Hi all,
Curious about the work that teams such as GS Principal Strategic Investments and JPM Strategic Investments do. Would a FIG IB background be helpful for these roles? Is the work comparable to corporate VC/growth equity (maybe like Paypal's fintech VC arm) and a respected exit opp post-banking? What does compensation look like? What role do these groups play in people's career trajectories?
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Principal Investment in BB as a Major Business? (Originally Posted: 08/25/2007)
Merrill Lynch just annouced that it will invest a bunch of money in an Indian coal mine, and even promise to buy all the coal production for the first year. All the investment are from the principal of Merrill itself.
And Merrill already has strong principle investing group in equities, debts and real estate. For mines, infrastructure and other hard-asset related principal investment, MQ is also a giant.
Goldman Sachs, Morgan Stanley and almost all other BBs have strong principal investment team. Goldman is famous for its successful investment in ICBC, and its private equity investment in Asia. Last year when I attended a campus event of GS, one ED said: "Everyone's dream is to become a principal investor." Is that true for all BBs?
It seems that buyside business, including IM, PWM, PE and VC are becoming more important rather than IB and S&T in many BBs. And what about Principal Investment? Shall it be more and more important, or it is just a current trend? Furthermore, which department is closest to Principal Investment (if the professionals want to make a change), IBD, Research, or IM?
IM is principal investment (it's just a mutual fund). IBD guys generally go to PE/private side of the bank, S&T guys much more likely to go the prop side of the bank, and then their are the in-between principalling that take from both sides of the banks. Ofcourse principalling is better, it is the buyside on the sellside (PE/HF) and that's what everyone wants to do in general. Still better pay on the buyside, the banks will never pay same $$'s to the principalling groups as the PE/HF's do
Bulge Bracket Principal Investment Area (Originally Posted: 04/21/2008)
What is a "principal investment area" of a firm? I know BBs like Goldman and JPMorgan have PIAs, but the functions seem to vary from firm to firm. To my knowledge, you can have everything from real estate PIA to natural resources PIA. Merrill has an energy principal investment area as well (Merrill Lynch Commodity Partners). What is the common denominator?
Thanks everyone.
The PIA area is the private equity arm of a BB. Essentially, these group put up some balance sheet for focused opportunities.
Sometimes they do it alongside clients. Goldman Sachs PIA was apart of a larger successful bidding group for the TXU deal in 2006/7. Google search an article.
The hours are better because of the nature of the work. On the buy-side, you make the hours for the bankers. Consider the following: An acqusition client calls you the banker on christmas eve to let you know that they have recieved an offer that demands a response within two days....Merry Christmas.
Alternatively, it seems to be a little more predictable on the buy-side because since your buying things....you more in the driver seat than your advisors and bankers.
For a young person, remember you want to learn finance first, then investing. You might want to learn about as many transactions as possible and not only LBOs. The value is the experience which create exit opps. Executing the same type of transaction over and over again has a quality of diminishing marginal utility and also excerbates your risk in times of reorganizations. I'd hate to be the kid that only knew lbo models in this market. I'd probably be wishing I knew how to do FIG valuations for secondary equity/debt/mezz offerings. Build a foundation. Avoid the fads and Rat race. Manage your risk.
Um, working with portfolio companies gets you a wide variety of experiences in finance. It's not like analysts at PE firms are only learning about LBOs. All of them are assigned porfolio companies where you're operating from (almost) a CFO perspective.
Plus, PE finance is no longer only about LBOs. There's a lot of creativity out there.
Principal investment division (Originally Posted: 02/09/2009)
I know what princiapl investment means. Investing with the firm's own money. What kind of distinct skills are needed, or you can learn from this division when you get the chance to work, other than somewhere else?
I think it has no difference with other trading activities, except for the characteristice of the money itself. Maybe, you could be more risk averse, or I guess more risk "aware", since it can dampen your equity.(Duh~~)
But, I want to know some practical things like, While, S&T division requires the staff to be a type whatsoever person, principal investment trader is required to be a blah, blah, blah person.
I can see that it may require more responsibility, and high-status person in the firm engages in the transaction, but don't give me those kind of facts, but I rather want some qualitative and quantitative requirements for the position. And I want to learn some skills you can gain, like for example, if you have an experience working at a VC as a researcher, you may have been exposed to some unique valuation models to better give judgements to venture capitals, if I'm right...
HElp!!!!!Please!!!Thank you!!!!!God blesses I-bankers!!!!!!!!
-ability to speak coherently -ability to choose the right forum when given a list of a few
JPM Principal Investments - Several questions (Originally Posted: 11/17/2009)
Any current IBK analysts have any information on this group other than whats on the JPM website?
How easy is it to get into from 2nd or 3rd year IBK analyst?
How does the quality of work compare to the ususal megafunds?
How much work compared to megafund, compensation...
They had a intern from HBS, not sure what his backgroup is. Comp is lower than megafund, pretty solid rep.
The intern from HBS left. The hours are 9am-late night. The head of the group is legendary, and you're going to get an amazing experience if you can get in.
They purchase pipelines or tolls and give it to the prop guys to trade, or they work to assist clients on various deals etc... They have a very strong reputation.
BAML Global Principal Investments group (Originally Posted: 02/10/2015)
Does anyone know exactly what the BAML Global Principal Investments group does? It sounds like it is internal PE arm. Anyone have more insight into this group?
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bump, interested as well
S&T - Principal Investing? (Originally Posted: 01/16/2009)
The S&T division of most banks is fairly expansive and I know that certain groups within the division also partake in off the balance sheet investments and take equity positions in particular asset classes. GS, for example, has some of the proprietary investing groups in the S&T division. Barclays has a commodities PIA that sits in S&T. DB has a complex equity group that does principal investing. Do other bulge bracket investment banks have principal investing groups that sit in the S&T division? If so, what are some of the better groups on the street?
dont have an exact answer to your question, but most banks are scaling back on prop desks and most prop desks have been obliterated with lay offs (i know specifically DB credit and CS prop)
Goldman has also been burned very very badly. Also, its pretty difficult to get into most principal investment groups. A lot of them don't actually have an application process for undergrads- you have to be selected from among the pull of S & T ers.
I was told by a current 2nd year trader that at his BB, wherein the past they would pull the top traders into their prop groups, they now keep them on flow desks. They've also pulled the top exotic traders into groups like etf's and other more vanilla derivatives (this is for Equities). I wouldn't plan on working on a BB prop desk anytime soon.
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