Asset BACKED Finance - Career Path? Day-to-day? Comp? Hours, etc.

Rank: Baboon | 171

Hi All,

I am currently trying to make a decision between a few offers and another opportunity came up that I was fortunate enough to interview for. The opportunity is with a BB Asset BACKED Finance group NOT asset based lending....which is very different. BB group - think Wells Fargo, PNC Capital Markets, etc.

Few questions --- if anyone can help it is appreciated:

1) I am curious if anyone knows what a day-to-day would be for an analyst and associate in regards to analytical/modeling and or presentation/client meetings?

2) Career path at the junior level?

3) Exit opportunities from asset BACKED finance - NOT asset based ?

4) Compensation, hours and lifestyle?

Thanks ahead of time, it is appreciated!

Comments (12)

Best Response
Apr 30,2016

"BB group - think Wells Fargo, PNC Capital Markets, etc."

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Apr 30,2016

Sorry - I should've clarified, larger banks with a presence in the Asset Backed Finance space.

@Bullet-Tooth Tony Do you happen to have any input on this?

Apr 30,2016

The below is a general overview but depending on the specific asset class, things may be different. ABS is pretty broad and doesn't cover a specific client type, so the work and industries can vary a lot.

1) On the origination / banking side, time is split between pitching (i.e. Pitchbooks) and, executing securitization transactions (i.e. Managing various deal processes). As far as modeling, depends. Most bigger groups will have dedicated structuring / analytics teams that handle the heavy modeling but the origination analysts will need a solid handle of the models too.

2) Not sure what this means. Obviously like any other role there is a path upward. Typically 2-3 years analyst and 2.5-3.5 years as associate depending on the promotion cycle.

3) Tends to be more niche and difficult, and gets more challenging as you get promoted. At the junior levels, can move to trading, though rare, and to structured credit hedge funds. At the senior levels, the buy side is harder, but it happens, though more often people move to specialty finance companies in some type of treasurer / CFO track role at an issuer. Not as broadly transferrable as M&A / coverage, but depends what you're interested in.

4) Pay should be in line with other banking jobs at the junior levels. Diverges further as you move along and highly dependent on group profitability. For hours, in around 8-9 and out around 9-11 is typical, also dependent on profitability and group culture. Its a mix between pure IBD and sales and trading, i.e. Hours are in between, there isn't much down time during the day, but it is a transactional group by nature so things will pick up or slow down depending on the circumstances.

If this is an internship I say go for it. If it's full time compare the name of the bank and the other roles vs your longer term goals.

Apr 30,2016

@tucker_fitzpatrick thanks so much for the quick response. I appreciate the feedback as well. Feedback wise:

1) Thanks, this all makes sense. Would you consider this a debt capital markets type of role?

2) Makes sense, thanks.

3) Did you make the move from ABF to a structured credit HF? It seems that the work for this firm would be highly transferable as I would understand the debt side of the business, but not as much underwriting/

4) Makes sense. From my understanding an analyst role with the firm I am speaking with is relatively high in regards to comp being $70k base and $25-40k in bonus. Is this what you would assume at the analyst level? Also, would a VP-Director type role in ABF Groups be a lot of going out and getting new business/client facing?

Thanks again for the advice. It is helpful as I come to a close in making my decision in ABF, Commercial Banking, or Public Finance.

Apr 30,2016

1) Yes ABS technically falls under capital markets, but generally more technical than a typical corporate DCM desk (but also more niche)

3) Depending on the group, the work is very transferrable at the junior levels, but the seats on the buy side are not common nor is it a definite exit option. Hedge funds really only hire when there is a need on a case by case basis vs PE funds that have a cycle and spots to fill each year.

4) I would have thought most BB analysts were at 85k base and 25-50k bonus first year but not clear which banks have made the switch and which haven't.

Apr 30,2016

Can someone outline the difference between asset based lending and asset backed finance, are we talking asset backed securities?

Apr 30,2016

Here is a good video explanation on ABF:

Apr 30,2016

Debt backed by debt, not by receivables/inventory or equity and the companies subsidary

Apr 30,2016

more like commercial banking

Apr 30,2016

ABL is a product group.

Most big banks classify it as commercial banking but banks like RBC or SunTrust will have it under the IB, Capital Markets or Corporate Banking umbrella.

BAML, WF and JPM classify under commercial banking although many of the deals they work on would be covered under IB at regional banks. They'll work with Middle Market companies with under $500MM in revenues but will also work with Corporate clients with less than $2B in revenues.

If this is something you're interested in you want to be at BAML, WF or JPM because they lead most ABL deals and you'll get the most modeling and structuring experience as most of the modeling is done within each ABL product group.

My point is that yes, while it is considered Commercial Banking at BAML/WF/JPM, you will absolutely have exposure to IB groups (particularly Leveraged Finance/Syndications/DCM) although your experience is going to be limited.m

For example, just because RBC has ABL under Investment Banking does not mean that outsiders view the group more favorably than a BAML/WF/JPM ABL group.