Traditional IB vs. ECM/DCM
Hi - could you guys please talk to me about the differences between investment banking and ECM/DCM? I'm specifically interested in the difference in exit opportunities.... thanks!
Hi - could you guys please talk to me about the differences between investment banking and ECM/DCM? I'm specifically interested in the difference in exit opportunities.... thanks!
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Career Resources
Investment banking Analyst: http://www.wallstreetwannabe.com/?page_id=184
vs.
Capital Markets Analyst: http://www.wallstreetwannabe.com/?page_id=468
Click on the "career path" for both.
Investment banking is more painful but you acquire more transferable skills like cash flow modelling. Exit opportunities from capital markets are limited as all you do as an analyst is prepare lists and charts. As a senior capital markets person, all you do is read the WSJ and regurgitate the words to IBD and clients
DCM V.S IBD (Originally Posted: 10/21/2007)
i have been working in a Chinese Commercial Banking group for 2 years. Our division is Debt Capital Market, and our main business is to issue corporate cp for industry clients(since corporte bonds issuing license is not granted to commercial banks in China),for some reason, our division do both IBD excuation(going to clients and make duly diligence and writing the related reports)and DCM(Distribution in the primary market),a complete cycle. my question is which filed should i pay more attention to? IBD or DCM? since both are in our business and one can only foucus in two of them. anyone can give me a suggestion, thanks a lot
Focus on DCM in China. IBD is of no significance.
because the interest rate in Chinese market is still managed by the central bank, and without further derivatives or other bonds/notes/Junk bonds that you can hedge or diversify you portfolios, its development pace is a little bit slower
the Chinese Debt Capital Market is actually segmented into different sectors by different regulatory authorities, and commercial banks only have access to corporate cp issuing at present, ABCP maybe under its way to invention, but i could not see further development, at least the sub-prime crisis may delay the introduction of the CDO.
IBD at least can give me an insight to industry and corporate finance, why not IBD but DCM?
Your description of IBD isn't what we spend most of our time doing anyway.
we mainly went to industry clients and made present interviews with their management teams, trying to understand and evaluate their corporate governance, internal control system, financial policy and writing the Duly Diligence, prospectus, Cashflow forecast and so on , and then submit these files to the regulatory authority , when approved, we can issue the cp for the client. that is what i do
PBnJ,
Great link, good description of capital markets and its role at a bank.
Stay in DCM or try for IBD? (Originally Posted: 06/07/2012)
Hey guys,
So I'm currently a first year analyst in DCM at a BB and while I like the people I work for, I've now decided that I would like to work in IBD at the same firm (or elsewhere).
My dilemma is this: given the current state of economy however and pending future layoffs, my group would probably see an attempt to move to IBD as a form of betrayal. I'm not 100% sure I'd be able to get into IBD (because of issues with headcount), and I don't want to throw away a likely third year offer in my current group to end up nowhere.
What do you guys think is the right move? I know I don't want to do DCM for the long haul but I'm not sure if the potential risk is worth it..
Why do you wanna leave DCM for IBD?
I thought DCM and ECM was IB, no? Aren't they just product groups?
looks like there will be a lot of issues with transferring internally. an option you have is to secure an offer in banking at another firm and potentially leverage it into an IBD role at the same firm if internal politics are that rough. pending layoffs is a real concern.
what i suggest is you focus on conducting an external job search.
to the other posters, yes DCM/ECM are a part of banking - but are different than Leveraged Finance / M&A / Industry Coverage in the sense they focus more on following the capital markets instead of running the day to day of deals (diligence, modeling, presentations to investors). a person can sit on a dcm desk their entire career, transfer to a sales/trading role or move into banking if the bank allows it.
ideally, you want to stay at the same bank for a while because laterals are usually the first to get kicked out when times get rough (as they appear to be getting now/have been since last year).
^ This.
Heard similar things of how DCM usually deals with more the markets, and especially investment grade debt products. Lev Fin teams might be embedded within a broader DCM name like Citi, whereas they might jsut do their own thing in other BBs. I think there was an article on M&I about Financial Sponsors, and the guy explains all the differences in FSG, LevFin, and DCM.
