5 Reasons to Avoid Working in MM Investment Banking (Other than Prestige/Exit-Ops)
Worked in MM and wanted to share some thoughts. It seems that most people on this forum are obsessed with prestige and exit-ops and see these items as the main reasons to avoid MM. In my experience, you should avoid MM but for completely different reasons.
If you have a few solid years of deal flow experience, know your field, and can network, you shouldn't be too worried about exit-ops no matter where you were an analyst or associate. BB will not necessarily make you a better analyst/associate. I've worked on deals with JPM/MS/GS as the counterparties where the deal teams were absolutely terrible.
With the prestige and exit-op arguments aside, here are 5 reasons to avoid MM: (Please add on your own onto the list)
1. You work just as much as the BB or more
I think that there is a misconception on this forum that MM is sort of taking it easy and BB is real deal. Honestly, reading some of the posts on here, BB might have it easier in certain cases. Sitting around waiting for the staffer and playing around on the internet is something that never happened to me at a MM. I worked 80 to 110 hours per week and every single minute of that time was occupied. MM is smaller; so the deal teams are smaller....aka everyone knows when you're not doing something.
2. No Training
Maybe not true of every MM bank but it seems that a good bit of them don't have formal training processes. You're just thrown straight into the fire. There is no time to study for the Series 7, 63, 79, etc. You just do that on your own time after working 80 hours.
3. "MM pays less"
See above....potentially same amount of work or more....worse pay. Do the math. Enough said.
4. "Lack of MD's influence in the overall bank"
If you're in MM, it's likely that IB is a side business. That means your MD is not that important in the organization as a whole which means less money for bonuses, hiring, etc. Furthermore, the whole thing doesn't run like a well-oiled machine. One year, you might get three new analysts and the next year, you get one analyst just by how the budget shook out. It's not a lot of fun to get promoted to associate and you're still doing analyst work because of internal bank politics. Same goes for VPs doing associate work etc.
5. "Deal flow can be bad"
Some MM banks are just not getting deals. However, that doesn't mean that you'll be doing less work. It just might be more pitchbooks and less live deals. See #1 above. Again, do the math, same workload but less deal experience equals not good.
Feel free to add on:
Lack of MD influence? MDs at MM banks have more relative influence than at BBs and it's not even close. The others at least can be true.
1) Be OP 2) Get job at Grant Thornton on Transaction Advisory Team 3) Think that you work in banking 4) Lie about hours worked 5) Write this article
realjackryan, I like that your post reinforces the exact misconception that I was referencing above. I don't work at a BB so I must surely be lieing about those hours. Nope those hours were very real and that's exactly why I'm passing on some of this advice. You gotta be real careful in picking MM banks. You can end up doing a whole lot of work for nothing.
And no, it was not something like Grant Thornton. Think legitimate bank with a large balance sheet but crappy investment banking division. Our VPs and upward all came straight from BB backgrounds.
Sounds like you worked for Regions Bank or PNC or BB&T etc. Commercial lenders who happen to have investment banking arm. Am I close at least?
I'm happy you commented on this because I was scratching my head a bit since I never experienced any of this at my MM. While I'm sure BB analysts receive more in-depth training and BB MDs pull in more deals, I never felt like I was getting a raw deal (no pun intended) or anything like that.
Totally agree that there are MMs out there that are just killing it. In fact, in my sector, I can name a few MMs that I would rather work for than the BBs, but that said, there are plenty of garbage MMs out there.
I would argue that those "garbage" MMs are not really MMs, but rather LMMs. Banks PNC, Regions, Citizens, and BB&T are offering IB services as an add-on service, kind of like how a vehicle inspection place might keep some windshield wipers on hand to make a few extra bucks.
Have you considered lateraling?
OP almost all of your listed problems are bank specific. You are painting with an unbelievably wide brush stroke and it is doing the readers of this forum a great disservice.
My sense based on your description is that you work for a HSBC, Nomura, BNP, etc. type investment bank - many of these are caught between an awkward space of wanting to do large cap M&A deals (using a large cap balance sheet) but not getting them and then competing with established MM advisory firms (like Blair, Jefferies, Baird, etc.) and not getting those either. I think a lot of these platforms are finding it is incredibly difficult to build an investment banking platform from the ground up and often times you get the washouts from the actual top tier banks (hence all your VP+ are from this background).
Taking your comments in turn:
1) Yes, at successful investment banks you will work a lot. BB's can pay a lot because they are generating massive fees and quality MM's can pay similar because they are cranking out volume. Whether you are doing 5 deals a year as a MD at MM vs. doing work for a large corporate every week for 5 years to get a big fish fee - you are going to work a ton. If you are a fledging investment bank you are also going to work a ton trying to get deals, this has nothing to do with BB vs. MM
2) No training is bank specific. Baird/Blair/HW have fully developed training programs and you will come out ready to rock
3) Not necessarily true - bankers at the aforementioned MM's are making a lot too and generating a lot of fees, it is just on volume vs. deal value. The HSBC's of the world are not going to be able to pay that much because they aren't landing enough deals, not because they are MM
4) Lack of MD influence is also HSBC/Nomura type specific. Those banks were built around the retail operations and not the other way around. Make no mistake about it, the research, Asset Management, S&T, etc. that exists around Jefferies is to support a flagship IB division.
5) Deal flow can be bad anywhere, entirely bank specific. You will get a ton of deal experience at HL, HW, etc. - you'll end up completing far more deals than any BB counterpart
OP I can’t believe you posted this...how Piper Jaffray of you
Next time when you’re writing a post you should make an effort to be more Evercore, to get to the Blackstone of the matter. If you follow this advice then your thread will be pure Goldman Sachs. Otherwise people will throw Barclays all over your thread and you will feel like you just got Morgan Stanley’ed