IBD to Equity Research?
A few threads on this from years ago but wanted to see if any updates or changes.
Also want to preface this with the fact I don’t want to do PE, I want to break into L/S equity. I understand that earnings season can be extremely harsh, but willing to work the hours if I am learning.
At a MM and honestly have not felt like I have learned half of what I thought I was going to. Maybe it is a grass is greener POV, but for those that are juniors in ER, what is a typical day like? Are you modeling? When you are intiating coverage or forming a thesis are you included in that, or is it just summarizing what seniors want.
Would love to hear any tips/stories of people moving from IBD to ER and eventually L/S HF. How did you recruit etc. Thank you in advance.
Use search bar for ER dude, it just ain’t the same as IB
Yes, I understand its not the same as IB. That was not my question. Simply trying to understand if anyone has done it before and could offer some advice. I’ve searched the threads and gathered what I can, but wanted to hear more recent thoughts as many are a bit old.
People who work in ER shouldn't be on the IB forum and if they are, they're probably looking from the outside hoping to get into IB.
People in IB don't visit the ER subforum, probably most don't even know what ER is if you asked them what the day to day would be like
Answer his question or move along.
It’s not the same. I may get monkey shit for this but research guys can become amazing modellers from transitioning to from research to a solid coverage group because they have extensive extensive industry knowledge and they forecast companies at a much higher, an in-depth level than a traditional banker, working on a single mandate. Under a research analyst, and he was better than any real estate investment banker that I’ve ever worked with. Obviously the only thing lacking was the execution experience, which is something you wouldn’t learn as a research analyst.
If you’re looking to switch from banking to Research, you better understand the industry that you’re entering inside and out and that the modelling you may do would be based off of a venture and strategies versus the traditional forecast that banker
TL; DR Apples to oranges industries.
Thank you. This is helpful.
I guess I just feel more interested in getting immersed in an industry and building those models. Something I should’ve probably identified before rather than now which is my mistake.
I read your post again if you want to get to a hedge fund and work as a long short equity analyst you’re better off going the traditional IB route then working in an equity research role. Research could lead to being a good picture on Bloomberg for example a tech industry for instance, but you’re not actually getting direct investing experience. I was thinking that research would lead me to working at a hedge fund. It could help from a research perspective but you need direct investing experience. If I were you, I would try to lateral to strong product team at a bulge bracket you could also go to CFA on top of this.
Another thing , if you’re really serious about working out a hedge fund, especially a tiger club just know that these motherfuckers who get there have been born for this shit at the age of 14.  there are select few recruiters in New York City, who recruit from target schools, and top MBA as well as top investment banks. Getting into investment banking is already extremely in this market let alone a market. Don’t want to discourage you, but if you’re talking tiger clubs, it’s going to be very very difficult. You could probably go from equity research to a smaller hedge fund.
Hope this helps
That’s a very insightful comment, thank you!
If you don’t mind me challenging only one point though, I tend to disagree (especially for some industries) on the modelling. E.g. groups in which the modelling is very granular, s.a. Power/Utilities/FIG. An ER analyst would know the different regulatory regimes / macro tend but there is absolutely no chance he can model a regulated utility business or even a power plant.
Your statement probably does hold true for the majority of the other coverages, equally though, at least in my experience, if you have an assoc in IB and one in ER, the former is usually more technical.
Ive seen IB guys move to ER. Definitely possible although for your goals it’s probably not needed.
Re hours and typical days, use the search function. There have been recent posts about this
Got it, thank you
I did the reverse, moving from ER to M&A. Happy to answer questions, but at a high level ER is much more modeling focused and analytical. In M&A, you spend more time trying to make sales-y marketing materials. One nice thing about ER is that you cover the same companies forever, so you really do become an expert in those companies over time.
You’re absolutely accurate on this and it kind of triggers me because I did report to a research guy briefly, and youre spot on on the modelling. I thought my modelling was good until I worked for a research guy.
Yeah, when I moved to M&A people thought I was really strong in terms of modeling. Its easier when you do it every day in research lol
What made you want to move from research to m&a?
We recently took on an internal transfer from ER. Would say his modeling skills are weak and he probably isn’t going to be working in our group much longer. Clowngrade hire
Just want to add on the modelling point, if any of you guys have looked at research model you would realise most of the time it's a fking mess with random shit like random hardcoded numbers, inconsistent formula, half hardcoded formulas, dated comments and sections that are not cleaned etc.
Also don't agree that research models are necessarily more in depth, you can only rely on public information, where as in IB you get direct and private access to C suite to better understand how they actually think about the future forecasts
I would argue where ER is strong is actually knowing inside out of a company, for any strategy of a company, they probably would have seen it from day 1 to multiple mutations and eventual outcome, so they would have better understanding on what works and not for the industry and company.
Why would anyone want to do IB? Equity research is practically the same job and you do even more modeling and have more responsibility and similar hours to people in IB
Do people get into PE from equity research or is it mostly HF roles?
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