MBA Recruiting into Lev fin

In your experience, is it true that less mba students are interested in lev fin? And any idea why? (I.e Are there less seats at the mba level or something?)

For context: I’m going to an MBA program next fall and preparing my story and goals for recruiting. I’ve heard that TMT, HC, Consumer and M&A groups tend to be the most popular among mba students during recruiting. On the flip side, I’ve heard FIG, FSG and Lev Fin are less popular. I’m someone who has an interest in HC b/c of my background in consulting. However, I recently started reading up on lev fin b/c of a client at work that sold a chunk of their business off to a PE firm in an LBO. It strikes me as a pretty interesting area which is why I asked the above.

 

In my cohort, it is mainly because most people didn't have a story that relates to FIG/Lev Fin/FSG. People chose their target groups based on where they work before and the majority of the people had prior experience in energy/technology sector. We had people recruiting for these groups, just not a lot.

 

Yeah that’s a good point, it seems like those with a credit background have the most straightforward story for it. I’ll have to see if I can spin it to fit mine, otherwise just stick to coverage groups in industries I’ve done in consulting. Thanks for weighing in.

 

Lev fin and DCM are perceived as less strategic because they are more "markets" oriented - more focused on e.g. spreads vs the issuing companies business.

MBA students are largely aiming for maximally strategic roles, across IB, consulting, industry roles. Also most people coming into IB from MBA have experience in some particularly industry but want to become a banker to that sector - such as your interest in healthcare.

 

LevFin does take MBA candidates. Tend to favor those with finance backgrounds. From what I've been told by peers, way more technical coffee chats / interviews but that may depend on the bank / group. Similar with Rx.

DCM? I don't think most capital market groups hire MBA candidates. One firm that does have a small DCM group that recruits at our school said that's a separate process and they do not hire MBAs.

 

I'd definitely agree with others above having just finished MBA recruiting. It really is dependent on your background, ease with which you are able to tell your story. Had a few persons in my class go for LevFin & Sponsors and their backgrounds tended to be bond/insurance/SWF heavy. It is definitely doable but as you may realize from the folks at your school, you may be running that process on your own (meaning less help from second years and potentially less alumni in those groups from your school). BofA/JPM/CS are the biggest targets. GS didn't take anyone there this year, if I remember correctly. 

 

At the end of the day in M&A you give advice for something where you have 0 stake in. I have never heard any M&A advisor getting sued for bad advice after a company went bankrupt. It is often seen as technical - true, but ultimately the numbers do not matter (for you the advisor as you don't have any capital at risk).

In LevFin you underwrite transactions (most of the time), meaning you put capital at risk, for a defined amount of time - typically 3-6months until you get to the debt markets to syndicate that out. so you have to be tecnical not just for your client but also for the capital you are ultimately putting at risk.

Sure DCM also does take such a risk but these companies are super low risk anyways.

 

People are going to take what they can get at some point. Not all MBAs get offers, so a wise prospect will be open to lev fin. It's not like banks are unable to fill the lev fin summer classes. If you have a good story, that would help, but there will still be competition.

 

A lot of people just don't find issuing bonds, particularly if you're not lead left and it's not an initial issuance quite as interesting the work you do in M&A or coverage.

From my experience with recruiting, Lev fin would love to have more interest from MBA associates but just aren't able to sell their group to the same extent. 

From what I've seen sponsors just hires less at the MBA level and I don't really have a good reason to give you as to why. The role tends to be more relationship focused vs. a more traditional coverage role, which would seem to me like it would make it a good fit. 

 

I’m at GS and financing groups including LevFin don’t take MBA candidates right out of school because teams are leaner and it’s harder for a new MBA grad to plug into deal teams. All of our associates are A2A, lateral hires or did mobility internally 

 
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I'm in LevFin - the reason that you don't see a ton of MBA folks going for the group is that many LevFin groups don't hire MBAs. My bank personally does not. The work is too technical, unless you have some kind of prior legal experience or credit background. Almost every single MBA we hired previously got fired for performance reasons, hence why we no longer hire MBAs... LevFin is an execution job which is heavy on legal / credit specific jargon that people who haven't been exposed to don't get.

The biggest difference between levfin and the rest of banking, as mentioned above, is the risk taking element. You are literally owning hundreds of millions to billions+ of the credit within the price of your flex terms. You have to think a lot more like an investor and be much more in tuned with issues that come up during diligence and how the market will react. In M&A / Coverage, you're just an advisor. Sell, get fees, rinse, and repeat. In LevFin, you are often acting as a buyside advisor, a credit investor, a credit sales guy, and a lawyer all under one hat.   

 

My senses tell me this is BoA based off of the interactions my peers had with their LevFin team. Makes a lot of sense honestly. 

 

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