Best group to lateral
Which group to lateral as a first year analyst?
- metals and mining
- FIG -industrial/diversified
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The first two are really specialized, so would only recommend if you know you want to work in those verticals. If you’re still unsure, would recommend industrials
(Background: I lateraled from a specialized team to an industrials team and it worked out great for buyside recruiting, so I’m biased here)
How did you position your industry and texhnical knowledge/fit potential in interviews coming from a specialized group that presumably wasn’t related to industrials?
Currently in an industry group I hate and would love to lateral to industrials
is industrials one of the better groups to recruit for the buyside due to the nature of the companies and LBO friendly? would you say tech, consumer, industrials, healthcare are best sectors for buyside recruiting?
For me I was coming from a product team, so I was able to hit on some of the experiences I had working with industrials businesses and why I had a genuine interest in the space. I'm much more so of a value vs growth investor, which fits really well for industrials (I was able to discuss why I thought it made sense to buy a business that makes something tangible and makes a steady profit for 10x vs paying 20x+ for a tech business that still is not profitable - definitely an oversimplification, but it was able to help me get my point across and relate to the industrials bankers I was speaking to).
For prep, the thing I love about industrials is how basic it can be if you're willing to make broad simplifications. At the end of the day, a manufacturing business could be simplified down to price x quantity for revenue and a cost / unit x quantity for a lot of the costs (you can still definitely make things more complicated, but this is a generalization). Looking at it this way, I was able to try to frame different modeling guides I found around that idea. Otherwise, I just spent a lot of time trying to prep on my own in the mornings and evenings to make sure I had the technicals down for a lateral interview (so basic through more advanced accounting questions, talks about how I'd build a model for something, thoughts about how to look at businesses and deals as a banker)
Exactly my thinking.
I unfortunately don’t have any XP with industrials deals at all though.. broadly work under lmm tech/hc umbrella. Any suggestions on how to frame the xp to showcase capability of pivoting to the interviewer?
I also try to model and maintain good shape on technicals, but am not sure if that alone would be enough to convince someone of my fit for industrials, as much as I enjoy the sector.
With that being the case, you could try framing it (without being too negative) about why you don't like tech / hc as much and then pivot those reasons into why industrials would appeal to you. Below are a few examples of some of my personal opinions:
- Don't like the unproven nature of a lot of the tech businesses I see. If the business is reliant on doubling growth every 1-2 years, is that really something sustainable? Does it make sense to be selling unprofitable businesses at such high multiples? Industrials on the other hand can have some more matured areas, where companies have a more steady-state growth rate and you can clearly delineate winners vs losers when it comes to operational effectiveness (if a tech company isn't profitable, you say it's early stages for the space; you can't do that if you have a manufacturing / packaging business --> if you can't make a profit, you won't stay around)
- HC can be too specialized and risky pending what area you work in. Is it reliant on approval for a new drug? How confident are you in that? Does it really get you excited? Industrials appeals to me because I also really understand the business. You make robotics? Got it. You do packaging for Coca Cola? I can see that product every day and have an idea of how it works / who you would be selling it to.
I'm not trying to recommend just hating on the areas you've covered, but you could take those experiences and then say how they've helped you refine your views on what you want to work on. You're early on in your career, so there's absolutely nothing wrong about realizing you want to pivot groups. Looking back, I thought I'd want to be a tech banker when I was in college, but now can't imagine how frustrated I would have been in that space.
So fucking spot on. Articulated what I was fuzzily contemplating so clearly
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