1st Year MM Buy-Side Analyst - Ask me anything (AMA)

This forum has helped me tremendously the last 4-5 years so wanted to give back and provide a AMA for the community.

Background: Attend a public semi-target think UNC Chapel Hill/UT- Austin/Indiana/Michigan/UVA with a ~3.5-3.6 GPA and am going full-time to a private investment firm in a core, but non-NY city (think Boston, San Francisco, Houston) on the investment team underwriting senior, uni, mezzanine, and equity deals, had a few banking offers but chose to skip IB knowing I wanted to do buy-side anyway

Previously interned at the same private investment firm my junior summer, a PE shop my soph summer and an ER boutique my freshman summer doing remote work

Comments (31)

Oct 1, 2018

Thanks a lot for this.
- What's your lifestyle during the day?
- What's exit ops for you?

Oct 1, 2018

Yeah of course, happy to help and give back..

Lifestyle during the day is different each day, but an example would be Monday
8:00 AM Get in to work, catch up on the WSJ
8:30 AM Review my notes and go through any new CIM's for new deals that were sent my way
11:00 AM Grab lunch with co-workers
12:00 PM Monday Morning meeting for new deals in the pipeline senior/mezz/equity, we have one investment team that reviews all opportunities
3:00 Management presentation that I am either dialed into (most frequent) or attending in person (less frequently), as an analyst trips to management presentations are not as common
6:00 Review and sign an NDA for a new deal presented to us
6:30 Start on the investment memo and model for the deal we are bringing to investment committee on Thursday
8:00 Leave work and head home

On average days are 8-8 with occasional weekend work, bringing hours to 60-65 a week, with the occasional 80 hour week and the occasional 50 hour week when deal flow is slower

Exit opps would be to a larger credit fund, a credit hedge fund, distressed debt fund, or possibly a LMM buyout shop.. The buyout shop would be a bit more difficult given the credit focus my fund has, however we do invest equity so I have some exposure as an equity investor

Oct 2, 2018

Wow late lunch!!!

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Oct 2, 2018

what a comfy job, enjoy!

What concert costs 45 cents? 50 Cent feat. Nickelback.

Oct 1, 2018

Thanks for doing this!
You mentioned working at a PE shop in soph summer. How hard was it to get internships on the buy side? Was it common among your classmates?

Oct 1, 2018

I had to cold email and call multiple firms, but luckily I found a firm not too far from my home and it ended up working out. Buyside-internships at a PE firm are excruciatingly difficult to find if you do not have any connections, however that should not deter you as if you are persistent you will be able to find a firm willing to take a sophomore. Compile a list of PE firms in your area and try to find a point of contact for each firm, and be concise and polite in your emails.. There are plenty of WSO examples of cold-emails to send

Oct 1, 2018

What is comp like?

Oct 1, 2018

Comp is similar to a MM IB firm so same base as a MM/BB bank and a slightly lower bonus... All in is around $120-130k for a first year analyst, a bit of a paycut from banking but hours are significantly better and you start off on the buy-side and are given a lot of responsibility from the get-go

Oct 1, 2018

Is this for an insurance co subsidiary?

Oct 1, 2018

No it is not. Consider it a private investment firm that invests throughout the whole cap structure

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Oct 1, 2018

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Oct 1, 2018

Thanks for the great contribution to the post! We need more college sophomores like you on WSO!

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Oct 2, 2018

I think he was saying those schools are actual targets, rather than dismissing them.

Oct 2, 2018

What's the most difficult part of being an analyst on the buy side and most difficult part of the work itself?

Thanks for doing this.

Oct 2, 2018

For sure, I'd say the most difficult aspect of the job is getting to speed with many of the associates who have come from 2-3 years of IB from top banks, analysts at my firm are treated similarly to associates and are given many of the same responsibilities.. The learning curve on the buyside is definitely more difficult than IB as you are given little guidance and are expected to do everything a peer in IB is able to do, plus put on the investor hat and smell out any bullshit either from the sponsor, bank, or management team. Buyside programs are not as structured on average and analysts are expected to be able to perform immediately. Regardless the responsibility you get is substantial and I would rather being staying in the office till midnight working on a memo to present to the IC the next day than waiting for my associate to give me back comments on a slide I've redone 5 times at 2 AM

Most difficult part of the work itself would probably be the interaction with senior counterparts, as an analyst you are expected to lead diligence calls with associates, Vice Presidents, MD's etc at the sponsors and investment bank we are working with, turning down opportunities while maintaining the relationship is also difficult as you don't want to step on anyone's toes, and you want them to show you deals in the future

Oct 2, 2018

Thanks for doing this! Can you talk a little about your firms investment philosophy and what they look for in an investment. Also how would you describe your firm I understand its a private investment firm but do you do all asset classes or just equity, fixed income, etc.

Oct 2, 2018

Yeah of course, just like any other PE or debt firm we're primarily looking for companies that are generating recurring revenue and have a strong defensible position in the marketplace, strong value proposition, low capex, favorable regulatory environments for the particular industry (industry tailwinds), however since we are credit focused investors for the deals we don't invest equity we don't see a penny of the growth profile so we want to maximize the potential of getting our principal + interest, thus we're looking at recession resistant companies, with a strong cash flow profile, low maintenance capex in comparison to growth capex, managemt teams that have been through previous credit cycles, sufficient FCCR with a cushion, etc

I would describe my firm as a direct lending and mezz shop as we invest throughout the whole cap structure senior, senior stretch, mezz, equity meaning we don't invest in bonds or debentures or public equities, you can compare us to a Crescent Capital or a Brightwood Capital or a GSO Capital Partners

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Oct 2, 2018

Thanks for doing the AMA

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Oct 2, 2018

Of course, this community has given me so much so I can't thank you and the WSO community enough Andy

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Oct 3, 2018

Thanks for the informative AMA!

Fortunately, I too will be joining as an analyst in an infra fund. I wanted to ask what I can do, in the 5 months I have left prior to joining, to hit the ground running? I have interned with the same fund this summer and the only thing Im really worried about is the technical side of things. As you mentioned, buyside training is a bit unstructured but my team does do model training. Are there things I can do beforehand like read certain books, do modeling courses (have done the BIWS course except for the LBO and M&A cases), etc?

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Oct 3, 2018

Would definitely recommend Training The Street whether you can get a self-study or have the firm cover it, it's worth every penny and is used by all the BB/EB banks. BIWS and Wallstrert Prep are both worthwhile. For free resources look into Macabus and A Simple Model. In terms of books the Rosenbaum and Pearl book is a staple for all whether it be IB or PE

Oct 4, 2018

Thanks for the suggestions! Will definitely look up Training The Street.

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Oct 3, 2018

Thank you so much for this !!!

1) What do you like most about the job, the so wanted job in PE lives up to your expectations?
2),The marketing stuff, and sliding on marketing material without any intellectual input (compared with m&a) are small compared to really interested stuff ? I mean, not a big part of the job?

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Oct 3, 2018
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Sep 20, 2019