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Career Resources
The municipal investment banking (Public Finance) space has its own dynamics and can vary depending on the economic environment and government funding needs. Based on the most helpful WSO content:
State of the Muni Business: Public Finance can be a stable area, especially during times of economic uncertainty, as governments often need to raise funds for infrastructure and public projects. However, it can also be cyclical, with activity influenced by interest rates, government budgets, and policy changes. For example, municipal debt often requires more quantitative structuring compared to corporate debt, as it needs to align with revenue constraints and issuer goals.
Firms to Consider:
Lifestyle and Skills: Public Finance offers a balance of decent work hours (around 60-70 hours per week on average) and a good living. It also requires strong quantitative skills and an interest in public policy, as you’ll work closely with government entities and advisors.
For more detailed insights, you can explore this WSO thread: https://www.wallstreetoasis.com/forum/investment-banking/public-finance…</a">Public Finance Q&A.
Sources: Public Finance Investment Banking Information, J.P. Morgan and now UBS? What exactly is the state of investment banking..., Public Finance Q&A, Q&A: Public Finance Recruiting and Interviewing, https://www.wallstreetoasis.com/forum/investment-banking/public-finance-qa?customgpt=1
Given the new administration coming in, most speculate that this will be a record year for issuance so should see a lot of volume. That said, some are also speculating that the new admin will remove buckets of qualified uses (mostly in private activity bonds) which will limit future volume on a go forward basis.
Bigger issue is fee compression that has been prevalent for decades as this point. Too many older bankers have already made their big money in the past when fees were higher/have too much of a soft spot thinking they’re doing “public good”/have no fee discipline and are willing to make juniors do all this white glove service for no money.
You have to do 5x the work of a LevFin or DCM issuance (for things like tax law compliance and structuring to remain within tax law) for 1/4 of the fees (munis aren’t breaking half a point on takedowns unless it’s certain types of PABS, but that product will be in focus of getting limited/reduced by the new admin). You’re looking at upwards of 2 points in takedowns in LevFin/DCM.
All that said, revenues aren’t supporting the headcount required to do the job so PubFin bankers are getting stretched to do more for worse pay than corporates. I see assocs in my group doing analyst work frequently and/or not having analyst support on their deals. VPs constantly having to take the assoc role. No one coming out of college should be building a career in munis at this point. Go corporate and don’t look back. If you’re in munis, try to lateral ASAP.
I thought hours are supposed to be lower in pub fin?
Slightly, but not like it used to be 3+ years ago. The pay differential/penalty doesn’t make up for the marginally better hours.
Hours are lower, about 60
Still a cushy role if you're not in NYC, I know some at Davenport in Richmond clearing 550k at the mid level
Maybe makes more sense regionally. my experience has all been NYC based
This seems like a huge exception? I used to be at a BB in munis and VPs definitely weren't even close to making that much. I don't think junior directors were even close to that. I guess if Davenport is commission based and they had a good year...? MDs at MMs are making this in my experience.
This is pretty spot on policy wise
Any advice for a junior with an upcoming SA position in PubFin at a BB looking to lateral?
Try to work your way into one of the more corporate like groups (energy/P3/healthcare/real estate/etc.) and try to parlay that experience into relevant skill sets for future interviews. To the extent you can work with equity (i.e. maybe private equity in a P3 deal) in some aspect, even better.
Agree with everything you've stated. The big powerhouses in munis have undercut negotiated takedowns so low (I've seen as low as $1 for a GO but I think $3-$5 is more common) that it is hard to justify a career in this space even if you like it. 80%-90% of DCM hours with probably a 50% haircut in comp over time does not sit well... However, I have seen some interesting things in the healthcare / P3 / transportation / sports segments that are closer to corporate transactions and most likely the better paid of the pubfin groups and provide more exits/lateral possibilities if that's your end goal. Personally find the education (K-12 and university) segment interesting but certainly not for everyone!
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Top shops pay roughly 160k for analyst all in comp
Is base still 100-110 at most places for first year analysts
At BBs yes - at MWBEs probably less
Yes at bulge brackets (JPM, MS, BofA) it is 110 for a first year analyst
Where are the best muni teams?
What are VPS making at the top 5 shops, around 400k?
Top shop vp's will clear around 400, mm shops around 275-300. MD's are making between 500k-1.2mm but often seem to do more work than you'd think given how lean they have to run due to fee compression. Lot more deals need to be done or more high yield to make that 7 figure mark.
This is in line with what I see. Will update all in later this month when I am delivered my bonus.
So what are associates doing? They have 175 or 150 base?
What are common exits? DCM and Levfin I assume are easier than others but what about private credit and stuff
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I'm late to this, but I've been in the space at a BB for a few years now (specifically P3/Project Finance) and have a good grasp on the industry.
I wrote a thread on teams across the street (see link below), but high-level I'd classify the banks in the following tiers, based on a combination of deal size and complexity of transactions:
https://www.wallstreetoasis.com/forum/investment-banking/public-finance-municipal-groups
In general, the P3/Project Finance and Not-For-Profit Healthcare teams within PubFin develop the most "corporate" like skillset and tend to work on complex deals. Unlike other areas of PubFin, these teams tend to do a mix of debt financing work and M&A work. These bankers charge higher fees on transactions and likewise tend to be compensated greater than their other PubFin peers. Complex work and higher fees do come at the expense of WLB as these teams operate closer to traditional IB hours.
Conversely, the "traditional" business (regional coverage, public power, higher education, etc.) tend to develop more niche skillsets and mostly focus on debt financings for highly rated entities. This is not to say the job is easy (debt structuring/restructuring can quickly become very complex), but a lot of the job is spent on RFPs and pitching with client relationships often being rather political given the nature of the business. Fees are often low ($2 - $5/bond) and banks often win mandates by either 1) bidding the lowest fee or 2) being next-up in the "pool". On a positive note, these roles can be quite interesting if you have an interest in public policy and WLB tends to be good (~60 hours a week).
Due to the lower average fee pool, staffing in PubFin tends to run quite lean to keep expenses down. Senior bankers tend to be more in the weeds of deals and junior bankers typically are staffed as the lone junior or are expected to work on a multiple live transactions and pitches at the same time. This leads to there being very little downtime in the workday unlike traditional IB. As an extreme example, my team just completed a high yield project finance transaction with only two team members staffed on it (MD and Analyst). This dynamic can be seen as a pro or a con, but it is worth noting.
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