Was thinking today about how UBS and some of these non-deal flow banks, as well as non-technical groups at banks with good dealflow still are able to recruit for prestigious buyside positions. I was also thinking about firms like Lincoln (Don't work there but had a recruiter call a year ago) which are just LMM sell-side churn shops where you can see a bunch of deals close by the end of your first year. From a recruiters perspective you have 2 identical resumes in front of you except one is like JPM/BofA LevFin (0 modeling to my understanding) and the other is idk Houlihan or something with like 3 deals closed. why would you look at anything else other than the deal experience realistically? Even more so if you're a UMM/MF buyout shop, and you see someone from like a non-technical LevFin or coverage group why would you want to pick them up as well over some analyst at a 10 man boutique borderline running the full deal process? Was thinking maybe for marketing but that would make sense AFTER looking at job competencey no?
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Deal experience is increasingly irrelevant as on cycle timelines should indicate to you - kids are recruiting for PE before they even hit the desk. Frankly you really don’t need to be that competent in general + the majority of those with an IB offer are good enough, there are real diminishing marginal returns to recruiting for competency especially when they won’t be at your firm for more than 3 years anyways. Also a lot of LMM deal experience is frankly dressed up; small private deals with little info available to check against, process-based (even more than usual!) with no strategic input, a lot of time wasted adding back owner truck expenses and dealing with crap data and BS like non accrual accounting that populates the LMM
If we take a hypothetical JPMorgan Chase or Bank of America LevFin, even with minimal modeling, such candidates often win due to the brand, training structure and selection at the entrance. Buy-side funds look not only at “how many deals have you closed”, but also at how much you have gone through complex processes, worked with large clients and understand what a high-stakes environment looks like. My opinion is this: there is no ideal profile. Funds are actually looking for a combination of signals - brand, intellectual level, ability to work under pressure and basic technical skills. Therefore, a candidate from BB without deep modeling can still look attractive, because it is easier to “train” him than to change his mindset or level of training. Deal experience is important, but it is only part of the picture. Sometimes the reputation of the platform and what it signals about the candidate is no less important than the number of deals on the resume.
Throwing in some additional perspective. The nature of the MF world is different now than it was many moons ago.
For the most part, these are publicly traded firms. The MF associate program is often the equivalent of the “leadership development” program you can find at a typical corporate America Fortune 500 company. These programs are looking for who can fill the CEO, public markets facing, board member, answering to shareholder seat in 30 years time. It’s a long term investment.
As long as public shareholders still value JPM, GS, MS, BAC and other name brand banks. As long as public shareholders still value Harvard, Princeton, Yale, Penn, Ivy League, Big Ten, big name schools. As long as public shareholders (and the public at large) values investment banking; then recruiters who are tasked with recruiting for this kind of a pipeline will value those things. The day you start seeing Lincoln, HLI, PIPR, etc have giant market caps comparing to BAC JPM GS etc., then I would venture to say the MF PE firms would like to fill their associate classes from those banks.
I hope this helps
Echoing the above but to keep it simple. No one will give you shit if you hire a GS Analyst and he / she turns out to be a dope. If the same Analyst came from a 10-man shop then you'll get eyebrows raised.
Same applies for the CEO choosing to appoint GS for their sellside versus the 10-man shop. If GS screws up, well who can blame the CEO for chooisng a world class brand. If the 10-man shop screws up the CEO was negligent and gambling the company's future.
I exaggerate but.
BofA LevFin holds the pen
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