I went to Georgetown undergrad (Economics major) and worked in fixed income portfolio management for four years. I will be attending business school full-time beginning in September and am interested in working in banking. If you could pick one specific group or sector in a bank to work for, given pending regulations and the economy, which group would it be?
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If you are primarily concerned with mitigating regulatory risk, you are probably best off on the advisory side of the business (hence banking) than trading or principal investment. And I would think you'd probably also want to stay on the coverage side rather than work in capital markets.
Generally speaking, within banking the group that offers the most flexibility is M&A, and then sometimes Sponsors. If for whatever reason these are not options, and you are industry agnostic, you should probably pick an industry coverage group based on the strength of the firm you are at. Most banks tends to have an industry (or multiple industries) in which they are known to be strong.
As a post MBA guy would he develop a real network / real relationships working in M&A? (assuming it isn't handled by an industry coverage group and not at a boutique/top boutique).
Career-wise, relationships/network are important for two reasons: (1) exit opportunities and (2) getting clients.
From an exit opportunities perspective, I think M&A is still desirable relative to industry groups even as an associate, all else equal. The skillset is broad, so you're less subject to industry cyclicality; you're much more attractive to boutiques (which often don't segregate analysts and associates by industry); and the M&A group of each bank is often perceived as having first pick at the talent pool. Prior to the senior MD level, I think reputation and experience will drive most of your marketability to future employers rather than your client contacts.
Assuming you want to stay in banking, I would probably still say M&A is the place to start if you don't have a favored industry group. For one thing, it's easier to start in M&A and then begin specializing in an industry (happens all the time) than it is to go the other way. Generally speaking, M&A bankers also seem to have more opportunities to move up in banking management than your rank and file coverage banker. Also, my unscientific observation is that it's easier to make MD in M&A than other groups.
To more directly answer Relinquis' question, I don't think there is a material difference in relationship-building either. The M&A associates I worked with didn't get less client exposure than the coverage associates, and in any case, bankers don't really start covering clients closely until the VP level.
Just wondering, where are you going to B-School? Also I'm interning in ER, and I could see myself doing it the rest of my life. (Maybe a little ambitious, especially because I'm 20)
Thank you, everyone. I am headed to Ross. One of the things I learned in AM was that being a generalist can be a bit dangerous in this economy, but I am glad to see that M&A still has a nice pick of the litter within banking. Do you think if I were to leave banking at some point that I could still get into a specific company, like an Exxon, if I hadn't been in a Power & Energy type group?
If you are interested in oil & gas then there's nothing wrong with going directly into that group (provided it's got a strong franchise at the bank you join). And assuming your group is a respected one, then your best exits to industry will be from that industry group.
M&A can still give you opportunities to exit to industry, especially if you've worked on a deal in that sector. And you generally have some degree of flexibility (not a lot) to request that you be staffed on particular deals if they interest you.
Ok, Thank you very much. One other thing that I'm curious about is the job of the Associate versus that of the Analyst. It seems to me that while the hours are almost as bad as that of the Analyst, that the job of the Associate is a little more interesting and rewarding. Is that accurate?
Kwapture, take what I say with a grain of salt: I was an investment banking analyst that took a job in private equity, so I have a natural bias.
In my frank opinion, the job of associate at an investment bank is very difficult and thankless. Analysts have an abundance of exit opportunities, and in the last five years, the investment banks have almost had to cater towards them, sometimes at the expense of associates (who are seen as much more of a captive audience). In my group, the associates worked about as hard as the analysts (a bit less), but were much more miserable.
In some ways, too, I thought that I had a lot more say in the work product and got to do more of the interesting analytical work than the associate. For instance, the MD would tell the VP that there is a meeting with the client on X date, the VP would outline his concept for the book to the associate and me, the associate would go and make some of the charts and write out text, I'd build the model and then put the book together. Then it went through a half dozen iterations of review. In the end, I would say I got as much of the client time that my associate.
Associate and director are two of the hardest roles, in my mind, because they are transitional. As a director, you're forced to manage projects like a VP, but are also expected to be winning business without the client base. As an associate, you're responsible for the models and materials, but you don't get to build them like an analyst nor do you really lead the thought behind them like a VP.
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