So I'm recovering from a procedure and out of commission for a couple days, and I thought I would use the downtime share a few observations / career guidance for those people starting out in the business. Take this with a pinch of salt, as its one person's advice, but these are all things that have served me well over the years. To give you a bit of background, I've spent more than 14 years in the industry, having started as an analyst at a BB M&A group, and principally worked in BB M&A, although increasingly sector focused. I now run a sector coverage team at one of the leading firms, across all products including M&A.
1. You are your deal experience
Your ability to be an effective senior banker (or senior private equity professional or corporate M&A head or even hedge fund manager) is almost entirely an accumulated sum of the wisdom, knowledge and experience you gain doing deals. Every transaction is unique and one's ability to provide customized high stakes advice or judgment (and the stakes are always high) on tactics, pricing, counterparties, structure, etc. is a function of having been there before enough times that you know instinctively how to react. The single biggest thing you can do as analyst to guarantee your success later on is to work on as many complex transactions as possible and dig deep to ensure you really understand what is going on. I read a thread somewhere where people were saying its better to avoid live transactions since they kill you, and it doesn't affect PE recruiting. I can guarantee that the analyst who has worked on more live deals when they start at H&F or Apollo or Blackstone is going to get the best staffing and experience, and its a virtuous cycle thereafter.
2. It only gets more competitive
Its great to get that analyst job, that associate promotion, the job in PE, into HBS, etc. etc. It only gets more competitive from here. When I was an analyst, I thought the greatest thing in the world was making associate. The day I became an associate, I was not satisfied and was gunning to be a VP. Now that I'm a team head, I realize I'd really like to run the investment bank. Guess what, there are probably about 20 people equally qualified who feel the same way. You cannot let your foot of the gas if you want to make it. Out of my analyst class, less than 15% are at MD / partner level today (of course, others will make it and many do very different things). An even smaller group will make it to the real top.
3. It's a long game, stamina matters
I have never pulled an all nighter in my life. I hate it when people who work for me do. A great chunk of the battle is showing up, and you cannot burn yourself out. Its more important to be crisp, efficient and thoughtful than trying to be the hardest working person out there and burn out. People rarely care about facetime as long as you are equitably pulling your weight; output is much more important.
4. You don't have to be perfect, but you have to "get it" and be part of the team
Getting it is understanding the broader objective, and being an indispensable member of the deal team. If you "get it", we will cut you slack when you make mistakes.
5. Enjoy your personal life
You will never be successful if you are miserable personally. Everyone has different interests, but ensure your indulge them, and you are happy. Have a good group of friends, party a lot, have good sex. Its not mutually exclusive with working hard. And don't miss the big stuff (friend's weddings, birthdays, anniversaries, vacations ever). As long as you plan and are efficient, there is no excuse for missing any of this.
6. Be amongst the best in your profession at something
If you are an investment banker, know one industry or product exceptionally well. The same thing applies in private equity or public markets investing. You may be a generalist later on, but during the hard times (and there are always hard times), having core expertise is something no one can take away from you. I've been on the rocks twice in my professional career, and each time, being damn good at something got me through that.
7. Your analyst years matter
Many of my most fortuitous career moves, or pieces of business I won were because of colleagues or clients I worked with when I was a very junior banker. People have long memories in this business, and the assistant treasurer you built a model with as an analyst could well be the CEO when you are an MD.
8. Develop close friendships with your analyst class
Always be supportive and never be competitive. It is not a zero sum game.
9. Develop your professional "team"
Colleagues, former colleagues, friends, clients, who you respect and have a lot of respect for you. These are the people who you fall back on when you hit career pitfalls. Be unfailingly loyal to these people. Help them out whenever you can. Never be judgmental, and always go the extra mile for your people.
10. Influence is free
Use it to help people. Especially when you get nothing in return. Karma is real in this business.
11. Participate in team drinks
Get to know people out of the office. And learn how to drink in quantity without getting too drunk. It helps that I can drink my analysts and clients under the table when I need to.
12. Develop an international perspective and learn to think beyond the NY financial bubble
If you are offered a chance to work internationally, jump at it. The world looks very different in Sao Paolo or Warsaw or Riyadh or Istanbul or Jakarta, and this will be where the overwhelming global economic growth will be in your careers.
13. Read a lot, not related to finance
History, classics, great literature. Being an interesting person is very important professionally, and it means you're a lot less likely to be a personal douchebag.
14. There are jerks in the world
Its not personal, strictly business.
