Why do EBs have worse exit opps than BBs in EMEA/UK?
Hey guys,
I was fortunate enough to have received offers from an EB and a BB. To be honest, I really liked the EB way more. The people were more down to earth and friendlier and the pay is better.
Yet, many friends advise me to accept the BB offer. They insist that BBs exit opps are considerably better and I wanted to understand why.
Is it because, on average, BBs have more high profile/larger deals than EBs? (But what if you are in a group at an EB that covers a sector with large deals? Does that make up for it?)
Do recruiters typically screen CVs by selecting only BBs when people apply for PE Analyst/Associate roles? Or do the Investment Teams at these PEs ask specifically to recruit people from BBs only?
Or is it just because the analyst class size is bigger at BBs than at EBs?
Damn Centerview is really establishing itself in Europe too. Very interesting stuff.
Thank you very much for the information!
That's kind of the selling point of working for the largest banks tbh. Globally recognizable brand. While working for Qatalyst/Moelis/Laz carry a ton of weight for US-based PE firms that know these firms well and play in their core markets, I could totally see the perceived prestige and brand recognition dropping significantly the further outside of said EB's core markets one is.
The answer to this is probably strongly related to why EB's in general are weaker in Europe than they are in the US
In general, the EMEA market is driven more by actual experience vs. brand of group/bank given that you recruit for jobs with usually 1-3 years experience. So you will have done deals and gotten reviews by then. In the US, going by specific groups is basically a proxy for the same.
As such, many EBs in EMEA suffer from the relevant deal flow that would be attractive to large sponsors. E.g., if you are at Moelis, Evercore, Centerview, (PWP), you could very easily have done no deal by the first recruiting season after year one and potentially just some smaller stuff even later on. That can make it quite tricky to exit. At the same time, I would say that from a pure brand perspective, all these firms seem to be generally well respected.
In general, I would say that league tables in EMEA are a pretty good proxy for exits given the above considerations when adjusting for size of firm. Obviously then there are some additional considerations, e.g. some firms running leaner deal teams and some firms focusing on certain kinds of deals (e.g. RS, Jefferies doing MM etc.)
Does deal size really matter that much for exits, particularly for Rothschild which has very high deal flow?
Below thread of EMEA Recruiting Rankings may help. Not sure it is so clear cut in EMEA that EBs have poorer exit opps than all BBs, particularly for Lazard and Rothschild.
https://www.wallstreetoasis.com/comment/2940434#comment-2940434
Because most EBs have worse deal flow at a European level, hence the experience is worse.
And why do they have worse deal flow? Well both the fact that they have been around for far less (or their presence has been anecdotal), and the fact that some of them simply don’t have (strong) regional offices because they think the dynamics of the European Market are similar to those of the US market.
That’s why Lazard and Rothschild are on par with BBs, even above some. They have both spent years building strong deal pipelines through their regional offices, which then helped them create strong London European HQs
"years" carries a lot of weight here
Edited:
Given that i am just finishing my undergrad I may not be the most reliable person to answer this, however, I have already spoken to a few headhunters so let me give it a try.They advised me that PE institutions mostly care about the deal experience you have collected. Sure if there are a two guys; one with better/more deal experience but he comes from PWP/EVC etc. he will be looked slightly less favorably than someone from GS/MS/JPM, but having said that, as long as you are not from a GS/MS/JPM, the name matters less and deals become more important.
However, as already mentioned lots of EB's have a lot weaker presence in EMEA = hence less deals. Having said that if you work at Rothshield you are likely to experience many deals and will still be looked favorably at by headhunters. Moreover, even if you work at a BB you are not automatically guaranteed to work on a big deal. As you might know analysts are allocated in buckets and usually only the best performing analysts get to work on the most exciting deals. So unless you are absolutely sure that you will be that analyst, I do not think that deal size differentiates that much between a BB and a EB (e.g. PWP has done some 5bn dollar deals, which is larger than a few deals from a BB)
Lastly, it is important to mention that some funds have specific requirements. For example some top funds also hire almost exclusively from the GS/MS/JPM or from MBB.
All in all I would recommend to start where you enjoyed it best, unless you think you are going to experience significantly less deals. It is important to remember that PE recruiting is differently in the UK than in the US. In the US you usually have recruiting cycles that start up to 20months before you actually start as an analyst and it is the norm that people switch after two years into PE. In the UK, hires take place on a need basis. This means that you do not only start in June but all year around, consequently recruiting cycles are a lot shorter and often only take 8-12 weeks (differs for some larger funds though). You also have to keep in mind that you don't have to switch after two years, in fact, the sweetspot is two-four years (less than two years experience you are not experienced enough / more than four years and you are often already a VP at the bank -> consequently you are overqualified for analyst/associate positions and would have to take a huge pay cut - and no its usually not possible to join a PE firm as a VP without prior buyside experience)
Your take on Apollo is wrong, they do take people from EBs.
The above about APO is straight cap. Im a former EB banker in London and got interviews at APO (HH gave me choice between PE and HV group), KKR, TPG, Centerbridge and GS PE.
Im at an EB atm (ignore title) which also has alumni at APO
Edited
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