Investment Banking Experience Questions

I just wanted to hear about some of your experiences in banking at small and large firms. It would be nice to hear from people who had experience at both. Please feel free to add.

  1. As a Junior on the team (Analyst/Associate); I understand that responsibilities would be grouped into 1) The Pitch Process, 2) Deal Execution 3) Random Admin Tasks. What % of Time is spent on each for you?

  2. For each of those responsibilities, What does each responsibility really entail and what % of the time do you spend on each? ex) Pitch Process: industry research, spreading comps, modeling etc.

  3. What makes the hours so unpredictable? Is it the facetime? Inefficient Staffing? Or just random requests from clients?

  4. I guess dealflow would be a major factor on how many hours you work. So what if there is no work? Can you just leave? Or do banks expect you to constantly pitch even though there are no immediate meetings planned?

  5. What events have made you cancel your weekend plans?

  6. During a live deal, how many all nighters have you put in during that time span?

  7. How many assignments were you staffed on at one time?

  8. For a smaller firm, (lets say 5 people doing M&A), do you see a different experience?

 
  1. Depends on the group you're in and your company, sometimes you'll feel like all you do is pitch, while other times you'll be too busy on a live deal to care. Smaller firms pitch less typically unless they are entering a new industry.
  2. At a BB comps are outsourced mostly and good research is more difficult to obtain with chinese walls and whatnot. Smaller firms you have less resources and have to do more work to accomplish the same thing, but there's less bullshit in presentations.
  3. I-Banking in general is completely inefficient and unpredictable. You'll spend hours working on pages some dipshit associate/vp produces to show they are doing work and the MD will remove it all after a glance. An MD also might get a call at 9pm from a client to meet the next morning, guess who is going to be up all night creating a book?
  4. After awhile you get a feel for when is a good time to leave. You won't create pitches on your own, you'll just sneak out... always remember 'out of sight, out of mind' when dealing with your staffer
  5. Anything, including internal materials, there's always somebody trying to impress a superior that will screw over your weekend without caring.
  6. Fewer in a small firm than a BB, but it also depends on how fast you can do your work and if the people around you are also fast. Worst time for me was 3 all nighters in a row, afterwards I worked between midnight-2am for the rest. This process lasted about 3-4 weeks total. You probably won't realize you're pulling an all-nighter until at least 10pm when you get dumped on.
  7. As many as 6 or 7, depending on how involved you are needed. Typically 2-3 newer busy assignments with 2-3 older assignments that usually involve simple follow up tasks
  8. Yes, but only to a certain extent. A smaller firm you have more communication so you're not as surprised by random staffings, although they do occur.
 
ERguy:
I 3. What makes the hours so unpredictable? Is it the facetime? Inefficient Staffing? Or just random requests from clients?
  1. I guess dealflow would be a major factor on how many hours you work. So what if there is no work? Can you just leave? Or do banks expect you to constantly pitch even though there are no immediate meetings planned?

  2. How many assignments were you staffed on at one time?

You are at the mercy of other people. For example you could send out a CIM for comments and only get minor nits or a complete rewrite. No way to really know what is going to come back. Once you work on a name you are on it forever. Usually no more than 5-8 "live" deals in addition to the 100s of names you have worked on previously for which something could just pop up.

 
Best Response

Happy Thanksgiving. As usual, I am about to disagree with the majority of the common wisdom that I've read here.

If you believe what you hear on my threads, boutiques and MM banks are a better experience for young bankers, with less BS and more real deal experience.

My opinion runs the complete opposite. I believe there is no substitute, I repeat NO SUBSTITUTE, for two or three years on a bulge bracket M&A floor when you are a brand new analyst or associate. There are very few places in boutique/MM world where you are exposed to the complexity and diversity of advising extremely large, complicated, multinationational clients on equally large, complicated and multinational deals.

The argument that boutiques spend less time or focus on pitching also defies logic. My experience is that the more established the bank, the less time they spend trying to prove how good or how smart they are. I have been involved in pitches where our marketing came down to a few pages to say, "look, you know who we are. We're big, bad and we have as much experience as anyone in the universe". We got trumped on brevity by Goldman, whose pitchbook basically had one page that said: "We're Goldman Sachs".

The smaller guys showed up with 200 page pichbooks.

I will say that the MM sellside guys probably have fewer fire drills. Why? Because they know a month in advance that a company is holding a bake-off, and they have a month to prepare. There is less of the "oh, the CEO got a strange call from a competitor - maybe that means something. We should get a book together and see him in two days." or "Verizon's CEO just had two hours open up Friday and wanted to get a snapshot on what's new. Go."

However, I will let you in on a dirty secret about why your hours are so bad. It's not because the job needs 110 hours a week necessarily...

It's because of me.

What do I mean? Your job starts at 8pm, when I go home. Why? You get in at 9 or 10am, after sleeping very little. For the first few hours, you get settled in and catch up on the comments I left you after reading the morning paper. You may have a flurry of activity based on what the VP comments on your last night's worth of work before he goes in to sit down with me. You may get some stuff in the afternoon if he does manage to get my attention in the morning and we generate commentary on your analysis.

