Recently hired IB analyst - why was this hard to break into?
I am fully aware I will get monkey shit for this but if you give MS then have the balls to comment :)
As the title says I am a recent college graduate who managed to land a FT role at a boutique M&A shop.
Now that I have broke into the industry and seen how easy the work bankers do is, why was this industry so difficult to break into?
Really, a monkey could this. Comps are a fucking walk in the park. Buyers lists are a fucking walk in the park. Building CIMS, Pitches, and modeling financials are a fucking walk in the park.
We’re never going to need to use CAPM or unlever betas, so what in the world do we need to understand that in interviews for?
I would really like someone to tell me if this job gets more intellectually stimulating and challenging, or was the whole “bankers are supreme” a bunch of bullshit? If this work is really as easy as I’ve seen so far, why are there such high barriers to enter? We’re literally real estate brokers but for businesses, although we make a much prettier book ;)
Would love your input here.
...why don't you need to use CAPM or unlever betas? I had a boutique m&a internship and we did that. also was not one of the ones who gave you ms
Wondering the same thing..my bank definitely still uses CAPM and unlevered Betas..
It's more because of supply and demand, than difficult work. Banking gives you a very broad set of skills, including attention to detail, working in a team, handling stress, talking to senior people, and knowing how to adapt to different situations. These skills are marketable in a lot of areas, like PE, hedge funds, corp dev, consulting, etc. Places want to hire bankers because these people have passed the "trial by fire", so they won't make basic mistakes, slack off, or have poor social skills. Most people going into banking never want to stay and use it as a springboard for their careers. Because of that, there is a large supply of qualified grads, who want to make it onto the buy side and have to go through banking first. So these banks make interviews more and more difficult, because at a certain point every one of their applicants is "good enough". You don't need a 3.9 from Wharton to do an analyst's work, but when recruiters have 40 stellar resumes on their desk, they need to find a different way of weeding people out.
If anything, banking is a stamp on your resume that shows you can do the work, as well as a way to network with people who can make your career. It's sort of like getting a diploma from an Ivy or other top school. Because let's be honest, with how difficult it is to get into a top college, there's not much you can learn about finance in a classroom that you couldn't learn from the internet with enough free time. But the piece of paper and exposure to alums who will go to bat for you is what helps people from top colleges and banks place better, than people with less prestigious education or work experience.
A lot of this is totally spot on
I view it similarly - it’s a stamp of approval: it says that you can not only put in the hard work, do the analytics, and have attention to detail for countless pitchbooks BUT you can also be confident in client meetings with senior execs and have “EQ / social skills”.
In my opinion it’s the best learning experience there is, it’s truly trial by fire. When people ask if college prepared me for work, generally no - I learned 99% through work by struggling through long hours.
I don't agree with this because the whole 'stamp of approval' thing seems very wasteful. With perhaps the exception of HF, there are PE firms that hire out of uni (granted, a masters degree not BSc) and consulting and corporate development positions are 100% open to people coming out of uni. I don't know the % of people who use IB as the 1-2 year spring broad but even if it's around 50% why don't people readily apply to the job they want 1-2 years down the line (again with the exception of HFs and most PE firm).
All the skills listed as being central to banking really aren't. Attention to details, working in teams, handling stressful situations and talking to seniors are all things you learn just as well in consulting or corp dev. For the 50% that choose to stay in IB; hats off, you really like your job.
Perhaps you'll say that even those who intend to go to consulting or corp dev stand better chances with a BB on their CV but is that really true? Would applying to an MBB with a BB give you better chances compared to have a tier 2 firm like OW or RB? I doubt that
The number of PE/CorpDev/CorpStrat/VC/HF opportunities you can get out of undergrad are miniscule.. there's far more of an established pipeline from doing banking/consulting first.
By going through banking, you're pretty much getting a full throttle education into the top tier corporate world. Going straight to the buyside or to corpdev/strat where you're expected to already have that polish and to hit the ground running doesn't really set you up as well.
There are also HF's that hire straight out of UG, just saying. Building off your response, I would have a 0% chance of getting into any buy side role right away, and if I did, it would only be because of my IB internships.
Also, you are completely ignoring the inherent value of gaining exposure to the sell side process of a deal prior to PE.
I am obviously biased but I think IB helps you build one of the best skill sets possible for PE (a close second is Corp Dev), NOT the buyside as an aggregate. Maybe you killed it way more than I did, but the idea that I am somehow qualified to work on the buyside out of undergrad is laughable.