15. Enjoy NYC (or London or Hong Kong or all three)
Appreciate the great nightlife. Know the great bars, and clubs, and the great restaurants. Have a go to where people know you.
16. Travel the world
Mod Note: Best of WSO, this was originally posted November 2014.
Good stuff :) Thanks for writing this
Speedy recovery. Great post.
+1
Great stuff. Frontpage @"AndyLouis"?
definitely tomorrow, one of the best posts of the year!
As a first year, I can't thank you enough for this. +1
I think this is being taken a bit out of context. I didn't participate in that thread nor have I ever worked at Moco, but I think the point was more that if you've already executed a few M&A transactions, a handful of debt financings on top of the dozens of bake-offs you're forced to endure as a junior banker, the last thing you want is to get slammed hard during the last 3-6 months of your analyst stint working on another set of M&A processes and regular-way refis. Not to say you won't learn more, but to your Third Point, it's also important to pace yourself, and you'll have plenty of opportunities to get additional reps in your next stint.
But I couldn't agree more with your underlying point on the importance of getting good deal experience as a junior banker.
@"iheartdietcoke" - I agree with you. There are diminishing returns, and if its more of the same, its understandable. I think in that case the key is to avoid being the guy/gal who worked their ass off for 18 months, and then left a bad impression because the last thing people remember is their being a slacker for the last couple months (I've seen it happen). By the time you've worked 18 months,.you are super efficient and you need to a) use that efficiency and b) not take on too much, so you are not killing yourself but also continuing to make a good impression. After all in two years, you will probably need to hit your former colleagues up for an HBS recommendation.
I have read this in a few other places. How does one know when he/she becomes that person who is working too much, and biting off more than they can chew?
Excellent write-up.
Many thanks for this post. Very insightful!
Thanks for the comments guys - I have a 2-3 days ahead where I am working from home, so I can address questions, etc.if that's helpful.
Thanks for the comments guys - I have a 2-3 days ahead where I am working from home, so I can address questions, etc.if that's helpful.
Any thoughts specifically on career switchers? I work at a BB (sounds like maybe the same one you do) currently in an FP&A function and am looking to make the jump to banking. In your opinion is the route there pretty much b school? Or are you ever open to hiring experienced hires without deal experiences?
Thanks for sharing your thoughts.
You mentioned you run a group but didn't mention any time spent in b-school so assuming you don't have an MBA. I'm aware that an MBA isn't necessary to advance to the MD level/group head level etc., but do you think one would be helpful at all? What about a JD/MBA (likely a 3 year program from Columbia or Wharton/UPenn) in the context of wanting to advance to senior management at a bank - will the greater familiarity with regulations, the law etc help at all?
Looking at it from the context of joining IB at a top bank right out of undergrad, and possibly wanting to stay at the same bank all the way through my career, finally advancing to senior management at the bank (as in your post, head of IB or something similar) - will an MBA (or JD/MBA) help or hurt me or is it irrelevant?
Great stuff, thanks a lot!
@ - no it didn't work out, my anchor investor pulled. I'm back to banking and here for the long haul.
@"notthehospitalER" - I do not have an MBA, and was a direct analyst promote. I do not believe having an MBA or a graduate degree is a prerequisite or an advantage, in itself, to rising up to senior management and beyond in investment banking. That said, there is certainly social and educational value in graduate school, and I believe what you learn in business school or law school (JD / MBAs tend to make excellent M&A bankers) can positively impact your career going forward. So its absolutely not necessary, but it still may be something you want to do.
If I had to do it again, I would have taken the time to go to business school because those two years matter very little in the context of a long career but would have been a lot of fun. Although, instead of an MBA I went international for a while, which was a phenomenal experience as well.
You are the guy who writes GSElevator, aren't you?
@"notthehospitalER" - I do not have an MBA, and was a direct analyst promote. I do not believe having an MBA or a graduate degree is a prerequisite or an advantage, in itself, to rising up to senior management and beyond in investment banking. That said, there is certainly social and educational value in graduate school, and I believe what you learn in business school or law school (JD / MBAs tend to make excellent M&A bankers) can positively impact your career going forward. So its absolutely not necessary, but it still may be something you want to do.
If I had to do it again, I would have taken the time to go to business school because those two years matter very little in the context of a long career but would have been a lot of fun. Although, instead of an MBA I went international for a while, which was a phenomenal experience as well.
@"AllDay_028" - its not that straightforward to move internally at the large firms.
There are two ways to do it, the first is that you work directly with bankers who know their teams have headcount. The second is that you go to HR; this only works if you are an absolute top bucket performer. In either case, you would probably need to start as a first year analyst.
