M&A/Investment banking during bear market....lack of motivation surely?
Just wanted to pitch this to people who are currently in M&A/Investment banking. I have done 2 M&A internships, which I thoroughly enjoyed but found it kinda gruelling because of the hours.
Suppose the market keeps on tanking down, how can analysts be motivated to keep on performing with long hours (100-150 hours a week) when YOU KNOW the bonuses are going to be crap? Pitching all the time, not getting any dealflow, staying awake 48 hours straight, just wondering what keeps analysts going through turbulent times when they know the bonuses are going to suck at the end (as the market is bad and pitches havent been converted to live transactions/mandates).
Surely those in Sales&Trading would be more motivated since their hours are much better but their bonuses would still be crap. Is this why M&A has a high 'turnover/dropout' as analysts and possibly associates lose motivation to prevail and work long hours during a bear market?
Any insight and response would be highly appreciated.
Have you really interned twice in M&A? If the market "continues to tank," you won't be working 150 hours a week - laughable. Also, I'm surprised that you're not wise enough at this point to realize that people don't work in IBD for 2 years to get big bonuses, but to get experience.
I work to make money and get bonuses. Sure the experience is good in terms of a 'stepping stone' to get into PE/HF. But I also feel that the work isnt that challenging and very repetitive after a while. I remember one associate told me that she feels stupid after 5 yrs in M&A and she was only doing it for the money.
Surely the hours would still be high compared to other divisions with work mostly comprising of pitching and pitching and pitching. What I mean is that obviously you wont be pushing 150 hours a week all the time, but you do get busy when you get staffed. The key point is the times when you are really pushed towards the edge, which provides the impetus to quit...Wouldnt this be common when analysts expect really low bonuses (lets say 20k? Would such bonuses have been prevalent during the recession in 2001?). I understand that some analysts in Merrill Lynch during 2000/2001 got no bonuses at all. I am just trying to get a feel of the environment/motivation of analysts in M&A during recession/bear marktet periods...
1) No, honestly when the market is slow, hours go WAY down. I don't care what anyone says, there's no way you spend 140 hours a week making pitch books for a $5K bonus. My hours have dropped substantially this year even as I'm doing more pitching than ever before. Deals take time over an extended period, pitching is just pain for a few days or so.
2) To be honest, the work does get pretty repetitive after you've been exposed to most types of M&A deals... I've done distressed, LBOs, strategic sales, divestitures, etc. and I rarely learn anything new these days, at least in M&A. That said, I'm also way faster at it and tend to leave earlier.
3) What else are you going to do? Start a surf shop in Hawaii? (Ok maybe that's not such a bad idea). But seriously, you can't time the market, so there's no point in avoiding work just because you think the economy's not going to recover or anything.
And to chime in on the question above: yes, despite what you hear, a lot of people in this job are doing it for money. Most analysts are doing it for exit opportunities, so it's still about money, just long-term money rather than short-term money.
Someone who stayed in this job from Analyst to Associate for 5 years MUST be in it for money. :)
I completely agree with everyone describing the tradeoff. During a downturn you will work less but your experience will not be as comprehensive. Your resume when you start applying for jobs is going to show way less work than analyst who were scouting out jobs after their 1st year in the spring of 2007.
I am a bit skeptical about bonuses falling to 0 or 20k. Analysts have more PE and HF options than in 2001. Banks will need to pay more than 20k in bonuses to retain junior people beyond the first year even if the market is mediocre in 2008-2009. What do people think about this view?
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Have you guys been following the deal flow so far this year? It is not that far down...
Quote: "MarketWatch’s David Weidner argues that despite dire predictions of a mergers-and-acquisitions slowdown, the M&A rush that fueled the market’s outsized gains last year may not be slowing after all — and it could help soften the blow of a recession.
While he acknowledges that private equity firms, some of the main drivers of the M&A boom, are doing smaller deals and banks are less likely to cough up as much financing, he points to some statistical evidence that deals are still getting done.
Though the combined value of completed global M&A in January is down 32 percent to $182 billion, Mr. Weidner notes that the announced-mergers-and-acquisitions market is surprisingly strong so far in 2008. The number of announced deals is up 8 percent to 2,381 globally, according to research from Dealogic. In fact, says Mr. Weidner in terms of sheer numbers, this January was the second best, after January 2006, of the last six Januarys."
Links: http://dealbook.blogs.nytimes.com/2008/02/04/as-some-predict-ma-wave-ba… http://dealbook.blogs.nytimes.com/2008/01/31/could-ma-help-save-the-eco…
When economy is bad, btwn BB M&A and MM M&A, which would get hit harder?
When economy is bad, btwn BB M&A and MM M&A, which would get hit harder?
You'll get answers going both ways. IMO, BBs have the ability to drop down and start pitching in the MM space given a downturn. MM shops get hurt as more banks are fighting for smaller deals.
A 150 hr week is working from 9AM to 7AM 5 days a week and working 9AM to 5AM Sat and Sunday.
Seriously.
If you work 150 hrs a week, get a new fuckin career. Is it honestly worth it?
there is no way someone could work for 150hours. That means you get 2.55 hours of sleep on average. How can you survive something like that?
It can be done. Straight from about.com's navy seal training page...
"For most, the greatest challenge lies in Week 4 of Phase One. A grueling 5.5 days, the continuous training ultimately determines who has the ability and mindset to endure.
“Welcome to Hell Week.”
Trainees are constantly in motion; constantly cold, hungry and wet. Mud is everywhere–it covers uniforms, hands and faces. Sand burns eyes and chafes raw skin. Medical personnel stand by for emergencies and then monitor the exhausted trainees. Sleep is fleeting–a mere three to four hours granted near the conclusion of the week. The trainees consume up to 7,000 calories a day and still lose weight."
Five straight days of work (and by work, I don't mean staring at a computer screen). However, I doubt that Goldman Sachs makes its employees endure 150 hour weeks. That's laughable.
"That means you get 2.55 hours of sleep on average. How can you survive something like that?"
most people who have pledged a fraternity have had worse than that.
Haha, so true. My fraternity hell week I lost 15 pounds. it was only Monday through Saturday, though. Probably about 1 to 2 hours of sleep per night. Much worse than anything in banking, no surprise there.
You are all full of shit or lack basic math skills if you say you work 150 hours a week. 120 is the most I've ever heard, and that was a rare hell-weel, and I still feel they were exaggerating a bit.
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