Is the day-to-day for MD's in DCM different than in M&A? If so, how?
I imagine it might be less stressful because you tend to see more deals throughout the year instead of trying to hit on a few big ones. And there is also steady revenue streams coming in just from being a passive bookrunner.
But on a daily basis, does it still involve being on the phone and traveling to see clients all the time, or is it different?
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When I worked in dcm my MD came in for 4 hours every week. Based on my understanding a lot of traveling and meeting clients. Sometimes will be on calls and let the VP pitch and answer questions and mostly WFH
One of the best job ever if you have no career ambition to climb up the senior leadership ranks. All they do is update clients on IG market environment/pricing/ratings/cap structure/ability to syndicate $x amt etc.. it’s a repetitive process, you don’t learn much after 2 years on the job. There is also really nothing much to pitch as well since IG is almost like a flow business - most clients just go to whoever can underwrite the most at the best price. Even if they choose to give their business to a specific bank it is always due to their relationship with a banker on the coverage side. A DCM revenue is a function of the bank’s balance sheet and has nothing to do with a Md’s capability/relationships
To your last sentence, if DCM revenue has nothing to do with a MD's capability/relationships, how does someone even prove themselves enough to become MD? Is it just all about politics?
I mean I know even though banking is touted as a meritocracy, in reality it is very political at the highest levels. But by what you're saying, it sounds like it would be even more so for DCM in particular.
“A DCM revenue is a function of the bank's balance sheet and has nothing to do with a Md's capability/relationships” - eh, no.. best efforts basis underwriting. Trading desks commit capital.
Have you ever asked ur self how they get pricing btw? and like how you actually get mandated? And like what you do when public markets are puking bonds and no one wants to buy? Or what format on bond issuance, reg s or 144a? Is it backed by something? What? When will the debt be paid down? What happens if we can’t syndicate the entire deal? Which clients should we approach today with a financing deal? Legal DD (ex. Issuing in Luxembourg vs Ireland? Termsheet? Covenants etc etc)? Tax efficiencies? How do I present this to client - PowerPoint + model output?
M&A is definitely more BS than DCM as in MDs and JRs are doing 0 value add and 0 substantive work. Thus more political…. I.e. FaceTime exists, people that work there are generally less sharp in their brain and more “perception type of guys”.. I mean what’s the percentage of successful mergers/acquisitions 5-10%?
the way to generally look at all MDs = credit/equity Sales guys on a trading floor but with actual knowledge about their area.
speaking from a trader perspective here
From my experience a good MD is able to generate deals from "thin" air instead of being on the rotation due to the lending commitments, that's pretty much from my perspective. A good MD in DCM is an actual advisor for big corps when the treasurer/CFO relies on the perspective of the bank of a potential opportunity. Had an example during my stint in DCM, big RE issuer contacts my MD (RE IG market was super choppy atm) and was asking for colour on the market and their opportunities, MD was able to advise them to go ASAP. Got mandated literally on the spot through a casual/update call and the deal got executed the next day.
Other way which is quite prevalent I would say is that a good DCM team is able to cross-sell their DCM products to generate extra fees such through creating green/sustainable bond financing frameworks.
How is your example with your MD different from what the above poster wrote about "All they do is update clients on IG market environment/pricing/ratings/cap structure"? Maybe it's my ignorance but it still sounds pretty simple to me, certainly a lot more straight forward than an M&A pitch.
Might be very similar, but it's a slight difference. Sometimes your MD/Director just gets called that its their turn to be an active bookrunner or you pitch out of formality knowing its your turn potentially soon. In this case the client was just trying to gather information and went to our MD for advice what he thinks and based on that he decided to go as the MD said if you wanna do it do it now. My point being the client trusts his judgement a lot which got him the deal instead of being just the contact person to get the bank's UW commitment.
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Surprised that no one here has mention sector specific difference. An MD in SSA is going to have quite a different day-to-day than someone covering Oil & Gas companies.
I personally work in FIG DCM and a lot of what we/my MD does is around structuring of bonds and the best format for the client.
Although I appreciate at some banks the coverage team would be doing that but at least at my bank we do it.
Do you know what the day-to-day is like for an MD in SSA? I think I would be more interested in that than FIG tbh.
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