I'm recently joining the valuation team and would like to know if I should ask for a transition into the transaction service team if my ultimate goal is IB in the future.
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Yes is the quick answer. Valuation tends to be very specific, and investment banking requires a much broader skillset. We seldom see candidates from a valuations background - it's just a bit niche. Transaction Services on the other hand is much closer to investment banking.
What about tax advisory services or does it have to be specifically TAS?
Not tax for sure (even more niche).
However, FDD (or CDD if that function exists) could be handy for moving to PE (not IB though to be honest). PEs like people internally who can critically evaluate investments and conduct thorough due diligence.
Thank you very much.
If I can't make the transition, do you have any suggestions on skillsets I can develop or any other things I can work on to switch to IB after three years in valuation?
I did valuations. I found it a lot more useful in terms of skill set. You are effectively doing fairness opinions all the time and you are gaining a lot more valuation knowledge than even bankers have. I was surprised how in a BB people are a bit more “high level” or you could say have more superficial knowledge of valuation. In a big4 you’ll be more academic. Bankers tend to look at where negations settle rather than theory.
I had a decent accounting background and frankly doing FDD wouldn’t have added to my skills that much. It’s audit x10. FDD would allow you to understand the P&L much better. You will get this doing valuations as well but probably won’t know very detailed accounting rules etc. Quite important as well - you will get deal exposure in FDD and not in valuations. On the other hand you won’t touch valuations at all if you do FDD so you’ll need to supplement that skill set in your own time.
Thanks a lot! I don't have any accounting background, would an ACA qualification + 3-year of experience in valuations be sufficient to get into IB? And do you have any suggestions on compensating for the lack of exposure to deals working in valuation :)
I had an ACA from audit (3 years) and then did valuations for 1.5. I think realistically if you start from zero you will need more than 1.5 maybe.
I would suggest taking 1 level of CFA at least. The work you will do will be quite transferable so shouldn’t be as hard for you. In fact ACA you might find harder as you won’t do accounting daily.
staffing wise try to get assigned to valuation of funds companies. It’s not a deal/transaction per se, but you will get exposure to how PEs think and their investment strategy.
dm me which big4 you’re going to. There’s a 25% chance I can give you way more useful info :)
If you are aiming for a long term career in M&A, both valuation and TS skills are highly valuable. But they can be relatively numbing and repetitive jobs. I think 6 months experience in both fields can add some value to your skillset. Sometimes I wish I had a deeper knowledge in, a.o., accounting principles or working capital adjustments when working on M&A transactions.
EDIT: btw at a big4 you could transfer to the M&A team, then jump ship to IB if that’s your end goal. That’s probably the easiest way.
Thank you very much :)
Currently in transaction advisory. Had 2 2nd year analysts leave to join BBs in the past year. In addition, working with a ton of alumni with my group at all kinds of top IBs and other real estate debt funds. Turnover in the group is crazy because of how much banks like to recruit from these roles at all levels.
Many folks have gone from TS/valuation to banking and ultimately to PE, including myself. Both are good skill sets so can't really go wrong with either if trying to go IB. Going straight into PE will be very difficult without M&A experience and seeing the entire deal process, which you won't get outside of IB and to an extent, corp dev.
Doesn’t the FDD team produce QofEs? If so, I’ve seen my fair share of inaccurate QofEs.
Lol, of course you d say so if it ain't favourable for your client.
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