Recently left my firm’s M&A division to join another firm’s sector coverage division (TMT). I have done my own due diligence with the juniors in my new firm but I thought I should still ask the WSO community for some wisdom (e.g. how to best succeed in a sector coverage team as an analyst, work hours, dynamics of day-to-day work, etc.)
Any advice would be appreciated!
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A few things:
- because it’s sector specific, you need to get comfortable with the go to methods. What multiples is the team using? What kpis? Are there a few good broker notes to read on the sector to follow trends?
- find the 2-3 key websites with your industry’s newsflow. In pharma it’s fiercepharma / endpoints. There will be a good equivalent for TMT
- all the above is dependent on subsectors. T will be different from M, and different from T.
- get your hands on the team’s usual models & books. Same profiles will come up all the time, same sets of comps. Most likely one analyst is in charge of maintaining transaction comps, etc
Over time, you need to develop your sector knowledge.
You’ll get exposure to other products - try to put your nose in the product teams’ work. It doesn’t matter if ECM is responsible for XYZ, a good associate / VP in the sector will be on their back to tailor the pages to the need of the client, which the sector team will know better. As a sector vp i had to explain which debt comps were right to levfin because they only had a superficial understanding.
Do not discount non-m&a deals. A sector banker gets paid whatever the deal is. The key is to be with clients all the time to get pid when they do something. It’s not super exciting to do non-lead-left IPOs or LBO financings as an analyst, but those deals bankroll a sector team at most banks. If you see yourself long term in banking (even as an option), a good knowledge of the bank’s products, what it wants to do and not to do, and good relationships with these teams so that they get excited by your clients is critical.
For example, I had an MD who kept trying to get the bank to participate in sub $50m ebitda lbo financings without advisory role “to be positioned next time”. Complete waste of time every time, lots of anger thrown across…
And when you are staffed on an m&a deal, if there is the m&a team involved, figure out a way to share the work with the analyst from m&a across both verticals. You want to still get your hands dirty in process, not just on writing an IM. That’s always a good opportunity to learn from product teams.
It’s also possible that the product team will have limited input on m&a deals.
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