Capital Markets on the Buy Side
Hey all - I’ve spent a few years in capital markets at the big banks, both on the equity and debt side. Have (surprisingly) gotten a few offers over that time for MM or LMM PE gigs that I just couldn’t justify over my current seat at the time. Something I am curious about, as I enter my late twenties (ignore the tag, not sure why it says I’m an analyst), are Capital markets jobs on the buyside. Candidly, I know almost nothing about those seats - from a work product perspective, opportunity set, and compensation.
Does anybody have 2 cents that they can add? Thinking roles like ECM or Private Capital markets on the buy side, as I’ve seen quite a few folks on LinkedIn in these roles and have never considered this as a “next step”, but I would like to better understand if maybe I should.
for buyout funds, almost always VPs or associates from levfin backgrounds. you basically just work to secure the best possible terms / run through grids all day with the banks / direct lenders. great lifestyle to compensation ratio. the senior cap markets guys often will get some kind of carry allocation as well. very nice career, although it is very legal heavy / technical in its own right. you will do zero modeling or financial analysis of any kind besides looking at paydown outputs to determine how the market will view the credit.
Appreciate the reply and sorry about delayed response.
This is very helpful - thank you. May I ask what this could look like on the equity side? I.e. at a growth fund, PE fund, or dare I say it at a later-stage VC fund (i know this is basically growth). My background is in ECM (albeit non-vanilla cash ECM) so that's the angle I am coming from.
I think buyout firms rarely hire ECM bankers into their capital markets team. The leveraged finance background is helpful as you’re literally raising debt for any platform deal and some times sizable add-ons. However, the private equity firm may do 1 or 2 IPOs (at most) per year so they rather outsource that work to bankers. I’m at a pretty sizable MF / UMM and no one on the capital markets / financing team has a background in ECM.
Agree with above. There are almost no transferable skills from ECM to buyout cap markets. Need to be on the debt side at shop where VPs run legal / grids.
Thank you both for the above. Recognize zero transferable skills from cash ECM to buyout - that said, I am at a MM bank (with surprisingly good deal flow / experience though) and I get staffed on a ton of private stuff - think growth equity (series B, C $120mm raise size +) as well as some special sits - i.e. raising private hybrid capital (structured senior / junior pref w/ maybe a recap of the existing cap stack).
I could be way off, and please do tell me if so, but would those skills transfer over better? I feel pretty lucky to get staffed on those projects vs. your typical IPO / follow on stuff. Further, I'd be open to non-buyout - I actually like the growth side a lot since I work on those deals pretty often.
Oh and happy new year!
The hybrid capital stuff maybe a little bit but hard to see how you’ll be competitive. The key of the job as already stated is probably closest to a LevFin syndicate desk (and that’s where a lot of them come from)
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