Where do Most Investment Banking Analysts end up?
There seems to be a lot of talk about just breaking into Investment Banking on this forum, given its target demographic is young college students and freshly minted analysts I can see why that is; However, I would like to know how many of these analysts make it to senior positions in IBD/PE or HF/AM.
Do most IBD analysts go on and make a career in high finance or do the majority end up in project management/corporate development/corporate strategy type of jobs.
Thanks
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Very few analysts go on to become banking MDs, PE partners, HF PM, etc. Most will end up on the corporate side, at start-ups, or doing something outside of finance.
Thanks for your insight.
I am curious how many positions there are in Investment Banking, Trading, Research, Private Equity, Hedge Funds, and Asset Management. Correct me if I am wrong, the sentiment I get from these boards is that there are 90-120 Investment Banking analysts per Bulge Bracket class. There are 8 BB Banks that gives us 960, lets round to 1000. I assume there are around 20 MM banks with a quarter the needs of BB banks in terms of new analyst hires. Would it be reasonable to say that there are 1500 new analyst positions a year. It appears that IBD is the most common career out of target business schools. Do Trading, Research, PE, HF/AM tend to expect their recruits to stay with them, thus less recruitment? I am not aware how many analysts the other divisions recruit. Do you have a ball park figure?
I have no idea to be honest.
Well, I interned at a large bank in Research. For perspective, there was ONE intern, yes one, for research, compared to at least ~30-35 banking interns. So if you assume 1500 new IB positions a year, I would assume 1/35th of that for research. Rough estimate.
When would you say the highest rate of turnover is for IB analysts? I am a graduating senior and have a great lead with a middle market bank. I have spoken with HR and they told me I am in the pipeline to fill analyst positions in the event of any turnover. Bonus season for the bank was on Mar. 1 and I have not yet heard. I am willing to wait it out, but I am just curious as to what I should expect regarding a timeline. HR sounded very confident that these spots open up every year and that it is just a matter of time. Just trying to get a better idea as to when that may be!
Usually it would be shortly after bonuses.
Consider that many bankers may end up as Executive Directors and not MDs as well. In my group are about 6-7 lifers at the ED level with ~20 years of experience. They don't work too much, probably bring in 300-400k, and generally have a good life.
I've also seen bankers hit up big4, consulting firms, private companies and some kind of head person. But yes, I agree the general sentiment is most do not end up in the sexier exit opps.
It's just like most things in life. When we talk lottery, we talk the highest prize. When we talk entertainment, we think of the most famous in each industry. But most end up somewhere in the middle
I like that way of thinking- Shoot for the stars and you'll end up on a mountain.
300 - 400 seems VERY light for an ED, not even mentioning one with 20+ years exp.
Do you work at a small boutique / regional office?
Prob BO/MO My dad is in a similar position
I'm mid/late-career. I just counted up the 20 analysts that I keep in touch from my BB class. Out of this small sample, around 40% went into corporate / entrepreneurship and 40% is split between HF, PE, and banking. The remaining 20% did something entirely different like going into non-profit, law, family business, etc. It's not exactly 40/40/20 but it's pretty close.
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Lower East Side piping out NYU chicks with their bros from college.
Where do most BB analysts end up long term? (Originally Posted: 05/26/2014)
I know the question sounds a bit simple at face value but with the pyramid structure of IB/PE and the competitiveness of applicants, where does your average BB analyst in a mediocre group end up 10-15 years down the road? Theres a lot of talk about what analyst end up doing for the rest of their twenties, but not a lot of talk about the long-term paths that IB funnels into.
I get that the most common immediate exit is PE, followed by HF and VC and to a lesser extent Corp Dev and entrepenuership/start-up. But pretty much everybody doesnt want to stay in IB, obviously a lot go to PE but in a pre-MBA associate role with post-MBA PE jobs more selective with more applicants. From what i can tell, VC and HF follow a similar structure.
