I see the first thing many say about M&A is that it is modelling intensive – highly technical.
Please correct me if I’m wrong but from my personal experience, while this is true to some extent, M&A is a lot more process-oriented than analysis-oriented. What you really do as an M&A banker is you handhold your client throughout the M&A process and be the coordinator for all parties involved, especially for sell-side.
You do get to learn a lot as an M&A banker though as you get to see all major aspects of a company as you go through DD, and you get to be involved in C-suite level situations as M&A is often a C-suite decision. It is a comprehensive experience and hence the wide range of exit opps. In terms of financial analysis alone, I see other groups / jobs like LevFin, FSG or Financial DD at big 4 tend to be more technical.
I’m in APAC region so it might be very different elsewhere, and this is from my personal experience. Feel free to discuss and please correct me if I’m wrong.
I work in M&A and do agree with your view on M&A not being just about modelling all day long. Technical part however also includes making sure you’re not getting screwed with closing accounts, W&I etc. You need solid accounting, legal and finance basis to understand it all. Next to that you are also asked for fairness opinions, joint ventures, etc meaning more valuation work.
How 'technical' your alternatives are (LevFin, FSG or Financial DD at big 4) I seriously doubt. Depends also on your definition of technical, but they don't spend much time modelling stuff. If you want to make models all day, look into quant roles.
by technical I meant financial analysis since it's finance. and yes M&A is more than just finance. for me it's like the "business administration" major where you deal with a bit of everything
Sounds like you’ve experienced process sell sides (i.e. auctions). They are highly process-oriented, with the only modeling being the sell-side model (which is essentially reformatting the management numbers) and (maybe) a illustrative LBO for staple financing,
Any other type of project would likely be more technical - bilateral processes, buy sides, minority investments etc. That’s because there’s more scrutiny of value and more negotiations between parties (client management and client board, client management and other party) that different analyses can aid.
True, Lifestylemna, sell-side is often largely project management and juggling. Back in the day I should have joined a circus!
I have a question for the OP. Are you looking to get into something that's more modelling intensive, or looking to get out of it?
Lifestylemna - thanks for the insight. It makes sense to me. M&A for me has been pretty much "glorified sales", basically I try to get the deal closed with the highest price possible in a sophisticated manner. Other kinds of assignments seem to have different angles to them.
M-and-A - I don't necessarily try to get into something modelling intensive. I enjoy corporate finance overall, including my current line of work. I don't do modelling alot but it's been a very comprehensive learning experience which is nice for me. For the topic I'm trying to understand how the industry works.
depending on bank, sponsors can be not very technical if the LBO goes to M&A. LevFin is only technical (modelling heavy) at banks where the group stays in IBD and not cap markets - ubs, cs, baml, jpm
I’m in coverage at one of those four, and even with LevFin within IBD, I’ve never had that team do even two minutes of work in the model.
In pitches, they are responsible for making sense of the indenture.
When we’re live, their responsibility is all about filling in technical, process-oriented details (eg. Timeline, specifics around covenants). For anything related to the model, the LevFin MDs come to the coverage team without CCing their own junior teams.
Thanks both for the insights. So I guess it really depends on the groups at different banks. I've heard coverage was about business development / relationship management while product groups are for execution. But it seems that's not always the case.
Hi TheSleepyBanker noticed you were from APAC - care to shed some light on the industry there?
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