oh yeah, and the $20 oil call isn't helping them either.

 
jankynoname:

They would not rank anywhere near the top imo. I can only speak for my coverage, but they have not had a good analyst for over three years. They're on their third analyst as guys keep leaving for the buyside. They barely roll out new coverage and then leave, and they basically are adding zero value at that stage vs the guys at JP / Barclays / Evercore ISI / RBC etc that have been covering the same companies for 7-15 years.

Research at GS basically only exists to support banking ops, whereas other firms take their ER product much more seriously.

Oh yeah, and the $20 oil call isn't helping them either.

This. GS has a different business model where ER primarily exists to support banking. You talk the party line, don't rock the boat, and everyone gets paid.

As for II, it's a game for sure, but it correlates highly with broker votes (read: commissions). Higher rankings also theoretically means more banking business (e.g. sponsors want to have top analysts cover their IPOs). There are also different approaches to getting ranked because clients all value different things. Some analysts are corporate access machines, some are deep in the winds/have great models, while others might be higher level/PM-focused. Your platform also matters. It's going to be easier to get ranked at a bulge bracket than a middle-market/boutique because you have a sales force to hawk your product.

 

the problem with GS ER is that you have a shit research team and probably just as crap sales guys. I may have an offer here, but I'm pretty hesitant b/c they're so crap.

 

Goldman doesn't care about their research anymore, like many of the BB, so while you are an analyst at Goldman, the IM world wont respect you as you would think a goldman analyst would be, down the road. But its not a bad gig, know a few guys there.

 

the best places for research are the independent house s - the hedge funds have given the finger to most of the bulge and all the money is being made in start ups. It'll probably end up that a BB will buy out these independents at some point so who knows what could happen there.

 

The biggest determinant of the quality of a franchise is the person, not the house. That’s why analysts get paid big bucks to move – in the hope that they bring their franchises with them. The only place that I feel the house plays a slightly bigger role in the franchise is UBS (and that’s not to say that they are better or worse).

The question should really be how you approach the decision of who to work under to get the best training as an analyst. This is not straightforward – the best analyst may not be the best teacher (like the best tennis players do not make the best coaches). If you only have one offer then suck it and see – you’ll get better training and experience than you would get sitting at home. If you are weighing up different options, then your decision should come down to which analyst you feel most comfortable with.

 

I have never heard of this position, but I know the chinese walls at Goldman are high, so you'll likely have little interaction outside of ER and your sales coverage. In terms of the position itself, it looks like it may be good. Ask if the job actually publishes, and how it relates to the buyside. If you have nothing else, this could be a good foot in the door to an associate position for ER.

 

I value your comment, and I am aware that my questions can be considered as daft, since I have not worked one full day yet.

However, if you could comment a bit on exit opps specifically in terms of B-School L/S HF , would be highly appreciated.

 
Best Response

B-school: you would be eligible for a MBA business schools">M7 school but it's not an automatic. The top programs are flooded by applications from people with excellent resumes. I don't think ER experience necessarily makes you a shoe-in for a top program so don't take this for granted.

Hedge funds: yes you would be a good candidate. However, these positions are always competitive.

In either case, how you perform at your job and the experience you get from that is really important. Having GS or another big name on your resume is great, but it only distinguishes your resume from the pile, it doesn't guarantee anything.

 

You will be fine. Don't worry too much about your b-school if it is only happening in 3-5 years from now. I am at an MBA business schools">M7 - you would be surprised how many people come from shops I have never heard of.

 

Sorry to burst your bubble but you do know that GS is ranked 14th or 16th on II? Even Cowen has more ranked analysts than GIR. GS says they have a "non-II" model which is a another way to say "our trading arm is the strongest so we don't feel the need to raise our budget to get better research talent".

For your reference, for ER you want to be at JPM, Evercore ISI, MS, or BAML. You will be at a disadvantage to bankers for MBA business schools">M7 btw.

 

sign with GS, your exits will be solid. Go in there and learn how to do all complex model structures: LBO, SOTP, M&A, segmentation, install base forward, macro model, etc... you will be more than a shoe in for HFs..

And GS does not have a II model, they hire analysts to lead up specific sectors.. not all sectors are profitable. BAML, others have a more holistic model, which is why they are all the way up in the rankings... note this does not mean they are the best. GS tailors to HFs, that is good because all the work you do is in some way actionable and a pitch, which is what you would be doing at a HF anyway....

.
 
weezy f baby:
and would that be total compensation for the first year?
You sound like a huge douchetard. Also do you not know what "ALL IN" means? The audacity you possess to question another's income is disgusting. Concentrate on yourself and your own personal development. If the dude is lying then who cares; he is doing so for some reason that makes sense to him.
 

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Follow me on Twitter: https://twitter.com/_KarateBoy_
 

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