I'm a junior at a non-target with only PWM internship experience, most recently at BofA ML. I just got an offer with a decent boutique as an unpaid Public Finance summer analyst. From what I've read on this forum it seems as though this isn't IB or people don't want to acknowledge it is. I was excited, now I'm skeptical. What do you think? Will I have trouble transitioning out when looking for a FT offer? Or should I just stick with Public Finance until B-School?
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What exactly does this "boutique" do?
It's a full service IB and commercial bank with a Public Equity division
They do M&A, Debt raise, and IPO's? They specialize in muni's or something? Sorry, not an expert here just trying to narrow down what this place actually does...sounds like its a good opportunity if what you say is right.
According to their website they offer a "...complete range of underwriting and financial services to Municipalities, School Districts, Special Districts, Public Agencies, Not-for-Profit Corporations and Public/Private partnerships."
Future Baller - thank you very much for the great information, that was exactly what I wanted to hear, I am very excited about the great opportunity I have been presented with.
Public Finance is somewhat of a misnomer.
People who work at an investment bank in Public Finance, are actually banking professionals who specializes in State & Local Government advisory & debt financings, which is by definition investment banking. The reason that traditional IB and PF are separate, is due to the tax-exempt status of these government institutions. Tax-exempt entities require a different type of analysis and have a unique legal structure.
So what does this mean in terms of hours, exit ops and yahtahyah? Well it depends on the group you are in / the deals you work on.
Within PF you might join:
Various DCM-type groups which act as underwriters for specific municipal securities. In this case you will likely do more complex analyses (simulation etc) then traditional IB.
Project Finance (think sports stadiums), which might allow you to move to a project finance specialty shop.
Utilities & Infrastructure, which might allow you to move to a PE fund.
Healthcare is unique in that a not-for-profit hospital functions very much like a corporation. You will gain M&A exposure and significant accounting / modeling experience.
Lastly, since public finance generally focuses on municipal securities, it will likely be housed under Capital Markets within an investment bank. This is not always the case, though. Since public finance also provides advisory services / industry coverage type work, a bank might choose to simply label it as a group in their investment banking division (e.g. Goldman Sachs IBD - PSI).
Future baller that was the most astute application of lipstick on a swine I have ever seen
Youre obviously a prestige bitch and a Goldman cock jockey.... like others have said, public finance IS BY DEFINITION I.B. and would be extremely good experience, especially given the fact our cities and states are broke, they are borrowing debt and issuing bonds at an alarming rate, this is big business.
Anyone making the claim that public finance banking isn't investment banking doesn't know what they're talking about. As someone mentioned before, it is by definition investment banking. If you're trying to get into a non-PF group after graduation, a PF SA position will be much more valuable than your PWM internships at big names.
These types of positions are very hard to come by at non-targets. Congrats, you definitely should be excited.
Is this at Duncan Williams, just out of curiosity?
Using the quote he gave below: http://tinyurl.com/4uq63jc
Using the quote he gave below: http://tinyurl.com/4uq63jc[/quote]
haha I like your taste.
I forgot about Google... in any case yea I'm excited. Now that you all know it's Wedbush, will I be in a good place come fall for recruiting into a MM or even a BB? I know I will not be the best candidate but will I have some semblance of being competitive?
Would I be in a better position if I lined up a part-time internship with a no name regional boutique for my Senior year?
I interviewed for a PubFin position, though I did not take it. Here are a couple things I picked up on you might be interested in:
-Hours are less (group dependent, and not always)
-Pay is less, but still great. Target range for the 1st year position i was looking at was 45-55 + bonus at a reputable, regional, pubfin-specific firm in a denver/phoenix type cost of living place
-Exit ops are limited because:
1) A computer program does much of the modelling for you 2) You are not working with financial statements that you would be in corp fin 3) Less negotiating/schmoozing -- as PubFin deals are mostly just about rate 4) PubFin has a stigma in the industry, and you will have a difficult time comparing to those with CIB experience if trying to break out. It is however investment banking, and that on a resume, especially outside of NY/IL/SF will get you a good job in finance later on.
