DCM Path

I'm interested in going into DCM. Yes, I understand that it usually comes with a sacrifice in regards to exit opps.

Any insight on whether or not the "path" of going into DCM is any different than it would be for M&A? Tips on internships, target schools, competition, etc. would be helpful....

More generally, which BBs and boutiques have good DCM groups? Is DCM big in any other cities --- like Houston, SF, Chicago, Boston, Atlanta?

 

Path wise, I don't think it is going to be too big of a deal for students. The only major difference I can think of is probably technical questions. Having gone through the recruiting process myself, I find M&A groups usually have more difficult questions.

BBs usually all have pretty decent DCM groups because of their distribution capacity. Not so sure about boutiques though...

 

Just to confirm, when you say DCM are you referring specifically to high grade and not including Levfin?

"I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant."
 
Best Response
gangstabanka:
I'm interested in going into DCM. Yes, I understand that it usually comes with a sacrifice in regards to exit opps.

Any insight on whether or not the "path" of going into DCM is any different than it would be for M&A? Tips on internships, target schools, competition, etc. would be helpful....

More generally, which BBs and boutiques have good DCM groups? Is DCM big in any other cities --- like Houston, SF, Chicago, Boston, Atlanta?

(Caveat: What I say below applies strictly to investment grade DCM.)

In terms of "the path": You have to interview with a lot of people at all levels, have them all like you and have good grades. Is it less selective than your typical M&A or coverage group? I don't know for sure, but I doubt it is much less selective if at all. Most DCM groups are far smaller than a bank's combined M&A+coverage groups (although larger than any one of those), and they are recruiting the same 3.5+ GPA kids from the same Ivies, etc... Now again, the odds are the M&A group is harder to get into simply because of supply and demand, but it's not like DCM group are letting kids with M&A group will get their pick of the litter

The banks with the best DCM groups are those with the biggest balance sheets. DCM is very balance sheet driven; i.e. the guys who act either as lenders to the issuers and/or have the ability to trade large volumes of their paper. To be big in DCM, you need to have a pulse on the credit market and the ability to sell new issues, and to have a pulse on the market and sell new issues you need to have a big credit trading operation. Few boutiques have this because they don't have the capital needed to do so.

Given DCM relies so heavily on trading, and vice versa, most banks have the bulk of their DCM groups located in NYC. You might find the odd energy-focused group in Houston/Dallas, and small regionals may have their DCM groups located in their home bases, but really New York is the only place you want to be in the U.S. if you are doing DCM.

 

If you're interested in going to EMEA, HSBC is the lead in DCM in almost every other market; as stated before, yes it has a lot to do with their balance sheet. why work at a small boutique M&A shop with limited dealflow to say you were in M&A when you could be working on financings for some of the biggest M&A transactions of the year and have actual deal experience

 

I disagree with DCM being mundane. All jobs at an analyst level is mundane to begin with. Having said that, I think DCM's pathway allows you to handle the deal on your own quicker + you get to have client exposure earlier. DCM deals tend to be higher frequency and they close faster, so you see a lot more deals compared to M&A deals that take >6 months to sometimes even 1 year + before closing.

I think the skill sets would be different but not necessary lacking in terms of exit opportunities. DCM is sort of a hybrid between investment banking + markets, so if you like the markets, you probably enjoy DCM more than M&A, which is more financial statement/accounting based. For example, if you wanted to go into corporates later on in your career, do corporates more often do mergers and acquisitions, launch IPOs or do bonds for capital raising? You can always go into bond syndication later on and you have more exposure to the sales and trading side as you will probably sit near the trading desk (although there will be a chinese wall between you as you will have the interest of the originator in mind, whereas they have the interest of the investors). Also, bonds are the most traded asset class in the markets.

 

Thanks for your comment.

You are right, I am an immigrant from Singapore.

My English is definitely something I am constantly striving to improve.

Aside from my career question, may I ask what specific weaknesses in my English thay particularly stand out to you? (i.e., grammar, sentence construction, awkward expression, etc.)

 

If the credit analyst position is supporting a DCM team (eg working in the Credit/Risk Management team, facing the IB division's DCM team), then you're going to build a network with the DCM team, you can demonstrate skills and business understanding etc - that should facilitate getting into the DCM team.

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

Sounds like the Treasury analyst role is my best bet. Thanks guys.

As for the credit analyst role, I should find out more about the role the job posting was very vague and the information I got from the interview wasn't much better. I will reach out to them and try to get some more background information.

Any more opinions are appreciated

 

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Those who can, do. Those who can't, post threads about how to do it on WSO.

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