AMA: Non-Target -> 3rd Year Analyst MM IB

Unfortunately turning comments on a pitch deck today so I have some time in between turns to do an AMA. Thought I'd give back to the community here now that I'm wrapping up my 3rd year at a MM. Definitely wouldn't be here today if it wasn't for WSO.

Quick background (Non-Target -> 3rd Year Analyst MM IB)

  • Econ major, 3.8 GPA at non-target (highly regarded LAC known for its academic reputation, just not a place where banks recruit at all)
  • College athlete (DIII though)
  • Freshman year internship bus dev at a startup, sophomore year internship at a PWM firm, junior year internship SA at my current firm
  • Top bucket ranking every year in an industry coverage group
  • My team wanted me to stay on as a full Associate and I had an offer to join a PE firm focused on the same industry I'm in now ($2B+ AUM, raising $1B+ on next fund), but headed to a multi-family office w/ $10B+ assets this summer

Happy to answer any questions people have. Was pretty involved with interviewing / recruiting at my firm, so can comment on my perspectives from the other side of the table as well.

Feb 2019 Update (3rd Year Analyst MM IB -> $10B+ Family Office)

Thought I'd revive this thread after 6 months at my new gig. Honestly, I didn't realize how much less happy I was when I was in banking. Wouldn't say I was unhappy, but definitely not even close to how much better things are now. My girlfriend and friends all say they can tell I'm a lot less stressed than I used to be.

Hours

In general, would say I expect my hours to be 8:30-8:30 - pretty much in line with what I expected going into the job. Sometimes I still have nights past midnight, but it's more common that I leave at like 6 or 7. But the biggest change is even if I have a late night, it's pretty much always ok to step out for a sit down dinner or meet up with friends for drinks or something and then go back to the office. There's no pressure to be at my desk as long as my team knows I will get my shit done still and that it will be high quality. Lots of flexibility to work from home - definitely don't need to go into the office on weekends. Hours are also far more consistent - I have high visibility into each day and week and it is very rare to be blown up at like 5pm or on a Friday, therefore ruining my entire weekend.

I was able to join a rec soccer league, I adopted a dog (and I live by myself) - both would've been impossible had I stayed in banking. A group of college buddies and I go on a New Years trip every year. For the first time ever, I did not have to do any work. I didn't even open my laptop.

Overall I work less, get paid more, do more interesting work, and work with nicer people. Only drawback is I like SF less than expected, but whatever.

Resources

As far as resources used during recruiting, free resources I used were Street of Walls and 10xEBITDA. Asking older analysts for either practice or real case studies they have is great as well. For paid resources, there's no reason you should be spending more than a couple hundred dollars max. I had an older version of the WSO PE Interview guide which I think is great - only used the interview questions and LBO case study sections, but definitely very helpful. Overall I think my philosophy w/ PE recruiting is very similar to IB recruiting - there is absolutely no need to shell out like a thousand bucks on a dedicated class or something given the vast amount of resources out there.

Feel free to post any other questions people have, whether about banking, recruiting, my current gig, or something else.

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Comments (68)

Jun 24, 2018

Thanks for the AMA!

What was the recruiting process like for the family office? What drew you to that over traditional PE?

Jun 24, 2018

2 phone screens, video interview, 7 hour super day that included a case study, lunch, and basically meeting the entire team.

I honestly was never that interested in a standard buyout shop. If I did PE, would definitely be earlier stage stuff - VC or growth equity. Big appeal for me with the family office was the variety of work I'll get to do there as opposed to working in one specific asset class in the same approx. $ range and potentially in only one industry. Should be a better work / life balance too.

    • 2
Jun 24, 2018

By better work balance -- what hours are you thinking?

Jun 24, 2018

Hey NP,

Curious as to why you chose the multi-family office over a MM PE fund. What was the thought process? Also, it'd be great to hear any useful advice you may have surrounding exiting a MM bank.

Jun 24, 2018

I touched on why not traditional PE in my response to clickers, but I'll add that the multi-family office has a very generalist approach which appealed to me - theoretically should make me a more well-rounded investor and I think I'll enjoy the variety of work across different asset classes and industries more.

As far as exits go, definitely emphasizing the leaner deal teams and breadth of responsibilities you get is helpful (and that's both doing more admin work and more associate / potentially VP work). People really liked knowing I had actual meaningful interactions with buyers and the clients and did a lot of work independently as well. Also, by being at a MM, often times (with my group at least) a lot of the work you have to do for your clients is from scratch - maybe they have pretty much nothing in terms of marketing materials / company presentations or you're constructing the Company's first financial model ever and having to work very closely with the CFO to develop assumptions / drivers from the bottom up.

