Big 4 to middle market investment bank?

catalyst's picture
Rank: Chimp | 6

Hi All -

I've read numerous threads on this forum for a year or so and really appreciate all of the advice and good insight I've gained.

I'm currently at a Big 4 on the audit side in a large mid-west market and have been there for 3 years. I went to a non-target school. I've been trying to break into investment banking for several months, primarily by networking with alumni and former Big 4 employees who moved to I banking roles. I came very close to landing two experienced analyst offers about 2 months ago (came down to me and 1 other candidate for both) but ultimately was not offered either job. They were both at lesser known boutique firms. I've recently completed a series of interviews with a prominent middle market investment bank (think Jefferies, Lazard) for a first year investment banking analyst position, and am hopeful that I will get an offer.

My question is, with my audit experience, would I be able to move to PE with only 1 year at the investment bank, or move up faster within investment banking than I would had I started in investment banking right out of college? Obviously, this would involve leaving my banking job after 1 year and then applying for PE roles or a 3rd year analyst gig or an associate role at a boutique. My audit experience, while definitely not investment banking, is somewhat related as I primarily work on alternative investment clients that have a lot of valuation work associated with them. I've been able to do a lot of this work myself instead of having it passed on to our internal valuation team. I'm hoping that with my big 4 experience, I just need to check the investment banking box and then can leverage my cumulative experience (would be 4 years at this point) to move up faster. I also have pretty good project management experience, and I generally have a couple of associates working under me.

Would you consider it worth it to start over as an investment banking analyst in order to switch to the deal side? Another option is to go for an MBA. I'm not as excited about that option mainly because I don't see the MBA as valuable as it once was, and it's such a large opportunity cost (lots of debt to take on as well).

I'd very much appreciate any advice or input. Thanks!

Comments (36)

Nov 8, 2013

I don't think you'd be thought of at the same level with 3 years of audit and 1 year of IB vs someone with 2-3 years of IB, but I could be wrong. Seek more opinions.

Nov 8, 2013

I agree with notthehospitalER. However, as a fellow B4 Auditor, there are more than a few transferable skills that will likely help you be a better 1st year IB Analyst than the other 1st years IF you are able to leverage those skills.

Once you get an offer, you need to crush every opportunity. Don't underestimate the experience you've gotten through Big 4 and go and get what you want. But don't think that just because the other 1st years are younger and less experienced that they aren't as good as you. You still need to crush every opportunity to be able to move up quicker or exit to PE.

Nov 8, 2013

This also depends on your location. I know people in my country who have gone from big 4 audit to become very successful bankers, but I think that big 4 is less respected in the US.

Nov 8, 2013

Why don't you move to TAS or Corp Fin and then into IB/PE?

Nov 8, 2013

Thanks for the input guys.

peinvestor - I've thought about trying to go to TAS and then to IB/PE, but my impression is it's still a pretty tough jump, and one where I would still be taking a step back. Maybe my impression is incorrect though - have you seen people go from TAS to a front office PE role? Corporate finance is tough to get into as well and I haven't been able to make that happen.

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Nov 8, 2013
catalyst:

Thanks for the input guys.

peinvestor - I've thought about trying to go to TAS and then to IB/PE, but my impression is it's still a pretty tough jump, and one where I would still be taking a step back. Maybe my impression is incorrect though - have you seen people go from TAS to a front office PE role? Corporate finance is tough to get into as well and I haven't been able to make that happen.

Ive seen non big 4 val to pe(small), ib, corpfin

Nov 8, 2013

Corp fin is more difficult, yes.

Is it an easy jump? No. But, it has been done both to MM IB and MM PE. I know a handful that have made it so there must be plenty more.

Nov 10, 2013

.

    • 1
Nov 10, 2013

I agree with NYU. While you may be crushing it as an auditor, that does not entitle you to a more experienced position at an investment bank or PE firm. I do think you will get hired as a 2nd year analyst (for pay / promotion track purposes).

The reality is your experience will be only tangentially applicable to the analyst role at a MM IB shop. Valuation is a ridiculously small part of the job for a traditional MM IB analyst at the likes of Blair, Baird, Lincoln, Harris Williams, etc. You also won't be managing anyone, so the managerial experience won't do you much good. You may very well outperform the other analysts, but don't think you're going to have a massive leg up, and don't think your advantage will last more than 3-6 months.

To your original question regarding moving to PE after one year: This will be challenging. Depending on deal flow, you may not even see one deal start-to-finish in your first year. You'll need to spin your audit experience pretty hard in order to get credit for it at a PE shop. Due to recruiting cycles, you may be interviewing for jobs with only a few months of experience. You'll really struggle to impress compared to the analysts that will have been there a year.

Conclusion: Expect to stick around as an analyst for two years. You may catch a break and get out in less than two, but go in assuming you're staying for two.

Nov 11, 2013

As I dont live in US (I'm in CEE/SEE Region), I am not sure if my story will help you. But I worked in Big4 Audit while I was my last year of study at the Uni. I had a little under a year of experience, when I received a FT offer to join a Regional PE as a Financial Analyst where I am now. As far as the skills go, excel and accounting (going through financial statements etc.), although I didn't have any valuation experience (aside from self-study) before.
The transition, as unusual as it may seem, was possible due to the fact that there are less then 10 people in my firm and also because the region is not as developed in PE/IB so job competition is a lot fiercer in Big4 firms and Commercial Banks. I am currently studying for level 1 of CFA, I haven't obtained, nor wanted to, ACCA/CPA.
If you have any questions, I would be glad to help you if possible.

