Disclaimer *********When I refer to Big 4 here I'm talking about Big 4 M&A...i.e. the teams that actually do deals...I am not referring to Valuations, business modelling, transaction services/support, restructuring, transaction advisory services, audit, advisory or any of the other services provided by Big 4.**********
As I near the end of a three year training contract in a Big 4 firm I am naturally getting more and more focused on the direction I want my life to take after this.
Looking into the options open to me I've been doing more and more research into M&A teams in the Big 4. For some reason these teams seem to be completely disregarded and I dont know wheter its through ignorance, insecurity or for good reason.
Let me break down the way I see it:
1) These teams do deals...actual bona-fide deals...look it up on mergemarket...ok they may not be as big as the deals done by BB but they are still deals
2) The work you do will be the same as what you would do in a bank...modelling/admin shit/other apsects of the deal process
3) The hours will be better....sure certain deals may be banking hours but overall the work/life balance is a lot better and your given a lot more lee-way.
CAVEAT A lot of people seem to be under the impression that life is sweet in the Big 4....this is not technically true and at manager level and above hours are pretty much 60 hours per week..sweet compared to the 100 hour weeks some pull in IB but still not 9-5.
4) what really got me thinking about Big 4 M&A as a viable option though is the compensation in the longer term. For example I was looking at ER....I might start as an associate on $100k, get to analyst level and make $200k-$500k and eventually cap out at $500k to $1m. Banking pretty similiar...PE, prob pretty similiar again with obviously much more upside potential (not 100% on these figures so corretc me if I'm wrong). Looking at Big 4 its not that much different...its just it takes a lot longer to get to good earnings so you might start on 60k, go to 100-200k as manager, 200-400k as director and 400k-1m as partner....OK so not quite as good as banking money but not a million miles off either....at the end of the day if your good their is a good chance youll be earning 500k-1m by the time your 40 doing interesting work.
5) Work at partner level is basically gonna be the same thing as senior positions in banking...ie managing relationships..basically boils down to lots of travel and expensive lunches.
So on the whole I dont think there is that much between the two paths except at lower levels you'll work seriously longer hours in IB for seriously higher pay. Yet despite this I have never once heard anybody say their goal it was to become partner in Big 4 M&A.
Why is this?
Am I missing something?
Are people just ignorant of this area of Big 4 believing they do nothing except FDD and PPA valuations?
Or are people really that insecure that they just have to have people call them a banker rather than an accountant?
Genuinely interested in peoples views on this and would love to hear from anybody with experience in Big 4 M&A.
Potentially heading down this path, thanks for the shout out Big 4 doesn get enough love ya diggg
I spent one year working at one of the Big 4 and couldn't wait to get out....by the way are you recording the time you spent writing this post in your timesheet ;-). I felt the same way you did going in....better hours, decent money and the potential to make very good money at partner level. Obviously you have been at your firm for 3 years and understand the ins and outs of it but surely you must realise that the chances of making partner are very slim? Most people leave after a few years for greener pastures and unless you're 100% dedicated to the firm and can bring in business you end up topping out at the £100,000 range here in the UK. Unless you love it its hard to motivate yourself to put in the hours and effort to make partner...take it for what you will.
Best of luck!
For other monkeys info. Big 4 M&A is referred to the one in the UK and its like. Correct me if I am wrong, but, Big 4 in M&A is solid in the UK
Correct me if i'm wrong guys.
The overall work life balance should be better. But the deals you work on are just within the range of a few hundred million (a few hundred million) which are not as big as what the BBs have to offer.
At the end of the day, its about the deals that you wanna put on ur CV when you are planning on exiting to HF/PE.
So its depends what one wants? Work-life balance, choose big4. Want a better CV, go for MM or BB i reckon.
Pardon me for the poor english here..
When reading about Big4 M&A on this platform you have to keep in mind that the majority of posts refer to the Big4 in the US. In the UK and in Europe in general the Big4 are much more respected than in the states.
By the way, during my internship at one of the Big4 some senior people complaint that more and more junior people (2-3 years +) were lured away to PE firms in London (althouh I can't confirm that trend).
But don't get me wrong, I don't want to compare M&A at the Big4 to IB at banks since banking is a whole different story.
With regards to the above, in the UK, CAs are well respected so it's not too uncommon to see someone with CA and maybe M&A experience at a Big 4 move to PE (maybe not a megafund, but respectable firms). Same goes for Canada, to a lesser extent (though IBers, and to some extent a few mbb consultants here and there, are still the norm pre-transition).
To address the OP, what Ovechkin said is correct. There's very slim chance of making partner. Partners have equity with the partnership and share in the pot - it is in the interests of current partners to minimize the number of new partners coming in. Also, I think your estimates are a bit high, unless it's the UK where it seems like pay at the Big 4 is higher. Directors (or Senior Managers) don't make $400K... that actually sounds more like what a newbie partner could make.
Great post, I've been wondering about this lately. I'd like to learn about doing the same work sans the insane hours. Money is not the primary consideration right now. I know nothing about Big 4 M&A except what's on this post, SO:
Also: what are other finance jobs in big 4? Valuations? ECM? Research?
