Q&A: 2nd yr IB Analyst - Australia
Hi all, Despite being of the minority in that I am not from the US, I have been using this site for over a year and have taken great interest in others experiences, particularly those from the states. I thought I'd have a crack at a Q&A for current Analysts and/or undergraduates in hope that I can contribute something in the same way those before me have, as it really has been helpful. #### A bit about me: I went to what Australians would consider a "non-target" school (the Australian equivalent of targets are called Group of Eight). For my first year out of HS, I studied Architecture in what I have described to a million HR recruiters as a panic move; I had no idea what I wanted to do career-wise at 17 years old (other than playing professional sports). After a year of hating every minute of this, I made the switch to Economics and Finance. Whilst at Uni, I represented my State in one of the biggest sports here. I would probably compare this to D1 sports at a major college in the US. I also played elite level (the level below pros) in another large sport. I missed out on being drafted in the first sport after tearing my rotator cuff playing the second mentioned sport, which was quite a low point in my life. If I were to convert my WAM to GPA, I'd be about a 3.75, discounting my horrendous marks from Architecture. Due to the tradeoff I'd made between sport and studying, I had not paid much attention to a career at the end of my degree (aka being a complete idiot). I missed the boat on internship recruiting and thus hit the panic button - I'd figured I wanted to work in IB but had no idea how to get there. After thousands of emails to different companies, I was lucky enough to intern in Corporate Banking at one of Australia's largest banks, which resulted in a graduate offer that I subsequently took. Corporate Banking was good, however personally, it wasn't for me. I knew where my heart lied, so I read anything and everything to learn more about IB. This is where the beauty of sports comes in to play... Through one of the sports that I played, I'd become very good friends with an Associate who was a few years older than me at a BB. After picking his brain on anything and everything - from recruiting questions to excel shortcuts to what stocks he held in his own portfolio, he offered to put my CV in front of one of his MDs. After a few pretty gruelling interviews where I was questioned on everything I'd ever encountered, from what I hated about Architecture to what part of my rotator cuff I had operated on, I was lucky enough to land a role as a first-year in a Generalist group at the Australian equivalent of a BB (Macquarie/UBS/JPM/GS). I should probably mention as well that my Mum was a VP at 28 in M&A, at a large European IB and my Dad traded Commodities for the same Bank. Both have been out of the industry for >20yrs and didn't make any phone calls to help me because, as they've put it, there are no gimmes in life. At times I wish they'd helped just a little bit, but they got to where they are by themselves, and I am grateful that they made me do the same. Happy to answer any question from any audience at all - from what I've gathered Australian IB seems very different from American IB in hundreds of different facets - from deal sizes to hours to pay, and I'd love to enlighten anyone who is curious on what the industry is like here.
Hey!
I'm in a similar situation as you were - I interned and have recently accepted an exploding return offer for insto in one of the aus big 4 banks.
I enjoy the culture of the bank and frankly wouldn't mind staying here for life but I'm concerned about long term comp / exit ops given that writing credit reports and annual reviews isn't a particularly rigorous or transferable skill set.
I've got a few questions here if you don't mind:
I know that the comp in big 4 insto is substantially lower than bb/boutique ibd - do you have any idea what all-in comp is at an associate director / director level in insto? Does this differ across product groups (for eg, does the comp differ between levfin and syndications)?
Is there any difference between the work done in the levfin / dcm / project finance teams at the big 4 and similarly named teams in BB? Does the levfin team do any LBO analysis or do they just underwrite debt?
Hypothetically, if I'm looking to transition to M&A when do you reckon is too late to leave, for eg. is it possible to go from assoc director in PF (which is quite modelling heavy as I understand) -> associate in Infrastructure and Energy M&A or would it be too late at that point?
What are your current hours like compared to your hours at big 4 insto?
Great to see some australian representation on here - you've done well and cheers for doing this!
Damn I replied to this and my comment never uploaded. Take 2:
Thanks for the questions mate and congrats on your offer. Completely understand your perspective with the report writing...
At my bank from AD level up comp was negotiated. Run of the mill was generally 150-160, however bonuses weren't paid last year due to the bank being slapped with a big fine. There was an AD who was headhunted by a BB, and in order to keep her it was public knowledge that the bank upped her pay to north of 200k. Not too sure about the Director level, but as you've stated I assume the ceiling in insto is much lower than IB.
LevFin and DCM at the Big 4 are essentially the exact same. The Big 4 get a shit load of the work in this area as well. DCM is pretty vanilla - debt underwriting/arrangement, refinancing etc, whereas LevFin is sexier, higher yield stuff. LBOs are used quite frequently in LevFin (I can only speak for the bank I was at), and I know a few people who have jumped from Big 4 LevFin to PE shops.
I'd say the sweet spot would be 2-3 years, which is generally what they ask for Analysts. It's very unlikely a BB will take you on as an Associate with no experience unless you are entering via the postgrad stream. Having said that, nothing is impossible.
Big 4 hours were very very good. Never later than 7pm, work drinks on Friday, never working weekends. IB is longer as you'd expect, however I gather it is on par with hours of say a regional in the USA. I'd say 60-70 would be run of the mill, 80+ when the foot is to the floor, with both scenarios accounting for a couple of hours on Saturdays and Sundays. In summer if it's hot enough I'd duck out for a swim at the beach in the evening before heading back in for the night shift too.
Hoping this is of aid, if you have any more questions please get in contact!
Cheers for doing this mate! A few questions:
1) Do you think you would have the ability to work internationally at some point in your career? I.e. intrabank transfer?
2) What are some of the stories you have heard about summer intern/graduate recruiting? How do your peers shortlist applicants?
