Q&A: Middle Market IB Analyst

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.

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.

3. 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.

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.

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.

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.

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

$200k all in for a first year associate.