Q&A: Public Finance IB at BB

There is a small haircut on comp at the junior level to M&A that continues to widen as you get more senior. The compensation ranges below are approximately street for TC:

• AN1: +/- $150k
• AN2: +/- $175k
• AN3: +/- $200k
• AS: $200k  - $325k
• VP/D: $300k - $650k
• MD: $500k - $1.2mm 

Unlike M&A where you may have fairly junior MDs (35 - 40), young MDs are incredibly rare in PubFin and many senior bankers don't grow beyond the Director level. For someone in the business for the long haul, a conservative assumption would be that compensation stagnates in the mid-six-figure range. 

As a counter to the pay haircut, WLB should be much improved. There are some specific teams and sub-sectors (Healthcare, Corporate, P3) that tend to work more hours, but in general, the following hours are fair in a typical week:

• AN: +/- 65 hours (no-to-limited travel)
• AS: +/- 60 hours (limited-to-moderate travel)
• Mid-level: +/- 55 hours (moderate-to-high travel)
• Senior: +/- 50 hours (low-to-high travel)

For the tougher teams, I would add ~5 hours, if not more, at each seniority level. The good news is the majority of the work is capital markets-based, which lends to more predictable hours. 

All-in, I think PubFin can provide a nice mix of pay to WLB at the BBs, but by no means is it a method to accumulate massive amounts of wealth. 

Nice username! See responses below:

1. I was placed on the team due to headcount needs and my comparatively stronger finance/business background than others in my class. I enjoy structuring a deal from scratch, selling a project's story to investors, and conducting credit diligence around investor appetite. I've also been fortunate to work on non-muni transactions in this role, which has broadened by skillset.
2. The same traits that make any banker successful apply to PubFin. I place additional emphasis on having a good attitude and attention to detail, as those are two easy things that make a huge difference. Lastly, being deliberate in every action item you complete separates a good banker from a great banker. If you can't describe in detail why you are doing something, and why it is important, then you aren't fully understanding the role or you are being inefficient with your time.
3. A rough breakdown is below. Deal teams in PubFin tend to be much leaner (to keep overhead costs down), which leads to days being pretty jam-packed with very minimal downtime.
   1. Morning: Read the news, catch-up on emails, internal calls, working group calls, and complete time-sensitive / ad hoc tasks (i.e. comments on deck, quick model sensitivities, NDAs, KYC, etc.)
   2. Mid-day: Filled with calls (deal execution, business development, etc.), ad-hoc work, and if it is quieter, I may be able to get some more impactful work done.
   3. Evening: This is when I get to do the more labor-intensive work, which is typically related to modeling, document review, more complex presentations, etc.
4. For me, it is raising capital for greenfield (new) projects and executing complex transactions. The vast majority of my financing experience has been for unrated credits, which leads to an in-depth structuring and investor marketing experience.  

Not good. interned in one and no one is excited about public finance. This seems to be true street wide but certainly where I was a few years ago. It's sad, most of them don't care about their work and there is an epidemic of lazy directors in PF.

From what I've seen and heard from peers at other banks, culture is generally good (i.e. more collegial juniors, less sharp elbows, etc.). The vast majority of seniors have families, which I think is a good indicator of culture.

I agree with the other commentator that there is a fair number of 40 - 55 y/o directors that are collecting paychecks while doing minimal value-add work. At the junior level, there are always a few people who are looking to jump to a coverage or M&A IB role.

I'm at an inflection point in my career. There is a clear path to a VP+ seat, making mid six figures (or better) with decent WLB. However, I frequently get pinged for other interesting roles and it is a lot easier to make a career switch in my 20s than later on. 

Those covering more "traditional" sub-sectors (i.e. HC, PF, Power, etc.) tend to have better exits than those focused on GOs. I've seen the following exits:

• MBA - Strong results at both M7 and T15 programs (with good scholarships). I've seen good results at H/W/B/C in particular
• Muni Buyside - Seen LO AM (both IG and HY) at top MFs and boutique HFs
• Non-Muni Buyside - MM PC, MM Infra PE, MM HC PE, and Endowment Funds. Those who move into PE/PC are always in NFP HC or Infra/PF groups.
• Sellside - LevFin, DCM, Equity Research, HC Coverage, PUI/Energy Coverage, Industrials Coverage, S&T, and PWM/PB seats. Most of these moves occur at the same bank.
• Public Sector - Treasury / Debt Manager exits to clients. I've seen one or two leave for a staffer role on Capitol Hill
• Other - IR and Product Strategy roles at top buyside shops (often for LO, PC, or DL), Project Finance roles at large/reputable developers, and FP&A roles at reputable firms. 

See my comment above on culture, but in general, I'd agree that it is more collaborative/laid back than coverage groups.

I've worked with plenty of mid-levels and seniors who started in M&A and moved to PubFin for WLB. Most of those folks tend to cover NFP HC, Infra/PF, or Power, as there is the most overlap in skillset. There aren't a ton of seats in PubFin, but if you network and are patient, you shouldn't have too much trouble making the move.

