PE (LBO Modelling) vs. Equity Research internship more relevant to IB?
I'm a rising sophomore at a non-target and couldn't get into a boutique IB SA this summer for my ultimate goal of BB SA as a rising senior. All I had left is an internship at a boutique research firm. However, I've done well so far (2 weeks into the current internship) and the manager is letting me pick which division to focus my research on. He even guaranteed that if I consistently do well, he'll let me touch some of the modelling too.
Here are the divisions:
1. PE Research : Will focus on recent LBO deals and create lbo models to analyze potential takeover candidates. (Guaranteed Modelling)
2. M&A Research : Conduct industry research, individual company strategic financial analysis, valuation (mergers models etc.), participate in client/marketing presentations (pitchbooks)
3. Equity Research : Will focus on valuation of stocks (comps, precendents, DCF) and analyze if they should be added to our portfolio.
To begin with, please forgive me if I sound naive, I just don't have much experience and they all seem similar.
At first glance, I'm thinking M&A Research seems to be the most relevant (just based on the name), but I feel like I will be doing more actual modelling work in PE Research whereas in M&A Research I feel like I will be doing more industry research and "M&A prospects" (these are based on what the analysts have told me). But on the other hand, the modelling work in PE will be focusing on LBOs and aren't LBOs not very relevant to investment banking? Also I've also put up equity research because it'll involve making valuation models on the stock as well.
Which do you think is the best prep for an IB internship next summer?
Lastly, would recruiters look down on a "PE Research internship" since it was done via a research boutique firm and not a real PE firm?
bumpp
can you not rotate within all three? Assuming its a 9/10 week or even "summer" program, a diverse experience like that as a freshman sounds great to me. If you can't rotate and have to just pick one then go with what you are most curious about.
Well yes theoretically I could, but I'm thinking wouldn't it be better to focus on one area and really learn a lot about it rather than just brush all three areas (LBO, M&A, equities)? I'm actually interested in IBD later on so I'd prefer to focus on an area most relevant to that. However (please forgive me I'm a newbie) they all seem some what "transferable" to IBD. Here is my reasoning (although it could be wrong and please correct me if it's wrong):
PE research : It will be modelling heavy and based on what I've read in WSO, PE is viewed as the best "pre-banking" internship for IBD (besides of course boutique IB). Basically analyzing potential takeover targets, and most of my analysis will be via modelling.
M&A research : just by the name, it seems most relevant to banking. Most of my work will be industry analysis and competitors. I would try to direct internship to analyzing past M&A deals and breaking them apart, re-modelling them to see if it makes sense financially and analyze synergies etc. but this isn't guaranteed.
Equity research : I would be picking stocks in term of a "long-only" basis and I will be using standard valuation techniques (ex. DCF) to value stocks, to prove they're undervalued (low P/BV, high RoE etc.) In terms of valuation techniques, the ones used in ER seem to be most relevant.
Do you think since I'm a freshmen I should just touch briefly on each of the areas? Or do you think it may be better if I just pick one, and focus on it?
That sounds like an awesome internship! What firm is this at?
It's a boutique research focused firm in NYC.
Willing to give 2 SBs for best response
PE vs ER internship to get to IB (Originally Posted: 03/31/2014)
Neither a private equity internship nor an equity research internship are ideal but give nth e two, which internship would be best in transitioning into investment banking?
For more information: -PE shop is a large industry specific fund and in a smaller city with limited networking ability -ER position is working directly with a well known industry expert in NYC
Which would you choose?
I would say ER position because of name recognition of the firm and the networking opportunities in NYC. But you should wait for more seasoned users to comment.
Anyone else have any thoughts on this? I need to decide within 24 hours.
Also, I forgot to mention that I already accepted the PE internship. So if I chose the ER position, I would have to renege.
I would go with the PE internship. PE internship is much closer to what you'll be doing in banking. If the fund is well-known enough, it shouldn't be a problem getting interviews for IBD.
First off - both are good no matter what you choose. Congrats!
Do you go to target school? Others may disagree but here are my thoughts:
If target school (banks do on campus recruiting), do the PE internship given there is greater specific carryover skills to banking. You shouldn't have issues getting interviews given the relevant experience and you could probably stand out more given your internship experience.
For non-target school, having the brand name and NYC on a resume really helps you get your foot in the door, especially if the hiring manager hasn't heard of your school. Plus, you could perhaps transition to the IB side of that shop for your next internship or job if you do well there.
Obviously you need to factor in as well what type of experience and training you'll get at each. (i.e. are you going to have the opportunity to gain some relevant experience or are you going to be grabbing coffeee half the day?)
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