I realize everybody is different and some stay in IB, some want to stay in PE but cant, some want to start their own business, some leave finance entirely..but what is the most common long-term exit?
So are the majority of analyst in corp fin, PE, IB, etc.??
What happens to fish after you flush them? Will there be solar roads in the future?
I'm equally curious as to where all the analysts who make the jump to PE and HFs end up. It's probably too early to tell, since the huge growth in those asset classes is a relatively new phenomenon, but they can't / don't all end up partners and PMs, or at least I suspect not.
Hell
18 years out.
10% banking at the MD level at top firms (I include the ones that made MD at top firms and then took some big $ guarantee to go to a lesser firm)
10% banking at second tier firms who didn't make MD at top firms (most EDs in banking at top firms get pushed out if they haven't crossed the rubicon after years 4 and 5; this isn't necessarily true in DCM, ECM or S&T)
5% banking at tiny boutiques / hanging up a shingle
5% partner level at top tier buyside
15% partner level at smaller buyside
10% sub partner level at buyside
15% family business (mainly the internationals)
10% c-level corporate (or on path thereto)
10% non c-level corporate (with no path thereto)
10% random
This is spot on. I'm 5 years out of IB and I'm seeing similar dispersion amongst my peers. A lot of them are still bouncing between these categories (myself included) while they are figuring out their plan.
What's your sense of the typical income range here? Even if Analysts' dreams of being a big swinger IB or PE MD don't pan out, it looks like there's a good shot at having a pretty comfortable life.
Seems like really promising stats and impressive for your class (class of 2000). Adjusting for the assumed 35% that aren't super high earners (family business / random / non-c level), ~65% probably cracking 7 figures.
As finance is a lot more of a mature industry today, with democratization of information and the internet at large, I'd be curious to look back on the class of 2018 to see where they've gone 18 years from now. My guess would be the number of 7 figure earners probably takes at least a 50% haircut to your number.
Assuming family businesses are large or even mid market, these folks could be cracking 7 figures too. Any successful entrepreneurs in your cohort?
Most of the "family businesses" are very large conglomerates in emerging markets that my analyst classmates inherited. It was that sort of class.
No successful entrepreneurs. A few who are trying to get there but not there yet (its really hard, even after you raise a couple rounds of capital, you're really just making your VCs rich).
Remember Class of 2000 dealt with the dot com bust right when we were finishing our analyst programs which made promotion and exits harder and the financial crisis right when we were really getting to the big earning years, so I think it will be smoother sailing for the class of 2018. At least I hope so. I like my analysts and want them to do well!
I left the industry almost a year back. Since then, almost half of my team has been laid off. I think there is a bit of self selection that is apparent in these posts (are you going to remember your successful analyst friends or the unsuccessful ones?). There may be a good percentage of former analysts making over 7 figures through W2, but they are usually located in in large cities where cost of living is very high. The UK releases the number of employees making over a million euros (aka code staff). At the bulge brackets, it represents roughly 10 percent of front office staff.
Even after making 7 figures, it will be very difficult to save a substantial amount. At the MD level, you'll incur substantial expenses that come with raising a family (Private schools run about 50k a year in a city like New York, 50 percent taxes, etc). The average tenure for an MD is usually 11 years before you are suggested to "retire." How high do you think your net worth will be at the end of your career? Income is just a number; there's a reason why the only Goldman Sachs employees who qualify for a GS PWM account (20 million liquid) are mostly the pre-ipo partners.
There must be good percentage of former analysts making "7 figures," but none of them are truly wealthy (30 million +) unless they are high up on the buyside or founded their own firms. If you go down this path, would you be happy knowing that you could work your whole life for a bank and be worth 5-15 million? Unfortunately, in the world we live in today, an amount like this will just allow you to live an upper middle class life. There are many small business owners who are worth this much in smaller cities, had happy lives, and didn't have to endure the difficult lifestyle high finance requires.
