This forum was instrumental in my development (especially during my analyst years) and figured it was time to give back. Non-target, non-finance undergraduate degree. Currently a VP at an M&A-focused EB in the U.S. Will do my best to jump on here and respond to questions
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Long overdue!
I came out of undergrad with a general business degree, but decided I wanted to be in finance during my senior year. I didn't know enough to know that I wanted to be in IB, but was fortunate enough to be able to network my way into a commercial banking program. From there, I jumped to a smaller, "boutique" bank where I did my analyst years. I was contacted by a recruiter looking for an Associate at my current shop, and I was able to join as an Associate. After ~ 2 years, I was promoted from Associate to VP.
I haven't gone back for my MBA (and don't plan to at this point), and have witnessed first-hand a push by banks to promote A-A and beyond for high performers.
Hours as a VP are definitely lighter (realistically, I work 60+ hours per week now, compared with 80+ as a junior associate), which is consistent with other groups at our firm.
The biggest change for me has been content creation. As an Associate, it was important to take the first cut at creating materials, but often times that came with significant guidance or input from the Sr. bankers. I have found that, as a VP, I am expected to come up with the content myself and run with it.
FWIW, the hardest part of the transition has been learning how to delegate. Frankly, because the groups I have worked with in the past have been thin at the VP level, there wasn't a great blueprint for me to follow in terms of knowing what I should or shouldn't take the laboring oar on.
First and foremost, this is still a meritocracy and it is hard to get promoted if you don't develop the technical skills while you are an analyst/associate. With that said, I am by no means the most technically proficient banker at my shop, but am regarded as a "solid" performer and have consistently been a top bucket associate. Aside from that, I can't emphasize enough the importance of dealflow. At the end of the day, it is hard to get promoted (at least in our group) if you don't get deal reps, and just as importantly, if you aren't able to show your execution ability. I would also add that soft skills play an important role and are often overlooked by junior folks who think banking is all about building the best model or pulling together a clean deck. I was fortunate enough to be staffed on several live deals and had the opportunity to show I could perform.
My advice to you is play to your strengths. You bring a unique perspective having sat on the client side, so emphasize that in interviews. You also need to make sure you have your technicals down cold. I can't tell you how many times we have had promising Corp Dev candidates who look good on paper, but then struggle to walk through basic valuation concepts. Given the number of FREE resources online today, there is no excuse for not knowing your stuff walking into an interview. Bankers want to know you are willing to put in the time necessary to ramp up quickly, and the most tangible way to show that in an interview setting is to know your stuff inside and out.
Can you elaborate on the Valuation concepts as I am in traditional Commercial Banking and not valuing a business on a day to day basis. Is a Discounted Cash Flow the most traditional valuation?
I won't sugarcoat it - the learning curve was really steep for me, and I struggled during my first few months as an analyst. The intensity and pace is very different in IB compared to other finance roles. I leaned heavily on more experienced analysts to get me up to speed and spent a disproportionate amount of time on google and YouTube learning ways to maximize my efficiency so that, while I was still learning the industry side of my job, I could save time by being proficient in excel and powerpoint.
I sit in a sector-focused M&A group now, but worked as a generalist while I was an analyst. The hardest part for me was trying to understand the different nuances across industry groups. I worked on Industrial, FIG, RE, and consumer deals and each of these industries have different drivers, important metrics and buyers. The hardest group was FIG, largely because it is so different from any of the others.
At this point, I would say I am working towards becoming an MD. That is still a ways off, but the skills I am focused on developing are with that goal in mind.
Exit opps get skinnier as you move up the chain until you hit MD. I think I could jump to Corp Dev or an industry-focused PE shop if I had to, but both of those would almost certainly come with a significant pay cut (and in the case of moving to a buy-side shop, a demotion).
My answer is going to be cliche, but that's because it is what I have seen work - make sure you are actively networking. It can be hard to find time to do this as an analyst, but your best shot at lateraling to a more prominent platform is to make a personal connection with someone who already works there. This site has a wealth of information on this subject, but the low hanging fruit is always your alumni network, former employees from your boutique that may have moved on to bigger shops, and of course, recruiters. Hope this helps
Thanks for your insights! I am currently an analyst at a middle market PE and was wondering if my buy-side experience would be a disadvantage or an advantage for me to break into BB/EB as a 2nd/3rd year analyst. I have covered the whole lifecycle of several buyouts (IB over me? I have only done an internship at a small IB in college but I do have some deal experience advising M&A deals.
Also, in terms of networking, I noticed that there's a huge decline in my cold email reply rate, compared to last year when I was looking for jobs. I wonder if it's a macro phenomenom (people are concerned about CoronaVirus, wfh situation, etc..) or my message needs to be improved.
Would greatly appreciate your thoughts on my two questions! Thanks in advance.
First off - you are definitely the exception to the rule on this forum! I can't say that I have seen a PE analyst make the switch to IB, but that is largely because PE analyst positions still aren't that common. I would say that, depending on your specific roles and responsibilities in your current position, you likely have comparable relevant deal experience as other lateral candidates. With that said, it is still "safer" for banks to hire an experienced A1/A2 over you given they have direct FT IB experience.
To your point on cold emails, PM me, and we can discuss that more. Real-time, the COVID-19 issue is likely going to impact hiring for the next few months as there is still too much uncertainty around both capital raising and M&A going forward.
It honestly depends on the MM shop. My first question to a candidate looking to lateral from a strong MM shop is why? I think there is a misconception out there that somehow MM banking is worse or lower-tier than BB/EB, when in reality, some of the best dealflow and experience can be found in the MM.
Back on topic - we tend to view any analyst with strong execution experience (whether from a BB or MM shop) favorably. I have found that, when we do hire analysts from middle-market banks, they tend to have pretty solid execution skills, but lack some of the broader strategic critical thinking that is an important part of a bankers development. The other thing that makes any lateral analyst move tough is there has to be an opening, and while we have had analysts leave prior to their 2-year stint being up, it is still rare.
i know this is late, but I disagree with Flunky on this one. This person didn’t go through MBA recruiting, which is incredibly structured. They got their job through lateraling, which is very different than campus recruiting.
reaching out now is high risk, relatively meh award, for MBA candidates. The reason is that you have one shot to make a first impression, and much of the mba recruitment is done through one on one coffee chats. They are really screening to see your interest in the industry, and while you most likely would not get a technical question, the senior person may ask “what’s a deal you’ve been following?”. if you can’t answer, it’s gonna look bad and potentially impact your candidacy down the line. If you answer well, sure, this could help get you through the first cut of people but honestly you could probably manage that anyway.
Just a different perspective.