10/15/15

Mod Note (Andy) - #TBT Throwback Thursday - this was originally posted on 10/11/13 and is great information for those thinking about which types of banks to apply to for FT and SA positions.

Autumn has arrived. For those seniors fresh off their summer analyst stint or juniors gearing up for recruiting, October means something more: you need to decide where you want to work. The easiest way to categorize banks is either as a "bulge bracket" or "boutique."

We all know the bulge bracket firms, so historically, "boutique" referred to any firm that was listed literally outside the bracket. Regardless of boom or bust, pre-crisis or post-crisis, inevitably the biggest rainmakers in the business are always tempted to jump (a sinking) ship and hang their own shingle.

Schwarzman and Peterson in 1985, Moelis in 2007, Altman in 1996, Zukin in 1972, Aryeh Bourkoff just last year, or Dean + Bradley + Osborne last year as well ... if they feel they don't get enough control or compensation at their current firm, the big boys will take their ball and leave. This has given us firms like Blackstone, Moelis, Evercore, Houlihan Lokey, LionTree, DBO, Greenhill, Centerview, and the like.

Most of these names are on front-page deals, going out and competing with giants like GS, MS, and JPM for the top advisory mandates. They're winning, too. Whereas the giants used to dominate the advisory landscape, they often sell their financing capabilities most heavily now. The boutiques operate on a pure-play advisory model, getting paid for their expertise rather than an ability to offer staple financing.

In recent years, however, most of the boutiques listed above have grown so large that 'boutique' is no longer an applicable term. Evercore, for instance, now has over 950 employees. Blackstone launched its LBO arm two years after opening as an advisory boutique, and today grosses nearly 90% of its revenue from businesses other than advisory. Moelis has over a dozen offices globally and 600 employees.

In response, WSO seems to have coined the acronym "EB," short for 'elite boutique.' I'm not a huge fan and much prefer what I heard one of the group heads at Evercore say: "independent advisory firm." This is a great way to delineate firms of this caliber from the true boutique, a small shop with anywhere from 10-100 employees and much lower quality and volume of dealflow.

Semantics aside, it's clear that there are really three buckets a firm can fall into:

  • bulge bracket (the nine established firms we know)
  • elite boutique
  • boutique

In recruiting, people always gravitate towards the best-known firms. It seems to me that most people take a fairly scattershot approach. They want to get paid a lot now and a lot in the future, and the way to achieve that is to get a top banking job, leading to a great exit, leading to great business school chances, leading to overall greatness. It's a lamentably short-sighted and linear mindset.

In terms of exits, people know who the heavy-hitters are. GS TMT, MS M&A, GS FIG, Blackstone M&A and Restructuring ... these groups and a dozen others always pop up in any discussion of top groups and exit opportunities. Few people, however, seem to put real thought into whether a boutique or a bulge bracket firm is better for them, and to me, that's a tremendous shame.

As an analyst, here are the things that matter to you:

  • Work-life balance: this refers to how many hours of the 168 in each week you spend in the office
  • Culture: often (wrongly) used interchangeably with the above, this refers to how people treat each other, the 'work environment'
  • Placement: how well the group recruits for buy-side positions
  • Pay: salary is very standardized at the junior levels (some outliers exist), but bonus varies between firms (and groups occasionally)

The importance of each of those elements may vary from person to person. The guy who thinks of himself as a career banker is going to care more about culture and pay than the guy who only envisions himself enduring banking for two years before taking a job with twice the pay and an entirely different working environment. Let's go through each of these elements individually.

Pay

In general, a bulge bracket is going to compensate you less than a top boutique. Let's talk numbers. Centerview, for instance, has numbers right now like $80k base, $50k signing, and $100k+ bonus. Moelis pays similar base, $20k signing (may be corrected on this), and bonus matching or exceeding salary as well. Evercore is $75k base, $25k signing, and bonus at or near salary also.

Bulge brackets have very standardized compensation schemes. Analyst base is $70k. Signing bonus is $15k. Bonuses don't match salary like they do at the boutiques.

Again, examples. I have friends at JPM who were grousing over $35k and $45k (different groups) during bonus season. Same at MS. And let's not forget the classic 'GS discount' where they know you'll stick around for the brand and can afford to pay you less. Summers at GS don't get overtime. Signing bonuses are still low.

Work-life balance / Culture

I will explain these two together, because as you will see, they are intertwined (though not the same). There is a stigma that boutiques are sweatshops. While this may be accurate for certain firms, I do not think it holds true in aggregate.

Bulge brackets are big, bureaucratic, stodgy, inefficient machines. Pre-crisis, MS had 60,000 employees globally. GS had 30,000.

Boutiques have smaller analyst classes. That is both good and bad. You may wind up with a stronger analyst experience: more closed deals, better client exposure, and better exposure to your seniors leads to better placement. The downside, however, is that you can be worked harder.

That doesn't mean you won't get worked hard at a top group at a bulge bracket. An inefficient staffer or poor process management by the seniors on your deals can mean you have a far worse time than your friend at a boutique who simply has fewer analysts to share the workload with.

