AMA: Investment Banking Associate

monkeyking722's picture
Rank: Gorilla | 570

***4/9 UPDATE: This is taking a little more time than I expected, and while I do appreciate and welcome all the questions, I will be a little less active on this starting tomorrow. Will still try to get to all questions though. Feel free to ask, comment and discuss though. Thanks all. ***

Decided to post an AMA, why not?

Some background - I graduated from a semi-target. Networked my way into banking and was lucky enough to secure an internship in IB my sophomore year. Returned for my junior summer; realized I liked IB but not the firm. Went through the FT IB analyst recruiting cycle and moved over to my current firm after undergrad. Did my 2-3 analyst years and learned a ton. Went through the entire PE recruiting cycle and received offers, but ultimately decided (for a long list of reasons), that A2A at my current firm was a much better fit for me.

To be honest, not really sure how this AMA will turn out. Figured there's someone out there that wants to learn about IB, recruiting, networking, etc. Definitely wished I utilized this blog more when I was in school though.

Comments (80)

Apr 8, 2019

What state/region? What industries do you analyse? What was your UG major?

Muchas gracias for the AMA

Apr 8, 2019

Went to school in Boston, working in NYC right now. For undergrad, I double majored in Finance and Economics.

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Apr 8, 2019

What are your hours like and the reasons you decided a2a was a better path?

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Most Helpful
Apr 8, 2019

When I was an analyst, I was spending anywhere from 65 to 85 hours a week at work. Currently, as an Associate, I spend around 60 hours a week on average. WFH has become much more flexible for evenings and weekends.

A2A was my ultimate decision even though I received offers from PE firms (think HIG Capital, Carlyle) for the following reasons:

  1. I have a strong and supportive team here. I work directly with the Group Head, and he goes to bat for me. He pushes for me and I would go as far as calling him a mentor. Even as an analyst, I was in meetings with CEOs and UHNW individuals. It felt weird being the youngest guy in the room, but people respected me for it and I eventually got used to it. I don't think you'll find that at many shops, even on the buy side.
  2. My work-life balance is pretty good now, especially for IB. To be honest, it's largely due to management style. My Director or MD rarely ever sends me a last minute 9PM email asking to see something the next morning. I'm looped into emails and know exactly what is expected and when. Having this has made my day so much more productive (I'm not sitting around waiting) and easier. I really do believe there aren't as many 2AM nights because of this. Of course, there's the occasional fire drill, but I think I'm in a great spot. I felt that I would give this up if I moved to a new shop, and probably have to work longer hours too.
  3. Compensation. You will be paid very well in IB and PE. I am a very simple guy and my lifestyle isn't going to change much if I make $500K, $1M, or $10M+. My firm paid me well during my analyst years (~150, ~180, ~215). There is a very significant bump for A2A, and a lot of the buy side shops weren't paying as much as I would make if I stayed on (I was surprised), and those that were, I wasn't sure I would have a team of analysts helping me, as well as the 60 hours work week there.

Overall, I stayed for the people, my boss, and my team. A lot of people move to PE because it's "prestigious" (honestly, prestige stops being important after you turn 23), because everyone else is doing it, or they hate their IB jobs. I feel that I'm one of the few that got lucky and figured it out. I'm very happy with where I am and have zero regrets.

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Apr 8, 2019

Are you planning staying to VP or above?

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Apr 8, 2019

How long would it take you to make VP at your firm? Also, how much do junior associates(with no MBA) typically make?

Apr 8, 2019

Probably anywhere from 5 to 7 years depending on overall performance.

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Apr 8, 2019

First year associates can make anywhere from 250 to 330, all in.

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Apr 8, 2019

My buddy cleared north of this number, middle-bucket, as an A1 at an EB.

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Funniest
Apr 8, 2019

Good for him!

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Apr 8, 2019

Was IB your goal at the start of college, and if so, how much networking did you do during freshman and sophomore years? Also if I could have your opinion on my major as a non-target, I'm currently going into my freshman year as a finance major, but do you think it would be worth it to double major in something computer related such as business information tech? How were the first few years as an analyst like after UG, and what made you dislike the firm you interned at? Much thanks for the AMA man

Apr 8, 2019

IB wasn't my goal from the beginning of college. I knew I wanted to do business, but wasn't set on a specific career path yet. I applied for internships for my sophomore summer and banking was the only field that took me (strange, I know). I figured out I was good at it, and that I liked it. Stuck with it since.

