Thinking about buyside before sellside even begins
I marvel at how many people in college are set on ending up on the buyside, despite having any experience (ie haven’t even done their jr banking summer yet lol). I understand it’s the path of most, but what if you like sellside? & it’s not like the lifestyle on buy > sell, and not every shop pays as high as Apollo, so what is it then? Hype, peer pressure, inability to abstain from the status quo, … ?
Would appreciate input from anyone who could help me understand this phenomenon. Thanks
I did an internship in IB and will now head into a PE internship at a UMM fund. I quite quickly realized that I did not really enjoy banking. The main reason was that I did not find it intellectually stimulating. You get very clear directions on exactly everything from above. The only things I had to figure out on my own in IB was how to design and present things. I also found that a lot of time was spent on things that wouldn't really matter in the end. For example, double-checking the first draft of an 80-page management presentation for formatting mistakes 5 times even though we knew we would probably end up changing half the presentation after input from management. I was only an intern and I understand that you get more responsibility as you move up. However, I did not see associates/VPs getting that much responsibility either. The VPs are pretty much project leaders, while associates are junior project leaders while still being hands on in a lot of cases. And when it comes to the MDs, they have a say in how to position the company etc, but are still executing the desires of the client. With that said, all of your analytical ability is spent on minor things such as "how do I put this idea into a nice figure on a slide".
In PE, you do not answer to a client so you can spend more time on the things that actually matter, rather than ensuring that the footnote on slide 63 is correct for the 4th time. You also have to think more on your own, which makes it a lot more intellectually stimulating. From what I've heard, you can also manage your own time better. You might work similar hours to banking, but you can control the hours better and you won't get as many "needs to be fixed in 2 hours" requests. I have friends in PE who can take a calm week at work if they want and make it up the next week.
Keep in mind that I've only been an intern in IB and haven't started in PE yet so my opinion might not be accurate.
You do know that you won’t be “presenting your thesis” to the IC as a PE analyst right? That useless PowerPoint / untimely request turnover thing builds corporate soft skills and most importantly gives you REPS. PE analysts really overstate how proficient they are at modeling…I’d only recommend jumping the buy side gun to students who have been able to rack up at least 6-9 months of IB internship experience through off cycle and summer opportunities so you can actually see what the analyst role entails.
Yes, for sure. I realize that I won't be the one making any calls in PE and that I won't be the one presenting to the IC. However, from my understanding from interviews and friends in PE, I will be given more responsibility. For example, a friend of mine who interned at a decent-sized PE firm (about 15B AUM) was given nearly full responsibility for market research on the deal. I also know others who at an intern level got to sit in on negotiations on deals they were working on etc.
I worked on the market overview section of an IM for a large deal when I was interning in IB. If the information was not copied directly from the CDD report, it was just pure and braindead data mining. "The VP wanted a chart with numbers on XYZ, can you find the raw data and plug them into the chart?". On client meetings, interns were not allowed at all in most cases. It could "look bad" if the client looked up your name on Linkedin and found out you were only an intern.
The extra responsibility is very present at EB/MM banks. Analysts are often the runs running the models from scratch, developing pages with insight from their own research (whether sources or pulled from the research team), on cam asking operational questions directly to the CEO of $200M companies so they can flesh out a model and so on and so forth. What you’re describing is exactly the BB experience, but you might shoot yourself in the foot thinking you’re getting a more hands on experience as a PE analyst w/ a fraction of the training/structure. This may not be the case in 10 years, but right now the risk reward ratio still isn’t that attractive unless you have tangible IB experience.
I agree. I also think that going to IB has a really good risk/reward because you are more or less guaranteed to get a great learning experience. You also have a lot of career options open for you if you decide that IB is not for you. It is because of those reasons that I would choose an EB/BB offer over any potential offer I might get from my internship in PE, even if I enjoy the work in PE more.
Bc people choose their career based on prestige, as dumb as that sounds. And once they get into the circlejerk of IB they want the circlejerk of EB and then the circlejerk of PE and then the circlejerk of H/W MBA and then the circlejerk of whatever the heck they read online, because deep down they are clueless on what they actually wanna do with their lives. Following what other people tell them they should do makes them feel better about being 28 and no clue on what they will do for the next 30-40 years.
Investment Banking only makes sense when you consider the long term. The salary itself doesn't come close to justifying the hours, stress and barriers of entry. That's why you see people obsessing about what they do after their first years of banking without ever having worked in it.
Sure but what about the people who stay long term?
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