FP&A and Investment Banking/PE/HF - transferable skills
Hi guys,
Wanted to try and ask this in the corporate finance forum.
I have a friend that's interviewing for an FP&A role entry level. Wants to try to make a difficult move to IB, PE, HF in the future and understand's it's not the best road.
Can anyone provide some insight about transferable skills from FP&A and Investment Banking. What are some things one would learn in FP&A that are useful in Banking, PE, HF?
Much appreciated.
I'm currently working as an FP&A analyst and would love to lateral to IB/PE. I haven't networked a lot yet so can't share much feedback, but I'd say FP&A is a very broad area and it massively depends on what your friend will be doing. Just to illustrate, my F500 company has a few FP&A teams within each region and each team has slightly different roles. Moreover, each team member is responsible for different tasks so we get specialized early on. Of course it's not the case in every company but that's how it looks in my workplace.
My every day tasks include forecasting; monitoring the budget (of some business units/specific projects); monitoring financial performace (i.e. looking at monthly revenues, updating excel templates with the latest data); P&L analysis; and general data analysis (i.e. coming up with hypotheses why a certain product underperformed, looking for market trends, possible causes etc). I also update lots of ppt decks because the key financial info have to be presented to other teams/CFO. It's pretty interesting, but after refreshing the same template for a few months in a row it starts feeling (too) repetetive. Also my team gets tasks with very short deadlines from other non-finance teams so I'd say the job can be stressful and I work longer than expected, sometimes 9am - 10pm, or during the weekend due to the workload.
I'd argue that there are transferable skills like understanding financial statements, excel skills, basic modelling (ok, I know it's not IB/PE modelling type but it's better than nothing) and overall business acumen. My piece of advice is to take an FP&A role in a company that operates in the industry one is interested in from the IB perspective (e.g. FP&A in Coca-Cola and then joining a C&R team in IB) because it's easier to tell the story. Personally, my company operates in an industry I'm totally uninterested from the IB viewpoint and I find this problematic because I'm usually suggested that group (so choose wisely!)
Thanks a lot Analyst 1
Agreed with all of these points, and a path I have seen is lateralling (or taking a small step down) to an IB, corporate banking, consulting, etc. team that worked with your company and that you provided direct support to. It gives you an opportunity to work with the team and after the project is all wrapped up it is free game to network with the team or apply to an opening there. Or if you're CD/CF at a Portco, there could be an opportunity to join the sponsor after their investment (your portco) is realized, though this isn't a common path.
If your friend is still applying, FP&A and corp finance are good options, but another to consider is joining big4 advisory/consulting, or even audit or tax with the intention to lateral to advisory/consulting. I have seen some posts about big4 audit to IB laterals and had many colleagues lateral from big4 audit to corporate banking, restructuring, advisory, consulting, etc. Big4 typically have a lower barrier to entry as they're chronically understaffed, other boutique/regional CPA/advisory firms could be worth looking at as well. Good luck!
I second what you've said on Big 4, this seems to be a good starting point to lateral to IB. However, you mentioned networking/lateraling to the banking/consulting etc team one in FP&A works with. I have doubts if people in FP&A really collaborate with any banking teams or consultants. I'm a 2nd year FP&A analyst in F500 and have never worked with any bankers/consultants because the scope of my tasks in very much internal (forcasting/financial analysis/reporting/budgeting) so there is no need to collaborate with external parties. This might be different when you work for PortCo, but in F500 teams don't work with exteral parties, so the chances of networking with bankers or consultants are non-existent, at least based on my personal experience.
Yes, agreed at larger, F500 companies the FP&A, Treasury, and CD teams can be very silo'd. My former F500 (audit) client had two FP&A teams, one that worked more with analysis of its operating subs, variance analysis, reporting, etc and one that worked with the CD and Treasury teams in more of a Corporate FP&A function. The first worked closer with the auditors (me) as a bridge to the operating subs and their reporting, the second worked with consultants and advisors as data gatherers and on ad hoc analysis to let the leaner CD and Treasury teams focus on other aspects of the deal.
My experience post-audit is FP&A manager at a portco, the "finance" department is just the CFO and myself with some help from business development (still just a team of two). I work directly with consultants, IB, and corporate banking teams, though the CFO takes the lead on model and presentation comments and I do most of the data gathering and fielding questions about historical financials.
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