Q&A: Leaving IB After 5+ Years

Thank you for commenting.

My role is based in HK but I cover the entire APAC region (ex-Japan) and have done transactions involving stakeholders from US/UK/EU due to the international investor base.

Their are many firm-specific reasons which I won't delve into too much on a public forum, but in my opinion, having completed an IBD summer analyst gig at a BB a while back, I find RX to be particularly draining due to the amount of negativity present amongst pretty much all stakeholders. The overall gist is, company is stressed/defaulted/engaged in some fraud, how do we emerge from a potential liquidation to save both the company and appease creditors? This question is very hard to answer given offshore creditors usually don't have much access or insight into a company's onshore operations and management. On the flip side, the company (using China real estate developers as an example) is equally as skeptical of offshore creditors' intentions, and generally have a lack of appreciation/understanding of the restructuring process. Long story short, the constant pressure from both camps along with lack of trust between stakeholders makes for some of the most painful negotiations. A simple amend and extend transaction could take up to a year from start to finish.

In terms of culture, I haven't worked in other financial hubs such as NYC/London so it's hard for me to make a relative comparison, but I will say that banking in HK is very demanding. There used to be a work hard play hard culture, but covid really took the life out of the city. Asians in general are incredibly hard working and a bit more risk-averse than other cultures, so will do almost anything to climb the corporate ladder (I grew up in North America so the contrast is crystal clear to me). Just walking around Central, you can certainly sense the stress and certain air of desperation. Again, the entire landscape of HK has changed rapidly, but this is a different story for a different day. 

As cliche as it sounds, don't prioritize prestige and money when thinking about career opportunities as a college student. Yes, I remember when I was in school and found out about IB and the perceived "benefits" it provides, I was very keen on breaking in. I learned a ton from my IB experience and would say it has definitely prepared me well for whatever I decide to pursue in the next chapter of my life. That said, despite all the merits of IB, I encourage students to be open-minded and view IB as a stepping stone to reach the next role which hopefully is more aligned with your strengths and passions.

The money is good for a fresh grad, but due to some structural issues with the culture and industry, I don't recommend it as a viable long-term career (trust me, the pressure keeps escalating all the way until MD, and you have to ask yourself whether being on standby pretty much 24/7 is worth it in the end). Looking in retrospect, 2-3 years of banking seems to be the sweet spot. Besides all the professional training, you most importantly will develop a better appreciation for what you can tolerate / deal breakers that you absolutely cannot accept in life. Whether that be never working past 6PM, being able to work on side projects after work, or simply having a predictable schedule - knowing yourself is a fundamental pillar that will guide you to what you really want in life.

TLDR; be open-minded and don't be blinded by money and perceived prestige. Everyone's situation is different, always re-evaluate your goals and passions and make sure what you are doing now is conducive to reaching your objectives. Enjoy the process. 

Thank you.

• What are the working hours from M-F in a heavy deal environment (2018/19) and the light deal environment now (23/24)? What about Sat/Sun? Could you deep dive into how you felt that there was no WLB?

I wish I had kept a journal, but from memory, I recall I consistently had 85+ hour weeks during my first three years as an analyst. This was magnified by the fact that there was 0 social life or travelling due to covid restrictions in Asia. As an associate, I generally averaged 70-85 hours, which is still a lot, but I had to do less of the grunt work. But in restructuring, associates tend to have to get their hands dirty more often than not, since most analysts have not seen certain types of workstreams before, so an associate as to hold the pen especially during crunch time. Overall, the covid restrictions + busy restructuring landscape resulted in a complete lack of WLB.

• What are your next steps? Do you plan to stay in finance?

Looking to take a break, go back home and think about next steps then, very likely doing some entrepreneurial stuff with a few buddies. There is less than a 5% chance I will be back in high finance, and almost 0 possibility of recruiting for IB/PE/HF.

• Why resign? Is it the usual reasons?

The usual reasons along with the fact that I just don't see myself motivated enough to move up any further. I'll be VP in two years, and then what? Director in 3-4 years, and then what? MD? Head of APAC? And then what? Also realized that opportunity cost of this job is simply too high, there are other ways to make money, and IB has equipped me with the skills for the next role.

• Did you feel like you had a realistic shot of being promoted to VP/Dir as a CBC that might find deal sourcing or building a book of business challenging (despite business fluency in Mandarin)

Was on track for VP. Being a CBC is not too disadvantageous as I was in restructuring. You get to build a book with international funds who conduct business in English. I have done some good Chinese deals so can leverage that when sourcing new business, debtor or creditor side. Furthermore, the restructuring space is very small, so having deal experience and technical expertise puts you at a greater advantage to a native Chinese speaker who has not done restructuring. 

• Did you feel respected in the workplace / or that it was a meritocratic environment similar to the BB offices in UK/US/Canada?

