I know most people exit to PE/HF (coming from my firm) and maybe 1-2 in each analyst class exit to corporate development. I myself also plan on exiting to PE but I've always been curious about corporate dev
I know the positive to corporate development is actually getting your life back but it seems like everything else is sort of subpar. Pay sucks, work is ok but working for a company that isn't an actual financial firm becomes tedious even working for F100 companies, exit opportunity or career advancement seems murkier. So those that exited to corp dev from BB/EBs do you actually enjoy the work?
And if you actually do enjoy your work what are sort of the opportunities 2-5 years down the road?
Thanks!
No Corp Dev is a complete bullshit function.
big 4 TAS guy with a PE badge throwing heavy shade.
Have done Corp dev and recently switched to PE.
If you work at a name brand bank and jump to Corp dev at a small, no-name company, then you made a terrible decision. Most people would know if the role has FP&A responsibilities, which does suck.
Pay and total comp does vary widely, both based on company size and industry.
Politics are a thing everywhere, so hard to broadly knock a certain job for that.
As to a deal and the diligence being done when the Corp dev team looks at it, you couldn’t be more wrong. Who the fuck would’ve done the bid price and diligence? Common for companies to not use banks on PE portco or small private acquisitions.
My team selected which deals to chase and pass on.
I think some companies can hold back high performing IB analysts in Corp dev simply on years of work experience, which makes the long term progression pretty slow.
Waiting for a promotion based on people retiring is more prevalent at old school companies or companies in mature industries. Have heard this specifically about Boeing, GE, and Exxon, Chevron, etc. for oil. Applies to positions above manager (director, VP, etc.)
I’d say it’s common for people to get solid industry experience and hop back to banking or into PE in the same industry. Good learning experience, but not necessarily better hours to the extent most expect.
Couldn’t be further from the truth.
I had a PE badge. For whatever reason, they assigned me an accounting badge and made me a certified user. It's unclear why. I don't work in accounting.
I spent half a year in Corp Dev during my rotational program here are my limited thoughts:
Corp Dev really varies company to company. If you're at an acquisitive company you can be doing a lot of deals and hours can be a little rougher. It also means the work you're doing can be a little more interesting. If you're not doing deals you might be selling business units, doing strategic work with other groups/units, looking for new deals etc. Hours usually aren't bad, pay isn't fantastic but if you can find a good balance that is where Corp Dev can be a good fit for some.
In Corp Dev you're always second fiddle to the actual product teams within the business. I was in tech, so the various product teams actually had the most say in M&A activity because we were almost always acquiring to advance some type of product strategy.
It was a bunch of BS decks and garbage work for the higher ups. Coming from a product group at the company I felt like I was going back into banking.
Most people on Corp Dev have come from banking and they're trying to make it into Marketing, Sales, Product, or some other operations function in the business. The path is decently well traveled and in our group, the senior corp dev people encouraged it, as in they would try and staff people within certain groups at the business for help with strategic work. The idea is you'd be a mercenary on a few projects, impress some BU leaders, and then jump into the business after a few years. I saw some more senior corp dev guys, jump to being directors of finance/CFOs of specific business units in the company.
All in all, I wouldn't want to spend a lot of time in Corp Dev unless I was at a highly acquisitive company or just one that had a unique spin on Corp Dev. It's definitely a place you'd go if you value your lifestyle over money. With that being said, if you could get in at a pretty senior level it can be cushy. I knew an ex HSW MBA guy who did trad banking to PE, then went to his MBA and started in Corp Dev right out of school. He moved pretty quickly, jumped around a few corp dev units and now he's running the Corp Dev group at a F500 company in his early 30s. Probably makes a low stress few hundred thousand a year, gets pretty good stock based comp and could position himself to be a CFO candidate in ~5ish years.
A few, but they're all basically in the vein of what I described above.
Ex BB, MF PE guy came into Corp Dev at a pretty high level. He wanted to move into a Product Management role, so after 6 months or so, asked to be staffed on all deal/strategy work for a specific BU that he was interested in. Got close with the GM of that division and made his intentions known that he saw himself moving into a Product Role. He bided his time, kept doing good work and made the jump after 1.5 years or so. I heard that he spent about a year in product, didn't like it and then moved out of the company and back into PE.