Double majoring is really up to you, but you definitely need to get a high GPA. If adding a major will have a strong negative impact on your GPA, I would consider just doing finance.

First few years of UG were not easy. The real world took some adjusting to. You don't get spring break, and you don't get a month long winter break. Steep learning curve, but I had two summers under my belt, so I knew what I was getting myself into. The other firm I interned at specifically did Emerging Markets in LatAm and Sub-Saharan Africa. It's a unique field, but it wasn't for me.

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Apr 8, 2019

Would you mind PMing or dropping the name of that firm? Their focus is very interesting to me.

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Apr 9, 2019

^ would you be able to possibly PM me what firm that is that does emerging markets in LatAm and sub-saharan africa? seems interesting to me as well

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Apr 8, 2019

What made you want to pursue IB in the first place?

Apr 8, 2019

IB was the only internship I got my sophomore summer. I liked it a lot. I didn't know I was going down this path until I did very well in all my finance classes - it was only then I realized this field might be for me. Haven't looked back since.

Apr 8, 2019

Curious how your firm (or any in general) would view someone from Corp Dev assuming they have significant transaction experience? Would it be possible to come in as an associate if you had ~2.5 years of Corp Dev and 3 years of Big 4 Valuation experience?

Apr 8, 2019

Honestly, it can be tough, but not impossible. I say it's tough because you'd be competing head to head with other IB analysts who have years of experience and MBA graduates. At the end of the day, good experience is good experience, and it seems like you have that. Some groups are willing to look past the fact that some candidates didn't start out in banking. Hiring the right person is more than just their experience. Personality, attitude, compatibility, adaptability, etc. are important too.

Probably not the most optimistic answer, but I never like to sugarcoat things. Keep hustling, and I am sure you'll get there.

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Apr 8, 2019

What was the greatest obstacle that you had to overcome in regards to getting to IB from a semi-target school?

Apr 8, 2019

The biggest challenge was competing with target students. They are favored because its where the current bankers went to school, or because the school has a great, long-standing reputation. I really had to stand out, and being a junior with one summer of IB did help. GPA is also important. You have to hustle and network your way in. Reach out to people, but don't be the annoying sophomore that emails the entire desk.

Keep your head up. You'll get there.

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Apr 9, 2019

By high GPA do you mean 3.6+ or 3.9+?

Apr 8, 2019

Thanks for doing this! Will be great if you can answer the following questions.

  1. What are MBA Associate hours like(A0-A3)?
  2. I know the 1st 6-12 months might be difficult for MBAs but after that does life get better?
  3. Are there any internationals at your BB? I don't see too many internationals-so just want to know what the reason could be?
Apr 8, 2019

Hours are strongly dependent on firm and group. It can range anywhere from 55 to 100 hours a week. Try to join a firm that values work/life balance, as well as a senior banker that manages his/her time well.

The learning curve is definitely steep, and life does get better. You'll know how things work, what people like, and where everything is. Of course, it also means heightened responsibility.

I work at an EB. Unfortunately, I am not sure if there are internationals (we have people from all parts of the world, but it never really occurred to me whether they are internationals). I think the potential legal obstacles a firm has to go through is the main driver behind some firms not sponsoring internationals. Wouldn't quote me on that though.

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Apr 8, 2019

Appreciate you doing the AMA!

  1. How often do you see someone lateraling in after 1-year exp in S&T as opposed to IB?
  2. What are your thoughts on becoming a career banker at an EB vs BB? I'm sure it varies by firm and culture but curious to hear first hand how your firm views grooming analysts or associates to the vp or md level.
  3. Texas Tech or Virginia?
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Apr 8, 2019

Thank you for doing this thread- it is great to hear about your experience! Just had some quick questions:

1) In terms of compensation of IB vs PE, people seem to be moving to the buyside given the potential to make more money. Based on your experience, is is really true that PE compensation is higher (at both junior and higher levels)? I understand that carry hits in at senior levels of PE but have also heard it is harder to get there.

2) You mentioned you are at an EB. Do you think EBs in general have a better culture than BBs? The culture at your group seems great.

