Difference between M&A and 'groups' e.g. Energy, TMT, Healthcare?
I have seen lots of group rankings, but always see M&A as a separate group to ones such as TMT or Healthcare.
I was always under the impression that all groups in IB do M&A, but have separate coverage areas. If this is the case, what does 'M&A' as a group actually refer to? Is it just talking about general advisory M&A (aka advisory corporate finance) whereas specific groups actually handle transactions within their relevant industry?
That depends on each bank, for example Goldman Sachs and most boutiques don’t have an M&A product group so Industry teams do both the coverage and the M&A execution.
On the other side, there are some banks, e.g. MS, BofA, Wells Fargo that have coverage groups and then have an M&A team. In this case the M&A team holds the pen on models, do the technical work and run the processes (communication with lawyers, other advisors…) while Coverage groups are in charge of holding the relationships with clients and provide the industry or market expertise.
These deals are usually run with coverage and M&A, with varying levels of responsibility. Most of the work done when it comes to typical client coverage (i.e. market updates, pitching ideas, fulfilling random client asks) is usually coverage. If a deal goes live, M&A will get looped in, but what they do really depends on the size and nature of the deal, industry, etc. On a natural resources deal, M&A often won't do too much - model will be done by coverage because M&A folks don't really know NAV modelling, the general company and industry stuff done by them too. The M&A folks end up supporting with that stuff in the form of extra bodies, take care of the data room and other organization stuff, etc. On the other hand, you could have a consumer deal where after the deal goes live, M&A is taking the lead on things like modelling and a large portion of the CIM, etc. Super situation dependant, and the lines often blur on actual transactions, but generally speaking (and super broad generalization, I know), is that coverage side will lean a bit more towards the industry type stuff, while M&A folks are probably more in the weeds of the numbers - i.e. when building out a CIM, those pages showing product overview, industry trends etc are probably coverage, while M&A is probably cranking out the financial outputs, EBITDA bridges, random financial stuff in excel/ppt.
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