CS IBD vs Goldman IBD vs Goldman IMD

BTbankerlol

SandhurstJust to clarify, I think that everyone on this board is assuming that we're talking about US, and particularly New York City. I am, at least. What follows is a lucid and comprehensive dialectical analysis of your options, various considerations pertinent thereof, and so forth, which I have prepared to assist you in your decision.

I'd think that the "typical" (i.e., the standard WSO post-undergraduate "path") way to approach this situation would be to consider exit opportunities (to be fair, comparative exits can be understood as a mediocre proxy for comparative group quality). So, start with your long term goals - for the purposes described above (the "path"), you would want to take investment banking, since this is considered by the WSO consensus (perhaps with good reason) to be a better route to private equity recruiting. That rules out GSAM/PWM (which collectively comprise GS Investment Management).

Now you're considering the two investment banking opportunities at Goldman and Credit Suisse. I submit that most of this board would agree with the following, that GS investment banking places better into private equity than does CS.

So far, point Goldman. Everything else equal about these two offers, take GS.

But if they are unequal offers, it now falls to you to distinguish the details, and then weigh them based on your preferences. Here you dig into nuance, and what inevitably follows is a succession of increasingly small distinctions between options. It might be helpful to keep in mind that you should not “lose sight of the forest for the trees,” so to speak.

Are both offers for the same city? If not, which do you prefer? Are both firms agreeable to you from a quality of life standpoint (including hours, team members, etc)? If not, which is better? Are either (or both) of your offers to these two investment banking programs offers to any specific group(s)? If this is the case, then there are a few basic considerations to keep in mind - individual group reputation, individual group private equity placement, individual group quality of life, etc.

I think in general, holding all non-private equity exit opportunities considerations aside (as is customary when following the "path"), Goldman will win in nearly every case. It is possible that you might have an offer for an industry group at Goldman which is relatively weak, while your Credit Suisse offer's group is best on the street.

Another possibility is a variation on the last. Say your offer to GS is to a weak group (from a private equity placement perspective), while your CS offer is to a top placement (probably the M&A group). Keeping in mind that all Goldman industry groups conduct their own M&A, it is possible that being on Credit Suisse's dedicated M&A team is a more advantageous position than a weak industry group at GS, where you might not see as many M&A transactions (M&A deal-flow being a decent proxy for how well a group places into private equity), and almost certainly would see a comparatively inferior diversity of transactional experience.

Another consideration to keep in mind is if your investment banking offer to either Credit Suisse or Goldman might place you in a "financing" group (as they are referred to at GS - also known as ECM and DCM, and/or “Capital Markets banking,” etc.). With the exception of Leveraged Finance, these groups are generally understood to put you at a significant disadvantage with respect to private equity recruiting, since the work they do (and therefore the skill-set you'd acquire) are not considered to be as closely translatable to the work expected of a pre-MBA private equity associate. A strong priority, if this general type outcome is a possibility, would be to avoid it. So, if the Goldman offer includes the possibility of assignment to "Financing" within investment banking, while the Credit Suisse offer does not have a similar possibility, then it may be best to take the CS offer.

A final consideration which comes to mind is the opportunity to move internally within one firm or the other, after the summer analyst internship, from the group of your summer assignment, to another more desirable group. This is hard to predict, and so the "play it safe" calculus might be assume that you won’t be able to transfer, but still plan to try. For a practical example, it is perhaps a poor idea to take a "bad" industry placement at GS, over M&A at Credit Suisse, if done with the plan of transferring to a better group at Goldman.

I hope this helps. The foregoing discussion above should be tedious, and its conclusions mind-numbingly obvious. That said, “you never know,” and I would hate to have failed to help you address such a prosaic dilemma as you seem to be facing simply because I assumed that the relevant logical framework, pertinent considerations, and so forth were plainly self-evident. Best of luck!

This is a good post and I agree with what you're saying but I just want to tack something on - the "path" is retarded. It's a bunch of crap that unimaginative people latch onto and plan their careers around with no regard to what they actually want to be doing. There's this whole paradigm on this site that there is a certain way to do things, that some jobs are superior to other jobs and there's some kind of hierarchy that everyone should aspire to be at the top of.

That's just not how it works - being successful in finance isn't about diving into the meat grinder and gunning for the most "prestigious" name according to your idiot peers by checking every box you've been told to. Banking is an apprenticeship business. The name of the game is finding mentors who have carved out a niche for themselves and created intellectual property that can't be replicated. You then trade your labor to them in exchange for this intellectual property, which you use and improve upon to carve out your own niche.

Finance is huge. Huge. It's not just M&A, it's not just Goldman TMT or bust. Keep in mind that the highest paid people at Goldman aren't the MDs in TMT, they're probably FICC guys. There are tons of interesting, rewarding, and highly compensated roles that your average college kid (or even your average analyst) has never even heard of in every single BB. Take the financing groups at Goldman - yes, generally new analysts shy away from those because the skill set is less transferable to an LBO shop. Which is fair, it is (if you only look at their LBO funds as opposed to the other funds they operate. However - the special situations group that everybody loves to stroke it to on this site would be considered a financing group if it sat in IBD. Would you argue those guys are rubes? And anyways, BBs tend to make much more in terms of fees, even ignoring carry, off the financing and derivatives transactions associated with M&A than the M&A advisory fees themselves are worth. The reason banks emphasize M&A so much is that you can make a nice chunk of change on the transaction itself, about the same amount on the bridge financing, which of course you sell them a cap on as it's a floater, so you make another point or so, and of course when you include the currency swaps they had to buy because of the target's foreign subsidiaries, there's another point there, and then you take out the bridge with a bond deal where you get paid again. 3 years later the sponsor that bought the company exits via an IPO and you make another 6 points. That's why you do M&A - it drives financing business, who generate far more revenue in most BBs.

Anyways, as I alluded to before, it's ludicrous to argue that M&A is always the way to go if you want to end up at a KKR or something for example. KKR just pulled the trigger on their first CLO in years, right? What background do you think they're looking for in an analyst in that group? Structured credit or M&A? They're moving into the REO to Rental space, who are they hiring for that? TMT or RMBS?

What I'm trying to say is, there are a lot of people in this world running a lot of sexy operations looking for a lot of varied skill sets, don't put too much stake in following the herd or listening to what other people think you're supposed to do. After all, none of the people that the WSO crowd drools about working for did. The work is a grind and you'll never be great at it if you don't enjoy it. Approach these and all future offers with an open mind, and really think about who you want to work with, what you think you'll learn, and most importantly, who you want to learn from. Remember that in the future, interviews go both ways - you should tell your story, but they should tell theirs, it's as much an interview of the employer as it is of the employee.