Public Finance / Municipal Groups
I've noticed a lack of PubFin / Muni Banking info on this forum and wanted to start a thread covering the major teams on the street. I've been in the industry for a couple of years and have interviewed with a number of shops as well. The below list is in no order and is as objective as I can make it.
- BAML: Top of the street from a deal flow perspective (especially without Citi) for decades. Very large operation that is competitive in most areas of the space. The department has strong synergies with the BAML's WM footprint. Team is a volume shop that will bid on every RFP/Pitch and will undercut takedowns to win mandates. Firm hasn't reduced headcount, while other firms have.
- JPM: Typically a top 3 UW. A strong team that is on the larger side (not nearly as large as BAML) and uses a fairly unique coverage model. Healthcare team in particular is strong. I don't think they've reduced headcount as aggressively as other firms. Have heard its a bit rougher culture than some other teams, but in general, is a great team.
- Morgan Stanley: Typically the 4th ranked UW. Department is organized as a Markets group with Banking, S&T, and Lending reporting up to the same person. Team has undergone significant headcount reduction in recent years, but has maintained its spot on the league tables. New management team is young and comes from non-traditional Muni backgrounds. Lending desk is quite strong and operates more akin to a prop desk than a traditional lending arm. Strong team that connects well with the bank's WM franchise, but has experienced a lot of turmoil in recent years.
- Goldman Sachs: Typically is ~5th in the league table. Small banking team that sits with Goldman's IB division. They focus on higher fee/complexity deals to make up for the reduced fee pool in the industry but still maintain a foot in the traditional business. Smart and generally nice people who work a little more than the rest of the industry. They selectively choose who to cover and what to bid on. They do not have lending capabilities, so they rely on idea generation.
- RBC: Typically is ~5th in the league table, but had an amazing 2023 and finished 2nd. Large department (believe only BAML is bigger) filled with strong bankers. Has been immune to the turmoil in Texas and has a lot of momentum going forward. RBC has a very strong housing team.
- Barclays: Typically a top 10 UW. Organized as a Markets franchise with Banking, S&T, and Lending reporting up to the same department head. Small banking team (similar size to GS) that selectively covers clients and selectively chooses deals. Firm is strong in Higher Education and Derivatives. Recently ran into some issues in Texas. Legacy Lehman team that mirrors the bank's culture.
- Jefferies: Typically a top 10 UW, that had an amazing year and finished 3rd in 2023. They have been immune to Texas turmoil thus far and seem to have support from their CEO (hired a bunch of folks from Citi). Sits within IB and they do more than just pure UW. Tough culture that mirrors the bank's reputation in general and will work you hard. Small team that is similar sized to GS and Barclays. Strong leadership.
A few other strong firms, but I'm not as familiar with: Wells, RJ, Stifel, Hilltop, Piper, Loop, Siebert, and Ramirez. Hope this helps those interested in the industry!
Never understood Citi's move to exit the Muni market as they have usually be a strong performer in the 2010's (Several #1 Volume years).
I think one thing to add to the list is your large volume (MS,BAML,JP) shops are going to have a much different feel from your regional(er) shops (Stifel, Hilltop, Piper, RJ). At your big shops, you are going to have a traditional bond desk feel, where in a regional office, you might have a team of 10 covering a few states. Regional shops give some good opportunities to work outside of the big markets, but still be in a semi-legit banking position (I say semi-legit, because an office might have a trading desk, it might not).
Thanks for the comment! I haven't had much exposure to the smaller shops, but would agree there are perks to being in a more regional role.
Thanks for the comment - not much pubfin discussion here. Any insight on the recruiting timelines for municipal groups in particular?
For interns it is the same recruitment cycle or later as other Banking jobs (i.e. some firms kick off in the spring others wait until the early fall). FT roles open during the early fall. GS and MS both have dedicated Internships & FT roles for MBA students. The other firms would be interested in hiring MBAs FT on an Ad Hoc basis.
If you're already in the industry most of the lateral recruiting happens through LinkedIn Messaging / Word of Mouth. There are rarely formal job postings for the open roles.
MS did not hire MBA interns this year
finally a hlepful post with info
Above is all correct information.
