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It's not as complicated and it doesn't involve valuation. If executing a bond for Walmart sounds exciting to you, then go for capital markets, but it will be difficult to get buyside interviews. That said, if you want to do banking as a career then capital markets is pretty cushy, if not prestigious.
Makes sense. I'm wondering about the prestigious part though. In my view of Investment Banking, it's always been that whichever group/desk that makes the most money for the firm always gets the most respect (the reason BO/MO roles are looked down upon) especially in an industry as $$ focused as high finance. I don't know much about DCM but it seems like ECM pretty much makes cash to burn in the good years
LevFin is also typically wrapped up with DCM as well, so I wouldn't write it off. DCM can get very technical in terms of pricing, origination, syndication. It depends what aspect of the deal you want to sit on and how close you want to be to the markets
You just dont get the IB skillset or the Trading skillset. you're in limbo and supporting the other 2 sides...
How do ECM/DCM "support" bankers? I thought they were bankers, just underwriting bankers as opposed to M&A, and of course "less prestigous"...and isn't valuation work part of pricing a debt or equity offering?
Theoretically, yes. Equity offerings are obviously very closely linked to valuation, but at most banks that valuation work is still done by the coverage group and ECM will focus more on issues like market receptivity, sizing, secondary/primary mix, etc.
Investment grade debt offerings don't have so much to do with valuation, because the debt is nearly always taken for granted as money good (unlike high yield where valuation and subordination becomes much more important). DCM prices offerings off treasuries, for the most part, so it's much more market-oriented.
They are unique skill sets and ECM/DCM bankers do things that industry bankers can't do - it just isn't a skill set that translates as well to the buyside, that's all.
read monkey business, capital markets is not considered bankers, they are just clowns who u hope dont insult the client too much to close the deal.
I love Monkey Business, Liar's Poker, Barbarians at the Gates, and the other classics just as much as everyone but I'm not going to use it to shape my perceptions of the current industry. If you applied the beliefs of the traders from Liar's Poker to the real world, then ABS/MBS desks would be the hottest places right now. There's a reason that it took almost two decades for an LBO to be notionally bigger than the RJR buyout and that adjusted for inflation no other LBO has even come close to matching RJR.
It was a different time then.
How much less do VP's and MD's in capital markets make compared to those in the traditional advisory IBD groups. Seems like its relatively easy to move up the ranks in capital markets.
yeah, i noticed a lot of "senior" people under 35 in capital markets.
I know a guy who got promoted to MD in ECM at Citi and he's only 32. I'm not sure how relevant his specific case is though because he seemed really driven to succeed. Very Type A.
capital markets people are experts in a particular product, just like M&A. if you ask which group killed it in 2009, everyone will tell you capital markets saved the day. certain capital market groups are a lot more valuation based than bankers pumping the same models everyday (e.g. equity derivatives, convertibles, etc).
The only downside of capital market is that you become specialize in something that might have limited use in the future, which limits your exit opportunities, but you get to have 8-7 work hours and no weekend work.
It's a good career choice, and capital markets bankers aren't fussed about exit opps. A lot get more specialized later in their careers and become highly sought after (especially in London and developing capital markets).
so i guess no one knows much about capital markets salaries at senior levels?
capital markets has weekend work. hours are more like 7-midnight. weekend you might do 12-6 on both days
you have no exit opps. pay is lower than traditional ib. ib has more bankers. at the senior level i don't really think you are sought after. if you are its for 1 job that all the senior capital markets bankers fight for.. just no exit opps. capital markets is first to go when markets go bad
hahah. nothing like a wannabe correcting previous posters who actually work in the industry
Ratatouille do you work in capital markets? If you are, maybe you should look for another one with better hours. I stand by the hours I stated, since that's what I had for the last 3 years...
He might be talking about the convertibles groups in Capital Markets. I know ECM Convertibles generally work closer to banking hours while the other ECM groups are the ones with 12 hour days and no weekend work. However, I think it's standard that pay is going to be dependent on group performance so I don't know what the hell he's talking about here. If you're in a FIG group that doesn't bring in clients, the members of the ECM group that are launching Visa and Google IPO's are going to be making much money than you.
at places like jpm, baml, citi they use their BS to bring in business, so is capital markets (ecm, dcm, levfin) viewed as more desirable (relatively speaking) at these firms as opposed to gs, ms, cs?
I work in the industry. i just dont work in capital marktes but have friends who work at MS, GS, CS, DB, and Citi. each in one of those banks. do a search on capital markets vs ibd, there have been threads on this, some of this is repeated
Thank you for confirming that you DO NOT work in capital markets.
Ask your friends about their REAL hours. Are they the type to exaggerate or very inefficient workers?
So are Converts the most quant product in Capital Markets? (aside from Lev Fin)......What kind of skills do you develop? Considering that you prob need a good understanding of the capital structure since its both debt and equity, it still doesnt have good exit opps?