More likley, you stand around joking with your bullpen mates and read WSO and SI.com. The afternoon consists of me not looking at your stuff as I make calls while the clients are still in their offices and the MDs at other firms are in their offices so that we can chat, negotiate and yell at eah other. At 5pm, my calls wind down and I begin to focus on the work you did last night. By 7pm, we sit down and I give you the work you'll be doing all night.

This is the first time you'll figure out whether it's a 10pm night or an all-nighter. You'll crank for a few hours after dinner and get the associate your first draft. Then it's 11pm or 1pm. Depending on how much you need to turn it, you'll go home at 2am, or not at all.

 
GenghisKhan:

However, I will let you in on a dirty secret about why your hours are so bad. It's not because the job needs 110 hours a week necessarily...

It's because of me.

What do I mean? Your job starts at 8pm, when I go home. Why? You get in at 9 or 10am, after sleeping very little. For the first few hours, you get settled in and catch up on the comments I left you after reading the morning paper. You may have a flurry of activity based on what the VP comments on your last night's worth of work before he goes in to sit down with me. You may get some stuff in the afternoon if he does manage to get my attention in the morning and we generate commentary on your analysis.

More likley, you stand around joking with your bullpen mates and read WSO and SI.com. The afternoon consists of me not looking at your stuff as I make calls while the clients are still in their offices and the MDs at other firms are in their offices so that we can chat, negotiate and yell at eah other. At 5pm, my calls wind down and I begin to focus on the work you did last night. By 7pm, we sit down and I give you the work you'll be doing all night.

This is the first time you'll figure out whether it's a 10pm night or an all-nighter. You'll crank for a few hours after dinner and get the associate your first draft. Then it's 11pm or 1pm. Depending on how much you need to turn it, you'll go home at 2am, or not at all.

I was just made aware of this post in another thread and I have to say, that this part of his post is probably the most honest post I have ever read on WSO.

I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing. See my Blog & AMA
 

Thanks guys for your helpful comments.

Firebi234: When you talk about 5-8 "live" deals. Do you mean the point where you signed LOI? What exactly are your responsibilities during this period? How many of those deals actually close? Aside from $ value, what would you consider heavy deal flow for 2009/2010 period? Do you think closing 6-7 M&A deals for a small shop of 5 people per year is high or low volume?

Keyboardcat: Where do comps get outsourced to? Have y ou ever had to do them yourself? How do you go about in checking them? From my understanding, spreading comps is just making everything apples to apples comparison. And you have to look through financial statements to take out things like one time charges, events, etc. It would seem just as burdensome to check these as it is to do them yourself. How can an IB analyst with minimial knowledge of the company, know what to take out. You would have to look through press releases, ER reports, and call transcripts to get a more complete picture. Does an MD or whoever, ever get pissed because you did a comp wrong (missed something) or is he jsut as oblivious?

GenghisKhan: How do botiques know a month in advance that someone is holding a bakeoff and a BB does not? You are saying that small firms have more time to work on the pitch vs. large firms. Is this because large firms constantly pitch, whereas smaller firm do a more focused pitch effort?

Also, what goes into these 200 page pitch books? I can't imagine it being all important? Some valuations, managment backgrounds, industry trends, market analysis, competitors, team background, deals completed, maybe some company profiles. 200 pages just sounds like a hell of a lot. And the client would just be overwhelmed imo.

 
ERguy:
Thanks guys for your helpful comments.

Firebi234: When you talk about 5-8 "live" deals. Do you mean the point where you signed LOI? What exactly are your responsibilities during this period? How many of those deals actually close? Aside from $ value, what would you consider heavy deal flow for 2009/2010 period? Do you think closing 6-7 M&A deals for a small shop of 5 people per year is high or low volume?

Keyboardcat: Where do comps get outsourced to? Have y ou ever had to do them yourself? How do you go about in checking them? From my understanding, spreading comps is just making everything apples to apples comparison. And you have to look through financial statements to take out things like one time charges, events, etc. It would seem just as burdensome to check these as it is to do them yourself. How can an IB analyst with minimial knowledge of the company, know what to take out. You would have to look through press releases, ER reports, and call transcripts to get a more complete picture. Does an MD or whoever, ever get pissed because you did a comp wrong (missed something) or is he jsut as oblivious?

Also, what goes into these 200 page pitch books? I can't imagine it being all important? Some valuations, managment backgrounds, industry trends, market analysis, competitors, team background, deals completed, maybe some company profiles. 200 pages just sounds like a hell of a lot. And the client would just be overwhelmed imo.

My definition of a live deal is that you are working for a concrete request or event occurring. As mentioned above, often times we pitch a company just to keep them up to date with the market or to present some ideas. Deal close percentage varies greatly with the nature of the transaction ie a wide auction process has a much lower close rate than a straight forward refi or div recap. I have never worked at a small shop, but I would guess that 6-7 closed deals in the 2-3mm fee range would be a good year considering the lack of overhead.

 

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