I can't speak to return offer rates across the street, but I've generally seen standard return rates at my firm (70 - 100% depending on the year). I imagine it is the same across the BBs, but it will depend on expected headcount needs and individual performance. 

I've been heavily involved with return offer decisions and junior mentorship at my firm. My advice is below.

• Have a good attitude and keep your chin-up. Being personable will take you very far in life. You don't need to be charasmatic, but simply being polite and kind is a must. Remeber that +90% of your colleagues are normal people with families and friends, so don't be intimdated by them.
• Be responsive. Always get back to people within ~15 minutes even if you don't yet have the anwser.
• Be deliberate with your actions. If you can't explain why you did something then you aren't thinking enough about the work product and you aren't understanding your role on the team. This goes for big and small tasks. Why are we responding to this RFP? Why did my Analyst ask me to color code certain cells in Excel?
• Show up early and leave late. I hate FT culture, but for an internship I don't think you should take any chances. Beat the FT juniors to the office in the am and I wouldn't leave until 1) your seniors are gone and 2) your juniors are ok with you leaving (check-in with them directly).
• Triple check your work, no exceptions. You will always be better off sharing a high-quality product under a longer-time frame than a poor-quality work product quickly. Don't rely on ChatGPT as I've seen interns do this in recent years as they think speed is key.  
• Have fun. Connect and spend time outside of work with your intern class and get coffee with juniors + seniors on your team. It is important to connect with others to show that you are a good culture fit.

I'll try my best to answer these questions, but it will be highly bank-dependent. I only have experience at the BBs. 

• Timeline(s): Generally in line with IB / Markets recruiting. A few banks may be a bit later. Most banks will have separate applications for PubFin, while others will be lumped in with IB/Markets depending on the firm.
• Competitiveness: There are fewer spots in PubFin than M&A. Most BBs will take 5 - 10 PubFin interns total, while coverage IB will take multiples of that. Candidate resumes are equally strong. Almost every intern will attend a name-brand school and have a +3.7 GPA, prior internships, and leadership experience.
• Networking: Networking for PubFin makes recruitment a lot easier. While your resume will still need to be top-notch, you can successfully navigate the interview process by networking ahead of time. It shouldn't be too hard to have 15-minute chats with bankers ahead of recruiting as long as you make it clear in your initial outreach that you are specifically interested in PubFin. If your resume checks the box, you network ahead of time, and you are moderately personable, I'd say you have a great chance at landing a SA spot at a good bank.
• Banks: The top banks (in alphabetical order) are BofA, Barclays, GS, JEFF, JPM, MS, and RBC. I wouldn't use league tables (M&A or PubFin) to rank the banks as each deploys a different strategy. BofA, JPM, and RBC have very large departments and chase every deal, even if it is small or pays poorly on a $/bond basis. Barclays, GS, JEFF, and MS have smaller headcounts and are more selective on what they cover. Other strong banks (in no order) include Wells, RJ, Stifel, Piper, Ramirez, Loop, and Siebert. Some of these banks may pay below street.

If this is in reference to traditional Muni-FA work (i.e. Hilltop, PFM, etc.) I can't really speak to it. I have very rarely interacted with FAs in my role. 

If you are talking about non-muni advisory work led by PubFin IB teams, I can speak to that. Examples of this would be advising a NFP HC system on M&A, advising a PE firm on the divestiture of a toll road, etc. 

Broadly speaking, the most desirable seats in PubFin for compensation, work complexity, and skillset development will be on the NFP Healthcare and Infra/PF/P3 teams at the BBs/JEFF/RBC. These seats have the most overlap with other IB roles and have the most diverse exit opportunities. The trade-off here is these teams typically have worse hours than the rest of PF (hours are in-line to a bit lighter than IB). If I had to restart I would want to remain in my sector (PF/Infra) or move to NFP Healtcare.

If you held a gun to my head and made me pick the most desirable seats based on deal experience and culture, I would pick the following depending on one's interest:

• NFP Healthcare: JP Morgan (financing), Goldman Sachs (M&A), or Jefferies (financing + M&A)
• PF/Infra/P3/Corporate: Morgan Stanley or Barclays (only two integrated teams covering each area)

Hey I’m an incoming SA at a pub fin advisory firm. Can I shoot u a DM?

Given that you got final round interviews at two reputable banks, it seems that you are quite competitive to make the switch. If you keep at it, I'm sure you will break in eventually. I think being ~18-months into your career makes this a good time to make the move,

In the meantime, I would do the following:

• Network with the banks you work closest with. Given you are already in the industry, I think it is fair to network with juniors, mid-levels, and seniors
• I'd make sure your "story" is really tight. Make sure you convey that this is a space you want to be in for the long-haul and I'd articulate what specifically draws you to the space and what area/sector you are most interested-in
• Be up-to-date on muni-specific news and the market in general. You'd be supprised on few individuals are really in lock-step with market developments