Why are analysts so keen on jumping from IBD to PEs or HFs? Aren't the hours basically the same? Or is it the salary potential?
Sorry if this has been asked ad nauseum, I'm new here and although I've spent a good amount of time looking for the answer to this, I haven't found anything specific enough.
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For most people, the idea of actually making investment decisions on the buyside (PE/HF) trumps the service/advisory nature of the sellside (IB). In many cases, the hours may be the same (or often less unless you end up at a sweatshop which most MFs are at the junior level) but the content of your work is generally more intellectually stimulating. Sure, you still have endless hours of modelling, memo/deck drafting, etc. but you get to think about companies in a much different way (i.e. should we invest, how can we improve operations, how can we lower the overall cost of capital to drive growth, profitability, returns, etc.) as opposed to how many different/meaningless changes can I make to a deck so that I can try to help my MD sell a company, raise capital, etc.
Besides the above, the biggest draw for me was that assuming you are able to climb the ladder there is tremendous upside potential in the form of carry participation and salary, opportunity to build an expansive network of investors, etc.
Thanks. That really clears it up.
Which is more popular for analysts to move into, PE or HF? And do you know why? And are there any benefits to staying in IBD?
It really depends on the interests and skillset of the analyst. PE is a much more transaction focused industry meaning that you spend months on acquisition due diligence, raising debt, structuring legal agreements, etc. whereas your typical HF role is much more market focused as far as generating investment ideas and monitoring your positions. Some people enjoy the advisory nature of IB and like "selling". As you move up the IB ladder it becomes more about building and maintaining relationships with iclients and some people enjoy and/or are better suited for such roles.
Thanks again. Are there any resources for learning the "ins-and-outs" of IB/PE/HF and finance in general? I'm still in high school haha. Thanks.
I would start with the FAQs. Then Mergers and Inquisitions. Then read some books.
Any books in particular that you'd recommend?
//www.wallstreetoasis.com/faq/what-should-i-read-if-i-am-interested-in-in…
//www.wallstreetoasis.com/faq/what-should-i-read-if-i-am-interested-in-trading
//www.wallstreetoasis.com/faq/what-should-i-read-if-i-am-interested-in-pr…
//www.wallstreetoasis.com/faq/what-should-i-read-if-i-am-interested-in-he…
etc.
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