So I'm recovering from a procedure and out of commission for a couple days, and I thought I would use the downtime share a few observations / career guidance for those people starting out in the business. Take this with a pinch of salt, as its one person's advice, but these are all things that have served me well over the years. To give you a bit of background, I've spent more than 14 years in the industry, having started as an analyst at a BB M&A group, and principally worked in BB M&A, although increasingly sector focused. I now run a sector coverage team at one of the leading firms, across all products including M&A.
1. You are your deal experience
Your ability to be an effective senior banker (or senior private equity professional or corporate M&A head or even hedge fund manager) is almost entirely an accumulated sum of the wisdom, knowledge and experience you gain doing deals. Every transaction is unique and one's ability to provide customized high stakes advice or judgment (and the stakes are always high) on tactics, pricing, counterparties, structure, etc. is a function of having been there before enough times that you know instinctively how to react. The single biggest thing you can do as analyst to guarantee your success later on is to work on as many complex transactions as possible and dig deep to ensure you really understand what is going on. I read a thread somewhere where people were saying its better to avoid live transactions since they kill you, and it doesn't affect PE recruiting. I can guarantee that the analyst who has worked on more live deals when they start at H&F or Apollo or Blackstone is going to get the best staffing and experience, and its a virtuous cycle thereafter.
2. It only gets more competitive
Its great to get that analyst job, that associate promotion, the job in PE, into HBS, etc. etc. It only gets more competitive from here. When I was an analyst, I thought the greatest thing in the world was making associate. The day I became an associate, I was not satisfied and was gunning to be a VP. Now that I'm a team head, I realize I'd really like to run the investment bank. Guess what, there are probably about 20 people equally qualified who feel the same way. You cannot let your foot of the gas if you want to make it. Out of my analyst class, less than 15% are at MD / partner level today (of course, others will make it and many do very different things). An even smaller group will make it to the real top.
3. It's a long game, stamina matters
I have never pulled an all nighter in my life. I hate it when people who work for me do. A great chunk of the battle is showing up, and you cannot burn yourself out. Its more important to be crisp, efficient and thoughtful than trying to be the hardest working person out there and burn out. People rarely care about facetime as long as you are equitably pulling your weight; output is much more important.
4. You don't have to be perfect, but you have to "get it" and be part of the team
Getting it is understanding the broader objective, and being an indispensable member of the deal team. If you "get it", we will cut you slack when you make mistakes.
5. Enjoy your personal life
You will never be successful if you are miserable personally. Everyone has different interests, but ensure your indulge them, and you are happy. Have a good group of friends, party a lot, have good sex. Its not mutually exclusive with working hard. And don't miss the big stuff (friend's weddings, birthdays, anniversaries, vacations ever). As long as you plan and are efficient, there is no excuse for missing any of this.
6. Be amongst the best in your profession at something
If you are an investment banker, know one industry or product exceptionally well. The same thing applies in private equity or public markets investing. You may be a generalist later on, but during the hard times (and there are always hard times), having core expertise is something no one can take away from you. I've been on the rocks twice in my professional career, and each time, being damn good at something got me through that.
7. Your analyst years matter
Many of my most fortuitous career moves, or pieces of business I won were because of colleagues or clients I worked with when I was a very junior banker. People have long memories in this business, and the assistant treasurer you built a model with as an analyst could well be the CEO when you are an MD.
8. Develop close friendships with your analyst class
Always be supportive and never be competitive. It is not a zero sum game.
9. Develop your professional "team"
Colleagues, former colleagues, friends, clients, who you respect and have a lot of respect for you. These are the people who you fall back on when you hit career pitfalls. Be unfailingly loyal to these people. Help them out whenever you can. Never be judgmental, and always go the extra mile for your people.
10. Influence is free
Use it to help people. Especially when you get nothing in return. Karma is real in this business.
11. Participate in team drinks
Get to know people out of the office. And learn how to drink in quantity without getting too drunk. It helps that I can drink my analysts and clients under the table when I need to.
12. Develop an international perspective and learn to think beyond the NY financial bubble
If you are offered a chance to work internationally, jump at it. The world looks very different in Sao Paolo or Warsaw or Riyadh or Istanbul or Jakarta, and this will be where the overwhelming global economic growth will be in your careers.
13. Read a lot, not related to finance
History, classics, great literature. Being an interesting person is very important professionally, and it means you're a lot less likely to be a personal douchebag.
14. There are jerks in the world
Its not personal, strictly business.
15. Enjoy NYC (or London or Hong Kong or all three)
Appreciate the great nightlife. Know the great bars, and clubs, and the great restaurants. Have a go to where people know you.
16. Travel the world
Mod Note: Best of WSO, this was originally posted November 2014.
@"notthehospitalER" - I do not have an MBA, and was a direct analyst promote. I do not believe having an MBA or a graduate degree is a prerequisite or an advantage, in itself, to rising up to senior management and beyond in investment banking. That said, there is certainly social and educational value in graduate school, and I believe what you learn in business school or law school (JD / MBAs tend to make excellent M&A bankers) can positively impact your career going forward. So its absolutely not necessary, but it still may be something you want to do.
If I had to do it again, I would have taken the time to go to business school because those two years matter very little in the context of a long career but would have been a lot of fun. Although, instead of an MBA I went international for a while, which was a phenomenal experience as well.
@"DMVbro" - its a perfectly fine way to start off. There are many bankers who have made very successful careers in regional cities and focusing on the MM market. But if you want to come to NY, there will always be windows, particularly early on where the opportunity to lateral to a BB firm in NY is there. And an MBA is a great reset too, and given your banking background, you will be in a great position for recruiting.
What I would say is that MM firms offer some benefits that BB firms don't always, so be willing to take care of them. If you get greater exposure to senior people and clients, take advantage of that and dig deep on transactions. For example, MM firms tend to do a lot of sellside M&A. Make sure you that once you get your feet wet, you are the lead person drafting the CIM and building the financial model. Make sure you are running the due diligence and understand the business well enough that you can proactively address the buyer's issues, and not just a gobetween. Insist on understanding from your MDs how the sale and purchase agreement works, and try to sit in on those negotiations. Be on every legal drafting call for the SPA. That way, even if you haven't worked on the largest deals, you will get exposure that a BB analyst will not have had, and you bring something unique to the table when you lateral.
When I was an associate and VP, I developed a certain expertise executing transactions in a specific niche of my industry and developed a reputation as an expert there amongst other bankers and clients. That kept me active and employed during a very ugly downturn. I could have continued to focus on that specific niche and could have had a successful career, but made a conscious decision to broaden my focus area product, geography and industry subset wise. It took some effort, but I wouldn't be in the position I am had I not done so. My view is that to be very successful, you need to have a "major" (an area where you are simply one of the top in your field), but be sufficiently broad minded to go beyond that.
My analysts and junior associates are still a work in progress so too early to comment. I have two senior associates currently in my growing team, both of whom are excellent. Both are direct analyst promotes. One is very good at modeling / understanding transaction structure and legal context, and probably needs to work on strategic perspective (and will get there). The other one has a very good strategic / tactical mind, industry knowledge and is an excellent writer, but is not as granular on the modeling / structuring. Needless to say, they both have an impeccable work ethic, are good mentors / role models to the analysts, and are socially good fun. Both have a very good path to MD.
I will work on another writeup in the next few weeks. Busy time, but should have some weekend availability during this period.