Public Finance Investment Banking Information
I am an incoming MBA candidate (M7) looking for more information on public finance (PF) investment banking. I am interested in government, finance, and the public sector, so it seems like a good fit for me. However, you never know until you ask and gather more information. I have searched the internet for some information, in addition to reading and exploring previous wso posts on this matter. But I felt as if inquiring further would not necessarily be a bad idea for the community and for my own use. I am looking for answers from those who have completed an internship at a BB in PF and/ or has been in this coverage group at a BB. My questions are as follows: 1) why did you go into PF, 2) how was recruiting different or unique, 3) why did you choose the bank you did, 4) what is the culture in PF at your bank and at other banks if you happen to know from personal connections or experiences, 5) what is the day-to-day like, 6) please go into detail about your WLB, typical work week in terms of hours, weekend work, and the high range in terms of hours for a bad week- I have read PF has better hours but less pay, 7) what connections and clients do you get to interact with, 8) what is a typical project worked on and what is the most fascinating/ "coolest" project you have worked on, 9) who are the BB leaders in PF, 10) are there (good/ important) regional offices in this role or is most PF done in NYC, and 11) how does the pay compare in terms of base salary and bonus from associate onward. The reason why I ask question 11 is because I have been given conflicting information on the pay disparity across investment banking and as you get promoted. For clarification, I am not looking to lateral into other finance positions. I would be making this a career or a stepping stone to a government position. Thank you for your assistance in this matter. I sincerely appreciate it.
1. I had family in the business, that’s what initially piqued my interest. I read the SIFMA book and found it fascinating. I like the tangible nature of many of the financings e.g. a new school, hospital tower.
2. Recruiting is different, it’s highly firm dependent. Some want a good sense of bond math, others are fit focused.
3. For me it was strong cultural fit, I really enjoyed the people I interviewed with and they had a long term plan for growth that included me. I felt and still feel that it offers me more growth potential than anywhere else.
4. It varies, ours is a bit wonkish and very collegial. I love it, people really get into policy and politics. People cover for one another if somebody is sick, there’s a recognition that we are in this together. Other firms are hyper political and cutthroat. If you’ve seen one firm, you’ve seen one firm.
5. It varies, but can be thought of in three buckets: pitching, RFP responses and execution. We cover issuers and to prep for a meeting we have to build out a deck, we cover the market, some case studies, relevant news, refunding analyses and ideas. For RFPs the questions vary from explain how you’d market our bonds to how many similar deals have you done in the last 2 years. Sometimes the questions are thought provoking, often it’s just qualifications related. Execution is a mix of project management, reading and commenting on legal documents, running or reviewing the numbers in DBC.
6. I’m at a MM, I’d say I average 55 hours a week, weekend work is rare, My worst stretch was 2 weeks with multiple presentations and an RFP all coming due at once with zero notice, I was working until 11-1 every day with no days off. I’ve only had one other similarly bad period.
7. A mix of cities, authorities, districts, counties, school districts and states. Clients are usually CFOs, treasurers or directors of finance. I also work with bond counsel, underwriters counsel and municipal advisors.
8. Typical is a GO bond for a city, coolest would probably be too identifiable.
9. Pretty much any BB with a PF presence is strong, UBS is weaker and houses PF in wealth management, WF is roughly on par, some minority and woman owned firms like Siebert and Loop are comparable to BBs.
10. Regional coverage is important, lots of RFPs ask is there a presence I the issuer’s city or state. It’s firm dependent, for instance some may have regional coverage models especially for general govies, but have industry coverage (e.g. healthcare, power/utility, housing) at HQ.
11. My base is the same as my peers in traditional IB, my bonus is smaller.
Thank you so much for your insight! Do you enjoy your work and do you plan on doing it long term? Or what exits have you considered? I have read a lot of comments saying PF is repetitive and boring, but then again I've seen that critique of IB in general. And have you ever worked an M&A deal in PF? Thank you, again!
I really do like it, I’m good at it, have a decent lifestyle and get paid reasonably well. More importantly, I see a path to coverage and then to MD. The only exits I’d seriously consider are entrepreneurship through acquisition or to be a finance executive at a not for profit healthcare system. Admittedly, kind of disparate, but there’s a reason for each.
PF’s interest I think varies proportionally to whether you wanted to be there or not. RFPs can get tedious especially if it’s just rehashing the qualification section to make it fit another issuer. On a live transaction I find being able to really dig in, read the docs and understand them is important. Modeling in DBC can be straightforward, but you can get creative. That’s the funny part, creativity is never mentioned, but the best MDs can think of novel structures to solve client problems. It also depends on your clients, if they’re all AA school districts in a single state and 95% are cookie cutter structures and documents, that’s probably pretty boring. But if you’ve got geographic coverage and you’re working on a BQ school district, a mid sized water and sewer authority and a TIF there’s more than enough variety.