-People stay in PubFin LT because pay/hours are good
For my interview I emphasized as much financial modelling as possible. They kept saying I would be bored, probably because of this. However, and like others have said, I felt that the op was great and would be doing it right now if I wasn't offered CIB right after I did it. Why? Because it sounds kinda easy--less stress, hours, good LT promotional ops in the MM and BB arena, and good pay. If you are looking at PE or a HF, it may prove difficult. I know I was, but when presented with this it really sounded like a sweet deal.
ALL^^^ VERY TRUE. Basically, it is IB for the public sector. Hence, you also deal with the debt side of the BS, not the equity.
Those who say that this wont be as good experience as a traditional IBD internship are forgetting that there are a large number of companies that are going to be doing big debt releases soon when the economy starts to really pick up to fund expansion projects. If you have experience doing basicly nothing by debt modeling you will be in a good position to fill a niche in IBD groups to analyze the debt factor of projects.
Keep in mind that the differences between banks (Boutique vs. BB) and Groups (e.g. Healthcare vs. Higher Education) are vast, and people on this forum generally collapse these dimensions.
Bulge Bracket Pay: Base 70 + 10 + Bonus Boutique Pay: Base 55 + ? + Bonus
And Bonus is deal size dependent. So, if you're at a BB working on large transportation deals you can expect traditional IB type bonuses (think 50k). Whereas, if you're working on smaller muni issuance deals, you might see 20-30k. The point is that they are FO size bonuses, although smaller than a group that works on huge deals such as M&A.
Also, if you're in a group such as Healthcare, you are working on merger models and gaining significant accounting experience. Expect the hours to be your classic 9 am - 3 am. This is not comparable to say, Higher Ed, where everyone gets off at 9 pm.
So the stigma / perception of limited exits, are mainly due to the fact that the deal experience / the skills you pick up, vary greatly between roles within public finance. A third of the Analyst class from Citi public finance went to Bain. A third of some no-name boutique working on small issuances have no shot at a megafund. And one other thing, moving to a HF is definitely not off the table (there is such a thing as a muni Hedge Fund).
The last note is that your experience will be equity deficient, which was mentioned before. So, if you're trying to go to a PE fund that's not energy / infrastructure related (given you worked in one of these groups), you will be at a significant disadvantage to your M&A counterparts. I don't think it is impossible coming from a BB out of a solid group such as Healthcare, though.
Conclusion: will a public finance internship hurt you in FT IBD recruiting? Will you be less competitive when applying to b-school? Will the world come to a sudden end when you sign a public finance offer? The answer to all three is: no. Absolutely not.
Thank you for the great information, it seems like I have a much better idea of where I stand. I am definitely excited about starting but wish I would get the longer hours and the greater work experience with equities that CIB offer. However, I still assume I will enjoy what I do and from how it sounds will be less likely to burn out before B School if I continue in PubFinance after.
It looks as though the deals I will mostly be working on will be cities, redevelopment, and municipal utilities. I'm assuming this is closer to Higher Education than Health Care on the spectrum that FutureBaller mentioned - is this correct?
Also I wouldn't mind working in public finance until I go to B School - would it be a doable move from Wedbush Public Finance this summer to FT BB Public Finance when I graduate?
bump!!
Public Finance Analyst - What do you do on the Job? (Originally Posted: 02/11/2016)
Hey Guys,
I am curious as to what to expect from a public finance interview. Additionally, I am curious to learn how PF is as a career as I come from an M&A boutique and am curious to learn more about what PF is all about.
I have read the PF MI stuff but are you primarily working in DBC and doing analysis on entities structures through there or what does a PF analyst do --- I am curious and look forward to hearing back from WSO, you guys are very helpful.
All the best,
Prospective Monkey.
I'm also interested in Pub Fin, while researching I came across this (from 07 but still some useful info):
https://warrington.ufl.edu/graduate/academics/msf/docs/speakers/present…
Has slides on "Analyst Role & Responsibilities"; from what I have read on WSO, interviews tend to be more behavioural, not too technical, need to show true interest in PF, and know some basic bond math.
Great, I appreciate this and am reviewing it now. Seems like a great focus to get into to be honest. Obviously M&A and other sectors of investment banking will probably give you more earnings potential but it seems that with what is going on in China - that Muni Debt will become more popular. With US and CHina bonds not as high of quality/most heading to junk status, I see muni debt more attractive on an invested capital basis because you will not loose par value of the bonds. More of a "Save Haven" Perhaps.
