4 Yrs Equity Research trying to Move into an Investment Banking Associate Role

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TNNYC - Certified Professional
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WSO,

I have been in Equity Research in NYC at a Middle Market Firm for 4 years and my career interests are more aligned with investment banking with the hopes of one day moving into corporate development or staying in IB long term. Given my sellside ER experience I do not have deal experience which seems to be tough for me to overcome. How should I go about marketing and positioning myself in order to land an Investment Banking Associate role? I have strong sector knowledge so I feel my efforts are best aligned with Investment Banking Coverage Teams.

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Comments (8)

Feb 22, 2018

I can't add much to what you already probably know...but have you tried reaching out to the same sector coverage team of your current firm? Probably the easiest transition.

If you can talk about deals that happened to some of the firms you cover it may help (especially if there is overlap with regards to the firms you covered with the research and coverage team - should work both internally and externally). Say that the deals you wrote about sparked an interest in moving to a transaction-oriented environment.

Some of the things I've seen work (in a BB) are:

  • Credit risk analyst > IBD analyst "I'm basically already working on / seeing M&A deals"
  • Credit risk analyst > DCM (intern) > IBD analyst "Enjoy the sector and want to put more in / get more out of my career"

Bear in mind credit risk is probably a harder transition than research so you should feel confident that this is possible. (Even at associate level should be easier than the above).

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Feb 22, 2018

sorry for jumping in here but just curious why is it harder for credit to jump to IBD than is it for the equity. Your example above was for credit, so am curious what other nuances are there for credit guys wanting to do IBD.

Feb 22, 2018

If it's credit research that's different, very similar to equity research in terms of prestige I think (I don't know but I imagine so). But credit risk is a middle office role. (IB credit is one of the better middle office roles alongside market risk, but is still middle office).

You can look at it another way, a lot of people have moved from IBD to equity research out of choice. Very few have moved from IBD to credit risk (I can't think of a single example).

Feb 22, 2018

Financial modelling / valuation is not really part of the role in risk, whereas it is core in equity research.

Mar 8, 2018

Literally just made this exact transition from ER Associate (with 4 years of experience) to an IB coverage group (same sector) at another bank in Dec-17. Started as an ASO1, so on par with the MBA hires from the summer of 2017.

I very much agree that you should pursue coverage groups in the sector you know, and your fundamental selling points should be as follows:

1) Deep industry knowledge (this sets you apart from virtually all other cadbdidate)
2) Strong modeling skills (albeit more operating model focused focused vs. valuation, but still a differentiator)
3) Most importantly, a demonstrated ability to communicate and develop strong relationships with management teams

It's important to bear in mind that when hiring at the Associate level, banks are making a long-term bet on a candidate's ability to eventually reach the MD level. As such, conveying your experience in research in which you communicated regularly with CEOs / CFOs of $X billion companies gives you a unique competitive advantage.

Examples of regular communication:

  • Quarterly earnings calls / follow-ups
  • Analyst days
  • Non-deal roadshows

Hope this helps!

    • 1
Mar 8, 2018

If you don't mind me asking - how are you finding it?

Mar 9, 2018

Only a few months in so probably too early to make a long term judgement call, but it's been a great learning experience thus far. Coming from an equities background, I had a very limited / elementary understanding of debt - that is changing quickly. Same can be said for M&A.

At a more basic level, speed and efficiency are much more important in banking (e.g. MD needs a 20-page deck for a meeting in 2 days) than in research (e.g. take your time with the report, but come up with a thoughtful analysis), and thus, PPT / XLS shortcut skills are more valuable.

Culturally, I'd argue the office environment in banking is significantly better (for me, at least). A research floor can easily be mistaken for a library where people often work in isolation.

Lastly, the hours and predictability of schedule are extraordinarily different. Coming in, I had anticipated a significant increase in hours per week. The unpredictability of schedule in banking, however, has been a bit of a shock. For example, it is somewhat difficult to commit to plans with friends / SO even 1-2 days in advance (this includes weekends) as there is a decent likelihood I'll have to cancel. My expectation is that this will simply take time to get used to.

All in all, I'm extraordinarily happy with the move and am highly confident it was the best choice in the context of my career.

Mar 9, 2018