When seeing people answer why they want to work in IB/PE, I often hear them say, "I like deal-based" or "transaction-based work".
Honestly, I've never understood what people mean by that. I feel like I'm being very dumb, but what characteristics does "deal-based" work have? What type of person would enjoy it and what type of person wouldn't?
I feel like this might be a dumb question, but indulge me.
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Skin in the game vs. lack thereof. Put another way, fee-based work as opposed to risking your own money to build something.
I'll take a stab at this - it means that your work is compartmentalised into discrete and unique chunks, albeit with similarities, and each chunk has a fairly well-defined start and end point. That's in contrast to, say, hedge funds or equity research, where the work is more of a continuum. The work in IB / PE might look much more different from one year to the next that for a hedge fund manager or research analyst.
As for why it might be attractive, it offers (A) A sense of closure or achievement - similar to when you finish a good book, as a bit of a rubbish analogy, and (B) Variety, where you might be working on very different transactions in different sectors, geographies, or with very different motivations or people. It keeps things fresh too, always working on some new company or sector.
It has downsides too - you'll never really become an expert in the same way that a research analyst or hedge fund manager should about their companies or strategies. And while you might move to new transactions, that could mean both great and exciting transactions, or painful, drawn-out deals that can and do fail.
Thank you, very clear
Deleting because toxicity
Ngl this seems edited by chat GPT
It clearly was – & it's irritating.
Whole lotta non-sense
it means pragmatism (vs. general curiosity/theory/interest/what-if thinking).
example: I like to prepare financial models (theory) vs. I like to prepare financial models where I need to check 30 times some numbers, get some seniors feedback to adjust some entires, and approach it realistically so as to be relevant (and not for masturbatory purposes) = deal-based work
another example: I like to buy companies (theory/idealization) vs. I like to manage and coordinate many shit that is involved in buying a companies because of the adrenaline it gives me, etc. (pragmatism) = deal-based work
also it's a way to enforce their position in the idea that "I can speak of work because I worked on it - I have direct experience". A student saying "deal-based work" would come across as strange because he never got exposed to the real work behind a deal.
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