Per a few PF Bankers I have talked to it seems that the Healthcare sector is a great place to be right now and will be into the future. Additionally, it seems analyst will do a ton of work on presentations for RFP's and DBC work. Do you know how tough DBC can be?
Side note - growing in PF and making a career out of it may be a great route as in 8-10 years you could really rise to a Director status from the groups I have talked too.
Yea definitely a lot of interesting things happening in the muni market. After doing my research I'm pretty sure PF is what I want to do, specifically in infrastructure if possible, since I'm studying civil engineering; I think infrastructure is the place to be in in the future since P3 action will just keep increasing IMO.
And in regards to DBC I hear it is pretty straight forward.
Curious, are you an analyst in M&A lateraling to PF or you were interning in M&A?
As far as the daily quant aspect - I would say that a large part of what we do is look for refunding (refinancing) opportunities for prospective clients (either for meetings or responses to RFPs). You would typically either get a Bloomberg pull with the issuer's debt or look at their financial statements (CAFR) to see what eligible debt (either currently callable or eligible for an advance refunding) they have outstanding and then you would structure refundings based on current market rates and a spread that takes risk into account (issuer's rating, revenue vs general obligation, etc..) that you would obtain from a trader.
If you have any specific questions, I would be glad to try and answer them.
Thanks Solstice3 I appreciate you informing us on what you do in regards to the daily quant aspect wise. I do have a few questions though if you do not mind answering, it is appreciated:
1) Would you say as an analyst 50% of you day is a quant aspect and 50% is meetings with clients, going to meetings with prospective clients, etc? If you could expand on that it would be helpful as from what I have gathered a lot of work is done in helping build presentations with Associates and VPs to get RFPs out to clients but I could be wrong. Obviously as analyst you mainly support the team when they need you.
2) When does PF become a lucrative business? Being the senior book runner on the deal? And could you provide an example of what a fee structure looks like? This is helpful because the typical M&A structure is based on the Lehman Scale primarily....
3) How many deals do you work on in your down time and how much do you work on when you are busy?
4) Comp wise are you looking at a 1st year analyst making between $60-80k all in or more than that at most shops?
May have more as you answer but for now, I hope those are good questions. Thanks!
Dude, was this with J.P morgan?
Thanks for starting this thread, Public Finance is an area I am interested in as well.
One question I have is, apart from Public Finance groups at your typical investment banks, what other specialized Public Finance firms are there out there? I've heard of PFM but are there any others that are of decent size?
Most (all?) of the BBs have public finance arms, though some call the groups Infrastructure Finance specifically. Other shops focusing specifically on Public Finance include, in addition to the one you mentioned, FirstSouthwest and GK Baum.
Citi has the best Muni platform on the street tbh. Descended from Salomon Smith Barney.
$15 dollars a bond? Who the hell are you working with? I have done some of the largest named debt restructuring deals and bankruptcy financings and we got paid nowhere near that I need to find some of them. Unless those were all tiny 50 million deals
I've done $30/bond but this is small 30-50MM non-rated to QUIBs with a traveling letter.
Comp I would say
A1- 115 A2- 130 A3- 145
Those a bb not clue what other people do
Public Finance - exit opps that bad? (Originally Posted: 11/17/2010)
Ok, I know this has been asked a million times, but I'm looking for anyone in pubfin, or anyone who knows someone in pubfin.
What were their exit opps? Is the transition pubfin -> IBD,PE,HF,VC unheard of, or just "harder" than traditional banking?
How about pubfin-->MBA-->?
I know there are a few groups within pubfin that do pub-private stuff, project finance, and even M&A (healthcare). Would this expand exit opps?
I know I'll probably get some "pubfin blows" stuff, but hey, it's still a pretty sweet gig when not compared to ibd.
Thanks for any feedback.
Citi huh? I think they are the only one that does some limited M&A within the h-care group....
The exit opps are not great and pub fin can be boring. Forget about PE and HF for the most part - very difficult transition. IBD would be difficult as well. You have placed yourself in the quintessential pub fin black hole.
Receptively, pub fin is a great place to build a long term career. My friend, 34 year old BB Director, is pulling in around 1 million a year and is really enjoying his job - has a family and works reasonable hours.
