Least Popular / Easiest Coverage IB Groups to Join
Coming from a DCM background as a first year analyst and trying to lateral to lateral into a coverage group in the next few months for all the usual reasons, better exposure to M&A activity, exit ops to PE, etc. I don't get to do modeling in my current role but have my technicals down cold and practice M&A models and LBOs in my free time.
What would the easiest coverage group at a BB or MM firm to lateral into be? I don't just mean that in terms of the actual work itself, but in terms of which one is usually getting the least applicants from other banks or the lowest bar to entry given I'm not coming from coverage right now.
Based on the most helpful WSO content, the "easiest" coverage groups to lateral into at a BB or MM firm are typically those that are less competitive due to lower perceived prestige or weaker exit opportunities compared to others. Here are some insights:
Industrials (IND): This group is often considered less competitive compared to others like TMT or Healthcare. While Industrials can still offer solid deal experience, it tends to attract fewer applicants due to the perception of less exciting or dynamic work.
Real Estate (RE): While RE can be a strong group for those interested in real estate-focused roles, it is often less competitive for generalist PE exits. However, it can still provide good opportunities for RE-focused funds or corporate roles.
Energy/Natural Resources: This group can be less competitive, especially if you're targeting firms outside of energy-heavy regions like Houston. The sector's cyclical nature and specialized focus may deter some candidates.
Consumer/Retail: While this group can have solid deal flow, it is often perceived as less glamorous compared to TMT or M&A, making it slightly easier to lateral into.
Financial Institutions Group (FIG): FIG is known for its technical complexity and specialized knowledge, which can deter some candidates. However, if you’re willing to put in the effort to learn the nuances of the sector, it could be a viable option.
Key Considerations:
While these groups may have a lower bar to entry compared to others, your success will ultimately depend on how well you position yourself, your technical readiness, and your ability to articulate why you’re making the move.
Sources: Accept mid-tier BB Offer or continue recruiting?, David and Goliath: The Boutique and The Bulge Bracket, BAML IB Groups (NYC), David and Goliath: The Boutique and The Bulge Bracket, BB Debt Capital Markets - Exit Opps / Comp
Bump
I’ll take a stab in a roundabout way:
I think that the question (as you phrased it) is somewhat invalid. Competition for a given coverage role simply relates to supply (# inbound recruits) and demand (# of roles they need to fill). So you can’t really generalize by vertical.
Good reputation teams that are already staffed will have few openings and tons of people regularly trying to lateral in. Teams with a bad reputation or who are poor performers in their vertical probably have fewer direct inbound recruits. If they are adding net new heads (either from trying to reset growth strategy or replacing folks who quit / they fired) that is probably an “easier” seat to get. But these probably aren’t desirable places to work.
Because of this, you are better off focusing your time on: (i) creating a very compelling lateral “story”, (ii) preparing for common questions you’ll get on your proposed move from cap markets to coverage, (iii) talking to as many coverage teams as possible to sow the field, and (iv) trying to understand their growth needs / asking them to keep you on their radar for when roles arise.
My guess is that this will give you a higher chance of converting a role vs. targeting “easy” industries.
The only way to gain an edge in recruiting is by having relevant sector experience and being able to speak intelligently to that experience. You can’t just game it by applying to the least popular industries.
If you have no meaningful sector-level experience then paint the wall and see what sticks.
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