AMA - Non-Target >> Valuation >> MM IB

McEnroe's picture
Rank: Gorilla | 533

Attempting to share my knowledge and experience lateraling from valuation to IB in an effort to give back to the WSO community.

The situation: Non-target, landed a valuation role out of undergrad. Leveraged my valuation experience and was able to network into a MM IB analyst role after a year at the valuation shop. Been in IB for a year and some change.

The lateral was not nearly as difficult as other posts on this site make it seem. Ask away any and all interested.

Check out these other relevant AMAs:
AMA: Non-Target + 2.7 gpa = EB IB Analyst
AMA: Big Four Valuation Associate - Deciding Whether This Job is Right For you
AMA: 2nd Year MM IB Analyst

Mod Note (Andy): This is an older AMA originally posted on 11/11/15 but the OP let me know he's still able to answer questions today, get your questions in!

Comments (49)

Oct 27, 2015

Currently also in a valuation group and was wondering how you went about that process. Did you use headhunters or online applications?

Oct 27, 2015

Headhunters - yes. Never applied online, not once. I treated it this way. If a headhunter contacted me with an IB opportunity, I'd interview, even if I ultimately did not want that specific role. This helped sharpen my interview skills (hadn't really talked about my experience since FT recruiting cycle in college).

After a few of those opportunities fizzled out, my confidence within the interview setting was up to speed, so I started really going after the roles I wanted - elite boutiques, well-known MMs, BBs. As soon as I received a notification for a job opening within a particular group on glassdoor or indeed, I LinkedIn stalked associates and analysts in that particular group. Networked with them and asked for an "informational interview" where they would ask me a few technicals and I would tell my story. Received invitations to five in-office interviews. Ultimately received two offers from five interviews and made the decision from there.

What you should do:
Get a free month of LinkedIn premium.
Set up job opening notifications on glassdoor and indeed on your mobile phone.

What you should not do:
Waste your time applying online.

^^This is so obvious to me now, and I'm glad I didn't do it then. Online applications are routed to HR (they don't make the ultimate decision on hiring). Networking directly with analysts and associates that you would be working with on a daily basis allows you the opportunity to show your skills and likeability over the phone, well before any official in office interviews.

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Oct 27, 2015

How did you go about converting the informational interview call into an invitation for the actual interview? Did they invite you at the end of your calls or were you aggressive in pushing it/following up via email?

Oct 27, 2015

Thanks for doing this. I'm in a val. group at a big 4 looking to make the move as well. Did you come from a big 4/D&P type firm? Also, what were some common (if any) objections you faced when trying to make the move and how did you handle them? Lastly, would you mind taking a quick look at my resume and giving some feedback on content? I posted it on here a couple days ago but can pm it to you if that's easier. Thanks again.

Best Response
Oct 27, 2015

No problem.

Prior Firm:
Not from a big 4, from a well-known firm that has tons of service lines, including IB. Ultimately didn't want to make an internal transfer given the red tape involved, and wanted to make it into a more well-known firm that had solid deal flow.

Objections / Hesitations:
Across the board, a lot of the people interviewing me didn't think that valuation offered enough experience/insight into understanding the various stages of the sell side process. I was confused by this at the time, but I get it now. Do some detailed research on this one. Rosenbaum's book simplifies the sell side process, but it gives you an idea of the general stages. If there is enough interest I would be willing to contribute a full-blown detailed overview of the sell side process in a follow up post just so you all can stick it to the jerk making this claim I'm your interviews.

Also I don't think that people in valuation are given nearly enough credit for the skill set that they acquire on the job (obviously dependent on the firm). I am light years ahead of all of the analysts (and even associates) when it comes to modeling. Valuation is an extremely transferable skill set. Writing always came naturally to me, so I was able to crush any CIM sample assessment in the interview. I was a guru in Excel from my experience, so PowerPoint was all that I needed to get up to speed on (much easier than starting from scratch compared to Excel). Knowing how to use CapitalIQ is a huge differentiator as well.

Recommendation:
If you are in Valuation and doing purchase accounting / solvency & fairness opinions... ACTUALLY READ THE CIMs!!!!! I cannot stress this enough. Understanding the structure, meaning, and purpose of the CIM was something that I was able to weave into my experience when talking in interviews. Having access to these is an invaluable resource.