Banking is banking. Seniors have packed schedules. Calls, meetings, conferences, speaking engagements, travel between cities, recruiting initiatives, internal talent development initiatives, and the like are all demands on their time. All of this means that you as an analyst are forced to spend a lot of time waiting for them to give you your work.

As always, an example (again, firsthand).

You receive a new staffing. The associate emails everyone on the team to schedule a late morning meeting. A VP leads that meeting, filling you and the associate in on what the MD shared with him before flying out to the West Coast for the next couple days. The VP sketches out a few directions for the slides and walks out the door. The associate spends 10 minutes with you going over it in greater detail, and you mentally dedicate 3 hours of your day to this task.
.

Back at your desk, your inbox is pretty full and you spend 90 minutes on small things before getting started on your new work. You send the associate your slides at 4pm. He replies with minor comments (if you're lucky) at 4:45. You make the changes immediately, but he doesn't see the email until 5:45. Since he is jammed, he passes them up to your VP without looking.

Your VP responds at 8:30 with comments exactly the opposite of your associate's, so you copy slides from your earlier version and send them back. At 10:15, you see your VP walking out of the office with his bag. You glance at your inbox and see an email where he's passed the deck up to the MD.

Your MD doesn't respond until 4am Eastern. His comments are extensive, and the email reply is "Pls fix as directed, huge meeting 1st thing at 8AM, need this rdy to go. Thx." You finish making the changes at 7am (you're tired and slow, you only got 4 hours of sleep the night before) and head home to pass out.

Your work phone and personal cell start violently screaming at 9:45; your MD woke up at 6:15 Pacific, had a new idea for one of the appendix slides, and wants it changed before the meeting. You flip open your laptop, make the tiny change, submit the deck to your West Coast office's production team before 10am (knowing they'll curse your existence for giving them only an hour before the meeting), and pass back out.

Your phones start screaming again. You glance at your clock and it says 10:30am. There's a fire drill for another one of your projects; 40 minutes later you are back in the office in front of your screens, and you can't remember showering, shaving, or the cab ride in between.

This is why culture is so critical. The nature of this job is unavoidable. At a shop with a healthy culture, however, people notice when this happens and proactively minimize the pain wherever they can. Communication is crisper, directions provided are more thorough and clear, useless series of back and forth revisions are minimized, and analysts who are getting crushed get positive recognition for their contribution and given a break to recuperate.

This is where the boutiques win. Every bank loves to preach about their "flat hierarchy" and "open-door policy," but in reality, that is rare. You're more likely to find it at the boutiques. Specific groups within bulge brackets may be like this, but given how impossible it is to control your placement, it really does not make sense to roll the dice hoping you get the one group with a healthy culture out of twelve at that firm.

Placement

People here love to refer to 10xleverage's thread on his experience at MS M&A and KKR. That is a phenomenal resource in terms of insight on his responsibilities and career advancement, but let me highlight how dated it is.

I can tell you firsthand that GS TMT's placement (though strong) is not as godly as people on this forum make it out to be. From the summer 2012 class, I can say for a fact only 7 of the 12 summers who received offers returned. One left for a startup, one went to McKinsey, two went to Blackstone (different areas), and I'm not privy to what the final one did.

Within GS, FIG and CRG have arguably outdone it in the past two cycles. CRG takes fewer analysts, roughly 12 a year, so them putting 3-4 analysts in MFs each year is noteworthy. The FIG analyst class is north of 20 each year. Exits from FIG are more to HF than those from TMT.

BX R&R and M&A place lights-out. I happily refer to this thread and can confirm that placement as well.

Lazard as a whole gets great headhunter love and buy-side placement; Restructuring especially so. Evercore places analysts into MFs routinely. Greenhill has put a few analysts into MFs in recent years and places into excellent MM firms routinely. Moelis recruits extraordinarily well (especially into HF) out of both the LA and NYC offices. A huge selling point with them is that seniors will go strongly to bat for you, calling people they know at your target firms.

In short, I'd argue that we're seeing a real trend where the top candidates elect for the top boutiques. In this post-crisis world, you are going to get paid better, treated better, see better deals (in some cases), and enjoy better exits from the strongest boutiques than the strongest groups at the bulge brackets. Couple that with the fact that you can't guarantee placement into those strongest groups at the big banks, and it's easy to see why the best guys go for BX, Moelis, Lazard, and Evercore where they know they don't have to worry about getting into M&A (MS), TMT or FIG (GS), or M&A or Sponsors (JPM and CS).

Takeaway

Have an idea of where you'd like to be in the future, then make your present selection based on that information.

Now, as a reality check, realize that getting a job at any of these groups is a tremendous feat. The amount of entitlement on these forums either nauseates me or makes me laugh and shake my head depending on my mood. You'll be in the top 1% of all college graduates in terms of earnings and set for a career where it only gets better.