With regard to B-School, it looks good as you can play up the whole. "I chose public finance because I want to facilitate non profit organizations, improve infrastructure to better society....." - B - Schools will probably eat that shit up. From there you could hit the reset button and attain any position within finance, given you go to a top school and network.
A few questions:
(1) What about h-care PE?
(2) After B-school IBD,PE,HF are on the table, then (assume HBS + 2-3 years BB pubfin)? If so, which ones?
Thank you very much, your response was quite helpful.
pubfin blows
It seems that every comment you make is some sort of attack. So here are my hypotheses on why you are such a flaming bag of douche.
(1) You went to an agriculture school. Curious - did you specialize in agribusiness?
(2) You couldn't get into a BB with your agriculture education, and you hate yourself for it.
(3) You are in fact an (ag grad) asshole.
Thanks for the advice, now here is some in return: maybe spend your free time trying to get laid, instead of bothering strangers on the internet.
I know a couple of people from Citi's group last year went to Bain, and others went to top B-Schools or stayed in the group.
It seems like there's a decent amount of infrastructure funds, eg, Citi Infrastructure Investors, Macquarie, Cintras, etc
Also seems like a lot of funds go for infrastructure/utility holdings, like CDPQ, Ferrovial, Terra Firma.
How would the exit opportunities into those types of roles be? And what about moving to project finance IBD or infrastructure consulting?
you would need to go to b school to get anythin respectable coming out of pubfin, trust me
Thanks everyone, I guess b-school is my next move then.
bump
I dont understand why it would be difficult to go to a ibd in the middle market as an analyst
The fact is, whether BB or not, pub fin will not provide you with the skill set to move straight into IBD. You will not have the accounting skills and will be deficient of relevant valuation experience. Your knowledge will comprise of structuring and valuing municipal bonds, which frankly is not that relevant in IBD. Contingent on your group within pubfin, you may get some solid credit experience and some skills that could possibly be transferable into DCM.
It all comes down to experience in the end, not name brand. The brand just validates and supports your experience, training, and knowledge. That being said, you will learn a lot in pub fin, and I hear the work is heavily quantitative, but you will not learn the appropriate information for a career path in IBD, PE or HF. (for the most part)
you wont get a spot
If you are at a BB, is there a good chance to move to DCM?
I nor anyone else could ascertain your probability of landing something in DCM. You will work mainly on the debt side, so assume there is a chance. Your best bet is to perform very well on the job and transition within your bank.
Pub fin really puts you in a hole from my understanding. You will be pegged as the "pub fin or muni guy." If your group gives you transferable experience, then I suppose you could push your way into an IBD position if you jump ship early on. IMO, a Big 4 trans adv guy would have a better chance moving to IBD as his skills are more relevant.
Additionally, if you had an IBD internship, your chances are better although you would be stuck trying to explain why you could not get into IBD. Why did you take the pub fin gig if you are so concerned about exit opps? Should of done your research. Just stick it out and if you truly hate the work, consider other options. For now, do not get turned off by the lack of prestige that comes from pub fin.
public finance bb********
How about exiting to an Infrastructure fund from muni underwriting? How hard is this?
Thanks
Public Finance Exit Opps (Originally Posted: 09/16/2013)
I know that's been somewhat covered here before, and I've read the M&I article on public finance, but I still have some doubt in my mind at this point.
I'm currently interviewing with a firm that is somewhat in the transition between boutique and MM size. Second round is a week from this upcoming friday. At this point, I am happy to be in this position, but I also have some doubts.
Really, my ultimate goal is the buy side, as I'm sure it is for many. Specifically, hedge funds. What interests me is markets, macro economics, investment ideas, etc. And so this is generally where my passion lies. I'm sure public finance is a great job, although I'm not sure I want to do that for the rest of my life. I'm between a rock and hard place, because I have almost exhausted my savings looking for a job since graduation in May, so I need employment. And I also want to get some decent work experience, and just get myself going in something that is at least generally in the ballpark of where I would need to start out. However, I've read many times that public finance is, 90% of the time, a one way ticket. You're in, then you're in. That's it. Very few make the switch, and when they do it's not easy. I would do anything to even intern at an HF at this point, except I am in Wisconsin (my home). So that's not an easy proposition. For now, I'd be happy to have this opportunity work out if I knew that after a couple years, I'd be able to start looking at making the jump to the other side.