I think B-school is a good option here. Or lateral to a bank through networking, but again, why take the hit when you can reset with an MBA?
@"AllDay_028" - its not that straightforward to move internally at the large firms.
There are two ways to do it, the first is that you work directly with bankers who know their teams have headcount. The second is that you go to HR; this only works if you are an absolute top bucket performer. In either case, you would probably need to start as a first year analyst.
I think B-school is a good option here. Or lateral to a bank through networking, but again, why take the hit when you can reset with an MBA?
Can you explain "have headcount" please?
He means teams that have space for more analysts/are hiring.
You have the authorization / sanction to hire people at a given level.
No, I have never worked at Goldman Sachs. And that guy was a bond guy.
He worked at Citi I think. And I was kidding. He also never got an MBA and went international.
I just started out in CF at a F50 company, and going international seems to put you on the fast track.
@mergersandacquisitions78 What is your opinion of analysts starting out at a MM bank in another city as opposed to a BB in NY? Would it have any effect on their finance career?
I haven't done a scientific estimate but in teams that are functioning and well managed, its about 10-15%. Basically people who were unsuited for the job and fell through the cracks. The others will not be allowed to burn out. In teams that are poorly managed, 1/3 by the first year and over 1/2 after two years. In my view, retention of top junior talent makes my life and productivity so much better as a senior banker, there is simply no excuse for bad management.
If you think of investment banking, its a lot like Russian dolls, where you have a very high level overall objective (say, I want to sell this division of the company), which breaks itself out into smaller objectives (development of a carve out financial model, drafting of an information memorandum, etc.), which breaks itself out into ever smaller tasks (preparation of a certain analysis for a management presentation). An analyst that "gets it" - in addition to being able to do all the technical and presentation work that's required in the job - is able to understand the interplay between the specific job they are doing, the broader tasks and the larger deal objectives, and put it all in context. They are not just processing, but are actively contributing to the overall deal, and being able to think critically about the job they are doing to improve their product and make it more relevant. Ultimately, that analyst is going to be guiding major aspects of the transaction and isn't just being told what to do.
BTW, that's the same person who will be successful in a private equity role, for example.
@"DMVbro" - its a perfectly fine way to start off. There are many bankers who have made very successful careers in regional cities and focusing on the MM market. But if you want to come to NY, there will always be windows, particularly early on where the opportunity to lateral to a BB firm in NY is there. And an MBA is a great reset too, and given your banking background, you will be in a great position for recruiting.
What I would say is that MM firms offer some benefits that BB firms don't always, so be willing to take care of them. If you get greater exposure to senior people and clients, take advantage of that and dig deep on transactions. For example, MM firms tend to do a lot of sellside M&A. Make sure you that once you get your feet wet, you are the lead person drafting the CIM and building the financial model. Make sure you are running the due diligence and understand the business well enough that you can proactively address the buyer's issues, and not just a gobetween. Insist on understanding from your MDs how the sale and purchase agreement works, and try to sit in on those negotiations. Be on every legal drafting call for the SPA. That way, even if you haven't worked on the largest deals, you will get exposure that a BB analyst will not have had, and you bring something unique to the table when you lateral.
I'm nowhere near the same level as OP but could not emphasize the above post enough. I was in the same position at my first bank and had the luxury of working directly with owners, CEOs, CFOs, etc. as an analyst, drafted the first cuts of models, CIMs, MPs as a 1st/2nd year and participated in almost all SPA negotiations (even though I was just listening to lawyers and taking notes, I was amazed at how much I learned and was able to understand the next time I was on a similar call). Speaking with friends at BBs, MMs, elite boutiques, etc. I quickly realized how rare this level of experience was, so if you have the opportunity to participate in all phases, don't underestimate it, and if you don't, ask your deal team to get more involved wherever possible. It'll be a huge differentiator when interviewing for future roles in any field.
thanks for the advice
@"snakeoil" - going international is even more valuable in a corporate / F50 job than in banking. That's where the growth is and you can definitely move up the ladder faster. Just make sure you keep your ties to the home vase.
Excellent post and superb advice! Thanks a ton!
I'd like to seek your opinion on something I read elsewhere on the site that "I'd argue that many of today's MDs are kinda dorky as well. The type A Wall Street is a thing of the past, unfortunately for some and fortunately for others".
What's your take on this?
I'm trying to understand how someone at/near the top views the current culture and how it is changing - both at the top and at the analyst/associate level.