3) Best hangouts for bankers in the city that you work? (guessing Melbourne or Sydney?)
4) Are the low-tier BB's in the US (e.g. DB/CS/Barclays etc) also generally regarded as low-tiers in Australia?
5) As an Australian analyst, what is your bank's training program like? Do you get to go to New York or Singapore etc. as a 1st year analyst?
Thanks!!
Not OP, but thought I will provide my $0.02 - hope you don't mind.
1) It's somewhat common. GS encourage travel upon the A2A promote - I've seen guys transfer to the NY and London offices, though they can stay in Australia if they really want. I'd imagine the opportunity is there at most banks, if you're a decent performer.
2) I'd imagine this varies from bank to bank, but assuming an applicant meets the minimum and automated culling criteria (based on WAM and sometimes even ATAR) the resume is printed and ready to be screened. I haven't sat on the other side of the recruiting table, but have been told resumes are printed and categorised in accordance with your school. Then an analyst from your alma mater will look through resumes from that school and sort into a yes/no pile for interviewing.
The approach to recruiting is less standard when you leave the meatier end of the market and look at middle-market and elite boutiques. Some hold networking nights and source interviewees strictly from that, others don't formally advertise and are only interested in students who reach out to them (have heard this is the case with Moelis, but unconfirmed).
4) Not really. CS is relatively strong here and has historically had decent exits into PE. UBS and Macquarie tend to dominate Australian league tables, despite being looked at as second-tier (or lower) in the US. GS as per expectation, still ranks highly in Australia.
5) Varies from bank to bank. Some banks do send all Australian recruits to NY for training (GS did this last year) and it varies for other banks.
Thanks for the AMA, always nice to see some locals!
1) Have you worked with any ex-Big 4 (Acc’g) since you’ve transferred to IB? If yes, what is your view in terms of their strengths and weaknesses?
2) Could you talk about modeling skill set expectations as an Analyst 2 in a bigger bank. How was your modeling test in terms of difficulty, and is it generally something that’s not too difficult to pick up once you land the role? In my current role I’m getting great overall M&A exposure but we rarely ever model which scares me quite often.
3) Is there any client interaction whatsoever at your level? Or is this something that one may hope to look forward to when they hit Associate at a bigger bank?
Thanks mate, appreciate your response!
Thanks for the questions mate.
1. I personally haven't worked with anybody from Big 4 accounting backgrounds, but assuming you are talking about TAS/Deals/Corporate Finance work I'd very safely assume there are transferrable skills. Big 4 TAS to IB is definitely a feasible move. In terms of strengths, I think being familiar and an expert within a specific product (M&A, Modelling, DD) definitely works to an advantage, as well as being a disadvantage. I can also see how a strong accounting base would be of use, particularly within valuation and modelling components. As previously touched on, my biggest concern would be the silo that you are put in within a TAS team at one of those firms, as well as live deal experience - I met somebody through a friend who worked at one of the Big 4 in the west, and he eventually left because he was working IB hour weeks for a fraction of the salary, was constantly pitching for deals, and his firm could never close a deal.
2. Modelling is very important. My modelling test was a bit funky in that I was asked to draw and talk through a model on how I'd value an early stage tech company - I'd imagine tests at superdays are different. If you have a legitimate interest in modelling, there are hundreds of databases on the internet which can get you up to speed with best practices and common techniques.
3. Generally speaking, there's a bit of client interaction; enough to keep you happy as an Analyst. I've been along to my fair share of pitches and meetings maybe a little more frequently than some (not all) of my colleagues, which is always a promising sign. I think I'm lucky in that talking comes quite naturally, I get along with my MD and seniors, and they've trusted me enough to take me along for some of the rides. Associates definitely get more interaction on average though - it's a big bonus if you get to go to meetings as an Analyst I hear.
Any more questions please let me know!
Appreciate the reply back and the detailed responses - thanks a lot!
One more question that came to mind: -I’m currently evaluating my options as to where I should apply and after hearing some thoughts from people I got almost turned away from applying for roles within the UBS/MQ/GS-type banks at the top of the leaderboards as I’ve seen a trend of MDs/VPs not really caring too much about their Analysts in the long-haul and just squeezing every last drop out of them as opposed to keeping progression of the individual in mind. Given I do want to stay within a bank for the longer term, I’ve been mostly directing my search towards boutiques as I feel generally they don’t throw Analysts under the bus as much. Given your experience, what are your thoughts?
Just a follow up response of sorts, apologies for the wall of text!
I’m currently within one of the lead M&A advisory divisions so in essence a ‘boutique’ bank of sorts, only that we mostly work on very LMM deals in most cases. The issue with that is that due to the low fees, modeling in our division is generally considered a loss-making activity and we just usually end up evaluating inbound offers on a multiples / comps basis to see if they are somewhat reasonable. In most cases we work with individuals who have found their business and just want to get out, as such, even if offers are low, the chances of them not accepting them are also extremely low.
With that being said, considering my future career moves I’m extremely happy with my deal experience thus far, exposure to preparing/attending pitches, drafting materials and general financial analysis but straight forward 3-way modeling is something that definitely scares me come interviews. I’ve been practicing BIWS on and off, but seems like I really need to make the time to try and get some really solid time in which due to the hours is unfortunately a little difficult.
Additionally, appreciate your insight regarding client interaction, I have heard some horror stories of having to be locked in the dungeon just monkey-ing away in a BB which is definitely a scary thought given we get quite a bit of freedom/exposure in the Big 4 due to the teams being pretty small. Great to hear this isn’t generally true!
Again thanks for the AMA and the very detailed responses. Don’t even know if we’ve had an Australian AMA on here in the past couple of years, as such this is indeed very valuable!