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I don't think you can gain an accurate picture of an industry in 20 years. Enron was considered one of the leading firms 20 years ago. What industry incumbents remain in 20 years will look vastly different.
Current industries that are doing well for IB include Tech, Media (although it's consolidating), Real Estate, and Healthcare (Biotech is crazy in a bull market and Medical Equipment is huge). All of those have exposure to growth, but that's what's good now.
5 years, we could be in a high rates environment. Real Estate is suddenly shuttering. Media might have consolidated into only a few companies, denying deal flow. Oil and gas could be booming due to higher oil prices.
Totally agree with what you said except for your last point. I don't see oil&gas booming, might still be big but because the world will have moved towards renewables, hence infrastructure will be big, just my 2 cents
Your oil comment is pretty far off. Global oil demand has increased every year for the past 70 years and is projected to continue to increase in the near future. Maybe in 2100 the oil and gas industry will be overtaken by renewables, but that's a few years away. Plus, it is really oil price volatility that drives activity in the market, not just the shear level of prices. Hence, even if the market shrinks there will still be activity (even if the market is smaller than it is today).
Show me a model that shows me me a renewable firm that outperforms any hydrocarbon based one (which will almost undoubtedly require massive gov't subsidies to remain even remotely competitive)
Most important thing (if you're choosing coverage group) is to work with people you like, who are well regarded and can mentor you. All of the industries listed above are good, but relative industry group rankings vary a lot by bank
This.
I rather work in an industry I don't like, but I like the team than the other way around.
If you don't have somebody on the inside and you don't know which teams are nice, go for the industry you like reading about. Buddy of mine didn't know which team he should choose, but he loved reading about oil companies, so he joined NatRes and no regrets.
But I would say the coverage teams that will be doing good are: - Healthcare (as mentioned by others) - TMT (as everything becomes more technological) - Industrials (regardless of the state of the economy, industrials will always be there)
Having given my 2cents on best industries, I like to comment on products: - ECM and DCM are products which will become smaller because there is much to automize and these products are heavily dependent on state of the economy - LevFin will remain relevant. Good times is PE High Yield, bad times is High Yield corporates and refinancing - RX is the best product group to position yourself in now. Even during good times companies fail, but during busts (which I think is coming within 5 years) these guys are really doing 'God's work' (and RX is impossible to automize)
Fintech
Healthcare (as mentioned above) is a great industry to be in although I think the Top 5 incumbents now will be the same in 5-10 years. Until the industries moves away from the 'buy a brilliant biotech start-up' model, the biggest companies with the most money will lead.
I also think medical cannabis will be an interesting market to watch in the next 5 years
Agree with this.
Barring a massive shift in strategy, Pharma companies will almost certainly continue to buy biotech companies for a long time. Big pharma companies seek growth in two ways: R&D and M&A. As long as there are biotech companies working on discovery, M&A will not stop.
In Healthcare services, M&A will continue to be robust given the ongoing pressures to cut the cost of HC (at least in the US).
It’s hard to say exactly where we’ll be in 20 years, but there’s no sign that HC will slow down at all for a while.
Agreed it won't slow down. The R&D itself will also be on steroids; mAbs and pAbs have had about 10 years of glory and now it's time for CRISPR, Viral Vectors and other gene editing methods. It's going to be wild. It's honestly hard to know whether it's better to be in healthcare IB or healthcare management consulting
This is only based on anecdotal evidence, having been looking at a lot of job listings recently for the buyside, but there currently seems to be a lot of roles for M&A analysts coming from Healthcare, Industrials and TMT - both on the public and private side.
Also a lot to be said for Generalist roles.
Could you elaborate on what you've seen on exit opps for generalist roles?
Like these as growth trends
The real question is: what industries are most tedious to cover?
Whats a general tier breakdown of BBs with top O&G/Nat Res groups?
Here’s my opinion on the energy IB’s in terms of dealflow & comp (in no particular order). The best dealflow in energy IB’s is typically going to be in the upstream which is why you see so many upstream shops listed below. Midstream is also pretty solid, but downstream and OFS is not as active.
Best dealflow - GS, EVR, Petrie, Jefferies (really strong A&D), TPH, CS, would probably also throw MS in here.
Best Comp (and worst hours) - EVR, Petrie, Jefferies
Citi, BAML, JPM, and MS are big in the midstream space. BAML and JPM win a lot of business by using their balance sheets, no surprise here. I would say Moelis is on the rise and has done some good midstream work recently. GS is relatively balanced across all sectors, can’t go wrong here. Jefferies does a TON of A&D deals and basically dominates that space. Petrie does a lot of upstream M&A as well as some midstream, heard it’s a sweatshop, but worth it if you can stick it out. WF has a very laid back group and the culture is supposed to be awesome (hours not as bad), don’t know much about dealflow. TPH has pretty good deal flow from what I have heard, although from what I understand they didn’t do very well during the restructuring period. Energy is a very diverse industry and the banks all tend to focus in specific vertices (which can make actually ranking them a little tricky). This is just my opinion and obviously some people are going to disagree. But in general, I think it’s a pretty accurate representation of the energy shops and you can’t really go wrong with any of the shops listed above.
This is a pretty decent breakdown though I'd say BAML and JPM are pretty meh. I mean, ya, they do a decent deal every once in a while but they're not that far ahead of DB or WF at the moment. You really have to divide up each vertical to rank dealflow imo and then do an overall ranking. That said, it'd be really hard to not have EVR and Jefferies at the top right now. EVR has a nice distribution while Jefferies dominates A&D. GS, MS, and CS get on a lot of name brand stuff but they lag a bit on M&A vs. EVR/JEFF. I'd maybe throw TPH in there too, their upstream guys are great and their midstream team is winning some solid stuff too.
It's not that OFS isn't active, it's that Simmons and PPHB dominate the market and handle pretty much everything below $500mm and will happily sell it to smaller players while the BB/EB won't really go below $300mm and there's just not that much work to be had at that level.
Petrie is like the ultimate sweatshop, but their guys place into solid MM energy PE shops. Haven't heard about any midstream deals they've been on but they see some big upstream work for being like a 10 man office.
>Petrie Partners
What year do you think this is 2004?
>GS
Oh nevermind. It's clear that you have absolutely no clue about the subject on which you are speaking
By far, Houlihan Lokey has the best platform.
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