Traditional IB vs. ECM/DCM

Hi - could you guys please talk to me about the differences between investment banking and ECM/DCM? I'm specifically interested in the difference in exit opportunities.... thanks!

 

Investment banking is more painful but you acquire more transferable skills like cash flow modelling. Exit opportunities from capital markets are limited as all you do as an analyst is prepare lists and charts. As a senior capital markets person, all you do is read the WSJ and regurgitate the words to IBD and clients

 

the Chinese Debt Capital Market is actually segmented into different sectors by different regulatory authorities, and commercial banks only have access to corporate cp issuing at present, ABCP maybe under its way to invention, but i could not see further development, at least the sub-prime crisis may delay the introduction of the CDO.

IBD at least can give me an insight to industry and corporate finance, why not IBD but DCM?

 

we mainly went to industry clients and made present interviews with their management teams, trying to understand and evaluate their corporate governance, internal control system, financial policy and writing the Duly Diligence, prospectus, Cashflow forecast and so on , and then submit these files to the regulatory authority , when approved, we can issue the cp for the client. that is what i do

 

I thought DCM and ECM was IB, no? Aren't they just product groups?

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.
 

looks like there will be a lot of issues with transferring internally. an option you have is to secure an offer in banking at another firm and potentially leverage it into an IBD role at the same firm if internal politics are that rough. pending layoffs is a real concern.

what i suggest is you focus on conducting an external job search.

to the other posters, yes DCM/ECM are a part of banking - but are different than Leveraged Finance / M&A / Industry Coverage in the sense they focus more on following the capital markets instead of running the day to day of deals (diligence, modeling, presentations to investors). a person can sit on a dcm desk their entire career, transfer to a sales/trading role or move into banking if the bank allows it.

ideally, you want to stay at the same bank for a while because laterals are usually the first to get kicked out when times get rough (as they appear to be getting now/have been since last year).

------------ I'm making it up as I go along.
 

^ This.

Heard similar things of how DCM usually deals with more the markets, and especially investment grade debt products. Lev Fin teams might be embedded within a broader DCM name like Citi, whereas they might jsut do their own thing in other BBs. I think there was an article on M&I about Financial Sponsors, and the guy explains all the differences in FSG, LevFin, and DCM.

 

As an analyst, you will likely have almost no chance of transferring internally before your first two years are done. Many banks will allow analysts who have been offered the option to stay a third year to transfer laterally. In other words, look externally now, and raise the possibility of an internal move after you've received a third year offer.

The right person to raise the matter with first is the HR person who runs your analyst program. This can be a little tricky...some banks are supportive of transferring good analysts, others get very upset. I would get a "lay of the land" first and see if there's good precedent for such internal lateral movement. Ideally ask a friend who has done it. If there's no such precedent, you may want to stay silent.

 

applying to CS, hope I get M&A. capital markets is same as at other places, its not modeling intensive and doesn't have as good exit ops. I would go for IBD first. You hear back yet from interview?

 

why do people call ECM/DCM "not IBD?" Banking involves IPOs, Debt, M&A, Restructuring, and Private capital raising. How is ECM/IPOs any less "banking" than M&A? Wouldn't M&A be considered not IBD as well then because its only one product?

That being said ECM is probably worse than other groups but why do people consider it separate from banking?

 
philliesphan:
why do people call ECM/DCM "not IBD?" Banking involves IPOs, Debt, M&A, Restructuring, and Private capital raising. How is ECM/IPOs any less "banking" than M&A? Wouldn't M&A be considered not IBD as well then because its only one product?

That being said ECM is probably worse than other groups but why do people consider it separate from banking?

I think the situation also varies with geographical areas. In Asia, especially mainland China and Hong Kong market, ECM is a major part of IB businesses.

 

I didnt say it was separate, I said I would go for IBD first. Also your answer is because most banks recruit differently from capital markets and IBD, like Citi and Morgan stanley and some others I forgot. Go apply and you see

Summer Analyst Capital Markets 2010 Summer Analyst Investment Banking 2010

so they are separate, and usually the capital markets interview is all fit and a bit easier. I think DCM is more part of IBD since sometimes levfin is DCM related.

 

This really depends on several factors.

Are you target or non-target? If you're target with lots of OCR, you may want to lean towards BAML for the traditional IB experience. When recruiting season starts up again, your BAML name will get you other interviews for M&A or industry groups.

If you're non-target or simply don't want to go through recruiting cycle again, take MS and do your best to transition.

 

Depends on many different things...but possible way the fact that BAML is cutting down quite a bit...especially in IBD. They closed their entire Dallas office and laid off a lot of bankers cross country. Could be wrong but there might be a better opportunity for FT offer with MS.

XX
 
Best Response
Pike:
Depends on many different things...but possible way the fact that BAML is cutting down quite a bit...especially in IBD. They closed their entire Dallas office and laid off a lot of bankers cross country. Could be wrong but there might be a better opportunity for FT offer with MS.

The Dallas office was small and a lot of the reductions were in groups like the Middle Market groups which weren't producing a lot of revenue... it's a restructuring effort there, but some groups have had great success.

The question is really, do you want to do banking? If so, then take the banking offer. ECM is not going to get you anywhere easily without a ton of networking, and trying to take a job in another product group at a shop you perceive to be "better" only to leverage that to get back into banking is retarded. If you want to do ECM then that's a different story, but BAML's ECM would be better than MS's, and it just doesn't make sense to try to make the move from ECM at MS to IBD at MS, when you would have a far easier time doing a year at BAML in IBD and then you could likely lateral anywhere you wanted after that if you networked.

 
Guy.I:
Curious, does this apply to Europe as well as US?

I will caveat that I don't work in Europe, but in the US, and I have limited interaction with our London EMEA team, but I think this would be true. I'm not sure of the strength of the ECM groups there, but you shouldn't take a job in ECM with the goal of lateraling to IB afterward, if you could get a job directly in IB to start with... it just doesn't make sense. That would be true anywhere.

 

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