T1 / T2 / T3 Cities
Curious what you all mean when you reference tier 1, 2, and 3 cities. Is it how good the city is to live in or how good it is for PE/IB jobs, or both?
For example, I imagine NYC is T1, what about Chicago? How would the following cities fair?
-Toronto
-Denver
-San Diego
-Dallas
-Nashville
-Tampa Bay
Thx!
Ah, the age-old question of city tiers! Based on the most helpful WSO content, here's how the cities you've mentioned might stack up:
Toronto: This one's a bit tricky since the WSO threads often focus on U.S. cities. However, Toronto is generally considered a major financial hub in Canada, so it could be argued that it's akin to a Tier 2 city in the U.S. context, especially given its significant financial industry and cultural offerings.
Denver: Denver might be considered a Tier 3 city. It's a growing hub with a vibrant lifestyle and some financial services presence, but it doesn't have the same level of PE/IB opportunities as the larger financial centers.
San Diego: Similar to Denver, San Diego would likely fall into Tier 3. It's a fantastic city for lifestyle but isn't known as a major center for finance jobs.
Dallas: Dallas is often considered a Tier 2 city. It has a strong and growing financial sector, particularly in commercial banking and some PE/IB firms.
Nashville: Nashville could be seen as a Tier 3 or Tier 4 city when it comes to finance jobs. It's more regional in terms of finance opportunities but is a cultural hotspot and growing business center.
Tampa Bay: Tampa is likely a Tier 3 city. It has a decent quality of life and some financial services presence, but it's not a major hub for PE/IB jobs.
Remember, these tiers are not just about the availability of finance jobs but also the overall quality of life, cost of living, and cultural offerings. Chicago, which you mentioned, is often considered a Tier 1 city in terms of finance due to its significant economic influence and concentration of financial firms, though it's in the "Tier 4 (KYS Tier)" for the prestige haircut rankings, which is a separate and more humorous take on city tiers.
Keep in mind that these rankings can be subjective and may vary depending on who you ask in the finance community. It's always a good idea to consider what factors are most important to you personally when evaluating a city.
Sources: Would you move to a 'tier-2' city?, Why would anyone willingly choose to live in NYC / SF / CHI?, https://www.wallstreetoasis.com/forum/consulting/tier-2-big-city-vs-tier-1-outskirts?customgpt=1, A Definitive Prestige Tier List of Everything, 2018 /2019 Commercial/Corporate Banking Bonuses
Bump
NYC and SF are really in a class of their own for quantity and quality of funds (NYC is really a tier of its own). Then LA and Chicago, followed by Dallas, Austin, Houston, Miami, and maybe Denver.
1) nyc, sf, london, paris, singapore
2) chicago, toronto, LA
3) boston, houston, DC, Miami, tampa, Charlottesville, denver, several more
4) Atlanta, Philadelphia, Milwaukee
5) St Louis etc
imo
It depends on what you wanna do, but I've always viewed it as a concentration on finance in a city. It's definitely different in terms of where I'd actually live.
T1: NYC
I mean its NYC, there are just so many funds and banks, hard to rank it anywhere else
T1.5: SF
Huge amounts of finance, especially within tech and healthcare, however there's more outside of the scope too
T2: Chic, Boston, LA, HTX
Generally places with multiple recognizable funds and strong banking groups (HTX - IB energy groups, Boston - big PE funds and banking groups)
T3:Atlanta, Minni, Little Rock
Recognizable finance scene but still fairly small. Atlanta for example doesn't have huge scene outside of AKKR, Roark and the gangs of MM banking groups.
T4: Dallas, Austin, San Diego, Nasheville, Tampa, Denver (Other Big Cities)
Very concentrated pockets of finance, some of these cities might have a well known funds but its not a main office. Dallas for example only has a couple recognized IB groups (HL RX/HC and JPM C&R) outside of regional boutique players, and no PE fund really raises outside of the $3b mark.
T5: Flint Michigan, The Island of Guam, Costa Rica, and the Neighborhoods Outside of UChicago
Arguably a worse ending than Equities in Dallas, you messed up finance recruiting worse than the nwm kids.
move htx to t3. add charlotte to t3.
How is Little Rock Arkansas a T3? That should be T5. Someone put Toronto as a T2 - while there are good firms there it is far too expensive to live in and the income tax rates are higher than anywhere in the U.S.
where would you rank Washington D.C.
Probably around tier 2 or 3, good finance scene especially in A&D with some diversity in FIG for some reason. Also can't forget that Carlyle is there. Would argue though that outside of Carlyle, DC buyside is mainly smaller MM.
Tier 1: NYC, London Tier 1.5: SF, LA, Toronto, Chicago Tier 2: Boston, Miami, San Diego, Houston, DC (NoVa), BC Tier 3+: Dallas, Austin, Tampa, Nashville, Denver, Seattle, Minneapolis, Atlanta, Orlando, SLC / Park City
Tier 1 and 2 you can get normal front office finance jobs at major banks. NYC and London are unbeatable wrt concentration of financial firms.
Tier 3 a mix of major firm offices and region-specific banks and funds. Real estate firms focused on that region and funds with a local LP base.
Below Tier 3 you’re looking at a few satellite offices of major banks but mostly local pensions and endowments, asset and wealth management, and smaller regional firms.
Toronto is definitely not Tier 1.5...ive lived in Canada and it's a disaster. 54% income tax rate, houses are 2mm+ in terrible areas, sales tax is 13%, and they have something called a land transfer tax - basically you pay like 30-100k+ to the government every time to buy and sell a property. That entire country is a disaster.
-Toronto - Tier 2
-Denver - Tier 3
-San Diego - Not ranked
-Dallas - Tier 3
-Nashville - Tier 3/4
-Tampa Bay - Tier 4
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