Is Structured Finance (Project & Export Finance) the Right Entry Point for IB (M&A/ECM), and How Does It Align with DCM?
Hey Community,
As I explore potential entry points for IB (M&A/ECM), I've been curious about the role of structured finance, specifically project and export finance, in launching a career in IB. I'd also like to know if this experience is relevant for breaking into DCM.
1. Do you believe structured finance is a solid starting point for someone in my position who's aiming to make their mark in investment banking?
2. How does structured finance tie in with the broader landscape of DCM, and can the skills acquired in this field translate effectively and would it increase my chances to land an internship with this former experience?
Best regards
I'll take a stab. Structured finance is a relatively niche role within IBD. Ranging from the model construction practices to the participants involved in transaction. I can only speak to infra project finance, but deal participants might include a Tax Equity investor, a PE investor, a debt provider, maybe some government entity of some sort (again infra related). The way things are done are just fundamentally different because of the entities involved and likely involves some regulatory agency.
From a development perspective, technical skills will definitely be pushed and challenged just because of the modelling complexity. Also, project / structure finance has a fundamentally different business operating model (think Long Term Tolling Agr or Power Purchase Agr) than a traditional M&A sell side advisory. The technical skills will translate if you go to pure M&A but you will have to re-learn certain things when moving to M&A.
On your second point: project / structured finance will definitely work with DCM teams. My experience with them has been relatively limited. Mostly revolves around me asking the banks what their terms then dropping said terms into debt section of model. If you can build a traditional debt model then you're like 80% there skill wise. (Look up the concept of DSCR sculpting if you're bored). In terms of landing internships, it'll definitely look good because it's pretty well know that infra is highly technical. But if your ultimate goal is M&A then I would focus on that. If I was a M&A hiring manager the person with pure M&A experience would pique my interest more. That could be subjective depending on person. Hope that helps.
Thanks a lot for the insights!
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