Road to Director and MD
What is the best career path to become Director or MD? I know that if you stick long enough everywhere you could technically make it. The question is more about the road to become a great/respected Director or MD. More specifically, does this path make sense (for M&A): - Make VP at current bank (5 years in total), I should have gained all the necessary M&A technical knowledge - Exit to PE (2 years), I will understand how PE works and create connections in this universe which will be useful later on as a D/MD - Return to banking as Senior VP (different bank than the first one and more prestigious/with higher deal flow) (2years), I will understand what makes this bank greater and gain a different perspective of M&A work compared to my first 5 years - Come back to my first bank as a D
Does that make any sense? IMO this should give me all the necessary skills and expertise to originate and execute M&A deals as well as being respected by potential clients.
That sounds fine on paper. Unlike the path to VP, the road to D / MD is never as straight forward as years of experience + brand name type thing. Sticking around long enough might get you to VP, but there is a lot more at play to move higher. The reality is being good at execution =/= being good at generating fees.
There are a lot of intangibles, the big one being how you are perceived by the powers that be. You ever run across those people who've been directors forever? Never pull clients, never generate fees, only execute for their MDs? Those people manage their image/rep with the right people. That's the game. Going to your firm's giving back/community day type shit reading to kids in schools or whatever, being active with recruiting, getting involved in firm initiatives type shit. It's relationship building.
This kind of shit matters, especially as you move up the ladder to larger firms. VP -> D is not a linear path like Analyst -> Asso -> VP.
Would add that it doesn't make a lot of sense and would be difficult to leave a VP role for PE. Then are you expecting to join the PE firm as an associate and leave after two years or trying to come in as a VP (which would be even more difficult)? Moving back to IB at that point it's doubtful you'd come back as a Senior VP, probably would not get any credit for time served. Additionally if you managed to join PE as a VP you're going to have carry and may be difficult to leave the golden handcuffs.
While this might be an ideal MD build and I'm sure some great MD has had this career path and it makes sense ex-post, not sure this would go as clean as you're planning.
What matters:
The brand name matters more than anything else on getting deals. Being clever doesn’t pay. Most banks will discourage people internally to work on quirky, complicated deals where advice makes a difference, simply because the probability of success. So you need to optimize ruthlessly, and that’s what great bankers know how to do well. Focus on the clients where they are in the right spot relationship wise, and where they can deliver product wise. That’s especially true outside of m&a: banks don’t really care about the optimal solution for a client, they care aBout the product they can deliver.
As a VP, you’ll get to D safely. If you are in a robust institution with the right product offering and brand name, the path to fees is fairly straightforward because they come from what is around you - you just have to use the tools
From that point, D to MD is a bit more bespoke. If there is space for a new MD because you’re additive in your shop, and you show you can deliver the bank and make money, the title will be there. It may take a bit of BD, for example establishing a client base in a new subsector where you can deliver the bank.
If there is no space in your bank, but you show you can deliver the products, then the path is to move to another platform that has the products but not the sector coverage.
I would advise against trying to navigate the path to MD in the boutique world. In my mind success at a boutique is much more binary. You need to attach yourself with the senior banker who for the next 10 years will milk his relationships, and be his number 2. A lot of partners at EBs are just that - they execute and assist for mote senior MDs. And there is the same setup on the client side: every senior partner to chairman discussion is followed by “junior partner” to CEO / CFO discussion.
Individual success in a boutique is near impossible - the bar is too high. At a minimum, you’ll have a good established director from a BB who can come and take the help of a more senior guy with a set of clients, with the director bringing specific content.
well said. this is very true
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