Is Prestige Really All That Important?

Hi you guys,

This will be a longer post (TL;DR: Which bank will have the most PE exit opportunities / significant career advancement within Houston?)

--

Currently recruiting, I am trying to prioritize certain firms and have been wondering...is prestige the main factor when it comes to IB?

Vault effectively defines prestige as being well-known on "The Street."

How does this come into play regarding recruiting for PE? Are certain shops more highly regarded?

--

Which would be the most important factors to prioritize in the case of PE recruiting in Houston?

  • Vault 100 Prestige rank

  • Total IB employees in Houston

  • Total deal value in Houston

  • Total Energy deal fees in Houston

  • M&A advisory deal flow

(Let me know if I am missing anything)

--

To put it into context:

  • JP Morgan is the #1 bank by Energy and Power fees (globally)

  • Citi is #1 in M&A Advisory deal volume in the past seven years (followed by Barclays, GS, Evercore, and JP Morgan)

  • Evercore has advised on the most deals in the past seven years (followed by Jefferies, Citi, RBC, and GS)

  • JP Morgan has the most IB employees in Houston (followed by Citi, GS, Piper Sandler, and Morgan Stanley)

--

TL;DR 2: Which bank has the greatest possible (PE) exit opportunities in Houston?

Come to think of it, I suppose what matters, in the end, is going with the group with the most Energy deal activity, which would be JP Morgan, followed by Citi, Goldman, Barclays, MS, Jefferies, CS, BAML, RBC, and Evercore.

What are yall's thoughts?

What factors should I consider when choosing a (potential) offer from any of these banks?

Does anyone have an exact list of the top Houston banks by deal flow since last year?

Comments (38)

  • Intern in IB - Cov
Jun 16, 2022 - 1:27pm

This reminds me of all the ridiculous college rankings that people religiously adhere to...

At the end of the day, every single one of the banks you listed will be massively helpful in opening doors down the road. A lot of people on this forum act like they're too good to work for a lower tier BB which is frankly ridiculous. All of the banks you've listed are incredibly successful in their own right, and it's pretty safe to accept an offer from any of them, so don't go in with the mentality of "focusing on the most prestigious banks."

Also, based on what I've seen, most people will end up recruiting for 20+ opportunities, and if they're lucky, they'll wind up with 1 or 2 offers, so at the end of the day, it's not really up to you to decide which bank you work for--they have to choose you first. 

Likewise, for the sake of  your mental health, don't be one of the people trying to chase prestige--if you're life is driven by prestige, you'll always be miserable because someone else will always work at a better bank/earn more money

  • Intern in IB - Cov
Jun 16, 2022 - 1:33pm

No, every single bank you listed will open doors down the line. There's no point in "focusing" on specific banks because at the end of the day--most people wind up taking the first offer they get especially if it's from one of the firms you've listed above. Likewise, for the sake of your mental health, don't stress yourself out about prestige--there's always someone who works at a better bank or earns more money, so you'll be miserable if prestige is top of mind

  • Intern in IB - Cov
Jun 16, 2022 - 3:31pm

Goldman coverages are mid. FTP is THE paradise. 

  • Teller in Non-profit
Jun 16, 2022 - 3:54pm

Let me ask you this:

Can you eat with prestige?

Can prestige defend your country?

Can prestige save your loved ones from terminal illness?

In a moment of absolute, critical need, prestige is useless. OK? Say it with me: fuck prestige.

  • Intern in IB - Cov
Jun 16, 2022 - 4:12pm

Prestige is everything. When you say you work at FTP and your base is 140k, bitches' pants are dropping down.

  • Analyst 1 in IB - Gen
Jun 17, 2022 - 12:31am

Not really sure how to answer this question. It's as important as you make it out to be.

I will say, in my experience, prestige is pretty worthless in and of itself. When I got into a top 5 college, I was over the moon...for like a week. When I got into a top bank, I was thrilled...for like a day or two. You reach a temporary high then fall back into the drudgery / misery of everyday life. Do you think the people in the most "prestigious" positions are happy with their prestige while working until 3am every day?

Don't pursue prestige just for prestige. But if prestige will help you achieve some other goal in life, sure, go for it.

  • Prospect in IB-M&A
Jun 17, 2022 - 12:53am

I'm not really sure why everyone's throwing it out of context; I for one don't care the slightest about a firms prestige, but I know PE firms do. My end goal is to go to a PE firm where the culture is laid back and the comp is "competitive".
 

Obviously, if I go to a BB, I can easily leverage that experience when it comes to PE recruiting. If I go somewhere like GS or Evercore, PE recruiting will obviously be significantly higher than if I go to Societe Generale, BMO, or Baird.

