Life of an MD
I've read a lot on this forum about junior bankers' lives, full of crazy hours and hectic schedules, but I'm curious about the lives of the senior bankers.
By the time you're a VP/MD and pulling in business of your own, what's a daily schedule like? What is your involvement in the daily goings-on at the office? Do you have a wife and two kids and a pure-bred german shepherd? Where do you live, assuming you're working in the city?
If anyone – even junior bankers who are in the know – can shed some light on this it'd be much appreciated.
You get to leave first. Priceless
There is an ocean between VP and MD. VP's are associates who get to leave earlier, travel more, and get more client interaction...but they still aren't direct revenue producers.
MD's, from my experience, travel a shit load... whether that means across town or across the globe. They aren't in the office a ton but that doesn't mean they arent working. Even society events are work, especially in industry-specific cities such as Houston or San Fran. Survival of the fittest at that level and you're only as good as your last fee.
Long time before you have to worry about where they're living and what # wife they're on.
I'm sure its well-deserved after 10+ years of working your ass off to get to the top.
I guess i meant "senior banker" in general rather than only MD. If i'm not mistaken, can't one remain a VP without becoming an MD?
I hear about penthouses and beachfront property in the Hamptons, but I haven't found any definitive answer on the reality of it. Is there even time for these luxuries?
You can't just remain a VP forever. If you don't advance after ~3 years, you'll likely be laid off / fired / "encouraged" to find alternatives. Up and out.
You get to watch Jeopardy all day and try to make reservations at the best restaurants in town. Once in a while you get to remake your business card. I suggest the Romalian type on eggshell combo.
during my internship, one of my MDs went to mexico for like 4-5 days, on a client's private boat. Then took the rest of the week off to go golfing with another client....
^ wouldnt that mean he didnt take the rest of the week off then?
at MD level you are mostly dealing with clients and relationship building. so i guess the nature of your work is far more enjoyable than doing bunch of grunt excel modeling work as an analyst.
expect lots of travel, lots of golf, and lots of dining out with clients.
my dad is a partner at a mid-sized accounting firm. his work mostly centers around client relationships and playing golf with clients 3-4 times a week. I imagine IBD MD's have similar work schedule...
being an MD at an i-bank or a partner at a reputable shop in any field (law, accounting, consulting, etc) would be pretty sick. you make 7 figure salary for taking clients to play golf and dine. it would be baller as fuck.
I wonder which career offers a better ROI, becoming an i-banking MD or a partner in an accounting firm? Sure, as a partner you don't make as much. But you could lead a reasonably normal life. Maybe even have a wife and kids.
yeah but the two are probably so different that it could be like this:
MD at Ibank (Nicolas Cage in Family Man during the first 15 minutes of the movie) Partner in acct (Nicolas Cage in the men's store where he had a fit with Tea Leoni over his shitty life where he sells tires retail and starts that pathetic van in that pathetic neighborhood they lived in)
I think ROI of accounting firm partner is better than ROI of IBD MD. My dad didn't work more than 80 hours / week in entire career. He loves his life and greatly enjoys his job.
Like i said above, at some point additional income has no effect on your happiness due to diminishing marginal utility of money. If an accounting firm partner makes 1 mil and an IB MD makes 1.5 mil, the question of who's happier with his life wouldn't depend on who makes more.
Besides, accounting profession is rather recession-proof. even in shitty economy, my dad didn't have much trouble bringing in clients. corporations and high-net worth individuals always will need accountants, but they don't always need IB M&A advice.
All the MDs I've worked with were rarely in the office past 10 and traveled a shit load for the most part. In my experience, MDs were typically in the office rom 8 - 6/7 but MDs are under a lot more pressure to produce since they are the sole revenue generators and therefore their job's are a lot less secure. Nothing worse than deal flow drying up and dealing with a bunch of stressed out MDs going insane with pitches...At the same time, it's a tiring life style I would imagine as all of the stress and pressure really falls on you if deals fall apart or you fail to bring in new deals and you make or break your group, so I would imagine it is not all rosey as some people would imagine.
a partner in a mid-level accounting firm does not pull in 7 figures for the record.
true
my dad started his own accounting firm that grew to become a mid sized firm today. he pulls in low seven figs.
A fresh partner in big 4 makes 3-4 hundred thousand I've heard. Far from MD pay.
We have established that.
Which offers a better ROI (salary for nbr of hours worked)?
Yes, but Big4 partners generally make it there by the age of 34, and then stick around for another 20-25 years. So the fresh fish are only making $300k - $400k, but the average is probably right around $1M. The practice leaders and more senior partners are probably upwards of $2M, maybe some approaching $3M (global execs). Still not MD numbers, but not shabby either.
yes, but that's not equity partner. that's income partner.
if you make equity partner at a large accounting firm, you make at least 700-800k a year. besides, you didn't have to kill yourself to get there, unlike IB MD's.