I don't believe there has been a material cultural shift at the top in the past 25 years. The 1970s effectively heralded the end of the "gentleman banker" in New York (it was the 1980s in London). Yes, MDs are nerds to some degree. After all, when we were recruited out college 15-20 years ago, it was the same thing - top schools, high grades, etc. etc. But you need to be an aggressive type A person with strong social skills to be an effective investment banking MD.
What's your best advice in terms of preparation for PE/HF? (yes live deals) but what other prep can you recommend? Also, if at a MM bank do you recommend lateralling to a BB bank after 1 year or attempting buyside recruiting with headhunters now and see what opportunities are available?
Understand what these firms do and how they make money. Each firm has a unique investment thesis and approach. Figure out what that is and learn to think through that lens.
Also, be the best analyst you can be. I can get my top analysts interviews at 5-6 top PE firms and 5-6 top HFs, if I decide to make those calls. But you have to be really good for that to happen, generally its one max two a year.
Hard to answer your questions - depends on the MM firm, and depends on the extent you interact and work for PE and HFs. Harris Williams is a different story than some lesser known bank.
Wow Thanks for the write-up!
Has your view on work-life balance for junior bankers working for you changed in the past few years, and do you see a long-term change happening or is it just a transitory trend? What can a junior banker do to try to improve their work-lofe balance and still get a top ranking? If you do well, I have a feeling there's going to always be pressure to take on more deals, which is great, but not if you burn out.
Further, what are some of the things first-year analysts have done to make a relationship with you that you think has had a positive impression on you?
Thanks!
Hasn't really changed in my view. There is an acknowledgment that things need to improve and yes, there are these initiatives that management is putting forward, but it doesn't change the fact that good, efficient management is better than any imposed limits.
Best way is to be super efficient at what you do and take charge of the process. When an MD assigns a pitch for example, take charge of the outline, hold people more senior to you responsible for deliverables as well. The work doesn't decrease, but you have a lot more control of your life.
Analysts that make an impression are ones that a) really understand the industry, b) are technically impeccable, andc ) take responsibility / take charge. I want to see analysts working to make associates redundant.
"I want to see analysts working to make associates redundant" is a very pertinent point. Maybe your procedure was a blessing in disguise to get you on here for a while. Hope your health recovers soon!
What do you want to see associates working towards?
Great write up! Seems like you're the MD one would love to work for!
Thank you. In real life, junior bankers either really like or really dislike working for me. I work very hard myself and expect a lot out of people, and expect analysts to take a lot of responsibility. Not everyone can do that, but the ones that do, I take good care of career wise.
Everyone has different views, i personally believe that you cannot truly experience and be opinionated on something, unless you do something you are supposed to and do it to your highest level of potential. Many people do wrongful things and give their opinions negatively, even though they don't realize that they didn't cooperate with things and how they should be done. Thanks for replying!
Now really, I should go prepare for interviews...or I may never be able to use all the useful things i collected .
WIth regard to going international, what is the best way of doing so? Would love to work internationally, but my firm does not have any international offices to be placed in, I don't plan on getting an MBA, and I don't speak any other languages. Currently in corporate finance and would be interested in finding a way to spend a few years working out of the country for the life experience without sacrificing my career in the process.
In your situation, its very tough with the status quo. Move to a firm with international offices.
"Its a long game, stamina matters. I have never pulled an all nighter in my life. I hate it when people who work for me do. A great chunk of the battle is showing up, and you cannot burn yourself out. Its more important to be crisp, efficient and thoughtful than trying to be the hardest working person out there and burn out. People rarely care about facetime as long as you are equitably pulling your weight; output is much more important."
How do you avoid pulling all nighters, especially at the junior level? What if you're a first year analyst and the second/third year analyst or the associate on your team decides to pull an all nighter? You can't just go home before them. I'm a first year analyst, and I've already had to pull a couple all nighters.
What makes you think you can't go home before a second/third year analyst?
Exactly. Just ask them if there's anything you can/need to do instead of assuming the junior most person leaves last.
Great thread! Thank you for the information.
I am curious about this as well. I forget the economics term, but all nighters are kind of like that situation that is frequently presented in economics classes where two prisoners are in two separate rooms and the police tells both of them that the other one is cooperating with police, so each prisoner has to decide whether or not he/she should as well in order to get a plea deal or if he/she should simply no cooperate, but risk that the other prisoner did. All it takes is one analyst to pull an all nighter, and then all analysts do.
As I've said many times, take control of the process. Then you can dictate timetables better.