And this isn't to say I wouldn't accept an offer from these banks, it is just to say that anyone in their right mind would accept an offer from GS over a group like Stifel, especially in Houston, and rightfully so.

The underlying question of this post was really, "Why firm over Y and Z?"

To put it into context as a question, since I want to do PE in Houston, should I recruit for PE straight out of University?

  • Intern in IB - Cov
Jun 17, 2022 - 2:45am

I'm not really sure why everyone's throwing it out of context; I for one don't care the slightest about a firms prestige, but I know PE firms do. My end goal is to go to a PE firm where the culture is laid back and the comp is "competitive".

If you care about PE firms and you believe PE firms care about prestige then transitively, it stands to reason that you care about prestige. I think you've already decided that you care about prestige and you're seeking validation for that opinion since you seem to be consciously finding a reason to reject the advice you've received. 

Given that you've established prestige is important to you, then you're post becomes a question of ranking which firms are most prestigious which is frankly the most overrated topic on this forum. There are also other threads about the ib scene in houston.

Yes, most people will take GS over Stifel which is largely based on the experience and learning opportunities of working on more/better deals. A lot of people on this forum love to debate about which bank/group is superior but those are all hypotheticals. Focus on every single bank you apply for and treat every bank like it's the most prestigious, and then if you land an offer at 2 comparable firms you could certainly come back for advice about where to go, but as of now, prestige should not be a concern for you

  • Prospect in IB-M&A
Jun 17, 2022 - 3:23am

I don't need validation when it comes to accomplishing my goal of landing a high paying role at a PE firm.

What do you mean by "If you care about PE firms?" I don't care about the prestige. If my end goal is PE (spoiler: it is), then lifetime earnings should be my only concern (and obviously having time to spend it).

If me going to a BB vs a MM bank helps me secure more opportunities and ideally a higher comp, then that's all that matters. If a no-name bank is the one that's going to (feasibly) maximize my "lifetime earnings", then by all means, fuck GS, Evercore, JPM, and Citi.

As a decent amount of people in PE and IB would say, one of the main reasons, if not the number reason they are in the field is for money. I'm just trying to see how I can (feasibly) maximize lifetime earnings while having the time to spend it. Yes, I could be a software engineer, a lawyer, and could choose another high earning field, but IB seems the path to me. Now it's my own personal goal to make the most of it…and by most of it, I mean money. 
 

I'm not trying to be a dick, and I will concede that I am set on working at a prestigious bank… not because I care about prestige, but as I mentioned, that prestige will translate into better opportunities at a PE firm (in theory). After all, traditional BB->PE doesn't take 2-3 years anymore. Now it's 17 months before analyst jump ship. From then on, they use their BB experience to land a high paying job in PE. By the point most people enter PE, they aren't even close to 10% into their professional career.

  • Intern in IB - Cov
Jun 17, 2022 - 3:30am

In that case, not really sure what your question is

As you've pointed out a bank like GS or EVR will be more beneficial in the PE process--I think everyone knows that and agrees on that. If you define prestige as best placements in PE then sure, I guess you should chase prestige.

  • Prospect in IB-M&A
Jun 17, 2022 - 3:37am

Well by all means, tell me if I am simply being ignorant, but my real question is: WHAT factors will help the most in the case of PE recruiting? So let me ask you: what do you think are the factors that help my case the most when it comes to PE recruiting at a firm that provides high compensation? Yes, I'm sure there's a level at which it doesn't matter if I did Moelis or Evercore but for what it matters, what are the exact factors that have lead to the best PE placement (preferably quantifiable statistics)

  • Prospect in IB-M&A
Jun 17, 2022 - 3:43am

And to add to that: WHY is GS and Evercore a better route? What does it boil down to? Prestige? Is it as simple as greater exposure to deals? Is it the better established training program? Stronger network? What is it exactly that makes the firms good? You mentioned it yourself, but I'm asking "Why is it the way it is; what are the reasons GS is better than Stifel (as an example)?"

I suppose directly looking at PE placement (which I probably should've done from the start, GS, MS, Citi, UBS (apparently), and JP Morgan has historically had the best placement into Houston PE.

  • Intern in IB - Cov
Jun 17, 2022 - 3:59am

I hate to give you a non answer, but I have no idea because it's akin to asking why Harvard is one of the best colleges

The bigger point is that the bank you end up with is largely out of your control, so while I applaud you for thinking ahead, you should realize that "focusing" on specific firms doesn't do much in improving your chances, so it's not worth worrying about. I haven't gone through the PE recruiting process, but from what I've been told, strong analysts at most BBs and boutiques will have a fair chance. Also, keep in mind, a lot of it comes down to self selection

Jun 17, 2022 - 8:17am
maplesyrup334, what's your opinion? Comment below:

Is it true GS recruits last ? If so how could they say they are getting the best talent. 

