I'm curious why you guys went into investment banking (or why you want to) and how many of you guys actually enjoy your jobs? It seems like so many people going into banking (especially at the analyst level) end up hating their work and the lifestyle that comes with it. I know investment banking is a highly competitive industry that many people are attracted to, in part because of the money and prestige.
Part of me thinks this said attraction is part of what feeds into people not liking their job once they fully appreciate all that it entails (the hours, lack of free time, time consuming and tedious tasks, etc.). In other words, it seems to me that most of the people I have encountered that "end up hating it" are those that maybe chose this career because of the money, prestige of working on deals, etc. instead of because they genuinely enjoy corporate finance and other aspects of the job. Maybe they chose it because most of their friends were doing it or their parents did it--I don't know.
To give you some context, I come from a very small non-target school (probably about as non-target as it gets) in the south where most people (even most finance majors) don't even really know what investment banking is. "Doing IB" isn't something common for people at my school to do, given that most people don't even know what the hell that means.
The reason I'm going into banking is because I genuinely enjoy corporate finance, economics, learning about new companies, etc. I actually think all that stuff is interesting, and enjoy learning about it. I interned at a top MM bank this summer and actually enjoyed doing so. Yes, there are obviously some shitty parts of the job (like any other) but I found the work to be interesting and each day to bring a new challenge.
I bring up this conversation because I'm starting as an analyst this summer and I'm curious to hear what you all think about your experiences in IB, and how your perception/enjoyment of what you guys do has changed over your career? Why did you go into banking? What did you enjoy the most/least?
Any thoughts or insight you guys would like to share would be much appreciated. Thanks.
(just my personal experience here, take it with a grain of salt, at the end of the day to each his own)
Around the 6, 7mo mark, you kinda reach the top of the steep learning curve and then at the 9mo mark it's a plateau. The interesting corporate finance stuff that came in waves in the first few months now reduced to a few nuances here and there. Learning about companies are not that interesting anymore - self explanatory if you work in coverage groups (I swear to god every fucking companies in my space have the phrase "we provide mission critical information" in their pitch), and if you work as a generalist in product groups, you just have so many companies from different spaces that you can only get to know them by their financials and the first bullet under "what we do".
Also, the amount / nature of work and intensity of the job are at a different level when you are an analyst vs. when you are an SA:
(1) Joining the bullpen, you are expected to run point and be responsible for those shitty stuff (drafting memos, chasing up capital markets guys on their bullets / pages, making sure the preso is perfect formatting wise, etc. ) while as an SA, you have the analyst as the guy/gal who gets the heavy lifting done as well as being your safety net. At least this is my experience at my group at a BB - I did not give important stuff to the SAs on my deals, and I scrubbed their comps output 2x
(2) if you are a rock star, you will be staffed with an insufferable amount of deals or pitches that have real potential. If you are below par, you will be staffed with an insufferable amount of shitty pitches. Either way your life outside of work is fucked, and your overall happiness deteriorates
A pitch to a company has real potential where there's factors like: - the MD has a good relationship with the company or the PE sponsor owner, - the MD has done advisory work for the company or competitors before and really knows the sector, has stellar credentials - the company is not already well-banked by other banks - the pitching bank has a well-followed research analyst who covers the stock or the space
A pitch without potential is where elements like that are lacking, the deal director has low credibility in the space and is firing bullets in all directions in the hope that something hits. You see these more where a director isn't doing a good job bringing in sales and is getting more and more desperate to hit his/her revenue target and justify his/her seat.
As an analyst, you want to be on real pitches that land real deals that will close. That means your fingerprints are on a deal that has brought in real revenue and you're working in a team/for a director who can justify his/her existence. If you're not generating fee revenue, you are more disposable. If you're in a team generating fee revenue, bonus time is a nice time.
You also want to be on real pitches that land real deals because that means you get real deal experience. There's a world of difference in the experience you get working on a real deal vs preparing endless comp tables in powerpoint slides for dead end pitches.
I don't work in IB but no, I do not enjoy my job. I regularly think about jumping out the window.
Honestly, it kind of comes and goes. I've been working in banking for a few years now and while there are certainly some interesting things that come around now and then, it begins to resemble a factory at times where even if something is a live deal, 60 - 80% of the stuff you have to do for it is pretty cookie cutter and you have seen it all before. Your 25th model usually isn't all that different from your 15th model and once you've assembled your comps, precedents and spinout analysis etc. a hundred times it's really not that riveting when you've got a fire drill that comes up at 8pm, and need to be done for first thing tomorrow morning. At that stage, it's not really about your intellectual curiosity as you don't have time for that so you just need to get it done as fast and accurately as you can.