I spent some time in public finance. Unless you are EXTREMELY passionate and certain about building a career in pubfin, would avoid for following reasons
1) A&A bonuses are WELL below corporate coverage groups (can be better as you move up, but stinks when you’re young)
2) Hours - better than corporate coverage for sure, but still long and no walk in the park
3) Extremely pigeonholes you - can certainly move as an A&A (usually internally if you are good), but it’s incredibly niche
I am not trying to convince you not to do it. My former colleagues are excellent and very happy in their roles in pubfin. Just be wary of the above when making your decision
I'd generally agree, though pay at the An/As levels is pretty close to Corporate at my Bank. If you are doing general Munis (GOs, Higher Ed Revenue Bonds, Water & Utility, etc.) then I'd agree that it is very pigeonholing. If you are doing Healthcare, P3s, etc. you get enough Corporate interaction and modeling experience (Debt Modeling, Operating Models, Valuation Work) to get strong looks from other areas of finance.
What were typical bonus % of base at your firm for analyst ?
Any advice on how to lateral to coverage/product at another bank or within the same firm? How long to wait before attempting, easiest groups to transition to, modeling skills to learn, etc.
Easiest groups to lateral into are DCM then LevFin given they're debt products. LevFin you'll probably need to take a modeling course online or study up so you can do the basic 3-statement model / LBO components. Honestly, I think you can have a shot at any group in the bank (not many do hardcord modeling anyway) and your presentation skills and pitchbook making from pubfin should be solid enough.
Adding on to the other comment. I'd agree that DCM and LevFin are fairly easy (DCM more so). I've also seen NFP Healthcare move to Corporate Healthcare Coverage, P3 move to Infrastructure & Industrials Coverage, Transportation move to Industrials, and Power/Utilities move to Energy.
Outside of Banking, I've seen people move to Infra PE (P3, Power/Utilities & Transportation), Healthcare PE (Healthcare), Equity Research (Healthcare), Endowment Funds (Higher Education), Muni Hedge Funds, Corporate Finance roles, Government jobs, and MBA/Masters programs.
In general, Healthcare & P3 have the best exits, followed by Power/Utilities and Transportation. These are the teams that interact the most with the private sector and/or work with the most business like clients.
OP here. Glad to see the thread has some traction. Spoke with friends in the industry and have a rough idea of who from Citi is going where.
Seems that most of the Bankers landed new roles at strong shops. There is a good portion of the Citi team that has yet to find a home
Ex-Citi muni banker here and impressive how much intel you've gathered. Know about 80% of these.
Couple others I've seen in the news:
Anyone have insight on P3 groups in Public Finance?
Citi (soon to be Barclays I guess) was the strongest across all the P3 verticals (Transportation, Project Finance, Circular Economy, Corporates, WFH, Student Housing etc.). They dominated the high yield market (where most of these deals fall) from both a Banking and S&T perspective. Believe they do advisory work and most likely do non-muni financings as well (the P3 team at my bank does at least).
The other large banks all are strong or at least had clear strengths in one of the verticals.
BAML and the like undercutting negotiated takedowns to almost nothing was part of the reason I left pubfin. Long term, why do I want to make 50% of my peers in DCM working the same hours because muni heads have price undercut the crap out of eachother for zero reason. I love the muni space and still have a BondBuyer subscription but the fees really deter people from long term careers. Sure you'll still make decent enough money but it doesn't make sense to be treated like the red headed stepchild of the investment bank, it used to not be that way. All of my old bosses hit their big paydays pre 2008, it's just not the same anymore. At the end of the day, it's still investment banking. You do endless pitchbooks, modeling/structuring (although in DBC), and client coverage same as any other banker.
What do you think changed that caused this trend?
My guess is to take immediate market share from what used to be a way more fragmented and competitive market, still is regional to some degree. The problem is, once you lower your fees/takedowns, convincing a public authority that is the fiduciary of tax payers that they shouldn't just go with the lowest cost provider (versus taking a more expensive option at the benefit of "superior execution") is an uphill battle. If this were to happen on the corporate side where you deal with boards / shareholders it would be an easier sell.
One thing I've always found interesting is how Munis tend to rank banks by total volume issued. Feel like if they did it by fees like every other group it would help a bit with the undercutting bids.
I worked at a volume shop and it was beyond dumb to me how much league tables mattered compared to revenue. For example, a regional team doing a $800mm AAA deal making $2/bond getting 50% of economics would get all the departments focus, resources, and recognition despite only making $800k. While the Project Finance guys would do a $150mm deal making $20/bond getting 100% of economics would get little support despite making $3mm.
Some of the Banks (GS/Barclays/Jefferies) seem to have honed in on revenue targets and not league tables. GS made this switch ~20 years ago, while Jefferies took Citi's HC team and Barclays took Citi's P3 team. All three keep headcount low as well.
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