Obviously, human nature is to always want more and thus we continually strive for the next thing better on our imaginary little checklist, but some perspective is definitely in order. I hope we can all step back to take a moment to reflect on how privileged we are for the seats we have.

The arbitrary lists and static rankings people continually make on this site grow very stale and tiresome. Most are clearly derived from some (admittedly studious) trolling of countless WSO threads, but that's exactly the problem. CS Sponsors hasn't been "good" in 5 years, but there are a dozen threads from 2006-09 talking about how strong it is and how great the exits are, so it features prominently in most people's lists.

The MS M&A/KKR guy's post is also dated, and doubly so. For one, it's from years ago, and secondly, his perspective is also dated because he was 2-4 years out from his analyst experience when he wrote it.

The people who talk in terms of 'bucketing' have it right, and even then, it's still arbitrary. I've met people at funds everyone here would give their left arm to work at who came recently from (the horror!) Jefferies, BAML, UBS, and other firms that continually get dumped on here.

In this industry, people care about your intelligence and competence. The firm you start at is certainly a good indicator of those traits, but they really are determined in an interview.

In summary, if you have the chance to work at any of these firms, congrats. You're on the path. If you're a junior and looking for a summer job, you have months to make all these determinations for yourself. If you're facing final deadlines as a senior and choosing between them, I'd recommend putting some actual energy into reaching out and getting in front of or on the phone with people who currently work at or recently left the places you're considering.

They'll be able to provide you real, concrete, actual info on placement, pay, and culture ... and that's remarkably more useful than coming on here to hear the same drivel regurgitated by people whose only impressions are formed by what they themselves have read here.

This is my first entry as a contributing author. I know it is quite lengthy, but I hope it is equally helpful. Please give me feedback, either privately or as a public reply. I intend to put out 1-3 pieces weekly in the future.

Comments (74)

10/11/13

This is top-notch content. Agree with pretty much everything here.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."

10/11/13

+1. I've been reading your posts for a while and they've always been top notch. With that said, I sense a bit of copying and pasting but the words are still gold so who am I to say anything haha. Looking forward to your next post.

10/11/13

You are right. As I mentioned in my introductory blog post (//www.wallstreetoasis.com/blog/giving-back-beginning...), my earliest pieces will each touch on the theme of some of my most popular replies in other threads.

This one was repurposed from the 'BB vs. EB' discussion in the late summer. I reordered much of the material, expanded some points drastically, and added more info, but it's very easy to see the connection.

As I see it, the goal of the Contributing Author program is to get some of the site's better content in the most visible place: the front page. To the extent that I can help drive traffic to this site, legitimize the site as a resource to prospective and current bankers, and foster a higher caliber of discussion, I will happily do so. Patrick has created a great site. I simply want to help.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

7/25/14

Well thank you for taking the time, its very appreciated

Best Response
10/11/13

Solid write up and great introductory material. +1

As a follow-up, I always felt that the standard WSO taxonomy of banks left a lot to be desired. For instance, among those categories, how would one designate Wells Fargo? Would it be MM despite its business model being so wildly different from other MMs like Harris Williams or Baird? Similarly annoying is the fact that it treats the term "middle market" as a designation rather than a deliberate market strategy.

Thus, I think the following taxonomy makes more sense (yet I realize WSO is too entrenched in the current designation for this to catch on).

Market segmentation (primarily in the U.S.) looks more like this (not in any particular order):

Bulge Bracket: GS, MS, JPM, Barclays, CS, DB, Citi, BAML, UBS
Tier-2 Balance Sheet Shops: Wells Fargo, HSBC, Nomura, SocGen, BNP, etc.
Global Independent Advisory Firms: Evercore, Lazard (Freres), Blackstone, Rothschild, Greenhill, Moelis, etc.
Elite Boutiques: Centerview, Allen, Qatalyst, PWP, Guggenheim (yes, really), etc.
Full-Services Middle Market: Jefferies, HLHZ, Stifel, RBC, William Blair, Baird, Piper Jaffray, etc.
Middle Market Independent Advisory: Harris Williams, Sagent, Lazard (Middle Market), etc.
Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.
Specialists: Financial Technology Partners, Greentech Capital Partners, etc.
True Boutiques: (Places with a few offices or less, 100 employees or less, etc.)

10/11/13

One problem with that is that is simply far too taxing. When referring to firms, I would just make it clear how I think of the firm I am referencing.

For example, everyone knows the nine BB firms. However, if I were referring to Blackstone, I'd say something like: "an elite advisory firm like Blackstone is unique in that it competes more a strong bulge bracket like GS and MS for talent in two ways, fighting both for analysts fresh out of undergrad and to recruit the other firms' existing analysts for its buy-side arms."

Also, one could make a compelling argument that Centerview belongs in the segment above it, WF could belong either where it is or in your "full service MM" category, etc. etc. That is one benefit of using broader terms: people know when a firm is in the bulge bracket or it isn't.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

10/11/13

Nouveau Richie:

Solid write up and great introductory material. +1

As a follow-up, I always felt that the standard WSO taxonomy of banks left a lot to be desired. For instance, among those categories, how would one designate Wells Fargo? Would it be MM despite its business model being so wildly different from other MMs like Harris Williams or Baird? Similarly annoying is the fact that it treats the term "middle market" as a designation rather than a deliberate market strategy.