My bank was pretty CBC-friendly when I was an analyst, now 90% of the team are native Chinese. Team culture is similar to what you would expect at an American IB. Restructuring is generally more meritocratic since technical/deal execution skills matter more than wining+dining and nepotism. Still, as you mentioned in your other post, there is generally no extra thought given to mental health or letting peoples' voices be heard. As a junior, you still feel like you are simply taking and following instructions, which is frustrating.

Good to see another North American interested in testing the waters in HK.

I'm probably not in the best position to answer your question because I made the conscious choice of starting my career in HK right after college. I didn't have the benefit of getting traditional western banking experience, but instead jumped right into the wild wild east.

I recall having read threads on WSO of people who have done the NYC->HK route, so perhaps you could reference those posts. @Earthwalker7 might also have some good perspectives to share on this topic.

Now, based on my experience, I think if you already have a year or two of NYC experience under your belt, doing a few years in HK would not put you at any disadvantage. You will likely be able to transition back to NYC as an associate. If your bank has a good internal mobility program, that could also facilitate this transition. I have several friends that have done this, but they were all analysts and had good NYC experience so were able to lateral back. I highly recommend this experience if it makes sense for you, understanding how things work in another part of the world will be hugely beneficial to your personal and professional development.

There are definitely pros / cons to living in HK / APAC. My ideal situation is doing something that allows me to spend perhaps half the year back home in NA and the other half in APAC. As you alluded to, the lifestyle is quite different in these two geographies, but variety is the spice of life. Just be cautious of not confusing lifestyle with work. Sure HK has a great lifestyle, but the WLB is brutal. What's the point of having access to great food, culture, nature and travel if you'll be stuck in a cubicle for 90 hours a week?

Just my $0.02.

Congrats on breaking into the industry and best of luck with the role.

During my analyst years, I was generally too busy to go out and date regularly, given the Covid-19 lockdowns in my area pretty much destroyed any social life. On top of that, I wasn't really looking for anything serious at the time so a relationship was out of the question.

Funny how life works, the less you look for something, the harder the universe works to secure it for you. When I was a senior analyst (AN3), I met a girl from a social gathering and we just clicked. Though she is not in IB, she was very understanding of my situation and lifestyle woes but was able to look past that and take a chance on me. She's also really cute so that also helped.

Anyway, we are in a stable relationship and now that I have more time, hopefully we can plan the next chapter of our life together.

Good luck with your relationship, I think the most important thing is setting the right expectations. As a banker, you have practically signed away your life and time to the bank, your weekends/vacations will get blown up and you will most likely not be in the right headspace during your free time. After a while, you need to ask yourself if your value the relationship more or the job - this is a decision you have to make on your own.

Congrats on the move and your experiences, just a quick question regarding someone who wants to break into HK high finance but only speaking english, is S&T the only place I can really still find a role in 2024? Any IB product groups care less about english only? Maybe ER/other IB adjacent career paths? Thanks and best of luck

Thank you.

Honestly, I would say the window for professionals who don’t speak Chinese or any other relevant Asian language is long gone. Do you have any ties to the region? I know plenty of international school kids who grew up in HK but have a tough time making it in finance simply because the demand for non-natives is nowhere as popular as it was say 10 years ago.

S&T, and more so trading than sales, does accept English-only candidates last time I checked, but I’ll defer this answer to someone in the industry. 
 

As I touched upon in another response, my team was probably a top 3 foreigner-friendly place when I joined as a first-year analyst (we even had Europeans who spoke no Asian languages), but now pretty much 90% native Chinese. It is what it is.

Given the large outflow of expats in recent years due to a myriad of reasons, there could be openings for someone of your background, so I would do some networking if you are truly committed to working in this region.

Typical age for an A2A.

Accumulated just under a buck in 5 years (including investment appreciation), this is mainly due to doing absolutely nothing for 3ish years during covid (no travel or social life) as well as just generally being a frugal person and having inexpensive hobbies. Low tax rate and some good bonuses also helped.

Hungrynotquitting

This was a great dive into your experience in IB. Thank you for sharing. First year MBA student looking to start the process of interviewing as recruiting season begins, any general advice you have? 

Thank you for the kind words.

Are you looking to break into IB in HK in particular? I understand that there are way less seats for post-MBA associates for IB roles in HK, as most tend to be homegrown or lateral from other banks. You could try to network your way in, but could be difficult given how much banks are contracting in HK paired with the lack of formal MBA associate recruitment.

If you are at a US MBA program and seeking to recruit for a US position, definitely start networking asap for a summer associate role which will be your ticket to a full-time gig post graduation.

The usual advice applies: network with professionals in the industry, apply everywhere and don’t be too picky (more leeway if you have already done IB previously) and be ready to explain your motivations on top of acing the technicals. MBA associates are generally viewed as longer term hires vis-à-vis their analyst counterparts, so be sure to equip yourself if reasonable answers to those. 

Best of luck with your MBA and recruitment, hope you land something that suits your goals.

