Banking to Buyside: 3 Keys to Getting Into the Best Groups

Aaron Burr's picture
Rank: Gorilla | 716

"What's the best group on the Street?"

It's one of the most common questions asked on the WSO forums. Nobody ever has a definitive answer, because there isn't one. Some folks want to make a career in investment banking, while many other forward-thinking monkeys sign on with an eye already on buyside placement post-analyst program. Assuming you are in the latter bucket, like so many WSO readers are, joining the right group for you is key to getting on the headhunter shortlist come recruiting season.

Here's how you find the group that will put you on the fast-track to the promised land.

The main issue that so many bankers-to-be gloss over is fit. I don't mean fit as in culture or personalities. When I refer to fit, I'm talking about how the group you join fits your personal goals. Somewhere, some buyside-obsessed college senior is putting together a database of megafund associates who worked at the firm s/he has a FT offer from, hoping to divine which group places best into PE. It isn't that simple. The key to making a successful exit from the analyst program hinges on much more than just past results or the perception of prestige.

1. You need an ally.

Several groups across the Street are known for churning out PE associates. These groups all have an institutionalized culture of buyside placement. They have no intention of holding onto analysts and promoting them. Instead, they seek to attract talent by offering strong recommendations and connections into the buyside recruiting process.

Every major bank on the Street has at least one of these groups. If you aren't in one of those groups, do not despair. All you really need to replicate the effect of this support system is an advocate. Your ally understands that your aspirations lie beyond investment banking, and s/he is happy to help you pursue them by leveraging his/her own contacts inside and outside of the organization.

Groups talk amongst each other, and the best analysts at each firm have transferable reputations. Even if your ally isn't well connected into the buyside personally, it's likely that he or she knows who is, and will help you get that person's ear.

2. You want responsibility.

Modeling, modeling, modeling. In the uninformed view of the typical pre-FT monkey, if you're not in an M&A/LBO modeling-intensive group, you're worthless in the eyes of the buyside.

This view is narrow and misses the point: a group that entrusts analysts with lots of modeling is giving analysts lots of responsibility. It has less to do with the actual activity, more to do with the group's attitude toward analysts' role in the value chain.

Financial modeling is not difficult. Especially for interview purposes, it shouldn't take anyone with professional experience in excel and an understanding of basic accounting more than a few days to pick up the requisite M&A/LBO modeling skills to clear a private equity interview process. In other words, you can pick up financial modeling by yourself.

On the other hand, you cannot pick up the experience associated with taking on tangible responsibility and ownership of processes by yourself - your team needs to give that to you. We on WSO cynically trivialize the "responsibility" given to a typical analyst all the time, but the fact of the matter is, you'd rather work 1-on-1 with an MD on a fluff coloring book pitch with no numbers than crank out 10 meaningless LBO models that never get looked at by anyone.

The fact of the matter is, you're at the absolute bottom of the totem pole, and people know that it's rare for you to get any say in the goings-on at your bank. So it's mostly about showing potential. Learning to manage responsibilities, even seemingly trivial things, will be far more valuable in building your skillset, reputation, and resume in the long run.

3. You want good opportunities to be challenged.

It's critical to your personal and professional development to always be learning.

You want to put yourself in an environment in which you will be able to capture opportunities to challenge yourself. By doing so, you can build the upward trajectory that every recruiter (from professional and academic backgrounds) loves to see. First and foremost, you want to be challenged in taking on more responsibilities, but you also want the complexity of those responsibilities to be ever-increasing.

Notice that these all tie into one another?

Most junior monkeys approach the buyside placement strategy from a top-down perspective - they assume that since top groups garner tons of PE-relevant deal flow, those groups are the best places for them to build a foundation for recruiting. Recruiting season starts at around the 1-year mark, at the latest. If you're constantly buried 4-deep on the deal team depth chart, it won't matter that your name was on the working group list for the biggest M&A deal of the year - because you didn't take on responsibility, and no amount of spin can hide that.

Or perhaps you're in a solid group that gets a lot of good deal flow, and you're on lean deal teams. Problem is, you don't have a great relationship with any of the senior folks in the group. Maybe you're jaded and apathetic from getting constantly slammed, maybe the MDs in the group are just jerks who don't care about your future, opting instead to work you to death for 2 years before discarding. Without an ally, your efforts will go unheralded.

The point is, you need all three of the above to give yourself the best shot at beefing up your profile for buyside recruiting.

Most junior bankers take at least one for granted. They simply assume that if they go off of perceived prestige, things will fall into place perfectly. They don't think about how they fit in, and they often end up setting themselves up for failure.

Many of the success stories here on WSO - at all levels - start with a person who knows him or herself, and takes the time to find the right place for them to succeed. If you are thinking about which group or bank you want to join as a FT analyst, make sure you choose a place where you have an ally, will get responsibility, and will be challenged - by tailoring your work experience to your career objectives, you set yourself up for success.

Aaron Burr is a retired investment banking analyst and currently works as an associate at a private equity fund. Share your thoughts on jumping from banking to buyside at [email protected]

Comments (3)

Sep 13, 2012 if we should listen to the guy who killed the father of American finance.

Kidding. These are great points. I'd like to echo the importance of knowing yourself. If you aren't honest about what you want and why, and your strengths and (especially) weaknesses towards that end, you'll spend a lot of time spinning your tires getting nowhere fast.

    • 1
Sep 14, 2012

This is great. Plz print, staple, stick it in a padded envelope, and mail it back in time to my 21-year-old self with a note that says, "Dear kid. Please don't fuck this up." Thx.

Sep 14, 2012