Also, my MM does full-service work, not just M&A, so depending on the position that can be a good thing to emphasize.

    • 4
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Jun 24, 2018

What do you think differentiated yourself from others to be one of the top-ranked analyst every year? Looking for advice on what makes someone a top bucket vs mid bucket vs low. Thanks!

Most Helpful
Jun 24, 2018

Super cliche, but it's critical thinking. Let's be honest, the actual work you do isn't that hard. But it's recognizing why you are doing a certain task and thinking about the bigger picture and using your judgement and critical thinking to really go beyond "just doing the task".

Like instead of just blindly trusting CapIQ pulls, recognize that if your EV / EBITDA multiples aren't going down over time for a certain company that you should dig into that and figure out why that is, so when your MD asks, you have an answer. Or knowing that if you have a standard "valuation methodologies overview" slide, that you don't just copy the same one in every time but think about the Company you're valuing and really think about which methods are going to be emphasized more, and then reordering / make sure to emphasize accordingly.

I'd also say if you ever come across some sort of problem or error, to not just go to your senior bankers and say "this is wrong, what do I do". Be armed with how / why it occurred, your potential solutions, and what the potential impact is.

And then last of all is just giving a shit. Keeping track of when you have to go to committee during an IPO process for example, and making sure your senior bankers are aware of timing so then it's not super last minute and everybody is scrambling to be sure the committee memo is up to date and correct.

Of course this goes without saying that your work should be done on time and sans errors.

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Jun 29, 2018

Stupid question, why should EV/ EBITDA multiples go down over time?

Jun 24, 2018

What is the comp like at the multi-family office compared to your analyst salary or usual PE salary?

Jun 24, 2018

Very competitive in terms of what you would get at most upper MM PE firms (seems to be ~225-250 market) but was a little lower than the PE offer I did have in hand.

Family office 135 base, 75% target bonus +7.5 relo vs. PE offer I had was 100 base, 150 target bonus + very small % on carry

Jun 25, 2018

It still sounds like the PE offer was very competitive even with a miniscule carry %. If you're being offered carry then you're likely a going concern. What I'm implying is that if you'd perform well then on the next fund the firm raises you'd likely get a higher carry % no?

I'm just postulating, but I'd think that this scenario is possible.

Work hard, work clean, & most of all do not give up.

Jun 24, 2018

Thanks for doing this man. Congrats on your family office offer!!

So just a general question regarding lateral hires. What kind of first or second year analysts do you guys hire? Were they from boutiques in your local area, to other MMs, Valuation shops, etc. What are some of the criteria you guys look for in a potential hire?

Jun 24, 2018

Thanks! Laterals come from all over and include all the ones you listed (boutiques, other MMs, valuation shops). Some from Big 4 accounting, some from corp dev. If somebody is going to come over without that type of experience, it'll be because of their previous focus in a specific industry. Haven't really seen anybody lateral from consulting, though that's probably more self selection.

Regarding criteria, fit is always important in interviews, but even more so for laterals since you are considering fit for one specific group only. What people look for definitely changes on a case by case basis and I know my group is looking for lateral hires now but are only considering experienced hires (and by that I mean people with IB experience only). But in this case that is only because of ongoing group dynamics based on who needs to be replaced. Prior lateral hire we had did not have prior IB experience, but that wasn't needed at the time.

    • 2
Jun 24, 2018

When the firm needs lateral hires, how quickly does the process wrap up? Is there usually a plethora of qualified candidates for these positions (experienced or not)? How much technical knowledge is tested during lateral interviews, as in will candidates be asked many technical questions or will they primarily be asked about their deal experience to cover the technical portion?

Jun 24, 2018

Thanks so much! Its very helpful. It makes sense that its at a ad-hoc basis or needed basis so its understandable. In terms of experience, do you favor closed deals or rather a variety of mandates? Again, agreed that its dependent on the group and how you can add value. I was just wondering what your experience was with interviewing candidates or mirorring the qualities that these hired analysts have. Any feedback would be greatly appreciated. :)

Jun 28, 2018

i recently did the lateral from a big 4 to a large MM in NYC. lmk if you have any questions on that route. this forum helped me a bit so i'd love to give back

Jun 24, 2018

Greatly appreciate you trying to give back and help. I sent you a PM if thats fine by you!