True, IBD MD's may still make more than accounting firm partners, but I don't think it matters since accounting firm partners still make shit load of money anyway. At certain point, money has diminishing marginal utility.
No offense, but I am not quite sure you have realistic expectations about working in NYC my man. This would hold true if IB's were stationed in Kentucky, maybe.
I used to work at one of the big 4 firms, and the biggest players were right under 1 buck. But they, similar to MD's, are slaves to their image/lifestyle. They cant afford to be the one partner who roughs it in his walk up in the BX- it looks bush league.
So do the math...
BRB, Busy paying ~400k for being in the '1%' BRB , Paying ~6k a month for rent/mtg/prop tax BRB, Paying 20k for my little brat to be educated around even more spoiled brats BRB, Paying Yolanda a couple grand to babysit said brat BRB, Busy giving the impression that I have mad guap (summer home, nice car, etc)-> call it at least 10k a month
And if you get divorced, which is pretty freggin likely, ay dios mio... That crap adds up, like really adds up... So the difference btwn the banker and the partner (probably like 500k-1mm) really makes a difference.
Thisi s the reason I respect and question MD's in banking. Even after all that work and time dedicated, they still aren't living as comfortable as you would imagine...
I don't think they have that distinction, at least at Big4. I know many law firms do that, so you have partners with the title but they don't participate in profit sharing (i.e. they are salaried). My understanding of the Big4 is that Partner = equity, and Exec Director = non-equity. So, an ED might be making $300K, $350k, whatever, and has similar responsibilities / expertise, but doesn't have the risk or reward of being an equity partner.
An MD's lifestyle (at least from my observations) is almost entirely dependent on the amount of revenue they're generating. E.g. one of our MD's is a f'ing hitter; is hoping around on planes on average 10-14 days a month maybe in the office 2-3 days and is always playing golf.
Another MD we have cannot seem to bring in a deal to save his life (or at least for sometime now) and he's always rumbling into the office at midnight to look over a book, just off a 15 hr flight from Korea or some shit looking like the most miserable soul on Earth. Poor bastard is probably traveling around 250 days a year.
It's funny how the IBD world changes so much as you move up the totem pole. It moves from a very technical/analytic driven position to one that is nothing more than high finance sales. If you have the connections, industry experience, and soft skills you can make it rain as an MD.
Agreed, the skill sets required of Analysts (technical) and MD's (sales) hardly correlate. I think this is why so few rise all the way through the ranks. Also, it's the only reasonable basis (in my opinion) for the 2 or 3 years and out model at most banks (which I still think is absurd).
Edit: I acknowledge using too many parentheses.
OP's pic looks exactly like an old MD of mine. Weird
how is the compensation of an average BB MD compared to a partner at a mid sized PE firm (no mega funds)
how is the compensation of an average BB MD compared to an average elite boutique MD (greenhill, lazard, etc)?
Average elite? I would think those two words are mutually exclusive.
i know, i was going to write "average boutique", then I changed my mind to "elite boutique", but forgot to delete "average"
I thought there was a mid-level Director position which was more or less a senior VP position, some of whom have core MD responsibilities, others who are simply extremely "senior" VPs.
I think a lot of you vastly overestimate the enjoyment of client-driven life. Going out to eat every night , having to be "on" and pretending to laugh at some asshole client's jokes on the golf course can get real old, real fast.
I'm just speaking of my previous life in S&T but the top levels (of any sales profession really) are very similar. Certainly helps if you like your clients but odds are you won't like all of them.
Obviously the travel is HIGHLY overrated. Not sure how many people here realize that since everyone is so young. But that gets old no matter whether you're in first or coach. I love playing golf but I want to do it with my buddies or in a tournament. Not with a client that I have to entertain the whole time and be "on", as you say. The only upside I could see to this is that my CC fees would be taken care of (and that's a HUGE bill for me) but other than that, I'd rather just golf on my own.
if you're an outgoing and alpha male, the sales-driven nature of the job at MD or partner level should be a great fit.
I am very social and outgoing, and enjoy interacting with people. so, personally, I would very much rather fly around, meet clients, and play politics with the clients rather than do tons of grunt excel work as an analyst stuck in a small cubicle while getting constantly shit on by associates
Heh. The naivete. Being an MD isn't a vacation. Your schedule is as grueling as the junior guys, just in different ways. You're sardined into a plane 15+ days a month (not necessarily first class all the time these days either), forced to participate in an endless marathon of conference calls, and have to suffer through meeting after meeting, after meeting, only a few of which will result in actual business. And throughout all these interactions you're not some "alpha" calling the shots. You are in client service. Your job is to grovel for business and when the client says "jump," you say how high. I think Ken Moelis even said one time in a Bloomberg article or something that a client could call him up at midnight and he'd be on a plane no questions asked within the next hour. That's not an easy way to live. I think one of my buddies put it best - if you are making $500K or more working for someone else your life is going to be miserable. You just have to figure out for yourself if it's worth the trade-off. I think there's a lot of truth to that, and it applies here especially.