Yes PM me your resume I will review and provide comments.

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Nov 4, 2015

I would like to see a post explaining the sell side process. Thanks. Or if anybody has a link to another post that explains this in detail, that would be great.

Oct 27, 2015

So you lateraled internally from a valuation group to their IBD group? Just wanted to clarify, I come from a similar background but went to CD instead of IBD. So its definitely possible to move out from valuations to IBD or CD, requires some legwork but can be done.

Oct 27, 2015

Nope. Lateraled from a non-IB role in valuation to an IB role at another firm.

Yes there is some legwork involved, but if you can tell your story in a way that answers "why IB?", you will definitely receive the opportunity to switch roles.

Feb 21, 2017

Interested in how you made the transition to corp dev? Currently working in valuations and curious about how to make my next move

Dec 15, 2017

So i was in a valuation group and went to an investment analyst at a hedge fund... little different though i guess, but at my big 4 within structured finance, the team worked hang in hand with the IB for deals so they were usually poached pretty easily. Maybe some others valuation groups are different by asset class. What are you in?

Oct 27, 2015

thanks for doing this, just added to the frontpage so you'll see more questions rolling in

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

Oct 27, 2015

How is Stout Risius Ross regarded in the valuation industry out of curiosity? Congrats on the lateral

Oct 27, 2015

Not very familiar with the firm, although I have heard of them from time to time. Looking at their website seems like they are pretty deep into valuation work and work with some bigger clients. I'm sure it would give you similar valuation experience to a Duff or Houlihan, but IB does not compare to the latter two.

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Oct 27, 2015

Just got an offer from the TAS valuation group at a Big 4. Any tips on lateral? Does geography play a part? Does specializing in an industry make you a more desirable candidate? Any specific projects you would suggest requesting more often for experience sake?

Oct 27, 2015

Tips:
See my reply to will smith

Geography:
Being in a bigger city made things invariably easier for me. Was able to interview without having to make some excuse to take a day off at my valuation shop. If you are looking to jump to a different city, only difference would be the extra time and annoyance of traveling to the interview.

Industry:
Don't try to act like you know a particular industry when interviewing, because I guarantee that a valuation analyst knows nothing about a particular industry compared to an IB analyst. This is not a dig at you, just an honest fact. This is coming from the guy that tried to act like I knew an industry because I did a fairness opinion on an A&D transaction. Ended up getting completely eaten alive when asked specifics about the industry as a follow up to a comment I made speaking about my experience and background. Yikes... That really came back to bite me.

Project Preference:
Get on anything and everything that somehow is related to a transaction. Purchase accounting valuations, fairness opinions, and solvency opinions. These allow you to read the CIM, perform LBOs, investigate the acquirer's LBO or Merger Model, get a feel for how the acquirees' operating model works. Avoid any tax planning work... Ouch. A guy I worked with worked on that stuff exclusively. Extremely boring compliance work that doesn't get you close to the deal.

Words of Advice:
Don't go into an interview and try to say that you were heavily involved in the transaction. The deal was closed and / or waiting on a fairness opinion to be completed. Any banker will grill you brutally if you try to convince them otherwise. Instead tell them that through reading the CIM, you really gained interest on being on the front lines of execution. Explain a particular deal, who the acquirer was, what the rationale was, and what the investment considerations were. That is how I framed my interest (after failing miserably the first few times), and it allowed me to eventually receive multiple offers.

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Oct 27, 2015

Thanks for doing this and congrats on making the switch. Question about valuations. Did you think the field was growing or stagnant?

Oct 27, 2015

How long did the entire process take? And at what point in your first year did you begin communicating with headhunters / asking for informational interviews?

Oct 28, 2015

Great question.

Timeline:
My commentary above oversimplified the process. I started looking about 7-8 months in. I really started going hard on networking around the 9 month mark. I interviewed extensively between 10-12 months, and received the offers at just about the 12 month mark.

