Investment Banking - Public Finance

I have some friends that worked in PubFin at BBs. Here's some info:

1. Base for analysts is similar, but bonuses are much lower than you'll be receiving in CorpFin.
2. The culture for most public finance groups is pretty laid back. Analyst hours are generally 9-7 on average, so you won't be working the killer hours of CorpFin. However, in my opinion, it's definitely worth it to put in those hours, especially at the analyst level. You'll learn much more about the market and it will allow you to understand more than your generic muni bonds.
3. For PubFin bankers to move in hedge funds or private equity is very difficult. Your skill set is much more limited than what it would be as a CorpFin banker. I would think you'd need to try to transition into CorpFin and develop those skills to move into more lucrative positions.

From my understanding, Citi, UBS, MER and maybe GS have the best PubFin groups. It's clear that PubFin bankers don't get nearly as much respect as CorpFin bankers, but the lifestyle is better for sure. It may also give you a warm feeling in your heart knowing you helped the local park district buy a swing set and a sandbox.

John McClane is correct. Public finance analysts are probably the most likely (in my experience) to come back to banking after b-school. More than a few guys who decided to pursue associate positions within industry groups or execution groups did public finance beforehand. Unfortunately, there's still a significant learning curve, since the guys I worked with still struggled with both technical valuation and adjusting to the working hours.

john, game - does this apply to infrastructure/privatization groups that may be warehoused under pub finance?

As far as I know, infrastucture and privatization groups are almost always considered public finance (ie financing toll roads/highways or privatizing the state lotteries). So yes, I would say this does apply. However, those are the "bigger" deals in the sector.

I would say that there is a movement these days to split out infrastructure and privatization groups from public finance. Both of them work in tandem for certain projects, but infrastructure is being considered more and more like an industry group (or an execution group if you count principal investments). I think because of how much you tend to work with sponsors (infastructure funds) and leverage, you get a pretty decent modeling skillset under your belt and you're familiar with the credit process (while the terms may not be the same, they are very similar). Whereas if you underwrite muni bonds every day, for example, you may not develop a similar breadth. My comment above is directed more towards the latter example than the former.

However, I've never seen a pure infrastructure analyst move to a "traditional" banking group so I have no case basis for my comment, it's just intuition. All of my friends in infrastructure groups worked in traditional banking groups first.