Incoming FT analyst at BB, considering joining the C&R team. Not sure if I want to stay in banking/pivot to corp dev etc long term.
What are the exits like for this coverage group in London? Does it place well into PE/corp dev? Curious if the sector will shrink/grow in EMEA in the coming decades too, if this will affect deal flow etc.
Any thoughts are much appreciated.
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Think traditionally GS, BofA have dominated the space in EMEA for BBs, with JPM, MS, Barclays and Citi slightly behind.
Exits tend to be quite broad as it's very generalist (probably the most generalist team outside of M&A).
I'm a senior banker in a C&R team in Lodnon, for what it's worth.
Compared to other sectors (particularly Tech, Infra, HC) C&R is shrinking (less PE dollars allocated to C&R in relative terms). That said, it isn't a huge decline (we did do some analysis on this in the past actually), but visible.
That said, you shouldn't worry about this. It's still a massive, massive market, and if your dealflow or your success / failure is because of a small relative decline in the market, it isn't the market that's the problem. IB dealflow is not like selling bags of carrots, you're selling a highly tailored product. You will be far more successful doing something that you are interested in, who your seniors are, and with the right mentorship.
Another point is sub-verticals. No senior banker covers "C&R"; they cover Pet, Alcoholic Beverages, etc., and choosing the right niche as you progress to a senior banker is the more important decision than a large and very (very) vaguely defined supersector (don't choose, for instance, Tobacco)
Hi, this is insightful. Mind if I DM you?
Thanks, really appreciate it.
Will be joining a mid-upper BB (Citi/BofA/JPM) and was wondering how strong their C&R teams are relative to the market? Given the rise of EBs in EMEA (CVP, EVR etc), with Weinberg especially investing in their European franchise, wouldn't you say BBs have less of an 'ingrained advantage' due to less need for financing on large projects (compared to say P&U/Infra), which makes them more susceptible to losing market share (something that would affect reps as a junior prior to specialising..?)
Also outside of banking, how are the exit ops for C&R into corp dev/other industries? You touched on the fact that PE's are allocating less capital there so assuming the exits are slowly shrinking there.
As very, very general points, (1) yes the market has become more competitive as tides shift and new competitor banks (often boutiques) enter certain verticals, but (2) this takes years if not decades, and your reps and broader success as a junior will be impacted by many other factors. In a similar tack to what I previously suggested, if Weinberg investing in their European franchise causes your senior bankers to stop winning deals, it's not Weinberg that's the problem.
I don't have a good view on exits - I'm a career banker. That said, C&R is super general. You will learn general skills relevant to any (non-specialised) PE shop. I'm afraid to say that PEs do not hire junior bankers for their deep industry knowledge and differentiated access to business owners. You're being hired 10% for your modelling, 10% for your vauge understanding of "due diligence", and 80% because [Citi/BofA/JPM] thought you were sensible so you probably are, and since you lasted [1/2] years there you probably have the work ethic / mettle to last at [PE shop].
I doubt if any data exists, but I'd guess C&R is equal to Industrials, Healthcare, Business Services, or any of the other "vanilla" sector teams. Also Corp Dev is huge in C&R
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Thanks for the reply. Currently working in a C&R M&A team in Ldn. At the moment I’m loosely aligned to the travel/leisure sector but still have flexibility to choose which sector I want to specialise in as I am fairly junior.
Which sub-sectors do you see growing the most/ being the most resilient in consumer? I’m leaning towards Food & Beverages as its more broad and I like the health angle but keen to hear other ideas
Good question and a difficult one. My honest advice is to choose to align with whatever senior banker is strongest themselves in your team (as long as they cover a broad enough vertical). A great senior banker will not only bring in deals and have deep client relationships, but also support their VPs / EDs in introducing them to clients, encouraging them to develop ideas and forge relationships, and maybe giving them a sub-vertical. If you're at the AS / VP level it's extremely hard to develop your own franchise covering a new sub-vertical even if it's a very hot one.
That said, as a couple of half-baked views, (1) alcohol and tobacco are bad (mostly consolidated at the larger scale, declining consumption at the consumer level), (2) food and (soft) beverage is big, but quite consolidated at the larger scale. That said, there are always emerging brands which the bigger players like to acquire, and if you're at a MM shop in particular and can represent clients at €200m - €1bn sellsides, there'll always be dealflow. Also, F&B has a lot of sub-verticals which have growth now and which PE in Europe especially love (private label, ingredients). There are also very difficult sub-verticals here (e.g. fisheries, meat processors / slaughterhouses) so be careful. (3) Travel / leisure is a growth area in my view. Very unconsolidated, growing in consumer spend, and a lot of sub-sub-verticals depending on your bank's politics (e.g. will you get into a fight with TMT if you try to work on food delivery apps? With Business Services if you try to work on restaurant recruitment?) (4) Consumer health is massive and growing. Again though, issues with internal politics. My IB has conflict with our HC team on supplements (e.g. Vitabiotics). (5) Pet is in decline right now but only because it had a massive boom during COVID. On the one hand it's a structurally growing sector which has seen a ton of PE interest, on the other hand I think (personal view) PEs are going to lose a lot of money in this vertical and it'll be a bit tainted. Also the pet population bought by consumers during COVID will die at some point. (6) Just be aware that if you work in any vertical suspect to lease liabilities (e.g. Retail) your life as a junior will be shit dealing with (almost certainly MF PE) requests to adjust for pre- / post-IFRS
Slide 1 says Lodnon
Pls fix. Thx.
- My VP
Thanks for this super helpful comment, associate in Commercial Banking
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