The Key Point:
I did reach out / speak to a ton of people in the industry. A lot of kickbacks simply due to the fact that people wanted to hire someone with prior IB experience. The key for me was immediately networking with the appropriate people when I would receive notification that a new role was open at a particular firm. People love when the gift is wrapped and left on the front door step. They also appreciate a potential candidate that is proactive and receptive to the need for a role to be filled. When you see a job post, find a contact within that group and call them directly. You will be surprised at just how successful this approach can be.

Oct 28, 2015

Would you say working in valuation at the Big 4 would give you a better experience/better exit ops vs. an independent valuation shop or a firm like yours?

Also, do you think it would be possible to move to PE with a couple years of valuation experience without doing IB first?

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Oct 29, 2015

There was a guy at my firm that made the move to PE sans banking after 2 years in valuations. I've heard of a few others making the transition but I'm not sure how common it is.

Dec 30, 2017

Valuation at any firm will give you a leg up against others looking to break into IB. I am inclined to say that working in valuation at a firm that is a specialist in the space provides better exit opportunities as opposed to a Big 4 (given the breadth of different service offerings that Big 4s provide.

I have seen people more directly to PE post-valuation work, but we are not talking about prestigious middle market let alone megafund PEs. All of these instances involved PE roles in extremely small and regional shops.

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Oct 28, 2015

Thanks for doing this. Just picked up a valuation role out of undergrad as well. I completed a PE internship during my senior year, how big of a help will having that internship be when looking to make the transition over to IB?

Dec 30, 2017

The PE internship will provide you with a nice talking point to include in your "walk me through your resume / experience" convo, but no one will be salivating over a PE internship completed in undergrad. I would focus more on how the PE experience drove you to realize that you were lacking technical skills required for you to thrive in an IB environment, and hence you moved to valuation in order to hone that skill set. This is exactly how I approached this conversation given that I had a PE internship in college prior to my stint in valuation. In a nutshell, it's a great talking point, but nothing that you should over-sell.

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Oct 29, 2015

I know that this isn't DIRECTLY applicable to you, but do you know anything about the Financial Due Diligence groups at the major public accounting firms? Have you seen people from the FDD group at your old accounting firm lateral into corpdev/IBD (MM or BB)?

Oct 30, 2015

I have FDD/Valuation offers so I can shed a little light.

FDD: People can exit to MM IBD, can't say I've heard of BB though. PE DD groups are also a pretty popular exist as is corp dev at a F500.

Valuation has a more transferable skill set to IBD IMO which is why I'm probably taking it out of undergrad

Dec 30, 2017

I don't see FDD experienced folks make the transition to IB/CorpDev nearly as much as thsoe that worked in modelling-intensive valuation roles. This is just from my personal experience.

Nov 3, 2015

hey, are you still able to answer questions? if so i'll add this to the frontpage. let me know, thanks!

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

Nov 11, 2015

Yes I will be providing responses tomorrow as we've got a light day with senior level bankers out of the office. Toss this post to the front and I'll continue posting and getting action on this one.

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Nov 11, 2015

great thanks will put up this afternoon

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

Nov 11, 2015

I have two conflicting career options between Big 4 TAS - Valuation and a Federal business technology analyst position in consulting. What is your opinion on these two and my IB possibilities from a government consulting gig? The Valuation position does not have great pay and the federal analyst one blows it out of the water. So essentially I am curious if there is a salary vs. experience argument with this one. Thanks for doing this.

Dec 30, 2017

Yes. Happy to answer more questions here as things have slowed down a bit.

Nov 11, 2015

Hello McEnroe, this post has been really useful to me in terms of knowledge. I will very probably start an internship in a big4 Valuation team and my plan is to move to M&A.

I have read in other posts that the most recommended stuff to do within the role is as much pre-deal tasks as possible (although they are few in valuation if Im right) and some fairiness opinions, is this right? Could you tell more things about the usefulness of valuation for going into IBD? I honestly dont know what to ask you, but you insights in this thread were really valuable to me.

Thanks a lot!

Mar 10, 2016

If there are pre-deal tasks available, jump on them. Most often this included assistance with transaction models for acquirers (mostly strategics) considering pursuing transaction of a specific target. I only was able to do this a handful of times (maybe 3-4 times). This allowed me to view the deal from the acquirer's perspective, which was extremely informative and interesting.

