McKinsey vs. MM IB
Let me start by saying that it has been a goal of mine to break into investment banking for some time and after a lengthy interview period with many botched technicals, I did secure an internship for this upcoming summer working in HC at a MM bank.
Now with that being said I have continued to explore, and one of the jobs I came across was McKinsey and Co. It seemed interesting enough, so I applied and ended up getting an offer. Now I am stuck and not sure what to do. The pay for entry-level is surprisingly good, and the base is above what I would be making in IB. I do not how bonuses work in consulting. Are they usually less then IB? Anyway I would love to hear some thoughts on this problem I have run into.
Thanks!
Based on the most helpful WSO content, here are some insights to help you decide between McKinsey and a Middle Market (MM) Investment Bank (IB):
Compensation:
Career Path and Opportunities:
Investment Banking:
Consulting (McKinsey):
Personal Fit:
Additional Considerations:
Ultimately, the decision should be based on your personal interests, career goals, and the type of work environment you thrive in. Both paths offer excellent opportunities, but they cater to different professional aspirations and lifestyles.
Sources: Why do MBAs seem to favor consulting over banking nowadays?, Q&A: Big 4 Consulting to Lower MM IB to MM IB (No MBA)., The Efficient Career Hypothesis: Almost All Jobs Are Priced In, What’s Harder? MBB or EB/BB, Why has Consulting become more popular than IB for post-MBA career??
If you are agnostic about the type of work, it essentially depends on how much you value an Ivy League MBA. McKinsey = guaranteed admission at call it top 5 MBA. Plus, if you still want to go to banking after time at McKinsey, you'll get interviews at Tier 1 BB/EBs very easily. So you do what you with this.
P.S., if above wasn't clear: unless you absolutely despise consulting work, McKinsey is a no brainer here
Will a consultant really get a look from IBs post MBA if they didn't do any finance pre-MBA?
From MBB? In a heartbeat.
Del
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PE exits from McK are ten times easier than from a random MM bank. I legit don't know anybody at McK who wanted to do PE (investing) and couldn't get a decent offer.
That being said it is of course still much more straightforward and easy coming from a good bank. Saying "PE exits will be tough" is, however, completely exaggerated.
Take McKinsey and don’t look back. This is a no brainer barring one case in my view. Seriously.
Look, IB is a great career path that teaches you the basics of finance and valuation. I did it and it was great. However, I would argue the real value of an analyst stint comes from becoming a verified professional workhorse—you also get this at McKinsey with arguably a better brand.
At its core, I think my main advice would also be not underestimating the toll investment banking takes on people. I’m sure you have heard and read the stories, but there is unnecessary poor treatment that exists in investment banking and a culture of hazing. MBB just doesn’t have this. Sure you might work 11am to midnight Monday to Friday at McKinsey, but you aren’t going to have 3am scrambles and loads of weekend work.
All my friends that did big 3 MBB consulting ended up with more work life balance and ultimately better mba and career outcomes. Undergrads love to have some sort of elitism about consulting vs IB and IB being superior quantitatively, but ultimately there are some brilliant consultants out there. If you work in PE you eventually have peers or work with MBB consultants who make you realize they have a skill set that is different from IB and very valuable. Further, people saying recruiting will be hard are just wrong. Plenty of mega funds hire consultants from MBB consulting. If you really decide PE is what you want to do, you can pivot over to a private equity shop and there you will learn all the finance you need to have a great finance career. I also know individuals who have gone mbb to PE to HF or even just direct to HF from MBB, do I don’t really think you close any doors.
So the question is really in what case would you take a MM IB over McKinsey? My honest answer is if you know yourself well enough to know you love the “hardo” mentality and/or are certain finance is the career path you want and you don’t care about brand or business school acceptance. Learning the M&A process and valuation and raising early in your career is very valuable. If you actually love finance and know there’s no way you will ever touch opps and believe your career will be limited to:
-IB, Private Equity, VC, Hedge Funds, Real Estate
Then I could maybe see taking mm IB over a McKinsey offer. However, I have seen enough people be certain they wanted finance careers who later burn out and end up at in MBA. So, my advice is unless you are someone who falls asleep thinking about dcfs, pick McKinsey.
Thank you for all of the insight I really appreciate it, leaning towards McKinsey
Yeah, reading stories about going through 100+ hour work weeks and actually doing it are SO different. Most students outside of those crazy double STEM majors will never have worked close to that many hours. I believe one of my friends said that once you cross 60 hours, every hour compounds in terms of misery. My 2 100 hour weeks caused me to seriously rethink every part of my life up to that point.
If you read the post I made on the private equity PEAC, there’s a whole additional level of misery once you realize there is actually a cost to neglecting other areas of your live the longer you stay in the game.
