Credit Suisse - LevFin or Financial Sponsors????

I have the choice between 2 offers with CS: the Financial Sponsors team or the Leverage Finance team.I've been told that CS FS team originates and executes its own deals, but not sure about their reputation. Also, I've been told by the LevFin guys that they were one of the top team in the City - but most of their job involves corporates (80%+) as opposed to Financial Sponsors given the current market, and they do some restructuring stuff as well.

Already spent 2 years in M&A (did one internship a large PE fund too) - which offer should I pick to be best placed to go to PE over the next 12-18 months???

Credit Suisse: Financial Sponsors Group vs Leveraged Finance

from certified user @wookie102

They've traditionally been regarded as the best FS group on the street, by a long shot

The general consensus here is that the financial sponsors group is the ideal choice. The financial sponsors group is ranked 3rd overall in fees generated. They were also part of the largest leveraged buyout ever (TXU). The financial sponsors group acts like a coverage group. The vertical being buy side firms. Leveraged finance handles underwriting and high yield debt.

from certified user @GameTheory

FSG is essentially a coverage group for financial buyers. They operate similar to any other industry group. They may bring buyside ideas to sponsors, pitch different exit options with supporting analysis to sponsor owned companies, etc.
Leveraged finance has one hand in the IBD and one hand on the capital markets. They have a good idea through their friends in DCM and the trading desks about how much paper the market will take and what the pricing will have to be to clear the markets. They can give FSG a good idea of what the realistic pricing is for the amount of debt needed to finance an LBO. Sometimes, when there isn't a whole lot of wiggle room, differences in pricing can have a sizable effect.
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Comments (22)

Mar 18, 2010

at least in new york, cs is generally regarded as having one of the top sponsors teams, so i'd probably pick that.

Mar 18, 2010

Hands down CS Financial Sponsors.

Mar 18, 2010

Isn't FS and Lev Fin the same?

--
"Those who say don't know, and those who know don't say."

Mar 18, 2010

FS is a "sector" team - you basically execute transactions for private equity clients
LF is a product team - you focus on how to structure debt financing packages for any client

Quite a few banks (ie. UBS) actually merge the two groups together to have a combined FS/LF group, but a lot of other banks split those groups. I'm jsut trying to find out which one is best to position myself for a PE job - it seems to me that most people in PE have leverage finance experience rather than M&A experience.

Mar 18, 2010

second marcus. financial sponsors is a no brainer

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Mar 18, 2010

not true. take a look at associate profiles. most are from modeling intensive groups like m&a or coverage groups that do most of their modeling in-house. the question you should be asking is which team runs with the model. in cs case, i believe it's fs that works the model not levfin.

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Mar 18, 2010

things to consider when picking sponsors teams...

people
relationships with pe
modeling intensive?
balance sheet

cs, ms, boaml all have great people with great relationships
all 3 teams run with the model
but only boaml has the balance sheet fire power from the commercial bank

you need all these factors to cater to pe shops. especially the last because it allows the bank to competitively bid on deals.

Mar 19, 2010

CS Sponsors dude. Congrats and hope you get to a good PE shop one day. BTW, are you starting over as a first year?

Mar 18, 2010

I actually managed to get an offer as a second year associate for CS. It took some extensive negotiations to get there, but I used my prior PE internship and M&A experience as a first year associate to justify this, and also agreed to start earlier and no graduate programme...

PE shops would look at M&A guys for the modelling skills and also because that is where smart people tend to be (doesnt mean all people in M&A are smart though!). They also look at leverage finance guys because of their knowledge about debt structuring which is directly relevant. In the end, it is all about the deals you've been exposed to and how much modelling you've done. If you've got that, there rest is just about fit, and a lot of luck! (and languages in Europe)

Mar 19, 2010

I dont understand this modelling vs. non-modelling debate. Coverage groups do modelling as well-when you pitch you're always gonna have a DCF/LBO/Operating model showing up in your 100 page pitchbook. How the hell will an M&A guy be able to know revenue drivers or operating assumptions for a tech or retail company?

All the people that i've talked to, who work in industry groups, told me they do financial modelling as well, so where does the idea that only M&A group do modelling, comes from?

