40% paycut
Hi All. I'm a 3rd year analyst in a tier 1 city that's feeling pretty burnt out. I'm not interested in PE and would like to go the corporate development / FP&A route. For others who have made the switch, am I crazy for considering a 40% paycut from my IB base salary for a 9am to 5pm role in a fast growing business looking to build out it's FP&A team?
I want the work life balance very badly but to take a paycut that big is a hard pill to swallow. Has anyone made a move like this and have any feedback?
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How important is a very strict 9-5 to you? Corp dev will pay a little more and provide better optionality down the road, but you'll still be working IB hours on occasion. Corp strategy might be an option too, even IR or AM.
FP&A is more of a dead end than corp dev comp wise. They are basically managing the budgets, helping accounting close the books at month/Q end, forecasting revenue for the next year etc. Also, many of my friends have been burned here - "fast growing" companies especially those that think they're the next tech unicorn can slurp the life out of your WLB, diligence that part carefully.
Ultimately any of these will be a large pay cut from IB, but take a look at your VPs/MDs and whether you want that life. At some point there's more to life than money, and a lot of people do the calculus around your age that they are fine making low 6s for now and having their life back. The new banking raises make it harder to leave, but did that incremental few hundred in your paycheck actually make your life any better?
I’d take baby steps here and do corp dev at a reputable pe portco. It won’t be 80hr+, it might be 60, it might be 40, but you might find 60 with a team you like is actually what you’re looking for after all. And if not, logical story to go back to IB.
all I’m trying to say is, you seem like you’re coming from a place of burnout and running away from something you don’t like rather than something you do like. So keep your options open. There is a reason you made it to IB to begin with - don’t confuse burnout with a sudden lack of ambition.
Here is my issue for all these people that want to move from banking to corp dev or something other “easy” job.
They are not always easy. You can have a bad boss. You can work in a bad group. And just because you’re not making lots of money doesn’t mean your new boss won’t want good work product.
Everyone works hard. Teachers, short order cooks, construction workers, police, fireman, etc. the difference is they make peanuts compared to us.
There are easy jobs in banking if you really want it. Go work at Mizuho or Rabobank or Soc Gen. You get close to street pay and you’re never a lead bank, so there’s not much stress.
Banking groups with a great lifestyle, where you will take a pay-cut vs. IB but can provide you career for life and typically 9-7. All of the below involve no modelling and no IM/endless books which is always the cause of a bad WLB.
- Asset based financing (i.e. ship or aircraft lending)
Caricaturing but it’s all about the asset LTV rather than creditworthiness of borrowing group. Upside: you do deals and you get to do DD to see how the aircraft/ships production side and take a LinkedIn pic with a bigass hull behind you
To be clear, not talking about Transport IB here which is completely different
- Export Credit Agency (ECA) financing
ECA guarantees bank against borrower default, bank funds deal but takes no credit risk. You do a bit of legal negotiation, a bit of pitching, and by the way, ECAs are all state-owned and take 9 weeks of holidays so nothing can happen during those times.
Downside: can be really quite boring and everyone who does this tend to stay there for life
- Credit Risk
You review credit application from any financing group (leveraged finance, project finance, the above etc.) and tear it apart. Your KPIs incentivise you to turn down every deal (if an underwrite fails, it’s on you, if a deal goes through and the bank makes $$$$, you have no upside)
Upside: good hours, job for life
Downside: small bonuses, everyone from the front office hates you cause you turn down their deals
- Investment Grade Acquisition Financing
In my view the best compromise- still very interesting but given counterparties are Inv Grade it’s a much better version than Leveraged Finance. Sometimes called Strategic Acquisition FInance. SG’s group for instance is viewed to be the best in the bank which is a bit of a joke in my view…
Downside: you have to work for SocGen
- Leveraged Syndication
Good mix between Capital Markets and Origination. At the heart, this is more a sales position but you still need to understand the credit you sell. Can make very decent money and everyone is out by 6pm.
Upside: you walk around the floor all day without shoes and with your headset speaking to investors about deals you only read 2 paragraphs on while playing the putter
Bumping. This thread has a lot of good anecdotes on life outside of high-finance even with the recent salary increases. Keep the pros-cons coming. Great thread.