"When a defining moment comes along you define the moment or the moment defines you."

Dec 10, 2013

Am from a Big 4 audit background. Pretty interested to know what sort of skill sets do you feel are transferable to your PE role. Mind sharing?

Nov 11, 2013

Sorry for the late reply, but I believe Mr. Manager's first part of the post summed it all up. In my conutry a lot of auditors also work on due diligences, so valuation skills, although during my Internship I didn't have any DD so can't comment further. You probably pick up and use some "smaller" skills, like mail/phone etiquette (with clients, superv. etc..) and those kind of stuff if you are straight from the college and it is your first job.

"When a defining moment comes along you define the moment or the moment defines you."

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Nov 11, 2013

where do you guys get all the cool photos for your post?

"The cheaper the crook, the gaudier the patter"

Nov 8, 2013
OutsideMan:

where do you guys get all the cool photos for your post?

the interwebz

Dec 13, 2013

Which big4?

Dec 13, 2013
everythingsucks:

Which big4?

EY

Dec 13, 2013

im curious too. a very similar route that i would like to take...however post mba

Dec 13, 2013

Well, I know someone who was a staff accountant at KPMG for a year, and he managed to get an IB analyst position at TD Securities. His GPA was a bit higher, but he networked his ass off.

I've also heard that if it doesn't work out this year, you should try to transfer to an advisory group at EY and then apply with that experience.

Dec 13, 2013
everythingsucks:

Well, I know someone who was a staff accountant at KPMG for a year, and he managed to get an IB analyst position at TD Securities. His GPA was a bit higher, but he networked his ass off.

I've also heard that if it doesn't work out this year, you should try to transfer to an advisory group at EY and then apply with that experience.

This.

At whatever bank you're trying to apply to... do you have any alumni or friends or some sort of connection that you can make? It helps if you have someone to refer you.

Edit: Also... somewhere in your resume in the Leadership section, you forgot to blur out your university...

Dec 13, 2013

You might want to break your second bullet under work into two separate things. The first phrase is a general practice and the second is an example of implementation. Making the example more prominent can help.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Dec 13, 2013

Thanks for your comments guys.

@everythingsucks- That is another (probably more realistic) option I am considering. The transaction advisory group at my firm will have internal openings starting next year and I will definitely be looking into it.

Was your friend's analyst position at TD an off-cycle offer?

@Kanon- Unfortunately, I don't know anyone personally who works at this particular bank. I found the posting on my alumni careers website. The person I have to send the resume to is an MD; I'm not sure if she's alumni or not but you've raised an interesting question that I will follow up on.

I just got into the whole networking game so I'm still learning the ropes and I know this will be crucial to me landing the job I want.

Also, thanks for pointing out that I missed blacking out my school name. I'll upload a more 'censored' version.

@happypantsmcgee- Noted and alterations will be made. Thanks!

Dec 13, 2013

yes - my friend was hired off-cycle. Started in June.

Dec 13, 2013
everythingsucks:

yes - my friend was hired off-cycle. Started in June.

That sounds eerily similar to a former classmate of mine who transferred from Deloitte in the same month mid-way through his CA exams.

Dec 13, 2013

Are your classmate's initials S.K by any chance? And is he at BarCap now?

Dec 13, 2013
everythingsucks:

Are your classmate's initials S.K by any chance? And is he at BarCap now?

No, we must be thinking of two different people. Unless he went to UofT in which case I might know him.

Dec 13, 2013

No, my friend went to queens

Dec 13, 2013
everythingsucks:

No, my friend went to queens

reply to my pm!

Dec 13, 2013

Resume looks pretty solid. PM once you hear back from the bank(s) you are applying to.

Dec 13, 2013

I'd shift focus more towards work experience, specific projects would help, maybe cut down on the leadership/volunteer stuff.

Dec 13, 2013

which bank are you applying to? they usually take applications in January for starting in September...

Dec 13, 2013
Getgo:

which bank are you applying to? they usually take applications in January for starting in September...

PM'd.

Dec 13, 2013

Bump.

I made the suggested changes and got some extra help. Refer to the thread description above.

Dec 3, 2013

As a former Big 4 Auditor / TAS professional who transitioned into banking, I couldn't agree more with the posts above (particularly NYU and CompBanker).

A few other notes:

1) Don't underestimate the randomness of the HR function (in banking or PE) in "second-tier" cities. I'm sure you've done this, but research the biographies of analysts at certain firms -- you may uncover a desired skillset specific to that firm.

2) Depends on the specific function, but a move from Big 4 TAS -> deal team PE is very rare, but possible (particularly in those "second-tier" cities). Big 4 TAS -> MM IB is very achievable. (Note: Big 4 Financial Due Diligence folks often find a home in PE, but in supporting roles to the deal team or to a subset of portfolio companies.)

3) At the very least, your Big 4 experience is an indoctrination into financial services / accounting; even if your experience is not directly or explicitly valued in PE (or via promotions in banking), it's a good foundation that should make you better at your job.

Just my two cents.

Dec 10, 2013
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Nov 8, 2013