Why does IB require such long hours?
I have noticed a lot of posts in the IB forum regarding really bad WLB, long hours, and overall just an extremely demanding job.
I’m fairly ignorant on the industry in general since I come from AM and would like to learn more about why the job is so brutal regarding long hours and really what the work of an analyst entails that demands that.
In my case, I’m fairly new in my line of work and most of my first year stuff is just training and shadowing, grant it, I get paid very little compared to IB lol but it seems like you all are doing some serious work from the start.
We are client facing which means in every transaction we adhere to every client's beck and call and often create more work for ourselves by MDs who are insecure about their ability to get deals over the finish line and add a whole bunch of largely ineffective discussion materials / analysis that the client will glance at for five seconds and then say in the meeting that they actually only wanted to talk about the valuation page and then get off the phone or on the other end you have the MDs who are generally shit and can't keep a client to save their life so they make it your problem by creating all these mass unnecessary materials so they can actually drum up a pipeline for themselves that you're lucky to receive .001% of despite handling 95% of the actual work at your year end bonus. Don't forget this dynamic is replicated at each level, with the associate sucking the VPs dick trying to look like they can run a book (inserting pages the VP never asked for), the VP sucking the MDs dick so he can perhaps build a "relationship" with his clients and the MD sucking royal dick to the client, all potential clients, and all clients not worth the effort…
This, If MDs could actually be insightful in their materials then the hours would not be nearly as bad.
Don’t forget materials built w the intent of “relationship building” (re: general state of the industry updates, pitches w/ 30 1 page profile ideas and excruciatingly refined summary pages) that everyone knows will go nowhere with no real meeting time set but VP wants a “shell” (which means everything is done except NPI that VP will pull out of his ass and exec sum) for first thing Monday (it’s Thursday at 5:30pm btw)
Industry updates are the worst. Was in a non-coverage group where we would semi-routinely do industry update books to send to a bunch of companies. As if some bankers w/ no experience in a given industry are going to tell guys who have been operators in that industry their entire lives something they didn't already know. But you gotta look like you're smart on the industry before these guys restructure and inevitably either hire Evercore or someone w/ actual quals in their industry.
Lol, so effectively, it's blue-collar prostitution.
So like the comment above, there is the internal team's fault and also the client side.
Let's say a CEO of a company wants a company profile/marketing material by Monday morning meeting. This means you will be working the weekends as not only you need to create the profile, but get signed off by the associate, VP, ED, and potentially MD. A lot of turns and comments. This alone would take several hours in general.
Or client wants some number crunching done by tomorrow A.M., but he gives this notice at 8PM because he forgot and just got home and phoned the ED. You do some number crunching here and there and then get approved by the associate up to ED, but then you notice some numbers do not tie up or the model spits out weird numbers that are illogical -> you spend multiple hours figuring out why this number does not tie to other number and etc, you have an all nighter at hand.
Of course examples above are not always like this. Company profiles can be done in a hour and get signed off without any comments. Your model might be simple enough to trace the precedents easily. But as it gets more complicated and deals get bigger, the more stakes at play.
A lot of it has to do with a false sense of urgency, I want it right now for no reason. I have an MD that like to promise immediate deadlines to clients when they didn't even ask "when can I have this" or "how long until that is ready", just arbitrarily promises we'll have it to you this afternoon, evening, in the morning, etc.. I've actually had to stop him on calls with clients and tell him and the client the deadline he promised is not possible and it will take X amount of time. I've had to do this on more than one occasion and it's embarrassing when it happens. There can also be very demanding clients as some of the other comments have mentioned and it is quite honestly a failure on the part of the MD when they don't manage client expectations properly.
Holy shit lol
How does this dynamic work though, wouldn't your md get super pissed, you might be correct but that would be directly hit a person's ego.
He's generally fine with it, like many MDs he doesn't actually know how long it takes to complete tasks. I do my best to be respectful about it and not make him look completely incompetent in front of clients. He's a very good MD, just doesn't understand timelines.
I agree with everything mentioned in this thread, but I wanna add that you also have an endless line of hardos willing to sign up to be an insecure MD's bitch, so there's no reason to change and find a more efficient way to do things. You have a lot of "back in my day, if I had to do it, so do you" boomers still in the industry and a lot of "I'll spit and swallow, whatever you need" hardos that believe they're in the "navy seals of corporate America" and take pride in being a corporate simp. A lot of these people have little to no self-worth.
This is a great add
Second this
Above pretty much covers it, will add the amount of OCD-level detail shit that goes on in IB versus other corporate roles (such as AM) is plainly ridiculous.
There can be 10 banks pitching for the same deal, they all offer more or less the same advisory product, so the MDs try to have the absolute best presentation.
It can be 11pm on a Sunday and the MD decides you need to change the color red in every instance across a 60 page deck.. or create a new bespoke PPT page with 5 private companies whose financials you don't have and have to dig up from corners of the internet... or the new VP shelled out a 25 page deck, the team spent a week making the entire thing, and then the MD wants to go a completely different direction and your work goes to waste
In AM and other industries, there is a balance of "is X analysis worth the time it'll take" as well as longer deadlines. in IB it's create first, ask later... can easily spend 12 hours on a weekend building a page that gets instantly killed.
I’ve been at it for 2.5 years and I still have no idea.
We’re paid some pretty large fees if a deal goes through and we certainly aren’t curing cancer or doing anything that complex. We’re paid to be available and let a board or some c-suit justify a transaction by saying, “see, we paid expert financial advisors $10mm to make sure shareholder value was optimized.”
To make everyone feel better about that we push around a lot of paper no one really wants or asked for.
cause there are a lot of dicks you need to suck. it takes time.
your MD is the client's bitch, and you are the bitch's bitch :D
One part that was left out is the shear amount of process work involved in a broad sellside auction.
As the sellside advisor, you have to deal with all the potential counterparties:
If it's a broad process that could be as many as 50 parties interested in the deal. So that means you are tracking contact with 50 different parties, turning 50 different NDAs, sending out 50 separately watermarked CIMs (assuming you don't use a data room for the first round), setting up calls / answering preliminary diligence questions with 50 different parties etc.
Multiply that by a couple deals (plus all the pitch work BS) and it eats up a majority of the day.
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