2/4/10

What range of AUM for a PE firm can someone from a MM IBD expect to get into? ex. IBD: Piper, Jefferies, Harris Williams, ect.)

Which MM banks place best into PE?

Also, are MM banks as picky about undergrad target school as BB?

Thanks.

Comments (31)

Best Response
2/5/10

As a former MM analyst currently in MM PE, I'll throw some thoughts in here:

Hours: MM PE blows banking away in terms of hours. I worked around the clock at the MM bank I worked at. So many all nighters, almost no time to myself on weekends, pretty much a perpetual state of exhaustion. In MM PE, it is the exact opposite. I work about 50-60 hours a week and I almost always have my weekends to myself.

Pay: Despite the vast difference in hours, I get my paid more in MM PE than I did in banking. On top of this, my pay is less correlated to the market as we still collect our 2% management fee regardless of what happens. My base is 6 figures so I'm never really going to have a "bad" year.

Work: Depending on the PE shop you go to, your work is a million times more exciting. I've made a couple posts now about the type of work I do on a day-to-day basis and I love it. I wouldn't go back to banking even if they offered me more $$$.

People: I've generally found that the people in PE tend to be more intelligent and down to earth than the people in IB. While I learned a lot from my IB mentors as an analyst, I'm very excited to have a hyper-intelligent senior team / mentors that actually take the time to explain things to me and help me to develop.

As for the comments above relating to Harris Williams and other MM banks: One of the reasons Harris Williams / Edgeview / McColl Partners / etc. have such good PE placement is that they are nearly 100% M&A shops. That means every analyst is executing M&A deals for their entire 2-3 years. MM PE shops care a LOT about M&A experience as they expect you to hit the ground already knowing the process. In addition, MM Analysts typically have much greater deal exposure and responsibilities in the deal process. This experience translates well to MM PE as Associates are given high-levels of responsibility and are expected to be able to operate with very little guidance / oversight from day 1. I was actually pretty shocked during my first month as a PE associate when no one wanted to review my work before I sent it off externally.

CompBanker

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2/4/10

Piper > Anywhere u desire

=========================================
We are excited to formally extend to you an offer to join Bank of Ameria

In reply to PiperJaffrayChiang
2/4/10
PiperJaffrayChiang:

Piper > Anywhere u desire

Good to know. I feel set for life now...

2/4/10

I know first hand how HW literally fights on your behalf to place you into MM PE shops. MDs really go to bat for their analysts...

In reply to Well-paid Slave
2/4/10
Well-paid Slave:

I know first hand how HW literally fights on your behalf to place you into MM PE shops. MDs really go to bat for their analysts...

I have heard that but it is nice to hear you confirm it.

By the way, why is everyone so fond of leaving a place like HW for pe?

Why not stay at the bank and work your way up? Is it that much diff. in pay?

2/4/10

Is it me or I feel that Harris Williams is getting trolls on this forum? I'm sure its a decent shop but I keep hearing things like unreal placement and I'm sure I've seen the exact term "MDs go to bat for analysts for PE" at least 3-4 times.

e.g. i just googled "go to bat" and these came up
http://www.wallstreetoasis.com/forums/sagent-and-h...
http://www.wallstreetoasis.com/forums/battle-of-th...
http://www.wallstreetoasis.com/forums/is-it-a-sign
http://www.wallstreetoasis.com/forums/undergrad-ma...

and each one has that phrase

2/4/10

i think they used to use a phrase like that in their analyst job postings, which is why it keeps getting repeated.

they have a list of where their recent analysts went on their website:
http://www.harriswilliams.com/welcometothemiddle/a...

2/4/10

I have seen that said also. So does anyone know the answer?

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2/4/10

For the most part it's true. It's a top MM PE firm and places well in MM PE. Why wouldn't the firm want their ex analysts to be alums at MM PE firms where they might source their deals???

I don't like the name cuz it sounds like hair, like hairy balls, but it's a good firm.

=========================================
We are excited to formally extend to you an offer to join Bank of Ameria

2/4/10

At my bank (very similar to HW), our analysts have typically gone to firms that ranged from $150mm to $3bn under management (with a few exceptions to much larger marquee names). And yes it may be cliche, but the MDs at middle market banks really do "go to bat" for their analysts. I had senior bankers proactively call on my behalf to PE firms they knew I would be interested in, and they also always gave glowing references. Of course, it's in their interest as well to place you for relationships and deal flow...

Bottom line, quality MM shops place extremely well into PE (especially MM PE, probably even better than BB analysts).

- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham

In reply to CaptK
2/4/10
CaptK:

especially MM PE

What constitues MM PE?
Less than 10 bn AUM ?

And is which is best in terms of pay/lifestyle, staying at HW (example) and working up to MD, or going to top MM PE firm and working up ranks there? I just see a lot of focues on PE and not so much on staying in IB?

Thanks for the responses CaptK and everyone else!

2/4/10
In reply to FTPiper
2/4/10
FTPiper:

MM = BB wannabes

What did you gain from posting that?

I really am curious.....

2/4/10

how much does MM PE pay for an analyst 2 years out of college with 2 yrs of MM IB experience? $150 to $200k (after bonuses) a year reasonable?

2/5/10

Stephens, Inc. has closed over $101B in M&A since 05, balk what you want about being in AK numbers are strong though, not sure about how their placement in PE compares to Piper or HW.