Jun 24, 2018
NuclearPenguins:

Freshman year internship bus dev at a startup, sophomore year internship at a PWM firm, junior year internship SA at my current firm

jeez

Jun 24, 2018

I think the biggest thing I would recommend for people is that you'll have to put in a ton of your own legwork for some of the earlier internships, but that it really is never too late and that just because there is a "path" / "roadmap" to getting into IB, doesn't mean it's the end of the world if you are off track for a little bit.

I mean what people usually think of as the "traditional" path is PWM internship, then boutique IB internship, and then an EB / MM / BB internship and so if I were to follow that, it would appear that I was a year "behind".

My freshman year internship I did not secure until the same June. I remember moving out of my dorm and getting the call that the firm wanted to bring me in when I got back from school. Worked out nicely that at the time, I was only looking at things around my hometown. But otherwise my fallback would have been to work an hourly job in retail or a restaurant or something, supplemented by some hours assistant coaching some kids for my sport.

My post-sophomore year internship I was abroad in the summer and took fall term junior year off - I sent out 50+ cold emails easily to PWM firms and then some boutiques as well, then did a handful of video interviews (even some case studies) while abroad so I could be as best positioned as possible to secure something when I got back.

And then this year for my family office offer (and PE offer as well) I did not secure until literally earlier this month. Ended up that both of those were through headhunters, but also had a bunch of interviews where I cold emailed a handful of firms in May just asking if they were looking for any near-term hires. Had a story that made sense about why I wasn't kicking off recruiting until super late, but I guess it's just to not be demoralized that you don't have something 1.5 or 1 years ahead like many of your peers will and that it might be more work / stressful, but it can work out.

    • 4
Jun 24, 2018

Damn, this thread just got bumped and I saw this. I've done a couple of search-fund internships since my comment abovebut I'm finding it extremely difficult to find some ground to network with private equity offices or THE (only one) investment bank near me. With that being said there are wealth management, and asset management firms but as a whole, what's the best way in your opinion of reaching out for internships? Mind you I go to a community college so that's kind of a turn off when they see my resume.

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Jun 25, 2018

Congrats on the offer! I'm a 1st year analyst at a MM and was wondering what the buyside recruiting process looked like. Any info regarding the timeline (heard it was later compared to BB/EB?), types of firms (AUM/geography), and how much you networked vs going strictly through HH would be greatly appreciated.

Thanks!

Jun 24, 2018

Thanks! So I had a pretty non-traditional recruiting process. Did no recruiting my first year and minimal recruiting my second year. Second year actually received a corp dev job offer (through HH) but turned that down to stay a third year. Would say that yes, from what I've seen with my peers, lower MM / MM recruits a bit later than upper MM / MF for sure - can easily swing 1 or 1.5 years into your analyst stint vs. starting 0.5 years in.

Did a bit of on-cycle recruiting my third year but didn't fully kick off the process until May. What I did was compile a list of all the headhunters and then send out blasts to everybody with an updated resume and update on why I was starting to officially look now and ongoing developments (top bucket, received offer to stay on as associate, etc.). Story made (enough) sense I guess and I started getting some pretty good hits immediately. Focused entirely on SF / Bay Area.

I did probably 50/50 networking vs. through HH, but only because a lot of the places I was looking at were leaner VC / growth shops that were less likely to be using a HH. If it wasn't for that focus, would be pretty much all through HH I bet. AUM mostly from $100M to ~$3B, but definitely skewed on the lower (sub-$500M) end - multi-family office I'm going to definitely the largest shop I seriously looked at. Was not targeting typical MFs at all from the get go. Looked at a lot more "creative" / "alternative" type roles vs. standard PE.

    • 2
Jun 25, 2018

Congrats man. You've contributed a lot here so really happy to hear you got something you're happy about.

How do you recommend going for FT recruiting? I've done an IB internship, a PE internship, and am doing another PE internship this summer but I want to do IB in NYC. How did you see FT recruits make it?

Jun 24, 2018

Biggest thing is having a story that makes sense. You'll have to convey why IB over PE for sure, and why you have a PE internship this summer instead of one in IB.

Definitely don't make excuses (I hate that in interviewing), but own the experiences you have and spin it in a logical and compelling way.

I don't think your background should be a problem at all unless you have a really low GPA.

    • 1
Jun 26, 2018

Congrats on making it from a Non Target. Since you've taken a different path to where you are now and with all the hard work that you've put in, how important do you think luck has been in reaching where you have?

Jun 24, 2018

Yeah, I'd say despite all the hard work required, I fully recognize that I've been incredibly lucky.

