Big 4 restructuring

Anybody any thoughts on it?

Whats it like as a job? Does it count as proper finance experience? Exit ops? How would it compare to restructuring with a bank? Much modelling involved?

Have done a search and there's very little on it.

Anybody any info/experience?

 

In my experience the restructuring groups at the Big 4 are largely concerned with fresh-start accounting, transactional accounting, etc and are involved after-the-fact of the actual restructuring (just like Big 4 valuation grups are usually invovled after-the-fact of the transactions, doing things like purchase price accounting.). Probably depends on the firm and group whether they get to model (my Big 4 valuation group did most/all of the modeling for restructuring group.)

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

I can only speak about continental europe.

As there is no chapter 11 (or equivalent) there isnt that much of restructuring in the US sense. Its either pure debt restructuring or operational (both concensual restructuring). Big 4 is a major player in europe for restructuring and has some nice exits.

If you are concerned about europe (what I doubt) Pm me.

 
awp:
I can only speak about continental europe.

As there is no chapter 11 (or equivalent) there isnt that much of restructuring in the US sense. Its either pure debt restructuring or operational (both concensual restructuring). Big 4 is a major player in europe for restructuring and has some nice exits.

If you are concerned about europe (what I doubt) Pm me.

Interesting and continues a trend of the Big 4 getting way more respect/better work in Europe. Were the Big 4 the primary restructuring advisors?

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

PM sent AWP.

Kenny_Powers_CFA:
Interesting and continues a trend of the Big 4 getting way more respect/better work in Europe. Were the Big 4 the primary restructuring advisors?

It seems big 4 is held in much higher regard in Europe. You routinely see job adverts for Corp fin/ER asking for Big 4 qualified ACA.

Not sure how difficult the CPA is to get but to get the ACA over here you need three years experience and you have three sets of professional exams (one a year, although you can get exemptions if you do a masters). Not sure if that is what makes the difference.

 

I interned there (just about to start my ft but somewhere else) so take all my knowledge with a grain of salt.

In Germany 2 out of the big 4 are, next to Roland Berger and AlixPartners, the main players in the restructuring space. All projects I worked on during my time there, the company was the main advisor.

The companies have operational teams but also financial teams whereas most companies (i.e. DCadvisory, rothschild, lazard etc) have only finance teams and the consulting companies pure operational teams. The name "restructuring" might just be a little misleading at this point because if there is no chapter 11, where does restructuring start (if not pure debt) and turnaround end?

I have never worked in the US so I cannot really compare the prestige or type of work. Nevertheless, most of you make it sound as if the big 4 are not really executing projects but merely "adding" a layer of service. This is not the case in continental Europe.

I have seen people leave to PE funds as well as other areas (interestingly I have also seen alot of people from Ibanks esp. lev fin join those groups.) and the work is also very interesting.

Despite the fact that I think Big 4, at least in Europe, are underrated, one should not forget that they are audit companies. I find this leads to two problems

(i) You are working in a division that is not the main income driver and not the main focus of the company (What division gets more resources? / what mandate to take? Audit brings in more money so there is a conflict of interest / "pigeonhole of the big4-name").

(ii) Even when having an exclusive mandate, the work will be closer on the reporting side compared to any of the other main restructuring players. The Big 4 brand name is incredibly valuable when it comes to guaranteeing new lines of financing, rearranging covenat breaches or speaking with creditors. Despite offering a variety of services, the main "selling point" will be the credibility that an independent business review adds. After this has been done, often operational or financial services are added.

 

Everything you said is very perceptive and makes a lot of sense. I previously worked in Big 4 valuation in the US and the people who came to the US from Europe/went to Europe from the US universally noted that the type of projects and amount of respect from other financial institutions and clients was drastically improved in Europe. Big 4 in the US is very much "bolt-on" services, usually focused on accounting- and financial reporting-related services.

For exit ops in the US, top-tier junior people occasionally left to banking analyst programs, but front-office buyside (PE, HFs, etc) was pretty rare. Buy-side and sell-side back and middle office roles were common exits as well.