Thus, I think the following taxonomy makes more sense (yet I realize WSO is too entrenched in the current designation for this to catch on).

Market segmentation (primarily in the U.S.) looks more like this (not in any particular order):

Bulge Bracket: GS, MS, JPM, Barclays, CS, DB, Citi, BAML, UBS

Tier-2 Balance Sheet Shops: Wells Fargo, HSBC, Nomura, SocGen, BNP, etc.

Global Independent Advisory Firms: Evercore, Lazard (Freres), Blackstone, Rothschild, Greenhill, Moelis, etc.

Elite Boutiques: Centerview, Allen, Qatalyst, PWP, Guggenheim (yes, really), etc.

Full-Services Middle Market: Jefferies, HLHZ, Stifel, RBC, William Blair, Baird, Piper Jaffray, etc.

Middle Market Independent Advisory: Harris Williams, Sagent, Lazard (Middle Market), etc.

Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.

Specialists: Financial Technology Partners, Greentech Capital Partners, etc.

True Boutiques: (Places with a few offices or less, 100 employees or less, etc.)


This might be a dumb question, but for your EB vs independent advisory firm, is your distinction merely based on how widely reaching the firm's capabilities are/the scale of the company, or are you ranking EB's below independent advisory firm? Just curious.
10/11/13

kidflash:

Nouveau Richie:

Solid write up and great introductory material. +1

As a follow-up, I always felt that the standard WSO taxonomy of banks left a lot to be desired. For instance, among those categories, how would one designate Wells Fargo? Would it be MM despite its business model being so wildly different from other MMs like Harris Williams or Baird? Similarly annoying is the fact that it treats the term "middle market" as a designation rather than a deliberate market strategy.

Thus, I think the following taxonomy makes more sense (yet I realize WSO is too entrenched in the current designation for this to catch on).

Market segmentation (primarily in the U.S.) looks more like this (not in any particular order):

Bulge Bracket: GS, MS, JPM, Barclays, CS, DB, Citi, BAML, UBS

Tier-2 Balance Sheet Shops: Wells Fargo, HSBC, Nomura, SocGen, BNP, etc.

Global Independent Advisory Firms: Evercore, Lazard (Freres), Blackstone, Rothschild, Greenhill, Moelis, etc.

Elite Boutiques: Centerview, Allen, Qatalyst, PWP, Guggenheim (yes, really), etc.

Full-Services Middle Market: Jefferies, HLHZ, Stifel, RBC, William Blair, Baird, Piper Jaffray, etc.

Middle Market Independent Advisory: Harris Williams, Sagent, Lazard (Middle Market), etc.

Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.

Specialists: Financial Technology Partners, Greentech Capital Partners, etc.

True Boutiques: (Places with a few offices or less, 100 employees or less, etc.)

This might be a dumb question, but for your EB vs independent advisory firm, is your distinction merely based on how widely reaching the firm's capabilities are/the scale of the company, or are you ranking EB's below independent advisory firm? Just curious.

It's slightly subjective, but I'm mostly basing it off of what I know about each firm's size, ownership structure, compensation, global access, etc. Outwardly, Lazard and PWP (for example) might appear quite similar based on the types of mandates they advise on, but internally the firms are a bit different.

For the most part, I would classify the "true" Elite Boutique category as one that is still a relatively small private partnership (this is a key feature), has a small handful of offices globally, pays well above street at all levels and has the same access to deals as the global advisory firms. Conversely, the global advisory shops are the former "Elite Boutiques" (per my definition of the term) who have either grown their Partner base substantially or have flat-out gone public already and thus have increased their number of offices and begun to converge their pay to street in order to appease a more bloated ownership base.

I'll admit that the categorization here isn't air-tight, but it's perhaps helpful to think about it as a spectrum or an evolution for pure M&A shops that have BB-like access to top mandates. On the one hand, the Elite Boutiques are nimble, more lucrative in boom times, have more tight-knit groups (and therefore better team culture) and better perks like less bureaucratic expense policies, etc., but are also more susceptible to being wiped out in a down market. On the other hand, global advisory shops have become a bit more "corporate" with some added levels of management, internal controls, etc., can leverage a much greater network of very well connected advisors everywhere, and can have ultimately reached the scale where they can weather a tough time via counter-cyclical businesses like restructuring.

Obviously where I placed each bank is debatable, for instance Moelis is still a private partnership that pays well above street and Centerview is expanding to new offices. I just needed to draw the line somewhere.

10/11/13

+1 I'm actually going to be starting at one of the banks you listed out of the independent advisory firms+EB's, and I have to agree with your characterization. Thanks!

10/11/13

congrats man, I would love to be in your position in a year's time.

10/12/13

Nouveau Richie:

Nouveau, is Duff & Phelps IBD really that bad?