At a higher level than the day to day, I've also found people start to get a bit jaded and cynical after a while. Everyone seems to have that deal that breaks them where you grind constantly for months (potentially years!) on a deal that just dies or never goes anywhere. It feels like you've ruined countless weekend, cancelled a whole bunch of plans, and have slept like shit for absolutely nothing. As interesting as it may be the first time you come to the realization that your firm didn't make any money, which makes your senior guys more anxious to bring in revenues which makes your life harder, the good bonus you've been eyeing could be down the toilet, and your job may be on the line should the firm downsize or manage headcount.
All that being said, the thing I find most interesting at this point is the people. Meeting with clients and hearing their rationale and thoughts on our ideas is interesting and certainly provides significant intellectual development as the people we deal with are generally pretty smart. Getting to go to events with clients and developing those personal relationships is what's most engaging to me at this point. I'd rather get an opportunity to pick someone's brain and talk about what's going on in the industry than build my 30th model and screw around in ppt.
Aside from being the highest paid position you can get out of undergrad, I think there is also the idea that if you complete a two-year analyst program you have a ton of doors that will open up and you will (hopefully) find a job you enjoy and could become a potential career. I don't think we need to go into detail on all the exit ops (covered ad nauseam on this site), but the basic idea is you grind through these two years, get a ton of experience / money in the bank and then kind of reset and find your true passion.
This is true, and I totally agree with you. If you make it through two years in IB you will have learned a lot and have a lot of doors open to you.
That said, I wanted to add a caveat to this true statement. It is very hard to step off the well trodden path and go find your "true passion" after 2 years of investment banking, or two years in IB + two years in PE. In many cases, the money and/or prestige is just too good (for the types of people who make it into IB) to walk away from. The act of stepping off to find your true passion tends to get delayed, and delayed again, and delayed again, until you are 34 and now NEED to continue to make PE/IB money (wife, kids, private schools, mortgage, nice vacations, MBA debt, etc.) and can no longer afford to take a risk or adjust your lifestyle.
Of course, there are many people that go into IB and love it or use it to open doors to other fields they end up loving (PE, VC, faster-track positions at companies, entrepreneurship, whatever), but just beware of the power of inertia, or whatever you want to call it, that these roles expose you to. If you truly have a passion, or find one along the way, don't be afraid to step off the beaten path to pursue it sooner rather than later.
I would say that I love my job working at an investment bank. I get to interact and most importantly negotiate with clients and solve problems when they arise on deals. Yes, the hours are long but the work is fulfilling.
However, I would say there are many analysts and associates who join investment banks really do not like their jobs. Because investment banking pays so much more for what is glorified office work and salesmanship, there are many people who just want a nice pay check and a nice name on a resume. My shop hires an army of extremely smart and eager analysts and associates, but the fact is most are gone after two or three years because the work really isn't all that fulfilling to most people. I would say many of them shouldn't have gotten into investment banking. Drafting pitch books and reading 10k's is not all that sexy work and add to that the long hours of just waiting for someone to "OK" your work is dull and mind numbing.
*** If you read anything in this post, read the Third Point below*** I worked in valuation before coming into restructuring banking 2.5 years. Recently signed a PE gig that it set to start in the fall after I get the travel to get the f away from this IB gig.
My $0.02:
The one deal that breaks you - The point made above about one deal breaking you is a real thing. I had a deal in 2015 where I worked 100+ hours a week for 5 straight weeks (not an embellishment) in order to negotiate a fucking amendment. That was a 6-month deal from beginning to end and it was the moment I was over banking. I realized that my supervisors had no real interest in my well-being at all. I am a bit shamed in saying that deal broke me and made me a lower quality analyst afterward because I developed a sense of bitterness towards the associate and vp on the deal.
