Why are you guys still here?
I'm having trouble wrapping my head around why people still continue to pursue IB year after year. I'm currently a senior in college, and I was also sucked into the IB groupthink in my sophomore year but thankfully did not end up going that route.
It seems like such a raw deal. Recruiting is rough, hours are just awful, the pay isn't even that great, and the work is neither meaningful nor fulfilling.
I pivoted to working as a fundamental analyst at a hedge fund/HFT. Not only was the recruiting process just way easier (simple brainteasers, probability, market qs -- if you can crack IB you can crack this), but the pay was so much better (3 digits an hour, housing, free meals, etc.) and the work so much more fulfilling. I can not stress how much easier recruiting for HFs/HFT shops was compared to IB. The most I worked a week was 45 hours. As a first-year FT, I'll be cracking 200k base.
Even other careers like tech seem so much better. There just seem to be so many better options than IB. What am I missing here? I understand that there's some degree of prestige involved in becoming an investment banker, but how important is that really? I don't understand why people keep throwing themselves at this industry. I also understand that for many of you guys the exit is to PE, but realistically, what proportion of IBers will actually be able to exit? And isn't PE just as bad as IB?
Can you walk us through a process a little of recruiting for you role? Did a soph internship at a HF but they don’t give return offers (said they only hire former bankers FT). Really loved the work and would like to get an idea of the process
Thank you!
…
They definitely give return offer, what’s the fucking point of internship if they don’t give out return offer. It’s a nicer way of saying, you have fucked up so no offer for you.
HF definitely not easier if you’re talking about P72/CAP/MLP. I’ve had offers from 2 of these and a top BB and the former was a much more rigorous type of assessment
The equity analyst programs at the market makers are a fair bit easier if you have basic finance knowledge and are decent at EV brainteasers though. The potential comp ceiling is generally thought to be lower than discretionary L/S
I think you're thinking of the more traditional HFs. For instance, I thought my interviews at DESCO and BW were much easier than IB. Comp not too shabby either. Not sure about equity analyst progam comp but I interviewed at Citsec for their fundamental analyst program and it was a much better experience than interviewing for IB
Ah yeah, the traditional L/S programs are a good few levels above IB in difficulty imo
The citsec equity analyst grad process is probably a few orders easier than citadel associate program tbh. I did the equity analyst process for SIG and found it pretty easy compared to P72/MLP types
>I'm currently a senior in college
You have too strong an opinion of the pros and cons of IB vs. equity research for a guy who hasn’t worked a day in either job
Yes, that is why I structured my post as a question. It also explains why I asked 5 different questions about IB in my post! Questions (as indicated by the ? symbol or words like "how", "why," "what," where," "when," "who") are typically used when someone is looking to find out more information from others. Often, questions can also be preceded with what the speaker already knows or thinks in order to receive information that is more relevant or direct.
Hope this helps. I think your Nobel might be coming in the mail soon
I’m still in banking because I couldn’t land the HF jobs
What shops exactly are you referring to here? I guarantee HF interviews are not easier than banking ones so I can only imagine you're talking about HFTs and given you're using both then I imagine we're talking Citsec? Either way doesn't matter.
Be serious for a second. You're implying that these jobs are easier than banking in every way, implying that basically less than a monkey could do these jobs.
Do you really think they're paying low 6 figs out of uni for lower than monkey work? How often do large corporates ever pay the most junior people they have in excess for no reason? Have you ever considered that perhaps you a) got lucky, or b) are more gifted than you think or are letting on? Like do some critical thinking here...
Regarding tech and all the rest, these are not new points and I'll refer you to the 10+ threads already on the topic. I actually don't disagree with you, there's so much more out there than IB and even finance but if you can't fathom at all why people are doing banking, you're being disingenuous.
IMO, some people join for the wrong reasons, others actually find the work interesting or are consciously using IB as a stepping stone to what they actually want to do. I find what I do to be really interesting at a macro level. I could see myself staying in RX or pivoting to something else distress related because of this. I don't mind the hours (now at least since I am young), and the pay is certainly not bad where I am at. Sure, there are higher paying lower hour careers (like what you do) but I am not interested in the work so I would dislike that even more. Also, IB is just a great stepping stone / brand builder on a resume, and someone who did not go to an Ivy such as myself (or some other elite school, I guess mine would be classified a low semi-target) did not have the alumni or opportunity to interview at firms like that. Lots of reasons to go into IB.
Tech - I would hate coding. Tried it, hated it.
Research - Boring.
Obv everyone is different, but those are my reasons.
Ty for response!
Echoing the person above.
I find the work fun, I learn a lot, most people I work with are great people and I hang out with them during my spare time as well.
Would I want to do it for my entire life? Hell no
Could I ever imagine doing research? Hell no, way too boring. Same with tech
Does that mean I look down on those who do the above? No it’s just not for me
Bro thinks research is more fulfilling than working on deals😂
Also congrats on no PE exit opps and job security
If you don't want to do it, you certainly don't have to. Not saying that to be snarky. If it's not for you, then I'm not going to persuade you otherwise. For me, my skills are more verbal than quantitative so those brain teasers for hedge funds you're talking about would not come easy to me. I don't know anyone at a legit hedge fund who would consider their interviews easy even with a strong quant or programming skill set. One guy I know at a hedge fund was a former software engineer at MSFT. I wouldn't be good in that role. IB plays to my strengths as far as working in a team and doing essentially high ticket sales.
Saying there are other jobs that pay well is true but also kind of stating the obvious. Being a NFL quarterback pays well but that's just not going to happen. I'm playing to my skill set.