"Those who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."- Benjamin Franklin

10/14/13

Nouveau Richie:

Solid write up and great introductory material. +1

As a follow-up, I always felt that the standard WSO taxonomy of banks left a lot to be desired. For instance, among those categories, how would one designate Wells Fargo? Would it be MM despite its business model being so wildly different from other MMs like Harris Williams or Baird? Similarly annoying is the fact that it treats the term "middle market" as a designation rather than a deliberate market strategy.

Thus, I think the following taxonomy makes more sense (yet I realize WSO is too entrenched in the current designation for this to catch on).

Market segmentation (primarily in the U.S.) looks more like this (not in any particular order):

Bulge Bracket: GS, MS, JPM, Barclays, CS, DB, Citi, BAML, UBS

Tier-2 Balance Sheet Shops: Wells Fargo, HSBC, Nomura, SocGen, BNP, etc.

Global Independent Advisory Firms: Evercore, Lazard (Freres), Blackstone, Rothschild, Greenhill, Moelis, etc.

Elite Boutiques: Centerview, Allen, Qatalyst, PWP, Guggenheim (yes, really), etc.

Full-Services Middle Market: Jefferies, HLHZ, Stifel, RBC, William Blair, Baird, Piper Jaffray, etc.

Middle Market Independent Advisory: Harris Williams, Sagent, Lazard (Middle Market), etc.

Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.

Specialists: Financial Technology Partners, Greentech Capital Partners, etc.

True Boutiques: (Places with a few offices or less, 100 employees or less, etc.)

Nice job classifying the banks into these segments. One thing to note, in my opinion working at the 'Full Service Middle Markets' is often a top-notch way to go. I had four BB offers, but my first choice was actually one of these Full Service MMs. I ended up not getting the offer there (despite two on-site interviews, post-superday).

The boutiques and elite boutiques often only do M&A, with little capital markets and general advisory work. This can be limiting if your goal is to stay in banking long-term. Also, beware the 'Tier-2 Balance Sheet Shops.' The work-life balance at those places is often not good and the work is often much less rewarding.

10/14/13

Nouveau Richie:

Solid write up and great introductory material. +1

As a follow-up, I always felt that the standard WSO taxonomy of banks left a lot to be desired. For instance, among those categories, how would one designate Wells Fargo? Would it be MM despite its business model being so wildly different from other MMs like Harris Williams or Baird? Similarly annoying is the fact that it treats the term "middle market" as a designation rather than a deliberate market strategy.

Thus, I think the following taxonomy makes more sense (yet I realize WSO is too entrenched in the current designation for this to catch on).

Market segmentation (primarily in the U.S.) looks more like this (not in any particular order):

Bulge Bracket: GS, MS, JPM, Barclays, CS, DB, Citi, BAML, UBS

Tier-2 Balance Sheet Shops: Wells Fargo, HSBC, Nomura, SocGen, BNP, etc.

Global Independent Advisory Firms: Evercore, Lazard (Freres), Blackstone, Rothschild, Greenhill, Moelis, etc.

Elite Boutiques: Centerview, Allen, Qatalyst, PWP, Guggenheim (yes, really), etc.

Full-Services Middle Market: Jefferies, HLHZ, Stifel, RBC, William Blair, Baird, Piper Jaffray, etc.

Middle Market Independent Advisory: Harris Williams, Sagent, Lazard (Middle Market), etc.

Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.

Specialists: Financial Technology Partners, Greentech Capital Partners, etc.

True Boutiques: (Places with a few offices or less, 100 employees or less, etc.)

Out of curiosity, where does Oppenheimer fit in here?

10/14/13

A 'don't work there.'

10/14/13

rhen:

Nouveau Richie:

Solid write up and great introductory material. +1

As a follow-up, I always felt that the standard WSO taxonomy of banks left a lot to be desired. For instance, among those categories, how would one designate Wells Fargo? Would it be MM despite its business model being so wildly different from other MMs like Harris Williams or Baird? Similarly annoying is the fact that it treats the term "middle market" as a designation rather than a deliberate market strategy.

Thus, I think the following taxonomy makes more sense (yet I realize WSO is too entrenched in the current designation for this to catch on).

Market segmentation (primarily in the U.S.) looks more like this (not in any particular order):

Bulge Bracket: GS, MS, JPM, Barclays, CS, DB, Citi, BAML, UBS

Tier-2 Balance Sheet Shops: Wells Fargo, HSBC, Nomura, SocGen, BNP, etc.

Global Independent Advisory Firms: Evercore, Lazard (Freres), Blackstone, Rothschild, Greenhill, Moelis, etc.

Elite Boutiques: Centerview, Allen, Qatalyst, PWP, Guggenheim (yes, really), etc.

Full-Services Middle Market: Jefferies, HLHZ, Stifel, RBC, William Blair, Baird, Piper Jaffray, etc.

Middle Market Independent Advisory: Harris Williams, Sagent, Lazard (Middle Market), etc.

Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.

