Wrapping up My Stint at an Elite Boutique Investment Bank
For reference, I finished my second year as an analyst in May 2016. I did M&A at one of the top EBs and work in one of the toughest groups at my firm. I do not say this as a badge of honor but rather out of frustration -- I've had notably worse hours than most of my fellow analysts within my firm as well as friends from college working at other banks. I am heading to a PE job this summer after my two years.
There are a lot things I have grown to appreciate at my firm -- most of them have been things I have realized in the past few months as my end date has become more and more of a reality. I've boiled down my two biggest positives from my experience to two ideas, culture and learning, which each have a flipside of also being the two things I will miss the least. I'll add one more preface -- this is my reflection from my experience at a bank.
You may not agree, you may think I am conceded or cocky, but I have been through plenty to make me feel the way I do. I am not here for a @#%^ measuring contest to tell you how rough I have had it (a la "bro how many times have you had to clock 140+ hours?! Have you ever stayed at work for 5 days straight?!).
These are simply some thoughts from someone who has given 110% for almost two years now and is glad to be parting ways with his current firm. I don't blame you for skipping over this -- it's long and includes a lot of things you've probably heard before (both good and bad). But they are my experiences and for the most part things I have never shared.
Two Main Positives of My Time in Investment Banking
1. Workplace Culture
While culture varies at banks and even at groups within each bank, I have had the benefit of being in a group that is a close community. For instance, in my group senior bankers are relatively understanding of near-term/last-minute personal obligations (e.g., getting out to do things last minute rather than putting some wedding you need to go to on your staffer's calendar three months in advance).
As a young employee, I suppose I don't have enough experience in the rest of the corporate world to say this in confidence, but my gut tells me that the close and often times "unprofessional" (I mean that in both good ways and bad) culture at a bank is very different with "regular" offices. I could see myself missing a lot of the positive qualities of that culture down the road depending where my career goes. The camaraderie among the analysts in my group during my first year is one of the few things that made my first year on the job bearable, and I doubt I could have had a similar experience outside of banking.
2. Learning (for the first six months)
"Drinking from a fire hose" or "thrown right into the fire" take whatever banker lingo you see fit -- my ramp up as an analyst was very rapid and I found myself having the same responsibilities (live projects, etc.) as the second year analysts in my group within weeks of being on the job (I think this tends to happen more at EBs where groups are much leaner on a junior level). In hindsight, the amount I learned in the first six months is something I am very proud of. The key part of this though is "first six months" -- which will come up later in my "negatives" section.
As a tangential point, with learning early on also comes the skill of time management -- something else that I learned a great amount of while an analyst. When I think about what I have had to juggle in the past (or still do) at any given time it makes me a bit more judgmental of friends outside of IB as they complain about what is keeping them "busy" at work.
Two Main Negatives of My Time in Investment Banking
1. Workplace Culture
When I first started recruiting for private equity during the traditional period of my first year, I had a few lengthy discussions with a close senior banker at my firm regarding what that career choice may mean for me long-term. I remember at one point he told me, in so many words, "I don't blame you for what you are doing. I will say, if you stay here you will get used and things won't get any easier."
Early on it became evident to me I was getting staffed on more challenging and higher quantity of work than most of my peers. Bottom line -- I got rocked hard and regularly faced horrible sprints for some last-minute fire drills because our group's senior team knew I was reliable and could get the complicated work done quickly and accurately.
Weekend plans regularly blew up on me, I lost my girlfriend over my job (after trying my absolute hardest to make time for her whenever I had it; although its not like I wanted to be going to Lavo with work people on weekends :P), and I had to cancel vacation plans three times during the summer of my first year. What really irked me was I was not planning and re-planning these trips while in the middle of live projects.
When our new first years came along, things didn't lighten up at all -- and it seemed like there was no real improvement in my work-life balance. Part of this is my fault for not pushing back more -- I wasn't out chasing nightmare projects but I also wasn't speaking up when I thought I already had more than equitable amount of staffings.
Was it fair for me to get stuck with much more work, spending just as many weekends in the office as my early months while our first years were never around? Probably not. Could I have done more to combat this? I'm sure I could have at least tried. Our first years' performance is very disappointing from my perspective, and their lack of dedication just makes me more confident I made the right choice a year ago deciding to look for another opportunity in PE while the window is open.
I don't mean to belittle any current associates, but the last thing a good analyst wants to do is become an associate who has to deal with terrible work product from an analyst who doesn't show the same dedication to his/her job after spending 5x too long to do it. And when I read about all this jazz about the same talent not coming into analyst jobs anymore, I feel better about not staying around as an associate.
