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
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.
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.
Lower East Side piping out NYU chicks with their bros from college.
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
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.
NYC/London 1M a year -- > 500k after tax 2 kids school = 120k --- > 380 left Rent for 3br apartment = 120k --> 260 left Expenses = 10k month --> 120k ---> 140k left 140k x 10 years (~7% return...very optimistic these days...) -- > 2.0M
2.0M x 7% = ~130k year retirement income....good luck with that in NYC/London.
Doesn't seem very attractive given lifestyle trade-offs required.
If this was all happening in Cleveland...then yes, it would all be a different story.
[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]