2/5/10

Pretty sure Stephens has an exceptionally high promote rate...

In reply to CompBanker
2/5/10
CompBanker:

As a former MM analyst currently in MM PE, I'll throw some thoughts in here:

Hours: MM PE blows banking away in terms of hours. I worked around the clock at the MM bank I worked at. So many all nighters, almost no time to myself on weekends, pretty much a perpetual state of exhaustion. In MM PE, it is the exact opposite. I work about 50-60 hours a week and I almost always have my weekends to myself.

Pay: Despite the vast difference in hours, I get my paid more in MM PE than I did in banking. On top of this, my pay is less correlated to the market as we still collect our 2% management fee regardless of what happens. My base is 6 figures so I'm never really going to have a "bad" year.

Work: Depending on the PE shop you go to, your work is a million times more exciting. I've made a couple posts now about the type of work I do on a day-to-day basis and I love it. I wouldn't go back to banking even if they offered me more $$$.

People: I've generally found that the people in PE tend to be more intelligent and down to earth than the people in IB. While I learned a lot from my IB mentors as an analyst, I'm very excited to have a hyper-intelligent senior team / mentors that actually take the time to explain things to me and help me to develop.

As for the comments above relating to Harris Williams and other MM banks: One of the reasons Harris Williams / Edgeview / McColl Partners / etc. have such good PE placement is that they are nearly 100% M&A shops. That means every analyst is executing M&A deals for their entire 2-3 years. MM PE shops care a LOT about M&A experience as they expect you to hit the ground already knowing the process. In addition, MM Analysts typically have much greater deal exposure and responsibilities in the deal process. This experience translates well to MM PE as Associates are given high-levels of responsibility and are expected to be able to operate with very little guidance / oversight from day 1. I was actually pretty shocked during my first month as a PE associate when no one wanted to review my work before I sent it off externally.

Your posts are always great to read, dude. Thanks.

2/5/10

1styearbanker, the man who was too dumb to get an offer at GS/MS.

2/5/10

What does post-MBA comp progression look like at MM PE shops? How much of it is carry?

In reply to firefighter
2/5/10
philliesphan:

Is it me or I feel that Harris Williams is getting trolls on this forum? I'm sure its a decent shop but I keep hearing things like unreal placement and I'm sure I've seen the exact term "MDs go to bat for analysts for PE" at least 3-4 times.

e.g. i just googled "go to bat" and these came up
http://www.wallstreetoasis.com/forums/sagent-and-h...
http://www.wallstreetoasis.com/forums/battle-of-th...
http://www.wallstreetoasis.com/forums/is-it-a-sign
http://www.wallstreetoasis.com/forums/undergrad-ma...

and each one has that phrase

People on here like to repeat what others say

In reply to l2010
2/5/10
jddl:
philliesphan:

Is it me or I feel that Harris Williams is getting trolls on this forum? I'm sure its a decent shop but I keep hearing things like unreal placement and I'm sure I've seen the exact term "MDs go to bat for analysts for PE" at least 3-4 times.

e.g. i just googled "go to bat" and these came up
http://www.wallstreetoasis.com/forums/sagent-and-h...
http://www.wallstreetoasis.com/forums/battle-of-th...
http://www.wallstreetoasis.com/forums/is-it-a-sign
http://www.wallstreetoasis.com/forums/undergrad-ma...

and each one has that phrase

People on here like to repeat what others say

Didn't know everyone would get their panties twisted up over use of a cliche...
In my case, I was repeating what I experienced first hand/heard from analysts going through the recruiting process.

Compbanker: as always, thanks for the insightful post

2/5/10

Bulge bracket or bust.

2/5/10

Thanks Mezz & Well-paid Slave. I wouldn't worry too much with the likes of 1styearBanker. I've met a number of people during my career that were of the "BB or bust" mentality. Luckily, I don't cross paths with many while working at MM shops.

And the silver bananas were much appreciated as well.

CompBanker

2/5/10

whats considered top MM? Jefferies, HLHZ, Harris Will, William Blair, Cowen, what else?

2/5/10

philliespan -- top MM is a lot less defined just due to the many shops out there. If you're looking to add to your list, the likes of Lazard Middle Market, Robert W. Baird, Lincoln International, and Edgeview are all solid places to work as an analyst in the MM.

CompBanker

2/6/10

What about Citi middle market group?

2/6/10

I thought the entire group was canned during the crisis?

2/6/10

What you say may be true Puss but not true for moelis. That is a declining shop which lost its best analysts and dealflow years ago and is now no longer an elite boutique.

In reply to lookingforanswers
2/6/10
lookingforanswers:
CaptK:

especially MM PE

What constitues MM PE?
Less than 10 bn AUM ?

Thanks for the responses CaptK and everyone else!

MM PE is more defined by deal sizes rather than AUM. Any definition is amorphous, but a fair bucket is to say that firms that typically execute transactions $75mm - $400mm can be considered "middle market". Above $400mm, you start to move into deal sizes that are more appropriate for larger funds.

A good example is HIG Capital - $7.5bn AUM, but did a ton of $75-$125mm deals with us at my old bank. If you did try to put an AUM cap on it, I would say that HIG is probably at the large end of funds that do middle market deals, simply because as PE firms get much larger than that, they need to deploy more capital per deal in order to get their funds invested.

- Capt K -
"Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham

In reply to 1styearBanker
2/6/10

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2/6/10

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