Lucky to have some older guys on my sports team in college who were pursuing careers in high finance who helped guide me in the right direction. Lucky to connect with some alums in the industry who were invaluable in helping me prep for interviews. Lucky to be placed in the group that I'm in now (great group of people, supportive throughout interview process, etc.). Lucky the multi-family office just happened to be looking for a near-term / immediate hire.

You get the point haha.

    • 3
Jun 27, 2018

Are you at liberty to indicate which firm you work at? Or at least which city? How was your recruiting process. I am a non-target recruiting for large MM banks and I've struggled to get my foot in the door despite constant networking efforts (outstanding experience and GPA). How "non-target" was your non-target? What city was your school in? What is your industry coverage group and why/how did you pick it or end up there? Interview process - were they harder on you because you were a non-target? More technicals? More fit? Case study?

Jun 24, 2018

If you look through some of my old posts you can figure a lot of this out, but I'll provide the below:

  • Baird / Blair / Piper in the Midwest
  • Recruiting process honestly did mostly online apps and then some recruiting with the help of alums. My current firm I got through an online app - got some others just by applying online as well (BNP, Oppenheimer, GS Chi, GS LA, one of the other 3 firms listed above). I had an even higher GPA at the time of applying which definitely helped, and a relevant prior internship
  • My school is very non target in the sense that I think only one lower MM bank came on campus in my 4 years there. Minimal to no resume drops depending on the year. However, very highly ranked and known for its academic rigor. Part of the lack of recruiting is it's a tiny LAC where a lot of the student population doesn't want to go into finance, so it's not worth banks' time
  • School in a rural Midwestern town
  • PM me if you want industry group or more info on any part of this response. Picked the group because I was interested in it
  • I would say they scrutinized my understanding of the basic technicals more by being from a LAC / non-target, but didn't ask truly difficult questions. Made sure I really knew what I was getting into and that I didn't just memorize the basics. But wouldn't go deeper and ask more obscure stuff such as in-depth LBO or super complex accounting questions
  • Never did a banking case study
    • 2
Jun 28, 2018

Grinnell / Oberlin / Kenyon / Carleton?

Jul 1, 2018

No questions and wanted to only say I've always enjoyed your posts on the forum. Congrats on the new gig and good luck with everything moving forward.

    • 1
Jun 24, 2018

Thought I'd revive this thread after 6 months at my new gig. Honestly, I didn't realize how much less happy I was when I was in banking. Wouldn't say I was unhappy, but definitely not even close to how much better things are now. My girlfriend and friends all say they can tell I'm a lot less stressed than I used to be.

In general, would say I expect my hours to be 8:30-8:30 - pretty much in line with what I expected going into the job. Sometimes I still have nights past midnight, but it's more common that I leave at like 6 or 7. But the biggest change is even if I have a late night, it's pretty much always ok to step out for a sit down dinner or meet up with friends for drinks or something and then go back to the office. There's no pressure to be at my desk as long as my team knows I will get my shit done still and that it will be high quality. Lots of flexibility to work from home - definitely don't need to go into the office on weekends. Hours are also far more consistent - I have high visibility into each day and week and it is very rare to be blown up at like 5pm or on a Friday, therefore ruining my entire weekend.

I was able to join a rec soccer league, I adopted a dog (and I live by myself) - both would've been impossible had I stayed in banking. A group of college buddies and I go on a New Years trip every year. For the first time ever, I did not have to do any work. I didn't even open my laptop.

Overall I work less, get paid more, do more interesting work, and work with nicer people. Only drawback is I like SF less than expected, but whatever.

Happy to answer any other questions people may have, whether about banking, recruiting, my current gig, or something else.

    • 5
Jun 24, 2018

How did you go about getting an idea on your current firm's culture during the recruiting process?

Edit: Also, how do you manage taking care of the dog while living by yourself? Do you go home for lunch to let it out? Really want to get a dog myself eventually.

Jun 24, 2018

On culture, was lucky to be introduced to two people who work or worked there through coworkers who were able to give me a more candid view on the firm - they were both on different teams than the one I was joining (but worked closely w/ my team) so was able to gain comfort they weren't purely trying to sell me on joining. Also, throughout the process a VP and a Director on the team went out of their way to have follow up conversations with me after each step. They were very open with me and I just got a good gut feeling on the group and firm's culture.

As for the dog, take her to doggy daycare twice a week (7am-7pm, with up to 10pm late pickup), otherwise she chills at home and I'll try to hop home real quick mid-day and take her on a quick walk. Worst case scenario I make it back at like 7 or 8 and she's fine hanging out by herself. Definitely wouldn't have been doable w/ a puppy, she was already house trained and stuff.