Learning Curve- The "rush" of learning new things will not last forever. You will get over this and get tired of slaving away until 2am looking for some dumb statistic or metric that your MD or associate asked for. On the same note, you will get tired of making marketing materials that provide little to no value overall but you bust your ass on. On models, you will probably not build as many as you anticipate and you will grow to hate them when the client asks you to build in 1,000 scenarios. When you are asked to do something at 6pm and to have by morning, you tell your "attention to detail" self to go to hell
Surround yourself with people you want to be like and don;t ever forget what's truly important (money is not truly important) - My bitterness aside, I have no idea why people stay in banking. Unless you are at some MM or small group who works mortal hours, banking WILL ruin at least one of the following: your health, your motivation, or your relationships. IMHO, your life goals and priorities must be skewed in the wrong direction in order to stay in banking. Yes banking pays a lot, but in banking, all you're doing is trading your life (until you reach mid to late 30s) for a pay check. There are certainly outliers, but overall, look at the senior people in your group and look at their lives. Senior level bankers have usually at least one of the following apply to them: gone through at least one divorce, don't see their kids, are overweight, and/ or insecure and only talk about fees/ money/material possessions. This is more for instruction after you get through your 2 miserable years of banking and are looking for your next gig. Be choosy in where you go and the culture. Surround yourself with people that share your same priorities in life. Know that you don't have to do the typical progression of 2yrs IB + 2 yrs PE + 2 yrs MBA. Know that if working crazy hours bothers your, it is OK to ditch high finance and take a corporate gig. I have friends who have made the switch and don't regret it for a second. The world of finance amazes me because people enter it to chase cash and are too focused/ greedy to see the cash corrupt them and ruin their lives. Be aware and stick to your roots.
End rant. I hope this helps someone.
i literally jizz my pants with ecstasy every morning when i walk into my office.
This thread hit way too close to home.
I'm a first-year post-MBA associate in banking. Absolutely hate it but couple of points.
Given my financial circumstance (lot of MBA debt, parents who can't help me out but rather the reverse), I had to take a job with a decent base and a well-defined upward trajectory. As much as people love to diss banking, it is actually one of the few post-MBA industries (along with consulting) that pay well and offer a steady progression in comp as you move up. We all know that hedge funds for instance are volatile; I have friends who got let go from top funds after 1 year through no fault of their own while others got lucky one year and got a huge ass bonus.
Transferable skills and exit opps were REALLY important for me because my previous job gave me literally zero exit opps since it was so niche and specialized. Granted, post-MBA banking doesn't open as many doors as post-college banking, but nonetheless, you'll be surprised at how many jobs out there want people from a banking background due to our expertise in valuation, modeling, accounting, as well as a big picture understanding of business strategy.
The way I see it, you make sacrifices now in order to reap the rewards in the future. Working long hours in your 20's and 30's is a LOT better than working long hours in your 60's because you didn't make enough money to comfortably retire. That's my worst nightmare, as I saw my parents work long arduous hours when they weren't healthy. Life is ultimately about trade-offs, and for those of us who were not born into wealthy families, these are the types of sacrifices we have to make to secure our future. And whatever Bernie Sanders and the liberals may say, I'm not going to apologize for it.
I'm a 2nd year analyst at a BB and I enjoy my job. Yes there are parts that are terrible but in reality it's not as bad as everyone says. Yes 100 hour weeks come up but you grind through it and take a breather on the other side. People see when you get crushed and lay off you afterwards. Depending on your group / bank, these come up less now than they have a few years ago thanks to initiatives put in place by banks. It will never be a consistent 40 hour a week job, but that's normally because the work you're working on is important or is interesting. If some VP starts generating useless work it totally sucks, but people recognize and push to get rid of that kind of stuff. If you find the work interesting and actually enjoy corporate finance and the deal environment (as I do) working late hours isn't that bad. As long as I can get a decent nights sleep, I'd take that any day over a 9-5 when I process shit and count down until 5:00pm.
Coming out of the woodwork, can't resist contributing my 2 cents...
I worked broadly in 3 areas, brief stint in strategy consulting, longer stint in a fairly large privately held commodities house (oddly enough ended up on the one desk that did exotics, FX, equities, etc. but it's a big family anyway), quit, moved to the other side of the world, worked for a few startups before bootstrapping my own with (purely technical) consulting.
Strategy consulting: great quality people. Top of their class, very smart, worldly, we had great conversations. I was very junior and I'm not sure this applies to those who stayed beyond 2 years. By the MBA stage, the consultants get VERY boring. But that's definitely the biggest (only?) pro. The jet setting lifestyle gets old very quickly, about as quickly as sleep deprivation takes its toll on your body. The worst thing was the utter meaninglessness of the work. Consultants are hired to cover someone's ass, at least in a large number of cases. I worked on helping bad management excuse their terrible decisions. I quit quickly. I did savour the excellent 5* hotels many of which were boutique (this was in Europe).
