I got an offer to transfer to the Private placements group in my bank. I currently work in the debt Capital Markets Group but I hear that Private Placements is far more interesting and the hours are also better. Any opinions on this? Should I take the transfer and piss my current MD off?
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what will you be doing there? job description?
Private placements basically creates financial models for private firms that are trying to raise capital through issuing securities. Private placements then use these models to raise huge amounts of capital from accredited investors, sometimes upto a billion dollars in debt and equity, mostly in the form of tax exempt bonds and prefered stock. The current market rate is about 4% of the amount of capital rasied. So if a bank raises two billion dollars in capital a year, it captures, approximately 80million dollars. I think it's really interesting, I think it might even ease my transaction in the private equity field because of the increased interaction with private firms.
private placement can also be for public firms. see PIPEs.
i don't know if this will help you get into PE but there is a growing market for PP due to the less stringent regulations. Also I think GS and some other BBs are starting trading desks to trade these PPs.
i interviewed for some private placement analyst jobs and it seems much less modeling intensive than dcm/m&a. For the most part analysts write private placement memorandums and make presentations for MDs to pitch to limited partners. This is not the most interesting work, check out a PPM! I did not think it was as good of skill set as traditional banking. I agree that you will get exposure to PE, but I doubt the exit opps are as good as dcm because you are essentially a salesman. How long have you been doing dcm?
For about two years, or ever since I have started. I'm really bored of debt capital markets now, and would like to move to another field. I'm trying to see what's good out there. I mean PE is one option, business school is another, but I really do not want to go back to college. I was considering stepping out of ibanking as a whole, but I may venture other options within in ibanking. Can you suggest any interesting groups?? There is another group called global services in the Industrials group, which also seems nice.
how about the strategy group? (m&a and business development for the bank itself)
Tends to be lots of generic auctions going around and sending out NDAs/CIMs to sponsors... my least favorite type of deal. And there won't be much modeling, it's more writing CIMs... so not as valuable a skillset for the buyside.
If you're bored with DCM maybe try M&A (I realize it's hard to get into) - you get to work on a wider variety of deal types (depending on the group of course) and still get good modeling skills.
It also depends on your goals: if you want to do PE, debt or M&A is the way to go. If you want to go back to business school or stay in banking long-term, you can probably afford to take a detour over to PP if it really interests you.
If you want to step out of ibanking altogether, you should get out before it gets too close to bonus season. :)
I would not go into private placements as a first year analyst/associate. Since you have 2 years experience in dcm, i would find out what exactly you would be doing working in placement. I was not knocking private placement, its just that it does not give new analyst/associates a strong modeling skill set. Placement would give you great contacts into the PE world and after some time in placement you could easily get into business school or PE. Placement is also fewer hours and is very lucrative. At the VP/MD level it seems like a great place to be especially given the fact that you already have the modeling/traditional banking skillset. Like you said above they get 4% fee of the total fund! The higher ups in placement make a shit ton of $$$$$$$$$$
What is "Private Placements" for IBD? (Originally Posted: 07/04/2014)
What does the Private Placements division do in IBD? I know they market and sell securities to private investors, but I was wondering if anyone could tell me about your typical day to day duties, a breakdown of the type of work you do, how PP differs from traditional IBD groups in terms of career progression, lifestyle, comp, and exit opps.
It's capital markets focused on non-public raising of debt and equity. It involves many of the same aspects (modeling, preparation of CIMs or OMs, powerpoints for pitches, etc.). I would be skeptical if its primarily source of funds is individual investors because retail deals are brutal.
Exit opps are more limited, particularly if you are focused on individual investor deals. You could perhaps move to a growth equity fund, mezz fund, venture fund, etc., but are not going to be in as good of a position as a more M&A focused role.
Exit Oppos for Equity Private Placements (Originally Posted: 08/27/2010)
Hello,
If anyone's familair with this position, can someone describe some of the exit opps of Equity Private Placements? I know sometimes it falls under ECM and sometimes under IBD.
Thanks
Depends a lot on your bank and the deals you work on IMO. I know some EPP groups that only work on the shitty deals that the M&A group wouldn't take on because they're either too small or the company is too risky. Other EPP groups work on PIPEs or venture financings, and your experience can be just as interesting and helpful as M&A. Highly variable, but as a general rule - if it's EPP at a no name bank, it's probably crap.
Private Placements - Funding (Originally Posted: 01/23/2007)
Maybe someone in the industry can help me out with this:
How do bankers screen for private companies that need funding? Obviously it is more difficult than public companies whose financials are available.
Anyone know?
Any thoughts?
I'll take a gander here...
At least with my group (Real Estate) in particular, it tends to be through referrals or repeat clients. I've never done a "screen" for companies who need private equity. There are potentially thousands of companies who fit that bill. Potential IPO candidates are another story.
On the other hand, we get approached fairly often by companies wanting to raise a fund, do a joint venture, etc. and if we decide the deal is worth pursuing, it's a matter of finding the right private equity investor(s) to partner with. That's where screening might come in.
Sorry, doesn't answer your question, but that's typically how things work on my end.
Private Placements - Type of exit options (Originally Posted: 04/02/2008)
Similar to the co-managing thread, can some guys in banking talk a bit about private placements? What exactly do you learn as an analyst, and if you were to work in a private placement group, what type of exit options would you have?
Thanks in advance
I assume you mean debt private placements.
It's similar to corporate lending, although approval is essentially what the market will accept, not what the bank is willing to lend. There are more pitch books and IBD analysis involved then corporate lending. Exit options tend to lead towards debt capital markets or lev. fin for another bank. On the plus side, private placements analysts typically don't work quite as many hours, but get similar comp. A close friend of mine did this for BofA and some weeks was out of work by 7pm, mainly because face time was not expected and the senior bankers were out of the office a lot of the time.
Private Placements / Capital Raisings @ Boutiques (Originally Posted: 09/22/2013)
Hi - this is not a space I'm familiar with at all but this something that I've been wondering about so if any of you guys work at boutique IB's or private IB's I'd be interested in your opinion.
When a boutique IB is doing a private capital raise for one of their clients either debt or equity I'm just wondering how this is held and who the investors are. My understanding is that it's usually the following in no particular order - VC firms, insurance companies, PIPE funds, Mezzanine Funds, Pension Funds, PE Funds, Family Offices and hedge funds, am I correct here? Would mutual funds also be a target?
Also, how are these firms targeted? Is this done confidentially for the client by the senior bankers in the firm where they'll reach out to the relevant PM's at the above funds or is there more of a formal road show? Would this generally be run by the MD's at the firm? How do they source these investors, it generally just through their own contacts?
Does anyone that works a boutique or MM firm have any ideas on this?
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