I can only speak out of the perspective of an intern over here in Europe, so take my responses with a grain of salt. But nevertheless:
Although many of the employees in Big4 M&A are from reputable schools and enjoyed a good education, you do also have the chance to break in from absolute non-target schools. At least at my Big 4, there have been people from very different backgrounds. That said, I would guess that a top 10 MBA would position you ahead of (many of) your peers and will give you a serious shot at breaking in.
Don't know about the Big4 - IB transition, but at my office I was told that it happens occasionally, although the IB - Big4 transition is much more common. In my energy team three out of six people (2 BB, 1 boutique) had IB experience.
At the Big4 you do have: - M&A - Transaction support/services (mainly Fin DD) - Valuation (& Business Modelling) - Restructuring - Capital advisory (equity / debt)
Never heard of a Big 4 research division though.
According to the junior people in my team (and in the whole junior staff "pool"), bonuses are pretty small. However, at some of the Big 4 (don't know if this is true for every firm) it is possible to pay out your overtime or take some time off, which is pretty cool in my opinion.
What about big4 restructuring ? Especially in the UK ? I know that BB don't have restructuring group. Is Big4 restructuring a good place to be ? if you're interested in this field of course.
Very interested to get answers to some of these questions and think I can shed some light on some of the others
Very few people in Big 4 will have MBA. Its not like its frowned upon but I think the view is two years of progression in Big4 is better than two years studying. Its not like in banks where people jump around all the time. The whole point is your trying to make partner by staying at the one firm for years.
Now having said that I did meet one Cambridge MBA who was starting in TS. I imagine if you had a top MBA and wanted to go to Big 4 you would be a very attractive candidate but it prob would not make sense to get an MBA if you were in Big 4 already and there's a good chance a solid candidate would get in without an MBA so doesnt make sense to blow 100k+.
Now having said all that its my personal view (for what little its worth) that an MBA would surely be useful....at the higher levels the job is just like banking...its about developing and maintaining relationships. A top MBA could give some seriously solid contacts that peers in Big 4 may not have....thats the way I would look at it but reality doesnt seem to match.
Bottom line is in all the people I have met in Big 4 only one had MBA and he was going into TS.
In UK this is very possible but also very hard. Its not like US where Big 4 CPA is almost a negative and you need to play it down to get in. In the uk Big 4 ACA is a positive but remember your competeing against a massive pool of seriously talented candidates so its never easy.
If you look on linkdin or efinancial job postings a lot of position specifically ask for Big 4 aca candidates and a lot of bankers are ex Big 4.
It could actually be a sneaky back door for those trapped in Big 4 doldrums in US. Get a transfer to the UK, get some solid modelling experience and start looking for positions in London....you have a much better shot at banking than as a big 4 CPA in us from what I can tell.
Still in this market its always gonna be tough and people going from Big 4 to banking are very much the minority.
This is what really sparked my thinking about this topic.
Also: what are other finance jobs in big 4? Valuations? ECM? Research?
I know absolutely nothing about ECM or research within Big 4. I dont know a huge amount about valuations but again I know in the UK they do some very interesting projects in addition to doing valuations for audit guys around busy season. To be honest dont know a huge amount about the work.
Restructuring.
I can talk a bit more about Big 4 restructuring.
Basically in the UK this is a very legit job. The bankruptcy system is very different and basically when a company is insolvent it will go into administration.
At this point a bank/accountancy firm or independent insolvency practicioner (eg Duff and Phelps) will be appointed as administrator.
The administrator basically takes over the company and needs to get as much value for creditors as possible. This can mean trading the business back to profitability (the minority of cases), selling the business as a going concern or splitting the business up and selling the parts.
In the uk the Big 4 get some of the biggest appointments around and at the higher levels this is seriously interesting stuff...some of the restructuring partners have incredible contacts in PE and industry and of course there is always the exit op to distressed debt funds.
Now if all this sounds too good to be true its because it probably is for a number of reasons.
At the lower level it can be seriously dull....think admin, admin, admin and little actual analysis. It takes a long time before your making actual decisions.
Its not like advisory where you analyse a situation, give an opinion and thats it....all of a sudden your responsible for thousands of Jobs, properties all over the place with tenants..basically you inherit a lot of the headaches of a failing business.
Yeah its sweet now but what about in 10 years if things pick up? Plus you'll still be woking 60 hours per week for shitty money (for the first while anyway).
Personally I really dont like formal restructuring as outlined above and dont think its for me but a lot of people really love it.
The Big 4 will also have special situations groups (SSG) doing advisory stuff on capital structure etc. I know less about that but seems far more appealing to me.
Bottom line is in UK Big 4 do some interesting stuff but you cant forget the pay is appaling for years (no joke it is seriously piss poor) and a lot of the time the work/life balance thing is a myth (if your in SSG an approaching a deadline you will be in a cubicle until 12 0'clock every night).
This is great info, thanks guys!
How is going from IBD -> big 4 IBD? How do accounting / big4 IBD groups look upon regular IBD? This is addressed above, I'd just like more detail if anyone cares to share: I really want to spend a few years in IBD but don't want it permanently (I want a family and all that).
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