ECM or DCM for exits & the next ~4-5 years

It’s a tough one for sure. Off the top of my head I would say DCM although I don’t work in either group so don’t take my word as gospel. Also I’m just an associate so what do I know. Some banks group Levfin inside DCM and others stick structured products in there too but here I’m more concerned with the traditional origination/syndicate/HY/IG etc setups

This is how I think about it: I’m at a generic (key word here) buyside and I’m interviewing two candidates (obviously oversimplifying for the sake of argument)

1. The first one from ECM says: “I understand IPOs really well”. My reaction is “how can you say that? All sectors are different, let alone companies, an IPO is basically a once-off for a company so once its done you move onto the next while not worrying about how that company actually grows and scales. You don’t model the sector, you didn’t model the company and you don’t know how to trade it. Maybe you could argue that you are familiar with what questions investors like to ask and think about when considering buying into an IPO which seems fair”

   -Now, I am aware that I have probably triggered every single ECM banker in the world so let me amend partially: If you can land on a Convertibles desk I think that out of all the capital markets sub desks (barring lev fin maybe) that is the best one for exit opps. The state of Debt markets is atrocious (investors clawing their eyes out to oversubscribe some 0.5% yielding garbage) so convertibles are a clear step forward in terms of debt exposure and you learn a product well because you are product focused. Given the actual nature of the instrument you begin to make consideration about both debt and equity, few other desks offer this. Most importantly there are also convertible focused funds.

2. The second candidate, from DCM, says “I understand HY bonds really well”. My reaction is “Ok great, so you understand a specific product that is heavily traded and due to its nature you understand YC movements and can make macro and geographic considerations and you probably have an idea as to how the trading is conducted”.

   -Do you see the difference? The difference is DCM teaches you expertise of a product, not a transaction like ECM.

At the end of the day it will come down to two considerations. The first is that even though both DCM and ECM can be sector focused (TMT/IND/HLTH etc) there is very little reason to pick any ECM/DCM candidate over anyone else from IB/ER/S&T based on this. The second is that, once I understand the first, I will want a candidate that can have some sort of applicable knowledge of a product or a market and unless it’s the converts desk, DCM is clearly favored for me. Also lets imagine I am interviewing an ECM and a DCM guy for a lateral hire. While my opinion will also certainly change once I actually talk to them, if I look at their resumes I think “well, neither knows how to trade or probably pitch a stock but the DCM guy will understand the macro really well at least so I can always start him off with top-down focused clients”.

TL;dr: DCM offers product knowledge, ECM is transaction based so I would rather the former. Regardless, shouldn’t worry too much for your first SA/FT job. Both are still FO, highly coveted and well paid and if need be you can always move internally so congratulations, chin up and good luck!  
Happy to entertain criticism and DMs if needed