Also pointing this here since I want to reach some people who currently work in Commercial Banking.
I work at an Upper MM PE fund and am in the second year of my Pre-MBA Associate stint. Prior to PE, I worked at an elite strategy consulting boutique (think LEK/Parthenon) doing PE DD work.
I'm thinking about leaving the PE industry for a few reasons: * The job is much more about jockeying a process than high-level strategic thinking about investing. I feel like I got a lot more of that in my previous role than I do today. While this might get better by the time you're an MD, it seems like the VP role is even more about process than the Associate job is. I’d like to be in some sort of role where I’m working with teams and businesses in some sort of advisory capacity * While PE might be better than banking in terms of hours, everyone still works a lot. My guess is that this is table-stakes for taking institutional money: I would be surprised if any partner at a serious PE firm (i.e., not a family office) works less than 60 hours a week on average. The VPs I work with are regularly working 60-80 hours a week. I think my goal is to be in a role where I’m working 35-55 hours a week. As long as I’m pulling down $200K at some point in my career, I think I could be comfortable. I’m not particularly motivated by money * I’m much more excited about $5-10M EBITDA assets than $100M+ EBITDA assets. as I enjoy working with businesses that are “people-sized”
Strategy consulting seems like a better fit for me than PE for a variety of reasons, but I think work/life balance at the partner level in a consulting firm is still pretty brutal. A PE-investing role in a family office might also be a good fit, but I fear that I will continue to sit at a desk and run process all day.
Am I crazy to look at Commercial Banking or Community Banking instead? I think I would aim for some sort of sales role where I am advising and working with smaller-sized companies on securing loans. Full disclosure: I don’t know anyone who does Commercial Banking, and I don’t want to cold email for informational interviews if this is an obviously terrible idea. Really appreciate any thoughts or feedback
Hi PineappleExpression,
I am currently a 3rd year Credit Analyst within the Commercial Real Estate Lending group at a regional commercial bank, $38 billion in total assets. We focus exclusively in the U.S. and China markets. I've interned with the Private Equity Lending group at my current bank as well. Our private equity lending team lends out to some of the top funds out there. We're pretty under the radar. My team also works with Real Estate Private Equity funds too. $5-10M EBITDA is my bank's sweet spot for all lending deals.
Commercial Banking is definitely much less prestige compare to IB, PE, HF. It's one of those overlooked area in finance. Most people tend to look down on it. However, if you're looking for a good work-life balance (40-55 hours per week) while doing legitimate work and stay in finance., commercial banking will be a good place for you. Many MD's at my bank or other top commercial banks (First Republic, U.S. Bank, Union Bank, and etc.) all came from IB or PE backgrounds, but they all have families and they value that. In commercial banking is all about getting things done. No one wants to be here unless there are deals to work on.
As you have mentioned, you're looking for more of a sales role, in commercial banking, the roles are split between Relationship Manger and Portfolio Manager. Relationship Manager purely focuses on bringing in deals. You can get compensated very well if you can bring in big/good relationships because your bonus is based on the the volume of deals that you originate. In places like First Republic Bank (Top CRE lending) and Silicon Valley Bank (Top PE Lending), the relationship managers make a lot of money.
Given your background, you can definitely land a good gig within flagship group at a top commercial bank. At the end of the day, it's really depends on what you're looking for in life.
I would love to connect with you to learn more about your PE experience. I can share with you everything that I know about Commercial Banking or the work at a commercial bank. Look forward to connecting with you.
East West?
I am a SVP Commercial Market Manager at a Community Bank - in the $2B-$5B asset size.
Certainly the work-life balance is very nice. My comp is about $310M all-in - with the cash component being around $250M. I am also in a very low COL city (albeit nothing is too cheap in California) so my comp relative to my city puts me in like the top 1%.
It makes for a very cushy life. And because I am in a smaller market where there isn't a whole lot of growth potential - I am working 30-35 hours. Hardly even see 40 hours anymore. I also play golf a LOT with clients and prospects and am able to spend a lot of time with my family and kids (ages 3 and 4).
Those are all the pluses.
Negatives are it can get kind of boring. Especially if you are in a tier 4 city where deal flow is anemic. Spend a lot of time twiddling my thumbs - which I would rather be super busy.
Deals aren't sexy at all - although some can get way more complicated. Certainly more complicated than the IB folks will ever give us credit for - but you can see some fascinating stuff. Obviously I am not even close to Capital Markets being at a Community Bank. It is all pretty much senior secured 1st position debt.
At Community Banks - you may also have some exposure to having to do Retail/Operations stuff which absolutely sucks - but hey, it is what it is. They are paying me enough. I try to avoid any of that stuff like the plague and focus on my commercial activities.
Progression is either being moved to a larger market that has a bigger book and lending team as the Market Manager - or hit EVP status. Some go the Credit / PM path - but I prefer to be making deals, not criticizing the ones that are already brought in.
Not a bad life - just not super sexy and can be a tad bit boring.