    • 2
Feb 13, 2019

Hi @NuclearPenguins thanks for reviving the thread - it's been very helpful so far and its encourage to hear how much you enjoy your new gig.

My question relates to the PE recruiting process and specifically with regards to geography. I know you said that you focused exclusively on the bay area and I've heard from other people that it's best to focus on a single geography.

For me, I honestly don't care that much about geography I just want to get into the best MM/UMM buyout shop possible in a tier 1 city (could be Chicago, LA, SF, Boston, NYC) and will be doing on-cycle recruiting this september/october during the first months of my NYC IB analyst stint.

Do you think its critical to focus on a specific city when talking to headhunters? With on-cycle being so competitive and fast I figure I shouldn't be picky but at the same time I don't want HHs to think I'm being too broad and not put me through to any interviews...

Also, I don't have any family connections (no hometown story or anything) to any Tier 1 city that I want to live in and come from a non-target that's not in any of those cities.

Thanks for the advice!

Jun 24, 2018

I think it is fine to not be specific about location as long as you can be specific about the other qualities of the next job that you are looking for. Anything that shows you've really thought about what you want to do instead of just doing a shotgun blast approach.

You've got the first step down, which is narrowing down that you want to do buyout at a MM/UMM firm. But you can be specific about a lot more. Do you want a generalist model? If not, are there specific sector(s) you find more interesting? Do you want an operationally-focused firm? What size firm by # of employees do you want to join? Do you want to do buyouts only or join a team that also does, say, growth equity? What types of situations do you want to invest in - prior owned by PE, more distressed, or does it not matter? Partner track role or two and out? Do you want to source? I could go on and on. It's ok to not know exactly what you want, and providing examples of what you don't want is helpful as well.

If you are worried about location still, you can always frame it along the lines of something like this: "I've done New York for the past few years so I think I'd like to try working in the West Coast or Midwest if possible to broaden my experiences. I think SF, LA, Chicago, Seattle, for example, could all be pretty interesting. That said, I did enjoy my time in New York and if the most suitable opportunity is on the East Coast, I'd be open to that as well."

Hope that makes sense.

    • 4
Feb 14, 2019

I'm happy to hear this man. From this and one other particular thread, I can tell you're life really sucked when you were at "you know where". Really glad that things are so much better in such a short time.

Dayman?

    • 1
Feb 8, 2019

What are your problems with SF, just out of curiosity?

Jun 24, 2018

It's dirty, too crowded, lots of homeless people, and of course crazy expensive. I would be fine with it being dirty and too crowded and deal w/ the homeless people if it wasn't so expensive, or if it was expensive but super clean that'd be fine too, but alas.

Also, transportation in general is awful. Getting in and out of the city is a nightmare at the wrong times since there are only so many bridges (there needs to be another one in between the Bay Bridge and San Mateo bridge) and BART is basically useless unless you happen to travel right along the single route through the city. Muni trains help, but the footprint and ease of getting around pales in comparison to NY or say Chicago.

    • 1
Feb 18, 2019

ECON major? Is it more difficult for ECON student to break in Finance?

Jun 24, 2018

If you go to a school that has both Econ and Finance, it is definitely going to be much harder as an Econ major. Thinking about NYU CAS vs. Stern, Penn SAS vs. Wharton, Berkeley Econ vs. Haas, etc. There's always going to the the question of "why didn't you major in finance" and many times the real reason is that the individual wasn't accepted to the business program (even if that's not true, there's always that suspicion unless the reason they give is really compelling). I generally find the quality of Econ major candidates to be lower than Finance majors when a school offers both.

If you go to a liberal arts school that only offers Econ, you'll be under greater scrutiny (does the candidate actually know what they're getting into or did they watch Wolf of Wall Street too many times, have they prepped accordingly, how much do the really understand technicals vs. just memorization) but otherwise can't really fault them when their school doesn't have anything else and that's the best option possible.

    • 2
Feb 18, 2019

Well, my school does offer both ECON and Finance, the finance program is mainly strong in accounting side but the finance side is growing really fast. We have a few (around 2-3) who go to BB every year and some go to large firms on the buy side. I am in the finance program right now but the accounting courses are really not my interests which dropped my GPA really low.

Therefore, I am thinking about switching to Mathematical Economics and have a fresh start, IDK if it's going to be a good decision with all the math courses. You said that the firms are gonna ask the question " why didn't you major in finance", how did you answer that? Do you have any tricks that got you a high GPA(if the firms really care about that much)?

Feb 20, 2019

How did you answer the "Why not finance?" question? Thank you. Also, great AMA.