Commodities house: people were slightly lower academic smarts, but made up for it with heaps more street smarts and experience. Some of the best people I ever worked with... and this time, the more senior the smarter (there's a survival effect at play, or maybe they were the sort-of-founders that made it happen). I miss them all. The money was OK. Middle class money. You don't really get paid well until you have really proven yourself, and have enough stock to collect the large dividends (if it's a good year). The responsibility was given freely and in large amounts if you showed even a hint of competence, which was really nice, both to do something with impact, and because of the implicit trust from people you admired. On the downside, the problem with markets is that every day looks the same as the previous day, except you're a bit older. You're the spectator in Teddy Roosevelt's arena. This was why I quit, if I think really hard about it now. The pure commodities side has more fun, my former colleagues post photos from exotic locales on Facebook and talk of getting drunk with coffee farmers or parties in dachas in the outskirts of Moscow. Overall it was a much higher quality of life, a lot less stressful except on those days where the world seems to blow up and you're doing a million trades an hour but at least markets eventually close and you hand over to the next time zone and you can go home and relax.
Working for startups: people were MUCH less smart on average. Who works in a startup at the 50-employee stage? People who are OK with being paid maybe 20% more than minimum wage after being sold the "dream", told they were a "one in 4 billion entrepreneur" and any other list of myths that the industry likes to use to psychologically extract the most value before people burn out. And well... these people don't last as long as bankers or consultants (although they can be more varied and teach you a bit about life). Turnover was brutal. I stuck around to learn, that's what kept me going, and it's amazing how much you can learn in that world if you stick around given nobody else does. I guess I also enjoyed the cool hipster offices, the average employee age, the fresh roasted office coffee, the youthful enthusiasm of the herd. And the much higher female to male ratio. I was a bit cynical and didn't care much for the myth, the value of the company (and every subsequent one I worked for, and all my clients ever, and the probable value of my startup in the best case scenario in 5 years put together) was less than I'd trade in 10 minutes in my previous life.
Running my own thing: the money is not as good, the work is longer hours, the stress can be unbelievable when things happen like a client just shuttering your main contract and you still have to make payroll so you scramble to find new clients. You might pitch 200 clients and get 1 contract; in fact 90% of my clients came through referrals. It does mean you can be proud of yourself though, and you are your own master and clients treat you as an equal and human being (which is not true in the corporate world where there's a certain measure of herd dynamics involved). I'm also relatively successful so living comfortably, but the psychology is the best bit. There's always a sense of direction and you have a real feel of impact, since you don't really get paid to twiddle around on Facebook like full timers, you tend to do actual work and use your brain a lot. It took me over a year with the first co founder to not have a product (but we got a lot of consulting done), went through a couple more and then got the product launched within 3 weeks of the latest starting. Resilience is quite important but I couldn't stand going back to working in a structure where humans are potential problems and must be carefully penned, that helped keep going. I also think some people enjoy the hunting more than the eating the catch.
One thing I figured out is that all jobs add value at different levels of the value chain, orders of magnitude and maturity in the company growth cycle. An IBer is doing extremely high stakes work at a very abstract level (and the analyst is a small, even more abstract part of this). I am in awe of my most competent PE friends who deal at both abstraction levels and financial amounts at stake that I am certain I could not handle; they are very happy with their life and work and I think driven by much the same things as me, it's just implemented differently. Personally my happiness niche was building things in a high growth environment, perhaps because I can't abstract well at the more mature stage, I couldn't really "grok" that trading was actually creating value as opposed to being a more sophisticated version of watching TV all day. Professional management at a certain scale is about designing systems that are human error resilient - in the same way that trading is really about risk/downside management.
It's also worth checking in with your friends in other high stakes careers. Life in general makes you pay for success, you might find that your friend doing his PhD at MIT is just as stressed as you and with just as little light (and just as far) at the end of his tunnel. And the quit rate is about the same too. Or professional musicians, scraping a living teaching 5 year olds whilst trying to make it as a performer. The careers that are more "relaxed" also have lower stakes, you're just clocking in and back out and for a lot of people with a "hunting" personality this will lead to depression and stress more surely than the high stress lifestyle in an IB. I think that's also a function of not controlling your fate.