Am I wrong in thinking this? Does anybody have experience with public finance then making the switch? I'd love to hear it if so.
Public Finance has very few exit opps and that is the truth. Moving into Buyside will be hard to close to impossible because of no transferable skills.
What I have seen is, moving into DCM role, moving into a loan product group such as corporate banking might also be possible.
I have seen a good amount of people with Pub Fin get into good business schools because of the whole working with non-profit and govt agencies. The closet Pub Fin group that is similar to Ibanking is the H.C group and you might see some cross-transactions and be able to transfer.
If you need work asap then take the job and after a year or two make a transition to a loan product group, DCM or corporate banking, Lev Fin.
Also what position is this city in?
Thanks a lot. I was kind of expecting an answer like this. I'll tell you who the company is via PM so you might have a better idea of the kind of groups they have within. B school is on the to-do list most definitely, good to hear public finance might at least be helpful for that. Reading your PM now.
Good post. The biggest key is the healthcare potential overlap. OP, if you are at a group that works with hospitals and HC systems, that would be your best bet IMO.
Some Pub Fin groups are more focused on raising debt for governments. Even that could lead you to a muni financial analyst or comptroller type position if you have interest.
Public Finance Groups - Exit Opps (Originally Posted: 02/25/2014)
I recently accepted a PubFin offer at a BB as a sophomore. I'm hoping for IBD next summer. Anyways, my question is, which groups in Public Finance give the best skills/work experience relatable to IBD?
I've read around that healthcare seems to be a good one. How about the others (municipalities, higher education, housing, utilities, transportation)?
Spoken with some people in PubFin; ideally you'll want healthcare then higher education, so you've stumbled upon good information. The rest of the sector groups don't deal with capital structure for the tax-exempt entity and as a result you won't be working too heavily with cash flow models or three financial statement models, the most transferable skills to traditional IBD from PubFin.
Honestly, it doesn't really matter which group you get placed in to, since you're a sophomore with BB Banking experience (albeit in pub fin). 95% of bankers don't know what the PF guys even do, so the brand name on your résumé is much more important than the group you get placed into. But yeah, Healthcare is your best bet as they (sometimes) do M&A for hospitals/hospital systems/etc.
Although if I were you, I would try to get into the P3 group (public-private partnership). It's essentially the pub fin. version of Financial Sponsors and seems like it'd be the least mind-numbing.
Thanks for your input! Not sure if my firm has a p3 group, but i'll look into it.
I'd appreciate anyone else's advice!
Public Finance Exit Opportunities (Originally Posted: 10/17/2010)
What is the compensation, hours, exit opportunities, skills developed, etc. any info will be helpful
banking or trading?
What are the exit opps from Citi Pubfin IB specifically?
banking
the exit ops for pubfin are pubfin or b-school to realign your career.
Public Finance--No Real Skills? (Originally Posted: 01/25/2011)
I am evaluating a public finance investment banking analyst position. The requirements seem to be more like supporting the seniors rather than working with models. In fact, it seems like there will be little to no modelling involved. The emphasis was on creating pitch books, running down market research things, and basically doing anything a senior banker asks you to do.
My question is this: Are they just being more upfront with the requirements than other firms? Do most 1st year analysts pretty much just do these things versus modelling? How much do first years actually work with models?
Any insight into public finance would be great.
For the firm, think:
Siebert Brandford Shank & Co.
Stifel Nicolaus & Company Inc.
First Southwest
George K. Baum & Co.
Any idea on comp at a firm like this?
BTW, this is not just evaluating the job posting--i have finished the final round interview.
Send me a PM.
I am really confused on this offer. Any input would be greatly appreciated.
Also interested
I mean, you’re not going to be doing LBO modeling, DCFs, merger models, or whatever you’d typically do in CorpFin investment banking. If you’re in a healthcare group you, you might do credit models or merger from time to time. Housing and Power groups also do thing differently.
Otherwise, it will likely depend on the bank, but for day-to-day bond structuring and analysis, you’ll probably use DBC Finance, and occasionally bust out an excel model to determine different structuring alternatives for a toll road or something like that.
Public Finance--Debate.. (Originally Posted: 06/16/2008)
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?
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..
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