Why merchant banking?

Based on the most helpful WSO content, when preparing for your first round interview with a merchant bank, it's crucial to articulate why you're interested in merchant banking specifically, as opposed to general private equity (PE). While the context provided doesn't directly address merchant banking, we can infer some reasons based on the differences between investment banking, PE, and the nature of merchant banking:

1. Integrated Approach: Merchant banks often take a more integrated approach to investments, combining traditional investment banking services with direct investment off their balance sheet. This can offer a unique blend of advisory and investment opportunities, allowing you to gain experience in both areas.

2. Investment and Advisory Role: In merchant banking, you're likely to be involved in both the investment and advisory side of deals. This dual role can provide a broader perspective on transactions, from structuring and financing to investing directly, which might be appealing if you're looking for a more holistic approach to finance.

3. Strategic Investments: Merchant banks often make strategic investments in companies, sometimes taking an active role in their management or providing strategic advice. If you're interested in being closely involved with the growth and development of businesses, rather than just the financial aspects, merchant banking could be a good fit.

4. Diverse Opportunities: The investments and deals in merchant banking can span a wide range of industries and geographies, offering a diverse set of opportunities. If you're looking for variety in your finance career, this could be a compelling reason to prefer merchant banking.

5. Balance Sheet Investing: Investing off the balance sheet allows for potentially more flexibility and creativity in deal structuring and investment strategies. This might appeal to those who are looking for innovative ways to create value and are comfortable with a higher degree of risk and autonomy in their investment decisions.

Remember, it's important to tailor your reasons to your personal interests and career goals, as well as what you know about the specific merchant bank you're interviewing with. Highlighting how these aspects align with your professional aspirations can make a strong case for why you're interested in merchant banking over general PE.

Sources: Why Banking Over Private Equity/Hedge Fund?, Answering Why Private Equity - 9 Key Answers, Why do bankers think they are superior?, Answering Why Private Equity - 9 Key Answers, Why do people choose BB/EB instead of MM Boutiques?