I went into IB for three reasons: learning, comp, and future opportunities. I was not a kid who has been lurking on WSO since freshman year of college, planning out a "BB -> Mega fund -> MBA..." career before getting a SA internship, but I placed a lot of value in the fact that two solid years as an analyst could make me a viable candidate for a lot of different jobs -- which is pretty cool when you don't have an entire career mapped out in college. I was also attracted to the field by the learning curve. I have always considered myself the intellectually curious type, and thought some of the complexities of analyses conducted at an M&A advisory group at an EB would be perfect for me. This held true for awhile as I learned new things on the job.
After about six to eight months though, I started realizing how similar everything I did was. I wasn't inputting numbers into model templates, but I found myself building the same types of analyses over and over again, no matter how "company specific" we thought it was. I also got jaded, thinking all the mega-deal fire drills I got staffed on had a lower likelihood of happening than me winning the lotto.
Most importantly, I reached a point awhile ago where I stopped looking forward to coming into work. It wasn't from the frustration of being overworked, but rather no longer feeling excited about the possibility of learning something truly new. And while there is always something to learn at my level from listening to senior guys in meetings (tactics, etc.), it wasn't enough "new" stuff to keep me happy.
The past year or so has felt like a routine of processing the same types of requests over and over again that aren't intellectually challenging. I think some people find comfort it getting good at something and sticking with it, and that's okay. But at least at my level, and for the foreseeable future if I stayed at a bank (i.e., three more years as an associate), I simply don't find the work gratifying or rewarding enough for me to stay.
Mod Note (Andy): The above was a informative/helpful comment originally posted in the thread Anyone else fed up with the banking/finance industry? and received 15 silver bananas so we thought it deserved its own spot on the frontpage. Below is the update:
UPDATE - 11/17/16
- Hi everyone. Haven't been as active on WSO the past few months (new city, new job, etc.) but signed on yesterday to see that Andy featured this post. Some of you have asked for an update to see how things are going since moving on to the new job in PE. As a preface, I did not enter PE with judgement clouded by the wishful "grass is greener" thoughts a lot of people may have. In terms of lifestyle, there has certainly been a significant improvement from where I was versus my current firm. I have been making it to the gym a lot more regularly, and often find myself leaving in time to have dinner at home (say around 8-9PM) with not a lot of weekend work unless its something serious like a deal we where we have exclusivity. Cutting to the chase, I am very happy right now with the new job.
Investment Banking to Private Equity
I mentioned in my original post that one of the primary reasons I stopped liking my IB job was because I didn't find myself learning all too much anymore. That being said, when I went through PE recruiting my goal was landing at a top MM shop with strong operations focus (luckily I was able to secure such an offer), so a lot of lower-multiple purchases with turnaround stories. I wanted this because I thought it would provide me with the opportunity to learn a ton of new things about how businesses really operate and how to make them better.
I had spent my banking days doing a ton of creative excel modeling with all sorts of structured transactions, and wanted my start in PE to be an opportunity to really evaluate businesses with some new perspectives. That being said, I have been learning a lot about how businesses really operate, and most importantly, find myself truly growing as a professional with a lot more responsibility than I had at my last job (I'd say in banking terms its obviously the analyst/associate responsibilities with a fair amount of VP level work as well).
After doing banking for large-cap clients for two years, you really do get desensitized to numbers ($B everything creates such an abstraction); this has totally changed now for me, especially when we are deep in a process and doing things like insurance cost diligence, compensation diligence, etc. even if its for larger MM deals (e.g., $500M+). Happy to answer any questions you guys may have based on my original post or where I am now and what else is different!
Private Equity Recruiting:
A few people have messaged me seeking some advice regarding PE recruiting and how to balance the process while getting crushed at work. There is no easy solution here. The job itself is tough enough -- understandably, things become more stressful when you are trying to schedule intro meetings with headhunters, find time to study/practice LBO models, and make time for the real interviews once they finally come.
Three Key Tips for PE Recruiting
- First piece of advice here is to be very proactive about keeping in touch with recruiters. This means you should jump on those emails in the fall when they first start contacting analysts about scheduling intro meetings. After that, you should be regularly following up with them about upcoming opportunities, etc.
- Secondly, and probably most obvious, have your story down by the time you start meeting with headhunters. I was lucky enough to have a very short interviewing period (~ one week) and I think that was largely because I had a very targeted focus on specific-type shops and had a comprehensive story to support it.
- Third, if you find yourself short on time (and you likely will), I strongly recommend purchasing WSO's Private Equity Interview Course. The course is an especially fantastic resource for those already in finance (i.e., banking analysts) who need a concise, time-efficient way to prepare for interviews and modeling case studies (lots of lbo modeling tests too).
Mod Note (Andy): Best of 2016, this post ranks #19 for the past year