3/28/08

Please excuse my ignorance regarding this thread, but I'm a bit confused as to the difference between work done in TS versus work done at an i-bank. Could anyone speaking from experience expand on the difference?

The reason I ask is because, if currently working in a tax department at a Big 4, I am interested in knowing whether it would be wisest to jump into an i-bank or the TS department of a Big 4, given that my goal is to eventually wind up in PE.

Another possibility is M&A tax. I'm trying to think of all the possible routes I could take if I was unable to get into banking but had some choices at a Big 4. Would it be best to do M&A tax first before jumping into TSA/IB in order to have a basic understanding of the tax side of some M&A issues - or would it not be worth the time?

Thanks for the input in advance.

Comments (18)

3/28/08

that's a no brainer if you can get into a IB...

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3/28/08

That is why I said in case I was unable to get into banking.

3/28/08

I think if you can get into the corporate finance arm that some of the Big 4 have, they're usually a specialty group under TS, and are exactly like IB.

We're Italian, "WACC" means something else to us.

We're Italian, "WACC" means something else to us.

3/28/08

Mathematics is correct, the corporate finance arms of the big 4 are essentially boutique investment banks, providing M&A advisory to their clients (although they are restricted as to who they can work for - i.e. not able to do sell-side work for a public audit client). TS is due diligence on transactions, i.e. sifting through data rooms and auditing transactions. It helps build a great foundation, however you're not going to be doing any modeling or memoranda developing, which I think are two of the most important skills you learn as an analyst in an IB.

3/28/08

TS is vastly due diligence, but some places like Deloitte will actually be the lead advisor to a company for a middle market deal. This means that if you are lucky, you can see some real modeling/valuation in TS. But overall, if you want to go into PE, you'd very likely have to grab an i-banking or consulting job after you do your time in TS before you get into PE.

If you have the option, take investment banking, so long as you don't HATE the idea of working 80-100 hours. Even if you do, you'll get paid 1.5-2x as much and come out with a much more prestigious name on your resume.

3/28/08

Gomes3pc is correct except that it would be Deloitte Corporate Finance that would be the lead advisor on the deal. TS would fulfill its usual role (due diligence).

Deloitte and KPMG Corp Fin are actually on the Vault Ibank Rankings, hitting the list at #30 and #42 respectively. Not to give much credence to a bunch of worthless rankings, but they are legitimate advisors and you would get good work experience. However compensation and exit ops are pretty inferior.

3/28/08

I had no idea that their exit opps were so "inferior," but thanks for the heads up, everyone. Does that apply to all the Big 4 - or are PwC and E&Y not even considered when discussing these divisions?

I also didn't know that Corp Fin was under TS (I thought they were separate categories).

How about M&A Taxes?

Thanks for everyone's input - very helpful so far and I welcome any additional insight.

3/28/08

CorpFin is not under TS. It is a separate unit I believe. nystateofmind did TS though so he's the bigger expert on how these companies are broken down. All I know is that Deloitte does do more than due diligence and even works complete MM deals ($100-500m usually) as the sole/lead advisor.

3/29/08

bump

3/29/08

E&Y sold its Corp Fin group to Giuliani Capital Partners. Not sure about PwC.

In the US, Deloitte wil give you the best experience. However I have heard bad things about their culture.

Outside the US, in Britain and Asia, KPMG Corp Fin is pretty strong. I know they sometimes go head to head against BBs for legit deals in Asia. They have the most extensive emerging markets network as well.

3/30/08

Thanks for clearing that up.

3/31/08

Last summer I interned at Deloitte Corp Fin in NYC. As some of the earlier posters suggested we functioned as a middle market M&A adviser, often as the lead or sole adviser.

I spent most of the summer working on live healthcare deals so it was a good experience, which helped a great deal with this seasons SA recruiting. As for the culture, I can only speak of NY but they were all great guys. Hours where typically about 60 hours a week with little face time required. In addition, they paid overtime which was a nice perk.

12/22/09

you can compare TS to a truckload of auditors driving into the target company and checking everything there is. they collect all that data and then they make reports and put it all in a (digital) room (dataroom) and advise on some issues that came from their data collection.

I-banks are there to provide in depth industry knowledge, manage the M&A process, do the valuation, provide financing, investor relations, etc. I-banks are also more proactive in finding / creating deals, whereas TS often just gets called in when everything is in progress.

12/22/09

Big 4 Transaction services basically provides Due Diligence (DD), asset valuation, and transaction tax services. None of this is "doing deals" in the same sense as investment banking or corporate/business development (the internal group in a company that hires bankers). Instead, these services are all services offered to companies that are doing deals to make them easier.

This usually takes the form of due diligence (basically making sure you know all available information about a company before purchasing it, usually this happens during the exclusivity period after an offer is accepted, pending the results of DD.

The tax group in transaction services helps structure deals to be tax efficient (asset purchase v. stock swap, nol, deferred tax assets/liabilities).

Finally, the asset valuation group helps value the identifiable assets of a company for purchase accounting purposes (if you're interested in this group, I assume you've taken some consolidations accounting).

From a career perspective, Banking is a lot more intense and presigious. The compensation is also significantly better. However, if you can't get into banking, or care more about work/life balance, then Transaction Services could make sense. Just keep in mind that the Big 4 firms only hire a few people into these groups at the undergrad level and they usually do less interesting things. The more typical career path would be to be in audit and switch after making senior.

I looked at this group but decided banking fit my interests better. I base much of what I know on conversations with a director in my group who worked her way up to senior manager in E&Y's TAS group before making the switch.

12/22/09

waltermb,

I have second round interviews coming up with a valuation group at a big 4. Would it be possible to lateral to an ibank after a year and receive advanced class standing? Or would I have to start as a first year analyst?

Or maybe this isn't really a possibility?

Do you know anything about other exit options?

Thanks in advance

12/22/09

Based upon the people I know, I think that if you want to do banking, you should get a banking job.

I know that E&Y has a niche group that does something with hedge funds and those people typically do laterals over into hedge funds. However, this is an incredibly small group (less than 20) and my understanding is they only have a few slots which were primarily filled by people who interned.

As for people I know who are accountants, many of them started to do what you are thinking about. However, they found that it's not quite so simple. I know of several who did 2-3 years in audit at Big 4 and then had to go get an MBA in order to make the switch.

As for your advanced standing question, the short answer is it would depend on the bank and the exact circumstances of your switch (keep in mind that most places like to see at least 2 years per place, 1 year is an awfully short amount of time). I know someone where I work who worked for D&T for two years and is now switching into banking and is starting as a first year analyst.

If I'm not mistaken, the big 4 hires valuation people from schools like UPenn, which are also banking target schools. If this is you, I'd strongly recommend just going into banking rather than waiting. If you know what you want to do (it sounds like you want to do banking), then that's really what you should go into. So many times people plan on doing one thing and then switching, but making a switch is not easy unless you go get an MBA.

If you are already signed on for Big 4 (I'm pretty sure both Big 4 and banking hiring season is over), then I'd say your best bet is to work two years and then get an MBA (all the analyst in banking will be doing it too). Otherwise, try to meet people through your work who can help you make the switch. Meeting the right contact in banking is the most important thing to make the switch go smoothly. Also, several senior level bankers are former big 4 people, so they will appreciate what you've been doing at Big 4.

12/22/09
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