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Southern_Banker's picture

Public Finance--Debate..

by Southern_Banker (Senior Chimp, 22 Banana Points Points) on 6/16/08 at 8:15pm

So my friends and I were having somewhat of an argument over its classification...is it considered 'Investment Banking' or is it not the same? I know a lot of banks classify the group as a part of their I-bank, but how come a lot of kids in analyst classes dread being picked to be in this group?

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Cornelius's picture

because

by Cornelius (Senior Orangutan, 396 Banana Points Points) on 6/16/08 at 9:16pm

investment banking is for companies and sponsors. public finance is for public entities such as governments.

For example, say a state needs to build an airport. The financing for it is done by public finance.

Its classification depends on the bank..some may keep it under banking, others under capital markets.

i guess they dread it because the bonuses are not as high (probably 10-20k difference) as banking and KKR/Carlyle or top hedge funds don't really look for public finance analysts.

but public finance analysts are able to go hedge funds and pe shops.

i think its a good place to be for the lifestyle and pay. But you'll probably still be doing modeling and pitching.

being an incoming summer or first year, you're so hopeful about exit options and being a baller, thats why you think being a public finance banker is beneath you..

but let these analysts lose their jobs and then they'll change their tune..

ThatKidThere's picture

I worked in public finance

by ThatKidThere (Senior Chimp, 16 Banana Points Points) on 6/16/08 at 9:54pm

I worked in public finance at a regional bank in Chicago as an intern. Certainly there is a bit of a stigma concerning public finance, but it certainly does offer some unique experience.

I didn't have any trouble getting interviews/offers from ibanks.

Given the skill-set, I think pubfin is definitely ibanking. Pitching and modeling.

Though the deal-flo in some of the munihouses is pretty steady and you find some old-school bankers. Not second rate, but not the sexiest either. Better hours, though.

Hope that helped a bit.

srr636's picture

maybe it's just me but i

by srr636 (Baboon, 161 Banana Points Points) on 6/17/08 at 2:30am

maybe it's just me but i think it depends on who you're working for in terms of pub finance, and what you're doing....? ie infrastructure is oftentimes warehoused under pub finance but that's definitely a good sector in terms of exit ops, modeling experience etc...maybe i'm wrong though.

rpm4's picture

i have always heard that its

by rpm4 (Senior Chimp, 20 Banana Points Points) on 6/17/08 at 11:52am

i have always heard that its more of an issue of 'perceived' exit opportunities than compensation. i received offers in the public finance side and was told that on the analyst level the bonus bands were identical to those in traditional banking and S&T, and therefore for analysts the compensation was exactly the same. the difference comes in the higher levels where obviously the bonus significantly lag their corporate counter parts. just my 2 cents, but i would be interested if anyone could speak through experience