M&A is rare, healthcare bankers may do some as NFP health systems seek to combine, but rarely do you see M&A in the space. I personally have not done M&A for a muni client. The terms are often different too, you see more “true” mergers where for instance a small community hospital seeks to join a large health system and both are NFP. Cash consideration is likely to be minimal, but there may be the creation of a community foundation which is endowed with the value of the hospital or alternatively they may seek to have terms requiring keeping the hospital open with equivalent staffing and services for a decade. For municipalities most aren’t merging, if they do consolidate it’s usually more of a legal or legislative process than a banking one. Water and sewer, electrical utilities and colleges do also merge or get acquired, I’ve not been involved in any of those transactions either.
Any opinion on Baird and Meisrow's public finance team? Or should I not even consider.
Either is a fine shop, Mesirow has been senior manager on some of Chicago’s deals and Baird is good. Any specific questions?
Currently at a MM PF shop. Feel free to dm
I'll bite. Currently an analyst at a BB in pubfin who started off as a floater / generalist before focusing on tax-exempt project finance, corporate financings, infrastructure, and P3s.
1) Interned during undergrad and enjoyed the teams culture / tangible nature of deals
2) Interviews focused on why pubfin vs traditional IB, team fit, bond math, and macroeconomics. There was limited to no focus on DCFs, LBOs, accounting, etc.
3) The bank I'm at is very strong in the space and I thought I best "vibed" with my interviewers the most here
4) At my BB the people are nice and not very "fratty". Some seniors hold traditional banking views, but most have families and at least respect WLB (as much as you can in banking anyways). Most deal teams are pretty lean, so some seniors aren't afraid to do some hands-on work
5) Depends on what area you specialize in. In my area of focus we very rarely RFP (only 3-4 times per year) and we don't do a lot of traditional/intense pitch work. Most of our business comes from repeat clients and from seniors spurring new business at conferences. As a result, most of my day is spent on deal execution, attending client calls/meetings, and running some form of analysis for our core / repeat clients (refinancing opportunities, info on secondary trading, general market updates, tax law changes, etc.). With that being said, given that our clients aren't governments they're more dependent and have tighter deadlines and more labor-intensive requests. Most pubfin bankers spend a lot of time on RFPs, formal pitches, refunding monitors, and deal execution.
6) As an analyst I generally work from 9am to ~10pm M-Th, 9am to ~7pm F, and 0 to 4 hours on the weekends. I've also had the occasional weeks where I work until 3/4am regularly M-Th and have my weekends blown up. Sometimes I also have to join the S&T calls at 7am. My hours are probably on the bad side given the type of clients I work with. Some of my junior coworkers work 9am to ~7pm M-F with no weekend work and the sweatiest coverage teams work a little more than I do week to week. I'd say most juniors work ~60 hour weeks, with lower hour teams or more seasoned associates working closer to ~50 hours.
7) In my role I work with corporate clients ranging from large publically traded conglomerates, startups, real estate developers, DOT, and housing associations. I deal with CEOs, CFOs, Head of Finance, Head of Strategy, etc.
8) Generally the project/corporate stuff is all renewable, sustainable, or recycling-focused tangible products/projects. We also do traditional P3s (tolls, bridges, airport terminals, WFH housing, student housing, etc.
9) BofA, JPM, and Citi. Recently can also include RBC, MS, and maybe GS
10) My team is out of NYC, but we're a special case.
11) Junior pay is basically equivalent across the bank from my understanding
Not intending to hijack OP's thread but does anyone have any insight or perspectives (comp, job responsibilities, drawbacks vs. pf banking) on buyside muni roles - muni credit, pm, etc? guyfromct heyoo2001 Just tagging since you're on this thread.
OP Here: I am interested as well so thank you for asking! Further inquiring, since I would be coming in as an associate opposed to an analyst, what programs are there? I am assuming that for JPM/BofA/ and others, you would apply for summer associate positions and then put down PF as your desired coverage group. But then someone mentioned that PF mostly hires analysts. I am even eligible for getting positions at the firms previously mentioned? And thank you everyone who answered my original question! Your answers were very illuminating and I welcome more insights and experiences from others.
I am also an incoming MBA student interested in public finance. From what I've heard, only MS and GS have formal MBA associate programs for PF. At other banks it's more opportunistic/as-needed.
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