Corp. Dev. vs. MM IB?

TNtoHTown's picture
Rank: Chimp | 7

This is a throwaway account since I'm a regular poster but want to be anonymous.

Graduating from a target soon. I recently got an offer for an active corporate development team at a large energy company (think SLB/HAL/PAA/KMI/EOG/COP). It's a strong company and we'd be doing about 10 or so acquisitions each year with most targets having an EV between $100MM to $200MM. I'd likely see at least one deal in the $500MM to $1BN range but might not. Either way, it's a small team and I'd definitely get great deal experience.

The current environment has me a bit worried and even though this team has historically had pretty good exits, I'm debating on whether to pursue an opportunity at a larger MM IB (think STRH/RJ/Oppenheimer) doing generalist M&A. Their placements aren't great but have been getting better recently.

My goal is to get up to NYC (neither job is up there) for a few years at a buyside shop, ideally PE. I'm not looking to get into a MF or anything like that, looking more for something in the half to a couple billion range. Obviously IB offers the traditional route but I'm pretty green when it comes to PE recruiting so I don't know how much access I would get to headhunters at a MM bank. I likely wouldn't get access at the CD role but the senior people are known to help find exits.

Does F100 Corp. Dev. at an active acquirer set me up for PE better than a larger MM IB? Would I have access to jobs in NYC through headhunters if I was a top quartile performer at one of the above banks?

Thanks in advance.

Comments (11)

Jan 21, 2016

The Corp Dev offer sounds interesting but I suspect that there is a non trivial chance of them pulling your offer- SLB fired 10k people today.

Either way you are in a pretty good spot.

Jan 22, 2016

Thanks for the response.

Ya, though my position is said to be secure, it's still a concerning and very real possibility.

Jan 21, 2016

provided that your role will be modeling intensive, I'd argue that the principal investing experience you get at a CD role will help you think from a buy-side perspective. On the other hand the MM to PE route is tried and tested so you'd definitely be on more HH radars. Besides, you can always get a Corp Dev/Strat job after IB. It's likely more difficult the other way around.

Disclosure: I turned down a MM/Boutique role for a corp dev/strat role.

Jan 22, 2016

Thanks @Guest1655"

You pretty much summed up my thoughts right there. While I know of a high percentage of past analysts ended up with good exits, I really wonder if the exposure to HH at the bank might be a gamechanger.

If you don't mind me asking, did you try to transition into PE from your CD role or have you just stayed the course?

Jan 22, 2016
TNtoHTown:

Thanks @Guest1655

You pretty much summed up my thoughts right there. While I know of a high percentage of past analysts ended up with good exits, I really wonder if the exposure to HH at the bank might be a gamechanger.

If you don't mind me asking, did you try to transition into PE from your CD role or have you just stayed the course?

I only started last year (post MBA). I'd like to give it a shot but not optimistic about my chances given only a previous banking internship. Been thinking about IBD though as I just dont enjoy the corporate environment.

Jan 22, 2016

I come from a top 25 public as well and did an F100 internship my junior year and was not a fan - decided to switch to IB. I didn't really feel that challenged in my role and didn't appreciate the "9-5" / work-life balance - I'm a bit of a grinder though, so you could be looking for something different. High-level outline of each below.

F100 - Will be a good experience with decent pay, but unless you are in a leadership development role (e.g., GE FMP or Siemens FLDP) then you could be a bit restrained from an advancement perspective. Even in the rotational leadership programs, you can be placed in areas / locations you don't really have an interest in being in. However, you will likely have a great work-life balance, with working an average of ~50 hours per week (though you could work 60 during really busy periods). Typical starting salary can range from $60k-$80k.

IB - Will best position you for exit opportunities. You will work 80-90 hours per week (depending on the group / firm), but will get an unbelievable wealth of knowledge and experience. However, this will be a total grind, and can really take a toll on a person, unless you are very career-investment oriented and even a bit sadistic (i.e., you love the burn). Pay will typically be very good, with salary after the recent industry compensation changes typically around $70k - $85k and an annual performance bonus that brings all-in cash comp in to $100k - $140k (depending on group / bank / performance / etc.). You also get much faster progression of total compensation in banking - with the ability to make what a mid-level exec at an F100 makes within 3-5 years.

For me, it was about the challenge and finding the environment that would allow me to learn the most I could, as quickly as possible. I just finished my third year in banking, and I'm now working in private equity. In retrospect, I would do banking all over again. One of the best decisions I've ever made. Though, it's definitely not for everyone - you don't have to be that smart, but you do need to have a great attitude and thick skin at times. In order to be successful, you really have to have the mindset that you are investing for your future and "what doesn't kill you makes you stronger" - though at times, I thought I might die haha! :) Good luck!

Jan 22, 2016

It really depends on what you want to do a few years down the road. If you want to do banking or PE, go the banking route. If you're confident you want to do corp dev for a long time, you could go that route. If you're unsure of where you want to be in a few years, I'd go the banking route. It is relatively easy to move from a top MM bank to a decent corp dev group if you decide a career in banking or PE isn't for you. It would be much tougher to try to do corp dev for a couple years and then go into PE for example.

Banking will most likely pay more than corp dev, although you'll work much longer hours, and therefore likely make less on a $/hour basis. I am in corp dev and work 50 hours a week now compared to my 80/week on average in banking.

To sum it all up, I'd go the banking route if you're unsure of what you want to do in the future, as it will give you exposure to more industries (assuming you'll be a generalist) and keep more options open for the future.

Jan 22, 2016

The two above posters gave you some excellent advice. One additional thing to consider: you can go from MM to corporate development after your two years of banking. Going the other way is more difficult. I would choose the MM IB.

Jan 22, 2016

Thank you guys for the responses. Would it make a difference if this company is say much larger than F100 and is strictly in a M&A team with the opportunity to receive a full-time offer unless I really screw up this summer? The company is top 5 in one of the most profitable business areas.

Jan 22, 2016
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