Think I Made a Huge Mistake
Long story short, I started off my career as an analyst at a solid BB coverage group in NYC coming out of a non-target undergrad. I was pretty content just having made it into investment banking that I wasn't really going out of my way gunning for top-bucket or hustling for PE exits. The job was hard enough as it was, and I didn't prioritize getting good M&A or modeling reps in, and I largely coasted by working on pitches, market updates, financings, a failed sell-side, and a half-baked buyside. After my two years were up, I struck out in a number of PE interviews and my main takeaway from this process was that I didn't have enough M&A experience under my belt to be a competitive candidate for the buy-side. So I took the A2A promotion, but ultimately found my performance starting to slip at work and thought by lateraling to an independent advisory boutique I could better credentialise myself in M&A before taking another shot at the buyside.
I think my big mistake was taking a lateral associate role in an energy / renewables / infrastructure group. I had some experience in transportation / logistics from my prior coverage universe, but the energy / renewables stuff is completely foreign to me, and I thought I did a good job emphasizing this in my interviews. Unfortunately, I've spent the majority of time in my new role working on the power side, and feel like I'm completely out of my depth here. I've had next to no training or instruction, and feel like I'm back where I was as a first year analyst staying up until 3am figuring out how to spread comps or use Factset formulas, except this time I'm figuring out spark spreads and heat rates in complicated models, and at 26 I just don't feel like I have the mental energy to be in this position again. I've found myself feeling some intense anxiety around my performance and incompetence to the point where I dread getting emails and hopping on calls, and feel like I'm leaning too heavily on the analysts below me.
I know this is a recipe for failure, and I don't see any way out of the power/renewables side for the next few years, and am even questioning my ability to make it to the one year mark, collecting my bonus and then quitting. I've been in this role for four months now, and have no idea what to do. I'm fantasizing about a $120-150k corporate development exit with flexibility and work-life balance, but I feel like I have no way to explain this M&A boutique pitstop without exposing myself as, for lack of a better word, a total fraud. Any advice here? I am seriously considering quitting, taking a month off to re-set and get my story straight, and then firing off applications.
Hmm, it's tough. You exhibit a lot of self-awareness.
Maybe you're not doing as poorly as you think. I mean, I know that -- even if you're doing a suitable job -- it's requiring a lot of work and stress on your end. But why don't you do a "check-in" with a superior you've been working with? Tell him/her that, after a few months, you like to check in with your superiors and and see if he/she would like you to be doing anything differently.
This way, you're not "admitting" that you're struggling... but it's sort of like an early mid-year review. And if they say everything's all good, at least that will maybe alleviate your stress level. And if they say something's amiss, maybe they'll have some tips for you regarding how you can do your job more efficiently.
What exactly are you struggling with on the power side? Power models are really not all that complicated, nor different vs other operating models. Spark spreads is just the spread between power prices and fuel costs. Heat rates determine how efficient the powerplant in using the fuel/feedstock, the lower the heatrate the wider the gross margin.
Could you actually explain how you walk through infra models? Explain all these terms like spark spread and heat rates, among others, are there any other similar terms you would deem important? I ask because I'm on a power deal right now and I feel super lost as well (first year analyst though)
spark/dark/quark spread
on peak/off peak/ATC
nox,sox,trona,gas adder, transports costs
emission credits
day ahead vs real time
FTRs, capacity markets/auctions, ancillary market
Thank you so much!
I don’t quite understand your thought process leaving a BB for a boutique that focuses on a totally new sector.
You said you thought by moving from coverage to an m&a shop you would get more reps to make you more desirable to PE firms? But you don’t seem passionate about PE at all.
Did your comp go up or down when you left the BB? Could you not have moved internally?
Easy, you proved you were competent enough for the A2A promotion. You then jumped to a new firm to focus on energy (a sector you’ve always been interested in). You now realized you’re no longer interested in sell-side investment banking and would like to move on to… buyside, corp dev, etc
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