You're cooked.

PennPalstudent

Thanks for doing this! I’ll be starting up in a few weeks full time in RX IB. I didn’t do any RX specific internship in undergrad so I am slightly worried. Any tips or suggests for someone like myself as an incoming analyst? I have read many books and podcasts on RX but haven’t been able to work on any 13 week cash flow models or anything

Does your bank have a full-time training program? I remember my training program covered everything from M&A to restructuring specific topics. Honestly, it was overkill because you’ll realize that all deals are niche and unique and you will learn most things on the job anyway (they call it drinking from the fire hose for a reason). To be honest, probably only 30% of all modelling and concepts I learned in training were applicable to my daily job. You will get so many nuanced tasks and over time, you will gradually get used to them.

In terms of restructuring, as long as you know how to build an LBO and understand how to build a debt schedule with revolver etc. (Including how to calculate NPV and IRR of debt instruments, aka bond math strawman models) you should be fine. I’ve built 3 statement models on the job as well on debtor-side mandates, so also get comfortable with those. Finally, understand how to read credit agreements effectively. Develop a framework for identifying key provisions with bond indentures / loan docs such as EOD, amendment thresholds, security/guarantor structure - you will be doing a lot of credit doc reading as a RX banker.

Those are some immediate tasks you can do to get a leg up on your peers. Otherwise, I wouldn’t worry too much, the first year will be tough regardless so just keep a positive attitude and ask questions whenever possible.

Best of luck on the role.

Thank you sir

cognizantsparrow1

Have you got any distinct pros and cons of IB. You typically hear money vs hours, etc, but I was interested in your opinion?

Pros:

- Ability to build a great professional skillset that you can leverage throughout your entire career (more so the intangibles such as working under pressure, managing various stakeholders and being composed in high stakes situations)

- Provides a great foundation to future financial security. Compounding is known as the 8th wonder of the world - the earlier you start saving and investing (even in just index funds) the quicker you will be able to realize financial freedom

- Colleagues are probably some of the most ambitious and hard-working ones you will collaborate with in your career (this can also be a con though)

- Access to C-suite clients coming straight out of college is a very rare opportunity to work with seasoned veterans in the business world. You learn how to be more polished and gain confidence speaking to older and more successful professionals. This confidence will follow you in other areas of life

Cons:

- The more time you spend in IB, the more risk averse you become. They call this the "golden handcuffs". This is a natural phenomenon, given the structured promotion cycles and associated increase in comp, IB is possibly the best way to a comfortable upper middle-class life on a risk-adjusted basis. On the flip side, this takes away the drive to explore other potentially more suitable/lucrative career paths as the IB gig gets relatively cushier

- Opportunity cost is a main factor. Sure, you might be willing to put up with sacrifices as a 22 year-old fresh out of college. Once you are in the bullpen for a few years and become out of shape and out of touch with important people in your life, you will naturally start evaluating whether the money and "prestige" is worth the trade-off of better health and quality time with friends and loved ones. Even if the hours get better, the stress likely will not. Are you willing to always be on standby for the client and having perpetual unpredictability in your schedule?

- Job does get iterative after seeing several deals. Job at the senior level is different from that at the junior level. VP and above requires more sales acumen while junior level relies more on pure grind and processing. A good analyst might not make for a good MD and vice-versa. This is not really a con, but more of a consideration for people looking to be career bankers

Overall, IB is still a very good way to start a career and there are merits and downsides as mentioned above. In today's day and age, we are presented with so many different ways to make money, the so-called "path" is far from the only road to great earnings. It is important to be open-minded in today's ever-evolving world.

Another NA monkey looking to work/move to APAC (Singapore, Malaysia or Hong Kong) at some point.

How is the working culture for women? Are you expected to stay at the office until your boss leaves?

I heard this but I'm not sure if it's true. I worry because I'm a career-changer so I'm a few years older than the other ASOs. No idea if I would eventually settle/have kids in the next 10 years.

Is it rare for women to have kids in APAC banking? Thanks.

Can only speak for HK (I have heard that there is more prejudice towards women in Mainland China especially if a woman decides to start a family etc.). I recommend asking yourself why you want to transition to APAC. Is it for money (lower income tax does not really benefit US citizens given global taxation policy), do you have ties in the region, or just want to try something new? You mention you are more experienced than the typical candidate so such a big move would be a pretty big commitment for you.

Culture-wise, banking is very sweaty here in HK. Career banking is more the norm here compared to North America given the higher pay and lack of breadth of exit opportunities.

Women do start families and have kids here but the extent of how much time they spend with their family while maintaining a job in banking is questionable. Most actually just hire nannies to take care of the kids. Alternatively, I have seen women exiting IBD for a more chill finance role after starting a family. This comes at a significant paycut though.

Thank you, great to have served with you in the trenches.

Yes, it's the nature of the industry, plenty of douchebags with uncontrollable egos.