Coverage Bankers - What is the toughest part of the job?

What is the toughest part of being a coverage banker? From a technical modelling perspective, I have always thought that M&A modelling is handled by the M&A group while ECM takes care of capital raises.
So do coverage bankers focus mostly on the relationship-building aspect of the business and perhaps have some kind of input into the work done by M&A / ECM groups.

P.S. I am not in banking so some of my questions might sound silly but would appreciate any insight

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Comments (21)

Aug 17, 2019 - 11:14pm

Lol. Seems like you have had some interesting experiences going by your username.

Aug 17, 2019 - 11:38pm

Would love to know this as well. Never figured out where does the role of coverage group begin and end vs product groups


Aug 18, 2019 - 12:00am

My serious answer: it depends. In some banks, the coverage groups are also the product groups, so they'll be involved in both typical coverage and actually M&A execution work (rarely do coverage groups execute equity/debt offerings without a dedicated product group supporting them but that shit sucks so who cares). In that case you'll get good experience executing.

In banks that have a dedicated M&A group, you'll spend more time literally covering companies. You'll put together monthly industry updates, put together idea books, update books, random materials that your MDs will want as an excuse to meet with a company. You'll help out on pitches and might get to do some work on execution but likely not much. The experience in these instances seems less fulsome and more busywork but you can spin anything, I guess.

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Aug 18, 2019 - 2:02am

I am thinking more about BBs (perhaps except DB). Don't think coverage bankers are going to be doing M&A (or ecm transactions there).

So where exactly do coverage bankers end up after their stint in banking (assume BB)? Not sure what skills you learn by doing monthly updates etc - perhaps VC if you are in tech, but definitely very few hard skills

Most Helpful
Aug 18, 2019 - 11:34am

I was an analyst in a coverage group that outsourced its M&A and then a post-MBA associate/VP in a dedicated M&A group. Both at top BBs.

From my coverage group analyst class:

2 - grad school
3 - banking
6 - PE/Growth/HF
1- corporate

So people did still exit to great places. But if you have an opportunity to work in a group as an analyst where M&A is the focus, then you should do that.

Aug 18, 2019 - 7:35am

I have done an internship in the coverage banking department last year. It's probably different at every bank, but at my bank, "coverage" is a separate department. The coverage bankers work together with the product groups (M&A, Lending, Risk, etc., depending on products/services used by the client company). Also, they're indeed responsible for maintaining relationships and keeping an active dialogue. And, of course, networking. They play a key role in bringing in mandates.

Aug 19, 2019 - 4:58am

It can be a great experience as an Analyst if you move beyond making company profiles and get real deal and modeling experience. I'd imagine that the "international" focus plays well for MBA programs.

However, the coverage model is generally country specific. I have many peers who have commented that VPs sitting in New York doing generalist coverage appear lost.

Source: Started out as a summer in a NY-based BB LatAm team that was shut down

Aug 20, 2019 - 11:33pm

for some reason the culture in LatAm teams across the street (BAML, C, JP to name a few) is dogshit - something to keep in mind as you're networking

Aug 21, 2019 - 3:37am
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