Jun 17, 2022 - 9:55pm
Kevin25, what's your opinion? Comment below:

cause the best talent is fucking bitches instead all studying interview guides in Freshman year - let boutiques take these nerds

Most Helpful
  • Analyst 2 in IB-M&A
Jun 17, 2022 - 1:42pm
Prospect in IB-M&A

Hi you guys,

This will be a longer post (TL;DR: Which bank will have the most PE exit opportunities / significant career advancement within Houston?)

--

Currently recruiting, I am trying to prioritize certain firms and have been wondering...is prestige the main factor when it comes to IB?

Vault effectively defines prestige as being well-known on "The Street."

How does this come into play regarding recruiting for PE? Are certain shops more highly regarded?

--

Which would be the most important factors to prioritize in the case of PE recruiting in Houston?

  • Vault 100 Prestige rank

  • Total IB employees in Houston

  • Total deal value in Houston

  • Total Energy deal fees in Houston

  • M&A advisory deal flow

(Let me know if I am missing anything)

--

To put it into context:

  • JP Morgan is the #1 bank by Energy and Power fees (globally)

  • Citi is #1 in M&A Advisory deal volume in the past seven years (followed by Barclays, GS, Evercore, and JP Morgan)

  • Evercore has advised on the most deals in the past seven years (followed by Jefferies, Citi, RBC, and GS)

  • JP Morgan has the most IB employees in Houston (followed by Citi, GS, Piper Sandler, and Morgan Stanley)

--

TL;DR 2: Which bank has the greatest possible (PE) exit opportunities in Houston?

Come to think of it, I suppose what matters, in the end, is going with the group with the most Energy deal activity, which would be JP Morgan, followed by Citi, Goldman, Barclays, MS, Jefferies, CS, BAML, RBC, and Evercore.

What are yall's thoughts?

What factors should I consider when choosing a (potential) offer from any of these banks?

Does anyone have an exact list of the top Houston banks by deal flow since last year?

TL;DR – JEF, Citi will give best exits based on energy prowess, JPM / GS / EVR based on brand name & high-profile deals.

Looking to answer your TL;DR Q2 of "Which bank has the greatest possible (PE) exit opps in Houston?

Last 12 Months (across US O&G, Pipelines, OFS): 

by # of deals: Jefferies (18), Citi (13), Piper Sandler (12), RBC (11), Barclays (10), Evercore (8), TPH (8), Bofa (8), Lazard (8), JPM (7)

By $ value: Jefferies ($15.2), Citi ($14.0), RBC ($11.1), Evercore ($08.6), CS ($07.8), GS ($07.5), Barclays ($07.5), JPM ($07.3), TPH ($06.4), Intrepid ($6.2)

To see the No. of analysts I ran a search on Linkedin for those working in Houston at specific banks with the title "Investment Banking Analyst" (ran by banks that were either top 10 by # or by $): data as follows: 

Citi (31), GS (29), Evercore (22), JPM (20), Piper Sandler (16), Intrepid (16), RBC (14), TPH (14), Jefferies (13), BofA (11), CS (11), Barclays (7), Lazard (4)

If you were to look at deal flow / analyst headcount, the rankings would be as follows:

Jefferies ($1.12 bil), Barclays ($1.10 bil), RBC ($0.79 bil), CS (0.71), Lazard (.500), TPH (.457), Citi (.452), Evercore (0.391), Intrepid (.362), JPM (0.362)

If you were to look at No. of deals / No. of analysts:

Lazard (only 4 analysts, 2), Barclays (1.42), Jefferies (1.38), RBC, (0.78), Piper Sandler (avg. of $170 mil, 0.75), BofA (0.72), CS (0.55), TPH (0.43), Citi (0.42), JPM (0.35)

So that's a lot of data but I would honestly look at the data based on the no. of people working there – and analysts that is, not total group strength. I think its kinda clear from the data that JPM, GS are more of whale hunters – They have a large analyst class but not as many "big" deals and low general # of deals, so I would assume there's a lot more pitching going around or general business development work as they pursue such whales.

