I often hear that most IB analysts go on to be relatively successful, but I'd love to hear about your class and what the analysts in your class have gone on to. (Would also be great to get a complete view, like how long ago it was and what percent of the class went on to a certain position)
(Ex. 10% continued in IB and made MD, 20% to startups, 10% retired, etc.)
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Asking a bunch of interns who realistically were playing grab ass 10 yrs ago on the playgrounds
There are maybe 5 active users on WSO who are older than 32
LMAO yea I don't think anyone who was an analyst 10 years ago is on WSO.
That's not true
5-6 years out, analyst class probably gonna get fired from their current hedge fund employers after GME fiasco. Glad to be on the other side of the trade $$$
WSO vet here, and it's been just over since 10 years since I started as an analyst. The (small) analyst class 10 years later:
nobody in PE? did you work for a local credit union?
one of my parent's NYC analyst class at BB after 25-35 years... I think in total there were like 15
-2 still at CS.. think just MDs
-4 ended up starting or joining mid-sized distressed PE fund... All still partners/CIOs
-1 retired for 10 years, came back and works as corporate advisor
-1 made partner at another large HF/PE... passed away a relatively young in a car crash. (according to my parent: "the best analyst in the class")
-1 started an EV marketing company... think its going pretty good
don't know what happened to the rest.
I'm 31 years old, work in MM PE as an associate. Currently work 60-70 hours a week on average, making $250-300k a year. Pretty happy with my career trajectory so far, although I think at my current firm it will be a struggle to push up the ranks to VP and significantly increase my earnings.
Of my fellow analyst class, it's a real mix. Obviously these are not exact percentages but just my rough guesstimate off the top of my head:
- Around 10% are "super-successful", i.e. they either went into MF PE and are now VP/Principals or stayed in banking and are close to making MD (director level currently). These guys are probably making $600k-$1m a year. A lot of them though (especially in PE) look terrible and are still single, having got where they are by working 7 days a week (80-90+ hours a week) up into their early 30s.
- 60% or so are "standard successful" (by IB/PE standards). Either stayed in banking and are now VPs but not likely to move up anytime soon (because they were great analysts but struggling to bring in business/become a rainmaker in today's environment). I feel a bit of sympathy for these guys as although they're making good money, a lot of them are married with kids and have expensive lifestyles so can't quit (and no-one in the corporate world is going to pay an ex-VP $400-500k a year in corporate development). The other batch are guys who went into LMM/MM PE firms (like me I guess) - I think these guys generally have a good deal, as they're maybe not earning mega-bucks but they at least have a reasonable worklife balance/more opportunity to move up.
- Remaining 30% - people who exited IB and didn't want to go into PE. These guys have ended up in a variety of roles - a lot went into corporate development and are earning good salaries with a nice worklife balance, others joined fintech startups or even created their own startup. Very mixed outcomes/salary range for this group as yo can imagine.
Ultimately none of these groups is better than the other - it's all about what's best for you personally. If you're a rockstar IB analyst and want to slave away at a MF PE fund to earn the mega-bucks, by all means go for it. Equally if you want to work 40-45 hours a week in corporate development making $150-200k plus stock options, that still gives you a nice lifestyle with plenty of time left over to spend with your family.
What do you think will happen to the 60% that stayed but who don't seem like they will move up? Will they get pushed out?
Good question - I think it depends on a couple of factors:
a) Market environment - in the bull market of the past 10 years, banks have generally been increasing headcount (or at least there has been no real pressure to reduce headcount). Whereas if there is a sustained market downturn, these guys will probably be the first to be cut - for their salary/comp level they generally add less value than an associate or 2nd year analyst. However I've seen guys above me who were made VPs 6-7 years ago and are still in their role (even though they have no real chance to move up). So very market/macro environment dependent I would say.
b) Competence - a VP is ultimately an "execution guy" meaning their role is to manage the transaction and make sure it all progresses smoothly. Surprisingly you get quite a wide range of competence at the VP-level (at least in my experience, with the IB bankers I've worked with on the PE side). On one end there are guys who were presumably good analysts/associates but now think they've paid their dues, and seem to spend most of their time forwarding emails to their juniors without adding much value themselves. In my experience on the PE side these guys can be painful to work with, and frankly I'm surprised they stay in their job (presumably they're good at "managing up" and taking credit internally).