This is patently false. Being an MD isn't like a fucking Hollywood movie. It's being the client's bitch, being at their beck and call 24/7, 365.
Like mentioned above (numerous times), MDs have to travel - a lot. This is the prime reason I chose the PE route, and not the "BB IBD MD track". And I imagine the same holds true for many others.
Lol...i bursted out laughing reading this.
There is nothing alpha about being some client's bitch or having to deal with some asshole client who you don't even like but have to suck his dick because he can provide a shit ton of fees to the bank.
I think you're exactly right about this. I even believe some MDs spend so much time "on" that they literally change in personality 24/7 from themselves to the "on" person which is pretty scary.
Thanks for all the responses guys, they were helpful. How important is knowing how to golf / being a good golfer as an MD? I know golf is the stereotypical sport of businessmen, but what if you royally suck at it?
(I'm not a golf fan, if you couldn't tell)
2 - The challenge for business golf is that you'll be playing on some tough courses assuming that all business entertainment is done at high-end courses and/or CCs. I belong to a large CC that hosts a huge LPGA event and if you're a beginner, it's nearly impossible to improve your game on that type of course. So you're going to have to play A LOT of smaller tracks before you're able to play something that a client will want to play on.
Overall, its not hard to build a good golf foundation, just do yourself a favor and take lessons from an instructor from the very beginning.
There's always sailing.
Looks like that daily practice for HS varsity golf will finally pay off.
point above me is true when the shit hits the fans very senior mds will still wake up at 4 am and get on a call with a client halfway across the globe or hop on planes in the middle of the night etc.
in any client service job your a little bitch sucking the clients dick not some alpha calling the shots, you can maybe intimidate your juniors at the office but outside your a slave to your client.
Nice Morgan Silk photo...
From what I've seen...
REPE MD Being an MD / Partner in PE is awesome. There is still a lot of travelling, but you are not a slave to quarterly/annual sales performance, so the stress is different. It's the stress is having your net worth, reputation and career riding on a few deals, the calibre of your underlings/partners and exogenous factors (economy, politics, etc...)
Being on-call is different. You have to address all of the issues that your VPs/underlings highlight in the deals. Your money is on the line.
Networking to originate deals / potential investments is different from trying to be friends with CEO / executives, depending on your investment style. LPs can be a pain, but its different from having a CEO as a client. Road shows can be a pain if the market is bad, the funds have not met LPs expectations or if your LPs have made mistakes elsewhere in their portfolios.
PE is awesome when you have the capital to invest and see value, but it is nerve wrecking to deal with troubled deals, pissed off LPs, or fund raising for a new fund.
This exactly, i'm an analyst going through a fundraise on a new fund and its absolutely brutal. 8-12 basically 7 days a week, which blows ass since i'm used to my normal 9-8 routine and having weekends to relax. I couldnt imagine being in banking.
Going back to the original post, if your goal is to have a nice house, a good wife and spend time with your kids, its not your choice of career that will get you there, rather the type of person you are and how you decide to live and relate to people.
Ha I think we both know those aren't my only goals or I wouldn't be on this forum...
I appreciate your input Relinquis, your posts are always top-notch.
^^ yeah, bottles and models... haha! thanks bro, glad you like them.
Yes, lawyers are the biggest bitches of all.
And no one is saying that cranking in Excel is more "fun" than gladhanding and going to meetings (though some haggard MD's, and executives at most companies might not mind a day where they just hang in the office). We are saying that the lifestyle is not Entourage. You are not doing this when you are 22. .You are doing it when you are 42. And tired. And overlevered with a high cash burn rate because you've been divorced 1+ times and you've got 2 kids in college and 1 in private school.
And then, oh joy, you finally close a big deal but because you expect to be compensated for that, your expectations adjust. A million bucks doesn't look as good when you think you deserve 5. And then firm at large is doing shitty and so you just got maybe 2 million in deferred stock after closing 10b in deals and being gone from home for 150 days. That vacation house you could barely afford because of the above isn't so kick-ass when you are never there.
And advisory isn't exactly a cash cow for large banks. Just check any recent earnings call. So don't expect more than a high five the next day.
This.
Dude you had me rolling when I read this post..."lawyers are the biggest bitches of all" lmao
Lawyers dealing in finance are just extremely well payed BO employees
Monkey Business has some good descriptions of what exactly MDs do. That was one of the reasons the authors left banking - they realized there was no light at the end of the tunnel.