Specialists: Financial Technology Partners, Greentech Capital Partners, etc.

True Boutiques: (Places with a few offices or less, 100 employees or less, etc.)

Out of curiosity, where does Oppenheimer fit in here?

Full-Service MM

10/16/13

Nouveau Richie:
Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.

I just.. thank you. I fucking snorted out loud. This point needed to be made.

"There are three ways to make a living in this business: be first, be smarter, or cheat."

3/24/17

FWIW PwC M&A has come a long way since this post was made.

12/26/13

Nouveau Richie:

Solid write up and great introductory material. +1

As a follow-up, I always felt that the standard WSO taxonomy of banks left a lot to be desired. For instance, among those categories, how would one designate Wells Fargo? Would it be MM despite its business model being so wildly different from other MMs like Harris Williams or Baird? Similarly annoying is the fact that it treats the term "middle market" as a designation rather than a deliberate market strategy.

Thus, I think the following taxonomy makes more sense (yet I realize WSO is too entrenched in the current designation for this to catch on).

Market segmentation (primarily in the U.S.) looks more like this (not in any particular order):

Bulge Bracket: GS, MS, JPM, Barclays, CS, DB, Citi, BAML, UBS

Tier-2 Balance Sheet Shops: Wells Fargo, HSBC, Nomura, SocGen, BNP, etc.

Global Independent Advisory Firms: Evercore, Lazard (Freres), Blackstone, Rothschild, Greenhill, Moelis, etc.

Elite Boutiques: Centerview, Allen, Qatalyst, PWP, Guggenheim (yes, really), etc.

Full-Services Middle Market: Jefferies, HLHZ, Stifel, RBC, William Blair, Baird, Piper Jaffray, etc.

Middle Market Independent Advisory: Harris Williams, Sagent, Lazard (Middle Market), etc.

Fake Banks/Valuation Shops: Duff & Phelps, KPMG Advisory, PwC M&A, etc.

Specialists: Financial Technology Partners, Greentech Capital Partners, etc.

True Boutiques: (Places with a few offices or less, 100 employees or less, etc.)

What's the deal with Guggenheim?

10/11/13

Thank you for taking the time to write this up. I needed all of this spelled out as I was always conflicted between BB and EB. The kindness of peers and seniors as well as bureaucracy of a firm is really important to me.

I also understand that as a college student, you take whatever you can get. Thanks for clearly outlining pay as well.

I'm looking forward to all of your future posts!

10/11/13

Awesome content, thanks for taking the time to write this.

10/12/13

and just like that a new wso blogger is born, well done apae

WSO's COO (Chief Operating Orangutan) | My story | My Linkedin

10/12/13

Nice post APAE, really enjoyed the read.

I'm still amazed by the love that Blackstone M&A gets in the USA. They are rarely assigned on any major deals but still seem to place their analysts into top shops. Pretty impressive imho, sounds like a sweet gig considering pay and WLB.

Over here in Europe, the BBs still seem to carry a little bit more weight compared to their US counterparts. Sure, boutiques win their fair share of deals but I feel like the only two boutiques (or independent advisors) that constantly (i.e. over several years) compete for deals with the BBs are Lazard and Rothschild. However, that might change in the future.

Anyway, I'm looking forward to your next blog entry.

10/12/13

above_and_beyond:
Thank you.

Per Blackstone, I believe the reason M&A is so well-regarded is because they've really set up a self-perpetuating machine.

  • The firm has a great name.
  • Because of its great name, they can afford to have a remarkably stringent recruiting process. All divisions are challenging, there is no black sheep of the family. M&A is no easier in comparison to R&R, PE, GSO, et al.
  • They take smart, prepared kids with great grades from Wharton, Harvard, and one or two a year from one of Georgetown/Michigan/Ross/Columbia/Duke/Stern.
  • Because they have smart kids with great grades from great schools, they get lots of headhunter love.
  • Because they have small analyst classes, analysts get good exposure and have deals to talk about in recruiting.
  • Because the placement is so consistently stellar, the group gets heralded year after year as one of the best on the street.
  • Because it's regarded as top-notch, it's able to continue attracting the best talent.
  • Because it continues to attract top talent ...

It really feeds into itself. Some people say the prestige is 'borrowed' from the amazing restructuring practice, but I think that the M&A practice in America can stand on its own two feet.

Most people do things to add days to their life. I do things to add life to my days.

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10/12/13

Where do the newer boutiques such as DBO and Liontree compare to the more established elite boutiques and BBs in terms of exit opps?

10/12/13

They are too young to compare, really. Both of them were founded in 2012: DBO early in the year, and LionTree very late. Neither recruited heavily at the junior level, so they haven't yet had a recruited analyst class. Consequently, there's no insight on placement.

You probably wouldn't want to leave too much if you get to work in an office with less than 20 under people and someone like Bourkoff at the helm. Experience like that is so rare. On top of that, you get paid well. Two reasons. For one, since there are so few people around, there are few hands in the dish when the pie is served, and two, they definitely don't want you to leave given the 'switching costs' of replacing you.