On the other hand, there are VPs who really add value. Even though they will struggle to become rainmakers (and thus get promoted) they have become what I call "execution gurus." What I mean by that is by this stage of their career they really know their sector/specialty and all the various issues/roadblocks that will come up in a deal and how to resolve them - and at the same time are technical enough to still dip their toes into the modeling and thus can explain to their clients/external parties the model outputs and what affects them. Personally I really like working with these guys - as even if you have a rockstar analyst/associate who builds an amazing model, they probably won't have the necessary career/sector experience to fully understand all the roadblocks that can come up on a deal (whether they be structuring/lending related, or legal/regulatory and requiring the lawyers' input).
So in a good/neutral market environment, from my experience I see the latter group staying at their bank for a long time. Because even though they're expensive and don't bring in new business, for an MD they are well worth their salary - as the MD can just bring in a deal and toss it over to the VP to manage/run, knowing it will be handled very competently. Of course for this type of VP there is the question of do they want to spend a decade-plus of their career doing all the work for an MD who takes all the credit and makes the mega-bucks, while they're earning $500k. By the time most get to this point of their career however, they probably have a family/kids etc so taking a 50%+ paycut to go into corporate development may not be an option. And PE firms don't generally hire from IB at VP-level, since by that time (rightly or wrongly) they seem to view VPs as too "entrenched" in the sell-side.
With the former category, if these guys are good at internal politics they often seem to stick around for a number of years. If they're not so good at politics/managing up, I tend to see these guys move to steadily smaller banks over time - one example is a VP who was at a BB for 4 years, then moved to a mid-size bank for a couple of years and then a small boutique for another year or so. He's just joined a fintech startup now. So it seems like there's always the option to move to smaller firms if they get forced out.
I’m old enough to see patterns. The VP/Directors in this bucket will continuously trade down in banks until they churn out. 2-3 lateral moves in 5 years. Sometimes the lateral results in a promo, sometimes not. The comp hit associated with moving to corporate is very substantial and people will try to push it out as long as possible.
Last paragraph is a really great insight, thanks for sharing.
No worries. I think that last point I made is really something you learn with age (not meaning to sound patronizing here). What I mean by that is at 24 I thought I would love to work at a MF to make the mega-bucks - and I wouldn't mind working weekends/to 1am in the week every day to make VP/Principal there. I didn't get any MF offers so never had that opportunity anyway, but even now as a single guy at 31 I find having to work all weekend much worse than I did in my mid-20s. I can't imagine what it would be like having a family and working at a MF.
I think basically the opportunity cost gets much higher the older you get. Other threads here on WSO have covered this much better than I ever could, but essentially when you're in your early/mid-20s the opportunity cost of missing evenings/weekends is relatively low compared to the salary/future prospects IB gives you. Don't get me wrong it sucks working late into the night and at weekends - but if you're a single guy at 21 what would you be really doing then instead anyway? Watching Netflix or going for drinks with your buddies? Ultimately it's not the end of the world if you miss a few of those because of work. Not going to the gym does suck - but even with a busy IB schedule you can usually fit in a decent amount of exercise most of the time.
By contrast, by the time you get to your late 20s/early 30s - you've put up with working late nights/weekends for a number of years already, and you probably either have a family or are in a serious relationship or looking for one. And even with an understanding partner, having to cancel weekend/evening plans at last minute does put stress on the relationship. Must be even worse with young kids I can imagine.
Also even if you're a single guy like me - by this point a lot of your friends are married/have kids, so it's not like you can phone them up on a Friday night last-minute and get everyone to come out. For my friendship group at least, we now have to plan guys' weekends away/nights out well in advance - so cancelling on them at the last second would suck (I've had to do that a couple of times unfortunately).
Again I'm not saying one option is right and one is wrong - obviously most older guys at MFs and IBs have a wife and kids, so it's obviously far from impossible. I'm sure it can be stressful though. So I can certainly understand why people - once they have the career springboard that 2-3 years in IB gives them - go to work for F500 companies or join startups. They're still earning great salaries by the average person's standard and get a significantly better lifestyle. Each to their own I think.
Just looked. From one of the strongest 'elite boutiques':