I wish someone had told me this earlier. Yes, as a business owner you will make "less" but you will have a substantial net worth through your business/investments. If you are risk averse, high finance/corporate is a great path. However, from someone who came from a family of business owners, the choice was clear to me. You live one life.
Maybe it’s just me but your post seems so out of touch. Making $1M a year is 20x the median household income in this country. And yes I’d be happy to know I worked a whole career and I’m “only” worth $5-10M. Almost half of American households have no retirement savings and 29% of households with a HoH age 55+ have no retirement savings or pension.
[In retrospect, best not the discuss money as openly as I did before thinking twice, but I do think you are underestimating a few things]
This is so cool. Assuming this is relatively constant across analyst classes/decades, this is proof that people, in general, go into banking and come out with the best business education possible.
This reminds me of an old bankerella post where she compiled some data to get at the path of people that start out in IB. Makes for an interesting read:
https://www.wallstreetoasis.com/blog/what-banker-careers-really-look-li…
WallStreetOasis.com I remember that post well.
https://www.wallstreetoasis.com/blog/what-banker-careers-really-look-li…
Can't believe that was '12... holy shit
hominem mergersandacquisitions78 MMBanker14 @jzplayinggames"
Are these figures from Bulge Bracket and Elite Boutiques not middle market correct?
Top tier investment banking firm. I suspect the term Elite Boutique has outlived its usefulness. I doubt Ken Moelis or Blair Effron or Ken Jacobs would say they work at a boutique.
I agree.
I work at one of your direct competitors (if not your bank) and we refer to ourselves as "an advisory firm" or a "bank focused purely on advisory." Haven't referred to banks as elite boutiques since I was in school.
I was analyst at a top bb group in ny several years ago (early 2010s)
15% top HF 20% top Mega fund PE post MBA 15% mid HF 25% MM PE 10% banking VP 10% other corporate / start up 5% other
wow this seems like an especially finance-focused class of analysts. More people in my class have left the industry
If they left the finance industry, where did they go?
I recall reading an article written by FT a few years ago. You may find it interesting
https://ftalphaville.ft.com/2015/08/05/2136229/just-what-happened-to-th…
I was in banking for 5.5 years. In Western Europe, people tend to do longer stints than in the US. Small(ish) to mid(ish) market (think sales between EUR 50 million and 500 million.
I made the transition 4 years ago and am now Head M&A of a mid to large sized retail chain (think EUR 30bn to 40bn).
People constantly over-estimate how much Wall Street salaries are nowadays, especially the buyside. If you want $1mm you're better off in tech than finance.
What non-finance positions in Tech generally pay >1M? Out of curiosity, not contention.
Just like all finance positions over $1mm are generated via carry/equity, the same goes for tech.
Most have equity in their businesses, or own significant stock packages. Even at already public companies i.e. Tencent, Netflix, Facebook, etc.
There are also positions where you're head of a large corporate's major new development, such as with autonomous driving or machine learning.
One example: http://www.post-gazette.com/business/tech-news/2016/03/07/A-year-after-…
Very high level engineers (Principal level and above at Google or equivalent), data people, researchers, designers and product people (e.g. Group PM, Director PM etc) at top tech companies or unicorns.
For a position like the above, comp might be: ~$200-300k base, 30-40% bonus, $500-800k+ stock vesting that year. As you can see, the vast majority of comp is in RSUs for big companies (including private unicorns).
Pretty much every VP in a technical/product position at a BigTech/Unicorn tech firm also makes way more than a million.
Founders and early employees in high growth and high potential startups can also get pretty substantial equity which could average to a more than a mil yearly comp if amoritised.
It's important, however, to bear in mind that very few people make it to the high individual contributor levels or into executive management and very few people end up cashing out from a startup. The vast majority of engineers and PMs will hit mid-level (~senior) and stall at $250-400k total comp whilst some manage the next tier which is staff at $400-600k. Or if they're at a startup, just get their base salary for that time period.
Only the top 1% or so will hit senior staff or principal or higher (i.e. $600-800k minimum).
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