1) learned the experience of a 100 hour week is worse than you can imagine
2) Learning what years of those weeks do and watching life pass you by/ people get married while you are single or losing relationships and missing important events is a whole additional level of pain.
Undergrads think life is as easy as “grind” and hard work can set you up. Truthfully, you need to work hard and be smart about it otherwise you are in a head to head match against someone who will work themselves to misery and failed relationships and personal health.
As someone who spent time at MBB, I agree with this, but I think you're overestimating the ability to pivot from MBB --> MFPE/HF
I've seen it happen, but it's much less natural because a typical MBB consultant doesn't have the investing/finance knowledge that is required to get into these roles. And most PE firms fill the vast majority of their class with IB analysts. PE Ops is a much more natural transition from consulting.
This was my understanding as well. Confused by all the people in this thread because I thought that coming from consulting it would be hard to get looks for finance jobs but PE ops/PortCo roles were yours for the taking.
Curious to what your answer would be if this was a GS/MS offer vs MM
Let me offer my pov, which may clash a bit with some of the other advice here.
1. Bonuses are indeed much, much lower in consulting than IB. Still very decent overall compensation.
2. Exit to HF from MBB is pretty rare. In fact, I don't personally know anyone who has done it. Exit to PE can be quite common, but it is usually to the ops side and not the investing side. (These are two very different jobs with different outcomes!)
3. Have never done banking, but from all I see and hear, I do believe quality of life is better at MBB. For me personally, it was a conscientious choice to not recruit for IB, as I simply was not willing to put up with the hours.
4. And this is is a big one. At McKinsey, you will travel. A lot. And that can take a serious toll over time. Even if your working hours are 60-70 / week, if you are also burning 15 hours traveling, that can become unsustainable really quickly.
5. MBB offers you more freedom in where you can live, particularly M. There are offices in just about every big city all over the world, and transferring from one to another generally isn't too difficult. In IB, I imagine the geo options are much more limited.
6. You better have some decent networking skills. You need to network yourself onto staffing assignments and drive your own career. In banking, you will likely be assigned work (unless I'm wrong, I've never done IB). At M, you have to find good work for yourself and convince the team to bring you on the "study." If you can't effectively manage this consistently, you will inevitably be given the boot.
I've seen the hedge fund happen once at a long only fund. People in MBB can make some transitions to pure fundamental firms, but generally you have to be able to prove you can model and analyze financials past pure business
Just as a data point I have a family friend who did their summer at an EB, FT at McKinsey for 2 years and now at a top Hedge Fund. Probably rare but definitely possible
Make sure you take this in... this is huge.
This has happened to many people I know, and especially in the bad market that was present for the past few years, the staffing has been toxic. From what I hear at IB, you can grind your way through it by putting in the hours, but at MBB you need to be savy in how you play the game. The 'soft skills' like client interaction, networking, etc... are very critical.
I didn't realize this early on in my career and got absolutely screwed early on, had to dig my way out of a terrible situation where I almost got kicked out. I quickly realized that confidence, networking (including going to the stupid office events on Saturday), and pretending you know more than you actually do matter just as much as the IQ/analytical skills. I've seen multiple impressive people (HYPSM STEM majors, med school grads, etc...) get 'transitioned out' relatively early in their careers.
Good advice here. Definitely relevant to IB and trying to get on the “good accounts” and deals. Put in the work, be savvy, be likable, and there’s a chance you’ll be grinded less and be able to be picky with staffings down the road
HC buy side here. Which MM bank? PM me if you want color on the group or MD and I can tell you what I’ve heard, if anything. Exits in MM are highly group dependent
Just sent you a PM!
Congrats on the offers! McKinsey’s pay is usually strong, and while IB bonuses can sometimes be higher, consulting offers a broader experience. Consider what aligns better with your long-term goals and day-to-day interests.
MBB fs
Ditto probably mbb if you want to have the best exit opps plus you can always lateral to a tier 1 bank from mbb as well
MBB as well. Unless you are dead set on ib lol
MBB is a no brainer (especially M).
MBB is just miles better than banking. Weekends predictably off, great pay right out of school (though of course objectively lower than most banking roles), and establishes you as a sharp and hardworking person with a very strong brand. Are PE and elite high finance exits harder to get? Absolutely. Is it still very doable if you want them? Yes.
The culture is also much better because seniors are much more inclined to care about juniors (or at least have to pretend to). The mentality is “oh you’re tracking for partner” and not “you’re a resource I'm gonna grind for 2 years since i know you’re likely leaving anyways.”
Lastly, to the travel point, yes there are times when you are going to a remote place in BFE and staying at a crappy hotel. But there are also times when you’re at the Ritz in a T1 city and going to an NBA game with your team. Even if you have a rough week (which, hours wise, is like a pedestrian week in banking) the perks make it so much more tolerable. Plus, living for free during the week lets you save a lot more money
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