This is exactly why Centerview pays so highly; it will be interesting to see if that firm continues its (relatively) perfect balance of growth, dealflow, and compensation in the future.

Lastly, if you really did want to leave, I fully expect that a call from someone like Bourkoff would get you an interview absolutely anywhere you want.

Most people do things to add days to their life. I do things to add life to my days.

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10/12/13

Kinda stupid to think you can only get good jobs coming from those select groups. Have seen plenty of MF and other well regarded PE shop placement from every BB on the street

10/12/13

HarvardOrBust:

Kinda stupid to think you can only get good jobs coming from those select groups. Have seen plenty of MF and other well regarded PE shop placement from every BB on the street

Agreed. I plan to write on this as well.

The point of this article was to encourage people to put some effort into figuring out what type of place they'd like to be at; this is by no means an exhaustive commentary. I felt like the length was already a bit unreasonable.

Most people do things to add days to their life. I do things to add life to my days.

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10/13/13

Would love to hear your thoughts on what harvardorbust said.

sure it was long, but all of it was useful. Don't cut out anything you wanted to say in the future just cuz its too long!

10/12/13

@APAE have not heard good things about DBO. My friend interviewed there, and one of his interviewers told him they have analysts coldcall for deals.

10/12/13

Thanks for the datapoint, I have no personal experience with the firm, simply referring to them as an example of senior guys setting up shop in their own name (literally).

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

10/12/13

Oh, but Liontree definitely seems legit though. Have heard great things about them from multiple people. However, not sure how legit their analysts are...

10/13/13

I originally saw this thread and skipped it, but after actually reading it - bravo sir! Great content and insight.

10/14/13

Top post. A little massaging on my uncertainty of my prospects next year.

10/14/13

Don't forget Wasserstein Perella!! The guys who pioneered M&A.

Also, you could add to boutique culture that sometimes coverage and product group bankers are synonymous, so a HC banker may get some restructuring exposure under his belt, which is nearly impossible at a BB without moving around.

10/14/13

Great post. Very informative.

Progress is impossible without change...

10/14/13
10/14/13

Nice post +1, now I'm all out of bananas.

Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."

10/15/13

Great post, looking forward to reading your future ones.

10/16/13

Excellent post, the length isn't a problem by the way. However I'm curious to know whether somebody would do a segmentation like Nouveau Richie but for London.

11/9/17
10/18/13

Somehow that I feel it's harder to work at boutiques. Coz they want you to do more work. you really hv to be good coz they dont want to spend time and money training u

There is a WILL, there is a WAY.

10/18/13

Great post with awesome content, thanks for sharing this.

Love life, share wisdom, and enjoy challenge

10/19/13

Wow, awesome post.

10/21/13

Are you positive on the Centerview sign on? Not saying it's made up, just seems very high. Props if they are.

I'm with one of the independent advisory firms, ps I like how you said that. My sign on was $8k as an analyst (this was yrs ago, think we are at $10k now). Returned to a $30k sign on as a first-year associate which I think is pretty standard.

if you like it then you shoulda put a banana on it

10/21/13

frgna:

Are you positive on the Centerview sign on? Not saying it's made up, just seems very high. Props if they are.

I'm with one of the independent advisory firms, ps I like how you said that. My sign on was $8k as an analyst (this was yrs ago, think we are at $10k now). Returned to a $30k sign on as a first-year associate which I think is pretty standard.

Analyst signing bonuses have bee $15k for the past 2-3 years. Rumors of them rising to $20 next year.

Centerview is extraordinarily high; they take around a dozen analysts per year, offer a three-year contract, and don't want you to leave for the buy-side (so their retention mechanism is compensation). They can afford to do so given their rainmaking ability and lean teams.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

10/21/13

APAE:

frgna:

Are you positive on the Centerview sign on? Not saying it's made up, just seems very high. Props if they are.

I'm with one of the independent advisory firms, ps I like how you said that. My sign on was $8k as an analyst (this was yrs ago, think we are at $10k now). Returned to a $30k sign on as a first-year associate which I think is pretty standard.

Analyst signing bonuses have bee $15k for the past 2-3 years. Rumors of them rising to $20 next year.

Centerview is extraordinarily high; they take around a dozen analysts per year, offer a three-year contract, and don't want you to leave for the buy-side (so their retention mechanism is compensation). They can afford to do so given their rainmaking ability and lean teams.


can confirm EVR is 20k signing.
10/21/13

kidflash:

APAE:
frgna:

Are you positive on the Centerview sign on? Not saying it's made up, just seems very high. Props if they are.

I'm with one of the independent advisory firms, ps I like how you said that. My sign on was $8k as an analyst (this was yrs ago, think we are at $10k now). Returned to a $30k sign on as a first-year associate which I think is pretty standard.

Analyst signing bonuses have bee $15k for the past 2-3 years. Rumors of them rising to $20 next year.

