Which groups are ideal for laterals?
Context: Incoming SA’27 at MM bank (WF/RBC) and interested in private market investing longterm. I understand that the avenue to the best seats within the private space is much more accessible from the EB/BB seats, hence why I am considering either lateraling or rerecruiting for FT.
On one hand, M&A is ubiquitous and guarantees deal flow; but it isn’t as if I will be developing a differentiated skill set.
On the other hand, specializing within coverage could give me the opportunity for a deeper expertise, but deal flow is much more uncertain, perceived “prestige” is less than M&A, and I risk pigeon-holing myself.
Assuming no one group has an obviously horrible culture, what should I consider? What are some wise Monkey’s thoughts? Open to suggestions across the board.
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Product > coverage, typically, but your WLB will be shit. Product here means M&A / RX / LevFin.
Coverage work involves a ton of pitch work and group support that is not conducive to PE. That being said, a BB / EB strong coverage group is still an excellent placement (obviously GS TMT > most product groups at other banks, doubly so since GS does modelling in house at coverage groups).
If coverage is your only choice, try to go for a group with as broad a mandate as possible (Business Services, TMT, Industrials) and not a group with more bespoke analysis (Natural Resources, FIG, Infrastructure).
Thank you for your response and insights. Assuming I have all options on the table, which group positions me best for lateraling to another bank?
Or, would you recommend shooting for MM/LMM PE as a path to lateral to MF/UMM PE instead of shooting for a different bank?
If very early in IB career try lateraling to strong product or coverage group as I laid out.
If your bank isn’t that bad and not having luck with IB lateraling (you’ll likely add a year to your analyst career), aim for best PE shop you can get and yes you can lateral upward when junior, but it is difficult).
Why do you need a “differentiated” skillset? You’re entering a job where thousands of other people your age do the exact same work. If you want to do private equity, then you can’t beat an m&a skillset.
Imo it doesn’t matter if you go product or coverage as long as you don’t mind doing PE in that same coverage and you like it. Also assuming there is m&a deal flow and that group has a decent deal close rate. Otherwise, m&a groups will give you broad exposure to industries and you could pick and choose what PE seat you would want a bot more freely than if you were say a pharma ib analyst.
This is gold, thanks a lot.
Good advice.
You want as broad a skillset as possible to be most marketable and then shine as an individual. It’s a cool story to have a different background but firms want to make sure you have the table stakes technical abilities.
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