Also, if convert arb hedge funds are the main exit opp, how prevalent are they and difficult to break into?
I don't know how many funds are strictly convertible arb..... It seems like a strat that would be tough to deploy a lot of capital into
I think people in ECM tend to think less about 'exit opps' than bankers. Because ECM (especially convertibles) is product-focused, a lot banks seem to prefer retaining good analysts rather than force the b-school route or hire inexperienced assoc out of b-school. People also burn out less often, so there's not always a good reason to want to leave.
I'd argue that converts is even more quantitative than levfin. However, this also depends on what bank you end up at--if you'll be doing credit analysis or not, for example, varies from bank to bank.
If you end up in converts and do well as an analyst, you will have many offers come your way. Since it's so specialized, there's a definite shortage of talent at the assoc and VP levels.
Most SVPs and MDs in ECM earn just as much as senior bankers. And they work fewer hours.
Syndicate tends to have the best hours (averaging 7 am to 6 pm), followed by ECM (730 to 8), then converts (730 to 11). Keep in mind this will vary from bank to bank depending on the number of pitches/deals across various products and sectors.
I might also add that while ECM is fewer hours, it also is more deadline-driven than IB and more stressful on a minute-by-minute basis. Assignments are shorter in duration but occur more frequently. Whereas IB is a marathon and S&T a sprint, ECM is the 800 m.
Compared to banking, if you actually enjoy socializing with coworkers, capital mkts may be the better choice. On some IB floors, you could hear a pin drop, but ECM, although not as rowdy as a trading floor, definitely tends to be pretty conversational.
Bankers I work with constantly ask me if jobs are opening up in my group...
this is silly, you guys should just work in PE
For someone looking to stay at a firm and move up, I think capital markets is a far better choice (this is coming from someone in IBD). It is definitely an underrated option, especially in today's world of slimmer exit opportunities. If you think capital markets guys can't be ballers, just look up Richard Kimball from Goldman ECM.
One thing to keep in mind is that people in capital markets aren't as concerned about exit ops as other bankers are. The career offers a much more sustainable lifestyle than other areas of banking (although the hours are still longer than what most people outside of banking or consulting work), so people that actually enjoy the work aren't compelled to leave for the sake of personal sanity.
Just out of curiosity, do capital markets bankers have any hedge fund exit ops? (sorry for threadjacking)
For example, could someone in DCM covering IG debt spending his day studying interest rates switch to a global macro fund where interest rate knowledge might be useful?
Or could someone in HY DCM move over to a distressed debt fund?
Anyone ever heard of anyone doing something like this?
Also... when applying for MBA, will schools lump capital markets bankers in the pile with 'regular' investment bankers, or do you think they would be evaluated separately?
interested in these questions if anyone has any insight
Just to add my 2c here. I did an internship in M&A, got converted but picked ECM as my full time because I got very lonely being the only guy on the floor at 6am.
However, I do know a person who did the opposite. It's all down to personal choice, and like with all things there is an element of a "grass is greener on the other side" effect.
Where I worked (before it disappeared), "Capital Markets" covered everything from Sales and Trading to Research to Analytics to Origination. It was a division like IBD- except the origination bankers were lumped in with the traders and research guys.
In my view, the analysts in origination are just as smart as the people in IBD. They have to be pretty quick on their feet when dealing with snarky traders and salespeople. The main difference between a firm's markets operations and IBD operations, in my not-so-humble-opinion, is that BS doesn't cut it in markets but IBD requires more people skills- the lack of BS also included origination from what I could tell.
So let me get this straight, you have never worked in IBD, correct?
One of my managers (who did spend time in IBD) had an old saying: "Research and Trading are the quant developers; IBD are the business analysts."
That being said, maybe you're right, maybe those working in IBD are the dumb ones. But wait, was it the "dumb ones" or the "smart ones" that contributed most to their industry's embarrassing financial meltdown? Maybe IBD is home to people-skills and intelligence after-all, hehe.
Also, FWIW, the most recent meltdown was precipitated by a real-estate transaction, not mortgage trading, so we can blame those guys.
haha true, I guess I'd rather be an asshole than a pussy.
Holy shit this is a retarded argument. Illini may very well just have experience with bottom-feeder IB Analysts/Associates. Young might just have the privilege of working with some very bright people. The fact that either one of you is so willing to jump on a hasty generalization makes me think that you have pride in your industry (great!), take pride in your work and industry (great!), and need to find some outlet for your competitive side. I hear squash is a fun sport. Or kickboxing.
The point is you're going to find smart and stupid people everywhere.
I just watched the Tyson documentary, I can take it to the streets son.
...wait a sec... that doesn't sound right...
Illini, if you haven't worked in IBD you are not qualified to comment on it. Full stop.
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