3) The fact that your MD took you to meetings with CEOs etc. shows that you were a top analyst. What do you think made you stand out in your analyst years?

Apr 8, 2019

Compensation is very similar at the junior levels for IB and PE. The earning potential in PE may be higher as you become a partner and have carry. You are right though, it's hard to get there. A lot of my friends move to PE and realize they're getting similar pay, and won't realize those "gains" they thought they'd get until they reach senior levels, if they do. You will make plenty of money in either, so I think what it came down to for me was the people, and the work itself. Money shouldn't be a main driver, the work and culture itself should be - but that's just my opinion.

IMO, I think the culture is great. At EBs, you have the best of both worlds - great deal flow and resources like a BB, and tight knit group like a boutique. It's hard to define culture at BBs because they are so large. There is less of a standard firm wide culture IMO, and it varies from group to group.

I think what made me stood out (in addition to knowing how to do my job well), was that I was a very presentable person. I lean more towards the social side (which is part of why I think banking is right for me). I did my homework before walking into that meeting, and my MD was totally fine with it. Point is, know your stuff, speak well and dress well, and that client time will come. I was just fortunate enough to have received that opportunity earlier.

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Apr 8, 2019

Just another quick question about the EB vs BB debate. I have heard you get to work on more deals as an analyst at an EB. I was just wondering, if you don't mind me asking, how many deals you closed during your analyst years?

Apr 8, 2019

Thanks for doing this. What is the upper age limit of your colleagues? Anyone in their early to mid-30s?

Apr 8, 2019

We do have Associates in that age range. Usually did not start in IB, got an MBA, or served our country (marines, navy, etc.)

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Apr 9, 2019

Thanks for the AMA! I am currently a first year analyst. I see a general attitude of staying in banking as a "safety" and indeed a general view as a notch below PE. So far, I like the work in banking and wanted to get an understanding why 80%+ of analysts seem to go to PE. Having seen your friends in the industry, interviewed with such firms and interacted with senior people, do you think the hype around PE is justified and whether it is genuinely a superior path as it is made out to be.

Apr 8, 2019

What is really boils down to is what you want to do. The work in IB is very different, although the skills do overlap. In Investment Banking, you are winning and closing deals, raising capital, and advising clients, etc. In PE, you're backing up an investment thesis through analysis, and working with your portfolio companies to increase value (add-on acquisitions, changing business procedures, etc.), and hopefully, realizing a return over the investment horizon.

The prestige aspect is what attracts a lot of bankers over to the buy side. Most bankers have the Type A / competitive personality, and the potential for higher pay (when you are senior and have carry), less hours is definitely attractive.

I wouldn't say IB is superior than PE, or that PE is superior than IB. If you're leaving for the money, you may end up just miserable. You have to ask yourself what you actually want to do. Don't hop over to the buy side just because everyone else is. You will make plenty of money either way. The only race you're running in is your own.

I thought very long and very hard about this. And what it really came down to was the people around me, and the work life balance I have right now. I would rather work 60 hours with a team of supportive people that push me to grow on a daily basis at an EB, than potentially end up with some douche boss at a top PE shop that won't have my back. One thing I can say (and I have seen other people go through this), is some people leave for a brand name, but lose all their happiness and support on the way. It's really up to you and where your priorities are, but that's how I ended up making my decision. You will still make bank either way.

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Apr 9, 2019

Thank you for the detailed response! I was just wondering if you had any idea of the compensation range for associates (A0-A3) and VPs? Data on this seems to be very unreliable

Apr 9, 2019

Thanks for doing this. Two questions:

  1. Are you able to say which city you are working out of? Completely understand if you cannot.
  2. I worked in MM IB for two years before leaving for corp dev where I've been for 2.5 years. I am thinking of going back into IB. During the interview process, how can I ensure that the group or bank that I am joining emphasizes work/life balance?
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Apr 8, 2019

I'm working out of NY.

There's no correct way to do this, but I would probably just straight up ask the junior folks. They are usually quite honest about this because you're likely going to be working directly with them, and they don't want you to have the expectation that you'll be working less than normal, and end up leaving them alone in the office. Obviously, you want to have the tone that you're really just curious, rather than trying to figure out how long you'll be at your desk. You can also just tell by the vibe in the room how late some of the people work til.

