Advice for incoming IB/M&A analysts in the midst of a likely recession?

Lehman_Bro's picture
Rank: Baboon | 127
  • Pro's and Con's of this situation for incoming IB/M&A analysts (boutique and BB)?
  • How will this Covid19-related crisis affect the industry?
  • How to navigate Investment Banking through a period of low/zero bonuses?
  • How to deal with lower deal flow? Will this impact exit opportunities?
  • Do you believe in a V-shaped recovery and in a consequent boom in M&A and PE activity?
  • What's the risk of having FT offers rescinded?

Interested in everyone's opinion, especially from those who went through similar situations.

Thank you!

Comments (11)

  • Analyst 1 in IB-M&A
Mar 22, 2020

Nice post, let's hope to get some insights

Most Helpful
  • Associate 1 in IB - Ind
Mar 22, 2020

Purely Armchair Logic so take it all with a grain of salt:

Pro's and Con's of this situation for incoming IB/M&A analysts (boutique and BB)?
Pro: incredible experience to start during a truly unprecedented crisis in terms of what deals/market reaction will be and will be building interesting models (full revolver draw downs, etc.)
Con: if starting remote, it will be tough to get reps in traditionally and connect with team- may be behind the 8-ball once starting in the office
Con: with testing centers closed, getting licensed may be delayed- not a big deal short term, but tbd long term if this lasts

How will this Covid19-related crisis affect the industry?
Low/no deal flow probably- but still very unclear what the economic shock will look like- for many reasons given this is causing both a supply and demand issue and we don't know when things will stabilize and move up. Expecting a lot of training modules and reviewing old materials to prep for when things get back to 'normal' Also working remotely just isn't the same as being in the office, it may create long term changes in terms of work-from-home vs. facetime culture, but probably not.

How to navigate Investment Banking through a period of low/zero bonuses?
Keep working hard, no bonus is better than no job. You are still making more than a significant majority of people and the hours may not be 'as bad' as they typically would, but again its too early to say

How to deal with lower deal flow? Will this impact exit opportunities?
Still too early to tell, but pipelines are pipelines. Attrition may slow/change a bit, but IB analysts will still generally leave at the 2 year mark to go to PE which in theory when the market stabilizes will have many new deal opportunities and need a big team.

Do you believe in a V-shaped recovery and in a consequent boom in M&A and PE activity?
Too early to tell, want to say yes, but no matter how smart you are- nobody knows how this situation will play out- not the fed, not the world bank, not your MD- it's anyone's guess. Would love to believe in a V-shape recovery, but there are a lot of variables at play ranging from how long and how much of an impact the virus has on economic activity (predictions for millions of unemployment filings this week- which is crazy) to how the political landscape impacts things, remember people have lost jobs and things like taxes, rent and other bills are frozen for the time being- what happens when payments are necessary again and people don't have jobs? This has exposed lots of systemic issues in the US and Europe and we will likely have to reckon with them through policy changes that we can't truly predict.

These are just my bs opinions, I have no idea wtf will happen tomorrow. Just stay safe and work hard- you can control those things.

    • 18
Funniest
Mar 23, 2020

Full revolver drawdown modelling That gives me a pneumatic erection.

Mar 23, 2020

Just to touch on the licensing thing since I feel like people should be thinking about that, my firm said that if testing centers are closed, it is truly out of the analysts hands and they will not be penalized for it. Also, they mentioned that some consultant they use (not affiliated directly with finra though) said they might try to do stuff remotely. Not super sure, but this is just some news I heard. Not the most keyed into this but thought it might help.

    • 1
Mar 25, 2020

You can still order your study materials online and get rolling on that - be ready when testing centers reopen. Worthwhile investment.

  • Prospect in IB - DCM
Mar 25, 2020

Hey, thanks for your response. Would this apply to incoming SA's as well?

Mar 23, 2020

Incoming FT analyst, won't claim to know things I don't think, just here for the conversation. Great topic, OP.

    • 2
Mar 23, 2020

Would it be wise to take sabbatical leaves to delay graduation to when times are better?

Mar 25, 2020

For an incoming M&A SA at an EB, do you think there will be opportunities to be staffed on RX deals? Or do the EB usually keep both groups entirely separate, even with the increase in RX?

    • 2
Mar 26, 2020
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