The best energy experience will probably be at Jefferies – based on this data set - which is either at the top, or near the top in the categories. It is leading last year's league tables by $$, no. of deals, and has a relatively small analyst class, which means almost all the analysts must be getting meaningful experience. I would caution that Jefferies is a very high beta group, when the industry is doing well Jefferies is the best Energy IB group in Houston in terms of experience. The current group of 2nd years is exiting to Quantum, NGP (in addition to one A2A associate who exited there 3 months ago), Apollo, Carnelian, and one stayed on A2A with the group after being promoted mid-year with what I assume is a very lucrative retention package. The group is very sweaty (which you can probably interpret from the numbers) but also pays at the top of the street.

Citi will be another group that comes close, also leads the league after Jefferies in both $$ and # of deals but the only caveat being they have a very large analyst class and also have extreme first-year turnover – rumor has it around 50% of their first-year class quit before bonuses. Very sweaty as well but has a rainmaker of a group head and the balance-sheet gives it more stable outlook during downturns. Pay is below street.

JPM and GS both alike have very toxic culture. JPM's cultural change took place when Jonathan Cox came over from MS and brought the culture with him. Favoritism is very common, know second-hand of a computer mouse being thrown at a summer intern by a VP, and some analysts have been paid <35k as a first-year bonus which doesn't honestly make the experience worth it. GS is very sweaty and toxic in general. Either way the brand name helps the analysts get some top-notch exits but there's also others that don't place as well – which is expected given the large classes (there just aren't as many tier 1 exits available as there are people).

Then I would probably slot EVR, Barc, MS, and TPH here in terms of the next best exits based on historical deal flow (as evidenced by the data you showcased in your post) as well as being in the top 6-8 deal flow wise recently. EVR and TPH will be more connected to energy. EVR has also had high turnover, TPH had 3 interns not return (1 didn't get a return, 2 went elsewhere) out of 7 interns so that's not a great look. MS and Barc have relatively small analyst classes.

  • Prospect in IB-M&A
Jun 17, 2022 - 3:03pm

Incredible observation with Goldman, I hadn't thought about that.

A couple more notes:

- Some banks are certainly more too heavy such as Barclays who despite having a good number of people on the team, they effectively have no analysts.

- Also, some banks have skewed Oil and Gas numbers because some of their group might be in NY (such as Barclays once again). 
- Though the norm is to look at YTD deal flow, I think it would be better to look at the past two years (especially given that analyst turnover averages at around 17 months in; likely even worse in Houston. It's no surprise you said Citi has an insane turnover)

- Also, certain groups such as Citi (which I think is effectively the only real group) focus on energy transition.

- I think going back to the deal flow per analyst/team, I don't think it really says all that much at honestly. At that point, I think what matters most is simply overall Houston deal exposure/presence. 
- Another thing to note is that certain groups such will likely have huge layoffs come around the 2024 election in which crude oil prices generally always tank when it comes to an election. Piper Sandler/Simmons laid off about half the group back in March/April 2020.

I'm curious, how do you know the exact turnover from some of these banks-like TPH in particular where you mentioned the interns who got return offers.

Could you do me the favor and look at absolute total deal flow in the past two years from the top Houston Banks? 
I feel like that would realistically be a great number but at the same time, I'm not sure if even that matters all that much. I feel like a PE shop (in Houston) is more likely to hire someone from Centerview for example over RBC.I guess to add a question to that: Is direct industry experience more important than prestige when it comes to PE recruiting? I'm teetering off saying yes and no-I mostly want to say yes but I'm not sure.

  • Analyst 2 in IB-M&A
Jun 18, 2022 - 11:22am

There isn't a yes and no answer. To some people it matters, and to others it doesn't. I chose the "prestige" route, I'm content with the decisions I've made and I'm not looking back. A few of my friends went into MM IB, and are happy with their lives as well. 
 

Your answer lies within yourself - WSO, filled with interns, prestige wh*res, and a bunch of bitter non-targets kids who couldn't break in, won't give you the answer you're looking for. 

  • Prospect in IB-M&A
Jun 18, 2022 - 11:28am

Well who cares what I think, I'm just trying to figure out what PE recruiters think. And that comes down to asking, "What factors translate to better PE exit opportunities?" By the sounds of it, prestige is the most common factor, but I'm sure there's more to it as a mentioned-the question is which factors matter and how much?

  • Analyst 2 in IB-M&A
Jun 18, 2022 - 11:49am

If that's the case - I'd say focus on BB (for name brand) / Jef / Evercore

Jun 18, 2022 - 2:01pm
crabostrich, what's your opinion? Comment below:

IMO it could matter, but what is far more important is culture and fit. You want to be in an environment where you enjoy the people who you work with as well as the work. This contributes heavily to low burnout which will ensure a long tenure in the industry and success mentally, professionally, and personally.

Jun 18, 2022 - 8:00pm
DTA, what's your opinion? Comment below:

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