Transaction services

Firstly, TS is quite wide and there are different functions within TS. In essence, it means any service related to a transaction. The main principal area of Transaction Services is the financial due diligence, so I'll assume your talking about that.

1) FDD is about analysing the financial implications of a proposed M&A deal. Not financing the deal or doing a valuation, but more like producing a report saying: "This is what we think of the viability of the proposed deal and this is what we think of the valuation done by insert investment bank. These are the risks and factors you will need to take into account going into and coming out of this merger, this is how any synergies will effect the company in the future, and this is what the company financials should look like in a few years time. You will also pick up some relevant bullshitting skills for IB because in TS you are always working for one side: if you're working for the buyer you'll manipulate whatever you can to make the target look as bad as possible, so as to help lower any valuation, and if you're working for the vendor you'll try to do the opposite.

2) As far as FDDs are concerned, which I assumed you're talking about, M&A is of course the closest thing in IB.

3) Career progression at big 4s are slower that IBs, so you have little hope of being a Senior Associate equivalent after 2 years. If you're taking chartered accountancy exams, which many people in TS do, you will probably have to qualify first. So if you have the choice, do a more IB relevant qualification (I think some let you take CFA) than CA. As a guess I would say a move to IB after 2 years is quite early, unless you have great contacts. If you wanted to move, say after 4 years, it would depend on the reputation of your TS team and your big 4 firm. Could I ask what firm and TS department is it that you have in mind? If you're somewhere highly regarded, you get some good deals on your CV, you are amongst the best in your group, you network well, and most importantly if there is market demand in M&A, my impression is that it is very possible, I would say.

Hope that helps

Foubert and dosk17 - big thanks for your opinions! Great input and very informative!

Foubert - you assumed correctly - I'm talking about FDD. Also, the position is with PwC.

I've been working in finance at F500 for last 3 years and would like to switch into IB. Of course it's not easy at all and I'm struggling. I'm almost done with CPA and started studying towards CFA. However it's still difficult for me to make the switch (too much experience for an analyst, not enough relevant experience for experienced hire). So the recruiter I'm working with came up with Big4 TS. I'm planning to do MBA (start in 2009). The decision I'm facing now is: - stay in the industry, develop within Finance there (get promoted soon to manager), do MBA and then make the switch OR - move to TS, stay there 2 years, do MBA and make the switch.

I don't know anyone who lateraled from TS to BB without an MBA. However, with TS background AND an MBA degree, it will position you very strongly for an associate position at an IB. I know a couple of MDs with TS backgrounds before their MBA.

Although I should clarify - what type of "finance" are you doing at the F500? Is it more accounting/budgeting type stuff, or more corporate development/strategy type work? If it's more accounting/budgeting, definitely go with TS. I think Fortune 500 finance + TS + MBA would put you in a strong position for Associate in IBD a few years down the road.

The most similiar IB group to TS is FAS. FAS does a variety of valuation services including purchase price allocations, etc.

What's the compensation for a 1st year associate in TS (FDD) at a Big 4 firm like?

I was there a long time ago, so I'm not sure what the going rate is. But it's low and not even a fair comparison to IB. Keep in mind this is still within an accounting firm. Perhaps someone else has an idea of the current salary is.

1st year associate in TS is looking at about 80K, and a possible 10K EOY bonus. In general, TS pays about 10-15% above the typical audit / tax track.

I thought Audit/Tax was ~60k/yr + bonus?

Yes, for fresh undergraduates, although most of the numbers I know are closer to 55K in salary plus about 4K in sign on. The above question was referring to associate pay.

I believe for PwC, fresh undergraduates are given the title "Associates". Usually, they do two years at the Associate level, then they get bumped up to Senior Associate. Different title system than IB.

I understand that, but assumed the question was asked about a position comparable to associate level in the IB.

Oh, thanks for the clarification. My question was referring to 1st year out of undergrad going into TS.

So what's the compensation for a 1st year out of UG going into TS like? 10% above audit/tax as well?

Thanks for the help.

I remember someone telling that it was US$55k or so. But that was around 3 years ago.

Would an internship in the TS division of a Big4 be considered as relevant experience by an IB when applying for a FT analyst position in M&A?

I just received an offer with a big four firm, 61k, 3k sign on in TS. I am excited to start. From what I have been hearing and reading, end of year bonuses range from 20-40% and raises are about 10% a year...nothing like IBanking, but it definitely is a good gig and one can learn a lot. Also a good way to build connections as the partner told me the group works with PE firms a lot. Travel is stated to be 30-60% of the month. Hope this info. helps.

Blatant congradulations, what area of TS are you going to be working in?

I am not sure yet...hopefully working a lot with PE though. Thanks for the wishes.