Centerview is extraordinarily high; they take around a dozen analysts per year, offer a three-year contract, and don't want you to leave for the buy-side (so their retention mechanism is compensation). They can afford to do so given their rainmaking ability and lean teams.

can confirm EVR is 20k signing.

Yes, since writing this, I've heard that Evercore is $75k base and $20k signing. Seems I need to befriend some younger guys still in school to keep a finger on the pulse.

Most people do things to add days to their life. I do things to add life to my days.

Browse my blog as a WSO contributing author

10/21/13

frgna:

Are you positive on the Centerview sign on? Not saying it's made up, just seems very high. Props if they are.

I'm with one of the independent advisory firms, ps I like how you said that. My sign on was $8k as an analyst (this was yrs ago, think we are at $10k now). Returned to a $30k sign on as a first-year associate which I think is pretty standard.


Can confirm the CV sign on; i think they have a ridic clawback if you leave before 3 years though.

$30k sign on seems really low for an associate...

10/21/13

kidflash:

frgna:

Are you positive on the Centerview sign on? Not saying it's made up, just seems very high. Props if they are.

I'm with one of the independent advisory firms, ps I like how you said that. My sign on was $8k as an analyst (this was yrs ago, think we are at $10k now). Returned to a $30k sign on as a first-year associate which I think is pretty standard.

Can confirm the CV sign on; i think they have a ridic clawback if you leave before 3 years though.

$30k sign on seems really low for an associate...

Nice, if someone can provide something concrete on associate sign ons, happy to use that as a negotiating point at year end. Only good data point I've seen recently is the link below.

http://www.kellogg.northwestern.edu/parttime/intra...

if you like it then you shoulda put a banana on it

10/21/13

Great post too, by the way. A banana for the gentlemen. Please write more.

if you like it then you shoulda put a banana on it

10/22/13

Thank you for sharing this informative content, it is especially informative for someone like myself who does not have much of a background in the industry and is trying to glean as much information as possible. Let me give you some background information on myself. I am a somewhat recent graduate trying to break into the financial services industry, specifically within investment banking. Since my time in college I have founded a few companies and am now looking to leverage my experience to transition into investment banking. I understand that bulge bracket firms are out of the question for someone in my position, but what do you think about the possibility of attaining a position within one of the elite boutiques or regular boutiques?

Thank you so much for your time. I really appreciate any insight that you're willing to share with me.

12/31/13

honestly none of this matters...just get a god damn offer anywhere in IB...its so random, especially as non-target. very few have the luxury of multiple offers.

1/3/14

Awesome content, Thanks for sharing.

7/24/14

But what about the bar value - when you walk into a bar and say to a girl, I work at Goldman.
Either blank stare or you've got the conversation started.

"Everyone has a plan until they get punched in the face."

7/25/14

There needs to be a sarcasm font...

"Everyone has a plan until they get punched in the face."

7/24/14

thank you. please keep writing. length is not a problem at all.

7/24/14

wdb:

length is not a problem at all.

Thanks, I get that a lot.

7/25/14

I've been thinking about this a lot lately, thanks for giving some amazing insight on things. I think this will help me choose where i will want to get into.

VPA

7/25/14

Interested to hear which smaller shop people think will be next to skyrocket into EB status - anywhere not just US

7/25/14

Great post. I'm not looking to get into banking, but it's interesting to read about how it might be like at firms that some of my friends are working at this summer.

7/30/14
7/30/14

How-- for lack of a better word-- bad are the bureaucracies at the BBs? I'm interning at a huge (think 50 largest companies in the world huge) company right now and the bureaucratic system is insane-- that is, at times, people are so busy sharing their ideas with all of the different superiors and departments that nothing gets accomplished. That being said, my department is not client facing so there isn't that much of a sense of urgency.

That being said, given the fact that IB is client-facing and clients demand things be done relatively quickly, how pervasive are the bureaucracies at the BBs?

8/2/14

bureaucracies are everywhere, my firm is small but still gets hamstrung when a fast decision is made, I.e. A big four just put out a paper on their 'proprietary' framework which we have our own version of, we missed the boat because of bureaucracies and people too petrified to make a decision

10/21/14

great content, thanks guys

6/4/15

Where does someone who goes to a decently respected non target fall in all of this? Is there any hope of a decent buyside gig?

6/5/15

Get connected, get good grades, get studying Vault guide.

A lot depends on what year you are, internship experience, and (most important) how well you can network.

"Everyone has a plan until they get punched in the face."

10/16/15

Solid Post!!
What does MF mean?
"Lazard as a whole gets great headhunter love and buy-side placement; Restructuring especially so. Evercore places analysts into MFs routinely. Greenhill has put a few analysts into MFs in recent years and places into excellent MM firms routinely. Moelis recruits extraordinarily well (especially into HF) out of both the LA and NYC offices. A huge selling point with them is that seniors will go strongly to bat for you, calling people they know at your target firms."

Greed is Good!

10/22/15
10/22/15

Thank you!

Greed is Good!

10/16/15

Great post. Really hit the nail on the head.

10/18/15

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2/25/17