Your two points on the Big 4 are also dead-on in my view.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

Everything you said is very perceptive and makes a lot of sense. I previously worked in Big 4 valuation in the US and the people who came to the US from Europe/went to Europe from the US universally noted that the type of projects and amount of respect from other financial institutions and clients was drastically improved in Europe. Big 4 in the US is very much "bolt-on" services, usually focused on accounting- and financial reporting-related services.

For exit ops in the US, top-tier junior people occasionally left to banking analyst programs, but front-office buyside (PE, HFs, etc) was pretty rare. Buy-side and sell-side back and middle office roles were common exits as well.

Your two points on the Big 4 are also dead-on in my view.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

I can tell you I worked in Canada at a Big 4 firm, first in audit then in restructuring. Our system, CCAA proceedings, is similar to chapter 11's. However, in the US a lawyer is a Trustee in a bankruptcy estate whereas in Canada trustee is a seperate profession ( e.g. Big 4 accountants).

As such, most of the guys either stay on as trustee's or try to become turnaround specialists/CRO's. very few if not none go to front office positions at PE/HF, and if you switch to IB, like kenny said you have to start back as an analyst (is you're lucky, with 4 yrs Big 4 experience they'll start you as a 2nd yr analyst)

 

Here's my theory on that: The AICPA and FASB have tried really hard to make accounting a "profession" in the US analagous to being a lawyer. To this end, they have changed the licensing requirements to make it so that, for the most part, the majority of people who can become a CPA are those who decide by the time they are sophomores in college that they want to become accountants. When you consider the additional licensing requirements like 150 credit hours and the rise of 1-year MSAcc and masters in tax programs that students are pushed into by their professors, the limitation is even more severe. Combine this with the fact that most truly elite schools in the US don't have undergraduate accounting programs, and you have a permanent bias away from elite workers in the accounting profession-you exclude, as an example, every math, science, and engineering grad in the country plus every grad from Harvard, Yale, Princeton, and Stanford. As a comparison, an Oxbridge grad can take the ACA exams, get their experience, and be a qualified ACA. Finally, the strictness of the conflict-of-interest rules for CPA firms in the US make it so that the Big 4 are severely hamstrung in terms of providing non-audit services (like serving as a lead restructuring advisor).

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
 

Also, I think I know the answer, but...

Is there any fucking chance these guys will let me keep my 2nd year analyst salary? or would they require me to drop to 60k-ish? (coz thats not gonna work out...)

Dont think I can justify giving up 20k annually in base salary to move to a higher cost city.

Array
 

think it relatively hard to jump to buyside after just 2 yrs. have seen several people go to distressed HFs after 5+ yrs, but not a whole lot other than that.

best bet it to try to lateral after a couple yrs to an IB restructuring group and go from there.

 

From what I hear, I think they mostly work smaller firms and also provide support to other restructuring firms that work with bigger corporations. They probably play a much bigger role in other countries where there aren't as many specialized restructuring shops as there are in the US.

 

..its not a joke. clearly the scope of work you will be doing will be more focused on the audit, forensics, and diligence aspects of the restructuring (includes some modeling) but the financing, M&A advisory, valuation, etc. work will be carried out by the bankers.

other than big 4, there a similar consultancies that compete with them on these deals (alix, fti, alvarez, etc.)

now if you're working with companies that earn between one and five million in EBITDA, then you'll play more of a M&A role but I think that's more for the corporate finance division of the accounting firms.

------------ I'm making it up as I go along.
 
Cornelius:
..its not a joke. clearly the scope of work you will be doing will be more focused on the audit, forensics, and diligence aspects of the restructuring (includes some modeling) but the financing, M&A advisory, valuation, etc. work will be carried out by the bankers.

other than big 4, there a similar consultancies that compete with them on these deals (alix, fti, alvarez, etc.)

now if you're working with companies that earn between one and five million in EBITDA, then you'll play more of a M&A role but I think that's more for the corporate finance division of the accounting firms.

""Clearly the scope of work you will be doing will be more focused on joke, joke, and joke aspects of the jokes"

 

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