Energy Banking: A&D-VP or IBD-Classic Associate More Attractive?
Couldn't find the comparison on the forum, so thought I'd throw this out there.
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I naturally filter into VP A&D or IBD-Classic Associate roles (bio below). I'd planned to go the route of VP A&D for my next role... but now I'm getting conflicting views that some of the A&D technical guys are "2nd class" at most shops (bonus, exits, client-interactions).
Would love to hear your thoughts on if a drop down to Associate is worth the trouble.
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Background: 10-year Reservoir Engineer (on the E&P side). Even mix of Capital projects and A&D/Corp-Dev (worked two of the more recent 10-figure public deals). Hold CFA and MBA.
To me, it seems you enjoy and plan to stay on the upstream side of energy and your experience will be a value add - it would make more sense to take the A&D position in my opinion.
I would only take the "IBD-Classic Associate roles" if you plan on transitioning into something different and didn't want to do E&P anymore (or don't plan to anymore). Are these Associate roles for a Generalist program or in a different sector or would you still be in energy?
Depends on the shop. Some like to lean into technical prowess for evaluations and to win assignments. So you'd be client facing and a major element of the team. Others, maybe you're just cranking appendix slides, updating reserve reports on different price decks and making play maps. Better upstream advisors, in my opinion, are more integrated and most of the strong shops are moving that way or already have. Do what you honestly enjoy more. If you want to stay in upstream energy I'd lean A&D and learn the rest as you go.
Thanks for the thoughts! It looks like I'm getting mixed feedback. I imagine this is a reflection of differing structures across the shops.
If you don't mind me asking, what shops might you suggest where A&D technical guys are treated as of "similar class"? (integrated teams, client facing, comp, etc.)
I've heard decent stuff about Jeffries and Evercore in this respect... and I've heard poor stuff about Goldman.
I’d say the more boutique / energy focused banks will treat you as an “equal”. Having said that, being an engineering background myself, I’m biased that you’re always valuable to any upstream banking team.
The worst shops for “equality” tend to be satellite offices where they feel they need the reserve report guy just to add PDP at Strip on a comps slide for a pitch they’ll never win.
Comp, exits, and job security will be higher in classic, even factoring in the drop to associate (what year associate btw? 3rd year is a lot different than associate 0). Seems like A&D teams get cut en masse when there's a change up top. Definitely agree that the A&D teams are viewed as "second-class", which is kind of ironic given how integral they are to deal process.
IMO unless you love the engineering/A&D side of things, think IBD is the way to go. If you ever want out of O&G you can make the switch internally, and if not then you'll just be a top bucket associate for knowing the technical side so well.
Thanks for the feedback! I've quite enjoyed Engineering. However, I am certainly intrigued by the more finance-focused roles (where I get to eventually own the client interaction and build the pro-forma models).
It's a relatively high regret cost jumping into classic/coverage as an A0. And the idea of being junior to guys 5-years younger is a bit embarrassing.
Nonetheless, it seems like I may need to stomach my pride and go for it (?)
On the bright side, you will be a top bucket A0 with so much industry knowledge, and being in that type of training program sets you up to learn. If they threw you in at A2 or A3 you would be materially behind your peers in M&A skills, modeling, etc and would likely struggle all the way up to VP and beyond
There are associates in their 40s on the street... you are never too old!
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