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Apr 9, 2019

Excellent. Thank you.

Apr 9, 2019

Really interesting AMA. I posted this elsewhere but didn't receive many (any!) responses but do you have key pointers for a new incoming Associate.

For background, I've worked for a number of years at a private fund (think family office) and I'm moving to a coverage team at a US BB. I previously worked at a boutique M&A advisor and haven't worked in large-scale IBD before.

Apr 9, 2019

This thread has been very enlightening to read. If you ever want to take a risk on an Analyst from Australia, please let me know!

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Apr 9, 2019

Are you having fun?

Apr 8, 2019

Yes. I do like my job a lot.

Apr 9, 2019

The answer to this is likely obvious, but as an analyst, what characteristics most made you a successful one. And as an associate, what characteristics in an analyst make you want to staff them on your deals?

I come from down in the Valley, where Mr. when you're young, they bring you up to do like your daddy done.

Apr 8, 2019

There's really no one right answer to this because something that can be praised at one firm, can be frowned upon on another. However, there are a few things that differentiate a regular analyst from a rock star.

Intellect: I think it's really important that an analyst knows their stuff (and if there isn't a clear solution, know how to get there). That encompasses everything from financials, modelling, knowing where to look for things, how to solve problems, etc. Obviously I don't expect analysts to know everything under the sun, but the more time I spend explaining concepts you should already know, the less confident I feel in your abilities.

Attention to Detail: This is really important. Don't really think I need to explain. Always double check your work.

Curiosity / Thinking Outside the Box: It's good to ask questions. But be careful with this one. Dumb questions do exist. If it can be answered in 10 seconds through a Google search, you should probably look it up. Don't ask questions that make it clear your head is in the clouds - it hurts you more than anything. Also, don't be afraid to think outside the box sometimes (don't be a robot). It always impresses me when an analyst suggests doing something a different way that turns out to be better and saves us time.

Attitude: I know you're working hard. We all are. I don't need your negativity rubbing off on your colleagues and bringing them down with you. A can-do attitude is ALWAYS appreciated, and it moves the needle when it comes to peer reviews and bonus time.

Self Awareness: Know what's appropriate and what isn't.

These are just a few. The list can go on and on, but this is what crossed my mind first. Honestly, and I don't want this to come off the wrong way - the easier you make your senior bankers' lives at work, the more rewarding. You'll get staffed on the best deals, get paid more, and more importantly, build a strong reputation for yourself.

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Apr 9, 2019

Thank you for doing the AMA- How many of your Associate peers are MBA grads? Do you notice a difference between the roles and responsibilities you have as an A2A, versus them?

Apr 8, 2019

A2As tend to carry much more responsibility than MBA grads once they become Associates. They know the ropes and have years of investment banking experience. Some MBA grads usually take some time to ramp up and learn how things work because they haven't been in the field before. Over time, as MBA grads learn how things work in their group/bank, the responsibilities become pretty identical to A2As.

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Apr 9, 2019

SB'ed for a thoughtful thread about being an Associate. I'd agree that the Buy-side isn't always the best route for everyone. Not only does it take years for the long-term benefits to start showing, but in my opinion it becomes tougher and somewhat based on luck/politics/timing to move up the ranks. Banking is a little more linear.

Being a banker who has decent flexibility/control over their own schedule(~60 hours/week) with a supportive group and market pay is a pretty great sweetspot of comp to work/life balance. Sounds like you've found a pretty great balance!

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Apr 8, 2019

Thanks, appreciate it! There's definitely pros and cons to both.

Apr 9, 2019

Any advice for students for full-time recruiting? I know it's much more competitive than SA roles so what made you stand out?

Apr 8, 2019

I agree that it is definitely tougher. My advice would be (i) know your technicals... perfectly, because everyone else is also studying and will probably get them right... you don't want to be the only kid that got it wrong (ii) know your story - every single thing on your resume is fair game, (iii) if you worked in IB your junior summer, have a damn good reason why you're not going back there, or why you didn't get an offer, (iv) take advantage of your school's career center - they can get you interviews if you're nice (and qualified) as they hold direct relationships with the decision makers... many schools have excellent relationships with employers but shit marketing with their students, so the students don't take advantage, and (v) start early... recruiting season goes by in the blink of an eye... we already started some first round interviews...in April....