More Senior Corp Dev do the same thing, but position themselves to be the Finance leaders for a specific BU, so a mini CFO if you will. They control the whole P&L, run and lead planning, etc. I've seen a few of these guys make the leap to a high level finance role and then they get tapped for CFO type positions at smaller companies.
Corporate strategy usually has a slightly easier time getting into a broader variety of roles such as marketing, product, even sales. Corp Dev typically stays more siloed to finance roles.
With all that being said, this was somewhat unique to the company I was at. Can't speak for others.
Interestingly, most of the people in Corp Dev end up staying in Corp Dev or leaving to go back to another Finance role somewhere else. I haven't seen as many move into industry and stay there, but that's just my observation.
I can only speak about my experience, but at my firm, a CD/BD guy could never own a P&L. My company had three separate segments: generics, brands and injectables.
The head of generics is a JD and served as an EVP of legal affairs for years at a top generics manufacturer (think Mylan, Teva, Actavis). She understands patent law like the back of her hand. She spends all her time strategizing about how to bypass or invalidate IP. In the situation where she couldn't, her time was spent thinking about optimal settlement terms and how to maximize the company's leverage in negotiation with the innovator. The generics industry is a legal game. You have to understand the law.
The head of the brand division is a PhD and was the head of neurosciences at a major brand manufacturer (think Pfizer, Novartis, BMS). He understands development complexity, regulatory challenges, clinical benefits of various chemical compounds, etc. In other words, he's a scientist through and through. He's also a psychologist. He spent his time thinking about how to convince physicians to prescribe one product over another. How to convince one PBM to assign favorable formulary coverage to one product over another.
The head of injectables spent years working with major GPOs and has contacts all over the clinics/hospital space. Very strong relationships.
What I'm saying is that no one with a finance background could ever step into either of these roles. They just don't have the conceptual, technical ability nor do they have the relationships required. I'm sorry but in PE, you'll never make friends with some scientist in the R&D department that one day runs the company. You meet the CEO once he/she is already the CEO.
The relationship is much stronger when you know the person before they become a big shot.
I work in Corp Dev in a PE-backed company - am earning a base and bonus at a similar level as IBs, the hours can be long but better than IBs. But would say I'm pretty lucky in that sense.
Corp Dev teams tend to be small and hence can vary on pay and hours depending on company. There's some truth on lack of progression due to perceived lack of seniority, as some companies aren't used to the fast progression of the IB/PE world. Just need to be clever how you navigate internal relationships and politics.
The other thing that varies is deal flow - things can be very exciting and full on if the company is acquisitive, but the opposite if the company is focussing on organic growth or restricting cash/resources for inorganic growth.
So in short, it's a bit of a gamble. Advice would be to join a large, stable and acquisitive business with a good deal track record and offering a good pay package. Meet the team beforehand and try gage from their background and past deals on whether it's a good fit. If you do join and it's not what you expected, you can always leave.
Thought I'd throw in my two cents here since I have a slightly different experience than those mentioned.
I did two years BB IB, two years of industry-specialized LMM PE, then moved to a portfolio company and have now been there for almost two years. My title was strategy and I was essentially a jack of all trades working between functional departments. Took a 50% paycut from my PE gig to get my foot in the door, but rarely work over 40 hours a week and have so much flexibility.
This year at the two year mark my job is shifting to head of strategy and corp dev and total comp is over what I made in PE two years ago. I own equity in the company as well, am a one person team reporting to the CEO, and am lucky for the depth of what I get to see and touch. On the corp dev side I will be identifying and evaluating tack on acquisition targets. I will work through any future integrations and essentially take lead on this front, as it is new territory for our company.
If I had to work strictly in a corp dev unit I think I would enjoy it a lot less, particularly right after IB where it'd probably be for a more junior position. I thought about it but chose PE, knowing that strategy and corp dev are potential exits after PE vs. getting into PE later is difficult. I have friends who made the jump to corp dev after only a year of banking, realized the pay was not great for the amount of work they were still doing, and went back to banking so that they could get into PE.