Mar 19, 2010

what about the other way -- do M&A guys learn about industry trends or qualitative drivers of industries, or is it modeling M&A 24/7?

if its the latter, why is M&A so valued for PE? I would rather pick a guy who knows about an industry and its landscape along with solid modeling experience than someone who can only model

Mar 20, 2010

barcap levfin is weak, they are 9th on the current tables

Mar 18, 2010

in 09 barcap was last among bb's on the league tables for sponsors and 13th overall for us (also behind laz and some of the foreign banks). Nobody really did many deals that year, though, so sample size might be too small for those results to be too meaningful.

http://img28.imageshack.us/img28/5661/fs09fy.jpg

Mar 20, 2010

No because it's already happened for a while now.

that link makes no sense, baml is never that low. Here is January 2010 till march 2010 so far

http://www.leveragedfinancenews.com/data/high_yiel...
In order from 1-10

JP Morgan 7,122.2 1 1,883.7 2

Citi 6,245.0 2 587.6 8

Bank of America Merrill Lynch 6,201.5 3 2,285.6 1

Goldman Sachs & Co 5,030.6 4 726.4 6

Credit Suisse 3,472.3 5 622.5 7

Morgan Stanley 3,412.6 6 740.9 5

Deutsche Bank AG 3,113.8 7 1,186.4 3

Wells Fargo & Co 2,428.4 8 830.5 4

Barclays Capital 2,379.0 9 187.8 12

UBS 2,067.3 10 - -

Jun 3, 2010
fritos:

No because it's already happened for a while now.

that link makes no sense, baml is never that low. Here is January 2010 till march 2010 so far

http://www.leveragedfinancenews.com/data/high_yiel...
In order from 1-10

JP Morgan 7,122.2 1 1,883.7 2

Citi 6,245.0 2 587.6 8

Bank of America Merrill Lynch 6,201.5 3 2,285.6 1

Goldman Sachs & Co 5,030.6 4 726.4 6

Credit Suisse 3,472.3 5 622.5 7

Morgan Stanley 3,412.6 6 740.9 5

Deutsche Bank AG 3,113.8 7 1,186.4 3

Wells Fargo & Co 2,428.4 8 830.5 4

Barclays Capital 2,379.0 9 187.8 12

UBS 2,067.3 10 - -

Can you/someone else post an update of these rankings?

Thanks!

Mar 18, 2010

my link was for sponsors, not levfin. They are not the same thing (corporations use lev fin too, not just sponsors). Your link is in line with the assertion that barcap is 9th for levfin.

edit: i just ripped my link from another thread on this site though, so i can't vouch for its accuracy or what methods were used (completed vs announced, etc)

Mar 18, 2010

re Barcap - as a general rule I tend to be very suspiscious of places that "will grow substantially going forward" or that have a "very ambitious growth strategy". I'd probably go for an already established player and team with a good reputation rather than with "hopeful" teams...it seems that growth plans never realise. League tables dont really change that much at the top... Barcap is a strong player (but not one of the top), but I would definitely not choose a job based on "future potential growth".

re CS job - I started as a grad in Fixed income, then managed to move to M&A after a year and got promoted associate a year later (because i had several job offers from other firms but those were the good times in 2006/2007!) So I basically was a 1st year associate when I left for the MBA.
I had a PE internship with one of the bank's top client, and partners provided recommendations to the bank which was quite helpful I think.

One good advice for negotiations - you wlll never loose anything for asking something. Worst case they say no but they will not cancel the offer jsut because you ask something.

Mar 18, 2010

never said what you claimed.

each sector/product group runs their own set of models for their own objectives.

most college kids think of the widely known models (lbo, merger accretion/dilution) b/c these models give you best understanding of how the deals are structured because it gives you a holistic view on things.

levfin team at boaml - i'm assuming they run with their own set of models to do a variety of things, esp restructure debt (very useful skill set to have when you're shooting for pe shops). just because a model may not have a widely publicized name, it doesn't mean it doesn't add as much value. it can be anything from balance sheet sensitivity b/c accounting changes for junior sub debt with 30 yr maturity or even the black scholes (giving far out examples)

each team will get modeling experience, but it really depends on how much of the intensive modeling is outsourced to other groups.

Mar 21, 2010

BAML levfin is one of the top in the street because of the strong balance sheet in accordance with its banking side. Same applies to JPM. Therefore, its fsg is heavy in workload and exposure to some prestigious pe shops. Both fsg and levfin have exposure to modeling but fsg is execution while the levfin is product structuring.

I am not sure about the CS fsg and levfin groups.... anyone know any good pe shops they've worked with in the past? Ultimately the exit opp is to know which firms the banks have relationship with.

Mar 21, 2010

Stealing my name?

wookie0:

I am not sure about the CS fsg and levfin groups.... anyone know any good pe shops they've worked with in the past? Ultimately the exit opp is to know which firms the banks have relationship with.

For starters, the largest LBO ever. They worked with KKR and TPG on the TXU deal

They've traditionally been regarded as the best FS group on the street, by a long shot

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Mar 21, 2010