BO to M&A and think I've failed; should I move back to BO?

Hi guys,

I've been a stalker here for some time but never got round to posting until now. Looking for a bit of advice from all you wise monkeys, especially anyone who has tried the BO to FO M&A move (whether successful or not).

TLDR: I spent about 6 years of my life in BB BO in the UK, found it boring although quite lucrative, moved to mid-market accounting-firm doing M&A lead advisory (definitely NOT lucrative), from here moved to a 'no-name' boutique staffed by ex mid-tier accounting partners.

I've now got about 3 years' M&A experience, but the career move has not paid off financially, and I'm wondering whether I should cut my losses and move back to BO?

Some background:
I had no idea about IB back at university; I started my career in a Big 4 auditing role in London, made the move into a couple of BBs in the BO and - largely as a result of other things going on in my life - it took me longer than it should to figure out I didn't find it interesting or enjoyable. It was, however, a very 'comfortable' gig (by which i mean good working hours and base salary).

Thanks to resources on this (and other) forums, I made the leap to a mid-market accounting firm in their M&A team (think something similar to Grant Thornton). (The accounting firms in the UK account for a significant chunk of UK deal volume, often ranking within the top 10 by volume, but they tend to stick to 10-50 MM EV transactions in the main.)

I knew this wasn't the end goal, due to:
(A) equity-partner-takes-all remuneration model - accounting firms don't structure M&A remuneration markedly differently from Audit and Tax despite the fact the fact it's higher-margin work. So you basically get paid the same base as a bog-standard accountant + maybe 5/10% and bonuses are non-existent;
(B) lack of exposure to public company deals; and
(C) lack of solid financial modelling experience due to the fact most transactions are acquired by trade buyers and valued on a simple EBITDA or Revenue multiple.

I've since moved to a 'no-name' boutique. Well actually to be more accurate, it's an advisory firm that does restructuring, forensics, pensions advisory and, recently, M&A. Therein lies the problem: M&A is not the dominant part of the business and therefore the remuneration model doesn't 'work' for M&A. The partners here are mostly from mid-tier accounting firms except one who is from a lower tier IB (strangely he is the one failing to bring in any deals!) My base salary, whilst an incremental improvement, remains appalling, and is still significantly below what I was getting in BB BO, even discounting any progression I would have had. Bonus potential is low given the heritage of the firm and the M&A partners. I used to get a 20% bonus in BO; it's complete anathema to me that I'm now in a revenue-generating role with a worse bonus.

Personal factors (incl. getting married, wanting to buy a house) have made the issue of remuneration that much more important to me. I've tried my hardest applying to all manner of other small and less prestigious boutiques across the UK that I perceive to be proper M&A houses (with a proper M&A remuneration model), including direct cold email approaches, but I've had no luck. There are also hidden factors that, naturally, no one will discuss with you directly, such as the fact that I lack the private-school polish and black book of contacts; a LinkedIn search quickly shows that 99% of the staff in M&A at all the firms I've applied to are ex-private-school.

I thoroughly enjoy the M&A gig - I really do - but if it's never going to pay off financially to at least the same level that BB BO did, then I don't see the point in punishing myself.

It's basically Maslow's Hierarchy of Needs - I'm sure if I go back to BO and my financial needs are met, I will quickly complain that the work isn't as engaging but, right now, paying down my debt and building a family are more pressing concerns and I'm sure I'll survive being a little bored every day.

If you got this far, thanks for reading!

Comments (6)

Apr 29, 2018 - 8:43am

Mmmmm interesting your case. I want to read some answers and opinions. I am not ready to give you one since I have no clue what you should be doing but allow me to tell you that I think job satisfaction is more important over money, anyway, is there that much difference between your current job´s salary and your BO´s at a BB?

Best Response
May 1, 2018 - 4:37am

The original pay hit dropped me from a total annual package of around 90K down to just over 30K.

I've now managed to work my way up to 45K, but clearly it's still substantially behind the package I had back in BB BO.

It's worth me adding that the particular area of BO that i worked in was regulatory-related and therefore very high in demand, with the number of vacancies far outstripping suitable candidates. As such, it was commonplace for people to jump every 2 years commanding a 15-20% increase each time. There are some people in that department who have zero people-management responsibilities getting paid as high as 120K.

Unfortunately, the supply-demand dynamics of M&A are such that every Tom, Dick and Harry is so eager to get in, they're willing to accept a meagre package to 'get their foot through the door', which exacerbates the situation further (at least within the accounting firm circles).

May 1, 2018 - 5:58am
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