^ sbd the OP and sbd this.
yes its not rocket science but everyone wants in. and so this leaves room for interviewers to increase difficulty of questions even though it might not be needed for the job.
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What this person said. +1 SB
I'm still in school, and trying to learn the ropes. But from what I understand, having higher barrier to entry makes competition for entry higher. Just another way to protect the walls.
It's hard to break into because it pays well. Did you not study basic economics?
While I agree with the above, banking isn't exclusive in its 'putting people in front of management'. FP&A roles do that now because they do strategy work on specific micro level operating issues.
Basically, a lot of finance roles teach good basic business skills, but banking pays the best.
t. Will Hunting LARPer
50% chance this is a troll post; 50% chance OP failed to land his preferred job and works at a one-man "business-broker" shop alongside his alcoholic boss and the disabled office-dog.
Can confirm I am at a 25 person shop with over 16 active current deals
16 active M&A deals lol
That's how many a 100 person BB group has going... maybe these targets are $50M EV
I don't think (or at least I hope...) nobody has ever suggested that banking is "difficult" in a technical or theoretical sense. The difficulty in the job lies around efficiency, time management and, frankly, endurance.
Obviously the reason it's hard to break in to is basic supply and demand. The number of open spaces for a 1st year IBD analyst is magnitudes smaller than the number of university students who want those spaces and, as long as banking continues to pay well and set you up well for whatever you want to do in the future, it will remain that way.
Also, a lot of the interview process is a screening process for ambition. You don't need to be very smart to do IB, but you do need to be ready to do whatever it takes to get the job done or to get the job in the first place.
The average person can put together a pitchbook. However, the average mildly ambitious person cannot take working 80 hours a week while being treated like a piece of dogshit.
you also make a ton of money for a kid out of school, that alone attracts many people and the competition is fierce so school gpa etc are things just to filter out people.... you gotta do this someway and it seems like the most logical
now you know the dirty secret
Its probably because you work at a lower tier boutique and don't see the work top groups do. Tell me an inversion deal with multiple tax, consideration, cross border, structuring issues is easy. Then multiply that by everyday by demanding +$50bn clients who have their unique issues.
Usually the guys who tell me its easy I know to ding because they most likely were in vanilla groups.
Why would anybody admit that it’s easy in an interview? Someone who admitted that should be dinged out of shear stupidity.
Lol. This guy
I don't know your M&A shop, but I do know that my experience in M&A at several banks has been both challenging and mentally stimulating. Deal structure, negotiations, and building complex models all contribute to a challenging work environment. It sounds like you work at a shop dealing with smaller (usually simpler) deals that require less thought, and therefore are less mentally stimulating, but I wouldn't paint the broader IB world with your little brush.
Bc you are a financial anlyst at Houlihan Lockey trying to look like you do M&A
Because you work for a tiny M&A boutique serving unsophisticated small-business owners.
You mean to tell me Banking isn't a meritocracy where only the smartest can cut it?
Every industry creates barriers of entry for itself, in the form of advanced degrees, its own terminology and language, and certifications. In effect, what it is doing is creating for itself barriers to entry that both protect its members and allow it to create an illusionary effect of added value. These "barriers to entry" give legitimacy to the industry and help to form a a strong sense of professional culture.
I knew a derivatives trader that at 28, decided to enroll in medical school to become a doctor. Viewed in this light, he was only switching from an industry with a somewhat high barrier to entry to an even higher one (medical school costs, residency, etc).
Ask any lawyer and he'll tell you the same thing: you give him a piece of paper with what you want and he'll "make it legal". All he or she is is a professional wordsmith.
...don't even get me started on "Chartered Market Technicians" who take crayons and draw triangles on stock charts....
You're in S&T and you're shitting on TA? Lmao.
(although I may be wrong and you're just shitting on CMT's, which by all means is fine)
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After being told that I was getting promoted to associate, I thought about the exact same thing. What it really comes down to imo is work ethic. Not everyone has the capacity to review a text-heavy 100-page CIM from top to bottom after pulling an all-nighter and still be able to spot mistakes. That’s what it’s all about, not comps, DCFs, etc. Is the analyst going to be able AND willing to put in the effort when seriously exhausted or is he going to cut corners and submit something he hopes can hold up in a client meeting?
Otherwise, anyone can handle the technical side of the work.
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