AMA: Middle Market IB Analyst

Hi all, this forum has been very helpful to me in the past, figured it was time to give back. Some background on me: Originally from the South, went to semi-target / target institution depending on who are talking to and where you are applying. I currently work for a middle market bank covering healthcare in a Southern city (Dallas, Atlanta, Nashville, Charlotte, etc.). I am staying a third year and will be joining a health care focused private equity firm after.

AMA.

Comments (35)

May 10, 2018

In a southern city as well, cool to see a success story like yours. How was the transition from a smaller shop to PE? Did you have to be aggressive about getting recruited?

May 10, 2018

I have not made the transition yet to PE. I work in a subsector of health care, so my subsector team is about 15-20 total bankers.

When I began thinking about recruiting, I reached out to shops of a similar team size because that could be interwoven in my story. My background is one of extremely small high school, small liberal arts college, and intimate work environments. Naturally, most of those small team shops also focused on equity checks for companies my bank usually worked on so that matched up nicely. They enjoyed that my deal teams were small (analyst, junior banker, senior banker) as well.

You do have to be aggressive to be recruited. New York analysts have a leg up since they can get coffee and meet in person with recruiters. The best thing you can do for yourself is try to do the same, which would involve a trip to New York to meet them. Have your PE shops and geographies clearly defined before meeting them. You need to have a tight story.

Additionally, when I went home for Easter or Christmas, I got coffee with PE associates in my hometown, which has a decent PE industry for the South. Ultimately, I landed with a PE firm not in the South, but I felt more immediate traction with individuals who understood where I came from and my desire to work in a Southern city.

Networking and meeting in person I think is key.

May 10, 2018

Good stuff. Davidson grad? When did you decide to start looking at PE? After the first six months or so?

May 10, 2018

Thanks for doing this. Couple questions:

Why stay on a third year?
How do analysts at the firm do in terms of buy-side placement? Do most get looks and is it common to see upper MM-MF interviews?
How is the pay relative to major finance cities?

May 10, 2018
  1. Although the work sucks at times, I truly enjoy the city I am in and the junior people I work with. We have a very collegiate mentality and all come from similar schools and backgrounds. I am in no rush to jump ship as I wanted to gain more deal experience before moving to a small shop where I would be responsible for conducting more diligence and leading transactions. I also wanted to bolster my resume with more deals to set me apart from other candidates. I have taken a large leadership role in terms of modeling, client communication, and positioning so those were good to talk about in my PE interviews.
  2. Overall, I would say we have more difficulty placing due to brand and transactions we work on. Interestingly, our bank is realizing this and is actively incorporating resources for PE recruiting. We have senior bankers who are supposed to assist us with this process regarding next steps, whether it be corporate dev, next banking level, or PE. The firm realizes getting more analysts into PE shops is beneficial for everyone involved, especially as the firm tries to target more PE recaps and mandates.

Upper MM-MF would be difficult just because we don't work on transactions in that space; I don't know anyone who works at those size shops.

  1. Pay is one of the best parts. As a first year analyst, my bank paid street level across the analyst class (but no state and city taxes for me). I live in a fast growing city so rent is rising, but I live comfortably with a lot of spending money every month. Honestly, I feel bad for my fellow analyst class that lives in SF and NYC, getting paid the same as me and seeing it disappear in taxes and rent. Bonus was also street as well. The firm is actively recruiting good analyst talent and knows it needs to be competitive with other firms.
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May 11, 2018

Very helpful

"I have taken a large leadership role in terms of modeling, client communication, and positioning so those were good to talk about in my PE interviews."
Could you expand on this and share tactics you used/any tips for getting ranked a top analyst ?

May 11, 2018

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May 11, 2018

"No state taxes". I assume you live in Dallas then? :P

May 10, 2018

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May 10, 2018
  1. The investor scene in my city is very industry focused and small; sub $150 fund size. I looked outside of my city, casting a very wide net as I knew that would get me the most looks. I purposely positioned myself as opportunistic and geographically agnostic. No girlfriend, no ties, I was ready to pick it up and go where the opportunity was. The majority of funds have a health care investment thesis, so most like the industry background, but I certainly got more looks from HC focused funds, ultimately taking an offer with a firm that specifically invests in health care.
  2. I started my recruitment process in earnest my second year after the MF and upper MM were done in December / January. I networked and made recruiter connections in January with interviews up to end of March when I received my offer. Everything moved fast and quickly, prep is key. If I were to do it over again, I would probably move my outreach earlier just to see more opportunities as some funds I was interested in were on the MF and upper MM cycle (December, January). Outside of a true financial hub, you simply have to work harder, be more prepared, and network harder. I made myself standout with a few things (i) I hammered interviewers on my unique background - small 40 boys per grade monastery school, graduated early to do a unique experience post-college, (ii) emphasized top tier ranking (they always ask this), (iii) I love exploring new cities and have no latent connections to my old one.
May 10, 2018

Hours as an analyst were not bad. I'd say average 70, with some hellish nights here and there to slow weeks like right now. I never kept track though, my mentality was always "I'm still in college and I'm studying for a test I learned about the day before" when the going got rough.

