Houston SA Offer: Take EVR/LAZ/Moelis or Wait for GS Process
With Houston offers going out this week, wanted to get some perspective on taking an offer from Evercore/Lazard/Moelis Houston or holding out for the later GS Houston process?
While the current offer does have the RX exposure that provides some hedge, I have heard that GS/MS would provide a better exit ops out of O&G and potentially for FT lateral as well. For context, I have been close with both teams and feel like I have a good shot at GS but obviously nothing is guaranteed.
Would appreciate any perspectives on the firms and how the analyst have done in terms of exiting O&G?
I personally would not do the GS program if it’s Houston. NY and Houston are different beasts, and GS Houston has struggled constantly with culture. Also, the hedge matters a lot more given GS only really does OFS out of Houston.
Take EVR or Moelis - both are great firms with recent traction. EVR has been a top player on both the rx and m&a side of things, especially for upstream.
This is very much a BB vs EB question. Other than that, I would say two things: (1) EVR is the best Houston bank on that list by far in terms of dealflow, exits, culture and prestige. GS is a fantastic bank but it is not a tier-1 BB in Houston. (2) GS does have the best exits if you want to leave energy. I would say EVR's are only very slightly worse.
I think it would be crazy to turn down an offer from EVR. Even if you are committed to leaving energy, I would still take EVR on balance.
I’d hands down take EVR / LAZ / MOE for the experience. All are great shops. Evercore is best for M&A, Moelis best for restructuring. All have been picking up mandates through the downturn. Moelis has probably been most active in the energy rx market recently and just got $40bn Oxy deal.
Agree that GS Houston isn’t that great outside of brand.
Feel like the big question here is why are you recruiting for Houston O&G IB if you don’t want to exit into Energy?
I’m assuming it is a combination of either being at a Texas school that feeds to Houston, growing up/having family in Houston, having family connections in O&G, or thinking that recruiting into Energy would be easier than NY.
Whatever the reason is, I would first think about about why you initially decided to recruit for Houston and what has changed (assuming COVID-19). Even before COVID-19, O&G was still facing structural issues and headwinds in terms of ESG-focused investors. It seems counter intuitive to sign a Houston SA offer to try to leave, but I’m assuming that GS HOU is your only other alternative.
If you compare your different potential outcomes, I do not see a way the marginal advantage of GS outweighs the risk of striking out in recruiting. The EBs will give you arguably better deal experience/reps along with the RX hedge. Also consider the potential for FT laterals, where the EBs are generally more open than BBs for internal mobility between SA and FT.
Ultimately the minor (if any) upside of GS, is not worth the potential risk of not having any IB role in the fall.