These pre-deal opportunities are few and far between. I would recommend trying to get close and associate yourself with the senior level guys that most often represent your firm on the opinion-type work (fairness opinions / solvency opinions). 2nd best engagements to work on for IB prep would be Purchase Accounting Work. The Big 4 does a lot of this. This involves completing a purchase price allocation for a recently acquired company (doing work on behalf of the acquirer). This also gives you access to the acquirees' CIM & Management Presentation, and more often than not the transaction or deal model. This is the work that you realistically will have the best opportunity to work on on a consistent basis. This type of work would be preferred to private-client work for tax purposes.

Why Valuation is great prep for Investment Banking:

You do A TON of modelling. Not to be overly confident in my own abilities, but I am simply a much better modeler than all of the analysts in my group and most of the associates. In Valuation, you are literally modeling 80-90% of the time, so you become an absolute savage at working quickly in Excel and analyzing a company's financials. Had I started in banking out of undergrad, I would never be the modeler that I am today. I only model 15-20% of the time now, and am admittedly slower at it than I used to be.

What Valuation doesn't prep you for in Investment Banking:

You don't write "freely" in Valuation - it is extremely templatized and structured. IB is much more free-form when writing the CIM / Management Presentation - after all, you are hired to position the Company at its optimal level to achieve the highest valuation from prospective buyers (if you are doing Sell-Side M&A work i.e., the role that I am currently in). Writing has always been an interest of mine, so this was easier for me to learn once I started in IB, but could be more of a challenge for others. Still, there's always room for improvement. That's where reading the WSJ daily and reading other previously authored CIMs / Management Presentations (if you have access to them) comes in handy.

I know that being in college it is difficult to understand all of this having not experienced in the real world. Feel free to direct message me if you have additional questions.

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Mar 11, 2016

Never too late, thanks a lot, this has been really insightful. Wish you the best!

Mar 17, 2016

Hi there thanks for doing this, I was wondering how would you know about openings besides the job openings on indeed. I have networked and usually I get that they arent looking for any particular FT analysts at the moment. I try and treat the information interview as a way to know more about the banker. But as I get more involved on the phone or in person the usual response follows. How did you approach networking efforts when lateraling?

Mar 17, 2016

Hey, would love to know if you have any perspective on Valuation -> ER (stories/advice)? Or would the path be more like Valuation -> IBD -> MBA -> ER? I know anything is possible, but just want to hear your thoughts.

Mar 18, 2016

I'm in valuation an as analyst and think I can help here.

While I haven't heard of specific cases of this, I think if you have the CFA + valuation experience (preferably sector focused as most ER roles are in specific industries), you'd have a great shot at ER.

Mar 18, 2016

Thanks StrategyJunkie, I may have a shot at Big 4 Valuation in a year or two, so I am just sizing up what could happen.

Mar 17, 2016

Hey thanks for doing this AMA. Do you feel that the recruitment process would have been simpler/easier had you transferred into a target school?

Apr 3, 2016

Thanks for doing this! Just curious as to how many people you've seen or worked with from a Due diligence background and what the perception of them is. I work in a DD group right now, and wondering how it would be to transition since we work bankers quite a bit.

"Even if you're on the right track, you'll get run over if you just sit there" - Will Rogers

May 5, 2016

Hello All,

Looking for some help in transitioning into IB/PE.

Biology major from non-target ( California state school), 3.4 GPA..
Taken accounting courses and intermediate econ courses at JC and Cal state GPA 4.0.

Surely, I need to get into a killer MBA program to my career started right?

I was thinking I can do a Masters in Econ at a calstate (inexpensive) while working and finish CFA ( current level 2) and get into boutique firm prior to applying to MBA. I was also considering adding a online MSF like Indiana kelley onlineto have a target name under the belt.

What would be the best game plan! I know its going to take a lot of sacrifice but this is what I want to do.

I was also considering program's such as Dukes MiMs program ( I only have 2 years of work experience so far in startup and sales operations)

Any thoughts/help would be much appreciated.

Feb 2, 2017
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Dec 12, 2017
Dec 30, 2017