Hop on as the topics are interesting vs the rest of the web. IB is still a great career path and frankly better than most. Tech seems a bit more culty than IB IMHO. Odds going from school directly into a HF are low.
Will bite and give my 2 cents as a jr who (for now) plans to stay in banking for a while at a top group at a MM bank.
1) I’ve been given an enormous amount of responsibility at an early age. I find the work fulfilling and walking a CEO through our model pretty cool
2) people I work with are great. Hang out with coworkers in spare time like other posters have said.
3) the work we do is meaningful. Being MM means we work with a lot of founder led / owned company’s. For them, the deals we do truly are life changing and mint a good amount of millionaires. Even for larger PE backed deals, the exit / sale is still an extremely important milestone for the business.
4) I’m at a meritocracy based shop. Like many others, I proved my worth handling the menial tasks and was gradually given more and more interesting / important work
5) I don’t necessarily find the buy side that much more appealing. The grass isn’t greener and they work the same hours we do and send emails late at night / on weekends
6) The pay is solid. Even if I pivoted to a “normal” corporate job. The folks there making equivalent money in senior positions are still working a lot. Maybe not banking hours, but more than your average Joe
7) in my limited experience moving up the ladder. The hours get a bit better as you have more people under you. The stress changes (reviewing and making sure everything ties, new business, etc.) same as any other job as you move up
do you have any friends in PE/VC? what did they say about their experience, etc. just trying to gain more insight into other peoples perspectives
Most kids these days would probably work at a HF over IB all things being equal (because the pay per hour is good), but they probably don’t for a few reasons:
They don’t know about it
Also, I’ve been out of the game for a while but I think you’re downplaying how difficult it is to get a HF/HFT job. Back when i graduated (10 years ago), the people who went into these fields were brainiacs who had an uncanny gift for those quick math/brain teaser type questions. Not everyone is great at those (including myself).
There are not many careers out there straight out of college that (1) hire the numbers IB does so opportunities are relatively plentiful, (2) pay mid-6 figures, and (3) let's face it, technically undemanding.
Sounds like you got lucky with your HF gig, so congrats. Not everyone has that opportunity. What HFs do you see hiring 100-analyst classes? For a lot of my peers who were saddled with student debt, interested in business, and need an early career kickstart, IB was a fair choice.
If it's not for you, it's not for you. Get off your high horse.
To be very frank, you have pretty limited real-world perspective as a college student (though I suppose good that you’re asking the questions). The Associate 2 in MM covered some good points re: the aspects of the work and client advisory that that I agree with and also find enjoyable
But zooming out beyond the work itself, and just looking at a long-term career path, banking has certain advantages as well. Career progression tends to be much more straightforward, and often within your control - do a good job in your current position (or sometimes even just be mediocre depending on group/bank), and you move up in the ranks. With that comes a fairly notable comp increase - an A2A can easily be making $500k+ as an early VP before their 30s, with a reasonably high probability of getting there if they’re decent.
Volatility typically is lower than other finance paths - of course it’s possible your bank/group has a terrible year and RIFs but if you’re one of the above average performers, you have a good chance of being fine, with a reasonable number of other banks you likely can jump to. Point being you have a fairly high probability path of getting to high six figures and not a bad shot at making MD and into the 7 figures (though that promotion is less certain). Importantly, you can often make it by just consistently putting in effort, doing a good job, and are not heavily reliant on luck or some natural talent.
While I don’t know the other finance career paths as well, I have spent enough time with friends who have gone down those routes to know something. Taking your HF path for example - of course it’s great thinking as a junior analyst who is just coming in, and has no real responsibility, that you’re getting comp’d well with much lower hours. But as you progress, you will need to take on more and more ownership of investment ideas and eventually portfolios to progress in your career. That means you’re ultimately evaluated on consistently making the right calls. Mess up a big call, even if it was potentially due to something that was out of your control? You may get fired for it. Your PM messes up? You may get cut too as part of their team. LPs redeem due to overall fund underperformance? You may also get let go. While you technically don’t have to spend a lot of time on the desk, you need to constantly monitor your investment decisions - that means making sure you don’t miss something that happens off hours, reading prospectuses / news articles in your off-time to see what additional info you can glean to modify your thesis and make sure you’re timely in your reactions to changes. None of it is mandatory, yet because your job relies on you making the right calls (and being more right than other investors on the street), these are things you likely need to do. In many ways, you always have to be plugged in because the market is extremely time sensitive
Don’t get me wrong, some people love this environment - to many extents enjoy the riskiness aspect of both their day-to-day job and their broader career. But don’t trick yourself into thinking there’s no tradeoffs here - HF is probably one of the lowest job stability careers in finance
Great take appreciated this. As you've spent some time to get to director in IB, curious what your perspective is on IB vs. PE or VC in terms of 1) client advisory vs. buyside (investment), 2) career trajectory/performance (due to buyside being based on carry/fundraising), 3) work environment of sell-side vs buy-side (which is more collegial)? and just your general thoughts and having peers/friends
Caveat that I of course have no first hand experience on the buyside, so just limited to what I’ve observed outside in / what friends have been willing to tell me
What jobs are these that you’re talking about? I’m deep in the finance swamp and have never heard of this type of job that you’re talking about. I like money and freedom bro, hit me up
I would look into either fundamental analysis jobs at HFTs or non-traditional HFs (Bwater, Desco, etc) with more accessible interviews as compared to places like Citadel or P72
MONEY
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