As an analyst, you will likely have almost no chance of transferring internally before your first two years are done. Many banks will allow analysts who have been offered the option to stay a third year to transfer laterally. In other words, look externally now, and raise the possibility of an internal move after you've received a third year offer.
The right person to raise the matter with first is the HR person who runs your analyst program. This can be a little tricky...some banks are supportive of transferring good analysts, others get very upset. I would get a "lay of the land" first and see if there's good precedent for such internal lateral movement. Ideally ask a friend who has done it. If there's no such precedent, you may want to stay silent.
ECM VS IB @ CS (Originally Posted: 02/05/2010)
How is Equity Capital Markets similar to IB, specifically at Credit Suisse? Thx
applying to CS, hope I get M&A. capital markets is same as at other places, its not modeling intensive and doesn't have as good exit ops. I would go for IBD first. You hear back yet from interview?
why do people call ECM/DCM "not IBD?" Banking involves IPOs, Debt, M&A, Restructuring, and Private capital raising. How is ECM/IPOs any less "banking" than M&A? Wouldn't M&A be considered not IBD as well then because its only one product?
That being said ECM is probably worse than other groups but why do people consider it separate from banking?
I think the situation also varies with geographical areas. In Asia, especially mainland China and Hong Kong market, ECM is a major part of IB businesses.
I didnt say it was separate, I said I would go for IBD first. Also your answer is because most banks recruit differently from capital markets and IBD, like Citi and Morgan stanley and some others I forgot. Go apply and you see
Summer Analyst Capital Markets 2010 Summer Analyst Investment Banking 2010
so they are separate, and usually the capital markets interview is all fit and a bit easier. I think DCM is more part of IBD since sometimes levfin is DCM related.
fembot thanks! i was just wondering in general since it seems weird to bucket capital raising as separate from banking since banking is traditionally defined as capital raising+advisory, but now it seems to mean pure advisory
To follow up on this, how is Sales & Trading different from Capital Markets groups?
MS ECM vs BAML IBD (Originally Posted: 02/09/2012)
Hey guys,
I wanted to ask your opinions about this case.
I've got 2 offers from which I have to decide.
One is in MS ECM and other is BAML IBD. They are both for SA.
Although I really would like to do M&A, I feel that perhaps switching to IBD would be doable in MS. I am simply a bit worried about the skill set one acquires in ECM.
What do you guys think?
Thanks a lot!
This really depends on several factors.
Are you target or non-target? If you're target with lots of OCR, you may want to lean towards BAML for the traditional IB experience. When recruiting season starts up again, your BAML name will get you other interviews for M&A or industry groups.
If you're non-target or simply don't want to go through recruiting cycle again, take MS and do your best to transition.
I'd check out the http://www.wallstreetoasis.com/wso-company-database for reviews. (Adding to them as well is much appreciated)
Depends on many different things...but possible way the fact that BAML is cutting down quite a bit...especially in IBD. They closed their entire Dallas office and laid off a lot of bankers cross country. Could be wrong but there might be a better opportunity for FT offer with MS.
The Dallas office was small and a lot of the reductions were in groups like the Middle Market groups which weren't producing a lot of revenue... it's a restructuring effort there, but some groups have had great success.
The question is really, do you want to do banking? If so, then take the banking offer. ECM is not going to get you anywhere easily without a ton of networking, and trying to take a job in another product group at a shop you perceive to be "better" only to leverage that to get back into banking is retarded. If you want to do ECM then that's a different story, but BAML's ECM would be better than MS's, and it just doesn't make sense to try to make the move from ECM at MS to IBD at MS, when you would have a far easier time doing a year at BAML in IBD and then you could likely lateral anywhere you wanted after that if you networked.
Curious, does this apply to Europe as well as US?
I will caveat that I don't work in Europe, but in the US, and I have limited interaction with our London EMEA team, but I think this would be true. I'm not sure of the strength of the ECM groups there, but you shouldn't take a job in ECM with the goal of lateraling to IB afterward, if you could get a job directly in IB to start with... it just doesn't make sense. That would be true anywhere.
IBD or DCM? (Originally Posted: 05/02/2014)
My friend has offers from these two groups at a BB summer analyst stint. Which would be better for her professional growth / hottest field to be in with the best future opportunities? Thanks :) and any explanation would help a lot!
IB, the skillset is more transferable than DCM.
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