Definitely one of the advantages to working in the South.

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May 15, 2018

Your username and description of a "small 40 boys per grade monastery school" make me think of a specific school in Texas. Did you go to high school in Texas?

How do you integrate your "small 40 boys...school" into your story or even mention it in interviews to stand out? I came from exactly the same background that way. When it comes up, people are usually shocked, but I don't see it as a positive necessarily.

What was the unique experience you had post-college?

May 10, 2018

thanks for offering to do an AMA, added to frontpage

WSO's COO (Chief Operating Orangutan) | My Linkedin

May 10, 2018

Davidson - Bourne Partners - Charlotte was gonna be my guess.

May 12, 2018

He said his subsector team is 15-20 people which is as large or larger than Bourne is as a firm, I believe (I believe they have maybe 20 as a firm). Otherwise, I would have guessed the same thing.

May 10, 2018

How did you group source deals?
How was the close rate? See a lot of deals to close?

May 11, 2018

Group sources deals through relationships, PWM referrals, etc. We have a good brand name in certain HC subsectors so we generally get invited to all HC industry pitches. Beating out other banks is tough and every pitch is highly competitive.

Close rate has been iffy, especially in middle market / lower middle market. Depends on healthcare subsector (specialty physicians, dialysis, skilled nursing, hospice, etc.) and size of the company. Entrepreneurs are just inexperienced when it comes to their first transaction and is often difficult to manage expectations so you can pull the deal across the finish line.

May 11, 2018

Working in healthcare/biotech corporate finance could be helpful in order to break into MM IB/PE isn't it?

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May 11, 2018

The traditional recruiting paths of undergrad would still be the best method. All the analysts in the class above and below came from undergrad.

May 12, 2018

I already graduated, now working in healthcare's CF waiting to start the MSc..

May 12, 2018

How much is the PE paying and bonus?

May 13, 2018

$200k all in for a first year associate.

May 14, 2018

I'm white. I didn't choose a picture so I imagine they chose a stock photo? Why, does it scare you?

May 15, 2018

Can you perhaps expand more on the work atmosphere and culture of IB in the Southern city you're located in? Your earlier comments about the cost of living being lower, choosing somewhere in the South, etc. are quite intriguing and I'd like to hear more, given that I've only been exposed to the finance hustle & bustle of NYC. Would really appreciate it - thanks.

Most Helpful
May 28, 2018

Well, it is certainly less hustle and bustle than New York. Things just seem... slower and paced down here. I know that's an oxymoron being in IB, but I guess I attribute it to being surrounded by folks who have slower paces of life and are more relaxed in other industries and jobs. Finance mentality doesn't really exist down here and most people think I work in wealth management or something like that. Generally have to explain what my job is to people.

Context for cost of living: I receive street pay and don't have to pay any taxes except federal. I contribute max to 401K every pay period and get about $2,000 bi-monthly. Rent for a 650 square foot apartment with a 5 min walk to work in the middle of urban area is $1400 per month so I really never worry about my spending habits.

It's easier to do outdoorsy stuff since rural areas and hiking are in close proximity. Airport is nicer than the crappy airports up in New York. No ridiculous food costs like NY.

I get the appeal of working in New York. You benefit from a city that has the highest concentration of finance professionals in the world and a nice lively dating scene. If you eliminate the career benefits, I just don't see the attractiveness of living in the city though. The south is quickly outgrowing cities like LA and New York I think purely because of cost of living.

Hope that provides some context.

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May 28, 2018

Finally, someone speaking the truth! Thank you for doing the AMA. Was curious about a few things

1). How is the recruiting for non-regional candidates with prior IB or S&T exp? Say someone from a target/Semi-Target school on the east coast (Columbia, NYU, Cornell,Upenn)?
- Do they typically only source candidates from southern schools

2). What are the exits opps like for a regional office? Do you see more career bankers than the traditional 2-3 year and out to PE/HE?

May 19, 2018
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