This is the life of an MD. Being such a miserable fuck that you stab an immigrant cab driver over 100 bucks.
http://www.wallstreetoasis.com/forums/ms-md-arrested-and-charged-with-s…
It's a different kind of stress. A lot has already been said here.
At the analyst/associate level, the most brutal part is the hours. But the good side of it is you don't bring your work home (your personal life is separate from your work life - that is, whatever personal time you actually have). In short, it's grunt work - but nothing really more than that.
At the VP level and above, it's about SALES. You are expected to close. At the VP level, you are expected to begin building a roster of potential clients, contacts, etc. Start hustling for new business.
A couple stories from my days in banking, from various MDs/partners:
My group MD at the time (one of the most profitable and successful group globally at the time) submitted his business plan for the year (which I helped him put together) to the operating committee. Pretty aggressive goals - to continue to grow his revenue on what was already a blockbuster year. His boss doubled it, and when the MD responded with "that's ludicrous. It's impossible" the global head of our group told him "XXXX, you're a smart guy, you'll figure it out."
A coverage MD in Asia organizes a last-minute conference call with other MDs from around the world. At the start, a lot of warm chitter chatter in the beginning about Christmas holidays, family, etc. as it was a few days before Christmas. Then, the coverage MD launches into the agenda: says there's a huge privatization in the works and the gov't client is holding the beauty contest on Dec 25th. Silence. One of the MDs mutters... 'that's... Christmas..." and the coverage MD responds, "yeah, I know but this could be one of the biggest transactions this year" (which is code for: revenue sharing amongst the various MDs). All MDs on the call as expected cancel their holidays, and fly overseas for this pitch. Analysts and associates are off the hook once the materials are done - we go home for Christmas, these MDs are overseas pitching to some God awful Asian gov't bureaucrat. Easier to cancel last minute plans when you're a young single guy - much, much harder to look at your kids in the eye and tell them you've cancelled on them. Lesson: when there is a revenue opportunity, as an MD you are expected to put everything aside for the firm. Period.
In short, it's 100% a sales job. Your job as an MD is to bring in revenue for the firm. I'm sure as a 20-something single guy you may feel it's the bees knees to be golfing, private jets, wining and dining with clients, blah blah blah. But I can guarantee you that in your 40s if you have wife and kids -- you will think much differently. That is, unless you hate your family - which then likely means you are miserable (and there are MDs out there like that too who find "work" to be an escape from their family life).
I don't feel sorry for them at all, as there's certainly worse jobs out there, but it's hardly "fun". They are under tremendous pressure. There is also politics - not all MDs are equal, and one year you are the big fish, the next moment you are being stepped on by other MDs. It's a race on a treadmill. Constantly having to make your numbers each year (which the bank will try and escalate, making the fence you have to jump higher and higher each year) makes all that travel, dining, schmoozing, etc. more like a "job" than some luxurious vacation.
If you were to ask many PE or VC partners what aspect of the job they hate the most - and almost all would say "raising money." And ask them what percentage of their time they spend on this activity - it's anywhere from 1/3rd to 50% of their time - because the new fund you need raise a few years from now requires that you sow the seeds now (you can't just knock on someone's door and expect a check the following week or even month). And the ones with a sense of humor may say "we spend half our time raising money, and the other half bitching about our existing LPs". For some of you junior folks in PE or VC, I'm sure you know that you're the ones doing a lot or most of the analytical work and the deal sourcing effort, talking to portfolio companies execs, etc. - you know, the stuff that is probably way more interesting than what the PE or VC partners actually do (spending time raising money and trying to keep their LPs happy).
I have to agree with Alex on the fund raising part... a real pain in the ass. The stress of under-performing deals is bad too (every large firm will eventually have one or two of these at the minimum - there are no exceptions. Fact). Very stressful to potentially lose money and even more stressful to lose money for LPs that your firm depends on (in fact, you don't need to lose money to piss them off / lose them)... A lot of pre-2008 people won't be able to raise a new fund.
Two things:
1) Any producing role in any business is going to be much more stressful then a non-producing role. I am sure when I leave the office at 4pm the analysts think its a great lifestyle but they also dont have stress-induced nightmares over bad trades and they dont have to worry about explaining to investors or the guy who runs the place why they have had a bad month. The junior grunts just have to worry about not making a typo on an excel sheet...nothing really too stressful about that IMO. And no amount of money changes this...ie you never say "well who really cares I made a ton of money last year"...that's just not the way human nature works (at least my human nature).
2) I hate golf, I suck at it, and it has never hurt my career at all. In fact I actively discriminate against people at the junior level who are too into golf because I cant understand how someone who is in their early 20's could justify spending 5 hours playing a sport that doesnt even make you physically fit.
IB in general is depressing... thank god i found out about consulting last year (lol as if that is sugarpuffs and roses)
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