Low-Tier RX IB or Top-Tier RX Consulting?
Curious to hear people's thoughts on choosing a lower-tier RX IB (Piper/Baird/Lincoln/Jeff) versus a top tier RX Consulting firm (A&M/Alix/FTI).
RX Consulting doesn't provide a great training model for juniors (in my opinion): usually stuck on one long-term engagement (IB you'll be staffed on multiple deals), not really balance sheet focused (obviously catered more towards operations), exits to buy-side are practically 0. But, you typically work on the largest restructurings with top RX IBs.
On the other hand, the firms described above don't really have a strong presence in the RX space. They're mostly smaller or just starting with no real way of determining strong exits. No clue if deal flow will be strong or not yet so there's more risk as well.
What would career progression look like? Lower-tier RX IB to stronger RX IB firm to distressed buy-side? RX Consulting to RX IB or MBB Turrnarounds or Operating Partner doing turnarounds? Plenty of ways to go about it.
Curious to hear people's thoughts.
I would base that decision more on what you want to be doing/what skill set you want to develop (do you want to be focused more so on transactional work or operations/liquidity management)?
In the restructuring world, there is a fair bit of pivoting between the two at the junior/mid-levels, largely because you get decent exposure to each others work streams on restructurings.
If you know for sure that you want to wind up on the buy-side as an investor, you should go with banking. If you’re unsure of what you want to do long-term, interested in operational work, or open to a wider variety of career paths, it might make more sense to start at one of the rx consulting firms you mentioned given you’ll get experience on larger, more complex, big name deals and exposure to the cream of the crop of rx professionals and investors that are involved in those situations.
Thank you for that perspective, extremely helpful.
Do you think it'd be easier to lateral to a strong RX IB platform from a lower-tier RX IB or a top RX consulting firm? Are both challenging switches but have been done before? I did some LinkedIn searches and honestly couldn't find many people who made the switch from RX Consulting to RX IB, although I'm sure it happens. Could be I'm just not filtering correctly but any insight would be interesting to hear.
I don’t have any hard stats but would think that your chances are pretty comparable either way, and would be more dependent on your specific work experience and soft factors like fit.
From a networking perspective, as an rx consultant you’d be working closely with the bankers on transactions (i.e. assisting with due diligence in a sale/financing process, creating DIP budget and determining new money need, etc.). You’d also get exposure to the complexities of deals at that scale (i.e. numerous tranches of debt, disparate business lines and global operations) which, if you can speak to that in an interview, would be a big plus over a banker who’s worked on middle market deals that generally don’t have those complexities. On the other hand, working in banking would give you more firsthand knowledge of the transaction process aspects of a restructuring (i.e. new money/DIP financing, exit financing, 363 sale, debt/equity conversion). So I’d say it’s really a toss up in terms of what makes for a better background.
At the end of the day, at the analyst/associate level, you’re mostly doing excel/ppt work, assisting in due diligence processes, sitting on calls so the exits should be somewhat interchangeable.
Hop on LinkedIn. You’ll find a decent number of restructuring bankers at mid-top shops that started at a top RX consulting shop. It’s different work but those are top places in their respective fields, which RX IB groups recognize. On the other hand, you really won’t see people from those low tier RX shops moving much up the ladder.
Super helpful. I took a look at former people at FTI/A&M RX and it seems like there's a few who made the jump, but not enough where it looks like a common transition. Do you think it's because the sample size is relatively small given A&M rarely hires out of undergrad? I've seen a ton of non-RX groups go from a MM IB to a top IB firm, but less so on the RX side of things. Again maybe the sample size is just smaller (some of these lower-tier firms just started building out RX practices).
Both seem like good options with respective pros and cons. A&M RX is a top shop for RX Consulting, but it isn't RX IB. On the other hand the RX IB firms I listed aren't top shops, but it's still IB, so that could make for an easier transition.
Interesting. A good number of senior bankers at some of the top shops started their careers at those RX consulting shops and later made the transition. If those shops do not hire out of undergrad anymore, then maybe that's the reason you're not seeing as much RX consulting to RX IB transitions anymore, but I know people who have done that and ended up at top shops. There are also a decent number of distressed credit people who have made the switch to top RX IB shops.
I don't know too much but it seems that its easier, even today, to go into a top distressed/RX non-IB role and switch over to a top RX IB shop later on. I think (for better or for worse), that it's just tough to start at a "low-tier RX shop" and move up since people still see you as a "low-tier" restructuring banker. However, if you go to a top non-IB RX shop then you do not really have to get rid of that stigma. The finance world is still really prestige-based sadly, especially in RX. Just my two cents.
Would go with the "low-tier" IB here.
Illum officiis ea temporibus sint quibusdam dicta modi consectetur. Dicta impedit laboriosam occaecati ducimus voluptate et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...