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Apr 9, 2019

They've already started interviews for FT 2020? I've had some calls with both bulge bracket and EBs and when they find out I'm not looking for a summer role, they basically rush to the end of the call and tell me to talk to them in the summer.

Apr 10, 2019

Which is more important in the long run, being in an interesting coverage/product group that you're passionate about or being in a group with a strong team and colleagues? On WSO, a lot of emphasis is put on the interesting/sexy groups, but curious how much that matters in the long run?

Example. FIG group (Typically known as boring/less interesting) with a strong team and colleagues you like vs. TMT group but not as strong of a team/relationship?

Apr 8, 2019

Depends on what you want. Most people will join a "sexy" group for the experience and branding early in their career (even if the culture is shit), then move into something that makes them happier (a better team environment, different group/firm, etc.). Others are not too caught up on this and are happy where they are (and probably enjoy going to work).

Branding is important though, especially early on in your career. Working at a top firm and having quality deal experience will open many doors, should you want to leave.

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Apr 11, 2019

Thanks so much for doing this. Some background, I come from a non-target with a 3.54 gpa, LOTS of Extra Curriculars, and an F1000 finance internship lined up this summer. After getting 7 superdays and failing all of them, I was just wondering if you have any insights into whether applying for SA positions is harder than FT applications or vice versa? Is the process the same? If not, what's different?

Apr 8, 2019

Process is very similar, but FT is harder because (i) there are less spots open; most banks prefer to take in their summer interns for FT positions, (ii) the bar is much higher now for technicals since you've had an extra year and a whole summer to prep, (iii) some assume you have no banking experience, and that if you did IB the summer prior, that you didn't perform or get along with your team, and (iv) the hiring requirements are just generally higher for FT vs SA, especially since you will be competing against a pool that has more experience than you were last year.

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Apr 12, 2019

Great post. Thanks for sharing! What you think is the most challenging part of being an associate so far? Also, what is the lateral hiring process like for junior associate/senior analyst? Thank you.

Apr 8, 2019

I think the most challenging part is being closer to the fire. As an associate, you're ultimately responsible for the work of the analysts. You have to be even more detail oriented and the expectations are definitely higher. Finding the right balance between getting your own work done, and being able to look over the analysts was overwhelming at first, but you overcome it. You're providing comments instead of turning them. I had a lot of face time with MDs as an analyst, but as an associate, the bar is definitely higher.

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Apr 12, 2019

How did you differentiate yourself to get onto the A2A track at your EB? What can an analyst do to secure the promotion? Politics or performance?

"It is not our circumstance that controls us, but our thoughts that control our circumstance." -James Allen

Apr 8, 2019

The short answer is you keep your job because of performance, and you get promoted because of performance and politics. Not the answer some folks like to hear, but that's how things work.

As an analyst trying to go through the A2A route, I think one of the most important thing is reliability. Shit hits the fan all the time, and there are fire drills. Being adaptable, smart, and as well as being able to complete things quickly and accurately is key. There's no formula to getting A2A, but reliability, intelligence, a great attitude, punctuality, and self awareness works everywhere. Do the best job you can, and give it your all - it will show. Your hard work will be recognized and it will pay off.

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Apr 16, 2019
monkeyking722:

The short answer is you keep your job because of performance, and you get promoted because of performance and politics.

great quote

Apr 13, 2019

thanks

Apr 15, 2019

Would you mind PMing or dropping the name of that firm? Their focus is very interesting to me.

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Apr 16, 2019

Sounds like a Boston College grad.

I'm a BC sophomore and could really use some help. Any chance you could DM me if you are an alum?

Apr 9, 2019

Any thoughts on how IBD fares during downturns compared to PE?

Apr 8, 2019

Hate to give you a vague answer, but generally everyone suffers (some more than others). It really depends on your group and focus.

Apr 18, 2019

As an associate, were you frequently brought into meetings with corporate clients? If so, what were your experiences like? Generally looking for some tips / advice here. I'm called into many of these meetings and am unsure of whether I should be piping up when I get the chance or if I should wait until I'm addressed or nodded at to speak (and by that I mean speak more to the numbers in the deck).

Apr 24, 2019

Been thinking more and more about these two paths myself, and I appreciate your $0.02