Can you help me to evaluate the pros and cons of these IB teams?
I am currently in IB and I have to choose between two options:
Option A: Leveraged Finance, the team has a very strong deal flow as this is a “debt bank”
Option B: IB coverage team, same bank, long hours but bad deal flow
I am not so “young” anymore as I started my career in a different team, my goal would be to move to PE
I think this is highly dependent on the bank
I was in a very similar postition last year, with both teams from the same bank hiring me. After talking to as many people as I could, the conclusion was that in some banks the LevF team is considered a support group to industry/M&A teams (e.g. in MS) and in other banks they really own and generate their deals (e.g. JPM) (I think this is quite aligned with the size of the balance sheet of the bank)
If you want to exit to an investment team of traditional corporate PE, you dont want to be in one of those Levf teams considered to be a support team. They do 0 modelling. (You could exit to a capital markets team of a big PE)
From what you write, it seams like your offer comes from a weak bank in M&A with a big balance sheet (like BNP). If so, I'd go to the levfin team. Also, ask recruiters to see how aware the market is of how good/bad each team is. (If its BNP, they are aware). Good luck!
Thank you for the reply, may I ask you what do you mean when you say that in some banks LevFin is a support group and in others they own their deals?
From what I have seen, at my bank the LevFin team receives financing requests from PE funds, and then the analysts input the numbers into an existing model used to evaluate the cash flows and financing profitability.
Honestly it is not as glamorous as I imagined it and I am a bit struggling mentally…
Sure, when a bank has a levfin team considered support they are not sourcing any clients. No one's going to them and saying "can you advise me on how to raise all this junior debt" what'll happen is the client will ask the M&A/industry team "can you advise me on this acquisition" and the M&A banker will answer "sure, and here is my levfin team in case you need to find ways of financing the deal"
The result of this is that the M&A/industry/coverage group will lead all workstreams, including the financing and debt models, and the levfin team will only support them (giving juniors no exposure to modelling) giving them some guidance on assumptions to make regarding the debt (which obviosly as a junior, you wont do) (also, hours are much much better and comp, as a junior, is the same, which, if you want to exit to PE, you shouldn't care, but still good to know)
This will be the opposite in a bank with a solid levfin group where their team will lead all relevant workstreams
Essentially as a junior you'll get much more exposure and learn more if they have a solid levfin department than just a support group
The proof of this is that a close friend of mine who is at a top industry group at JPM said they'd happily always take someone from levfin, no banker at a top group in MS will say that
Having said this, being in levfin is already insanely good, and way above the average job, even though it may not be as good as M&A in terms of exit ops if you're not in a solid group. So cheer up, there'll always be ways of improving your position but you're off to a great start!
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