Dcm and chances getting into it ?

Hi everyone

I was wondering some advice here. I would appreciate hearing from others in DCM to get a clearer picture.

I was wondering if you can talk about your experience broadly about working in DCM (hours, salary, exit opps, satisfaction)

I see from a lot of threads that some say DCM has alittle bit more modeling ( on a very very small scale) then ECM can anybody comment on that if there is any financial modeling at all ? ( and what would this consist of as I realize LBO would be more from LevFin)

I also wanted to see if anyone had any thoughts on chances getting into DCM from someone like me :

Very interested in the markets and keeping up with market trends , was prior head of managing my universities investment fund, summer analyst experience in MM sales and trading , current position is at a major financial tech company ( think Reuters, Bloomberg, s&p)working in fixed income.

Any thoughts would be greatly appreciated.

Thanks everyone !

 

Also want to add how realistic would it be to lateral into leverage finance from DCM I see some threads mention that it's possible and some that it is very difficult ?

Thanks again, appreciate it

 
Best Response

Hours: In most groups across the street, you will work less hours than a coverage/M&A banker. The difference isn’t dramatic, but it’s definitely noticeable. Please note that most people on these forums tend to inflate coverage/M&A hours and discount capital market hours relative to the actual norms.

Salary: As an analyst you should get the same base as the coverage/M&A bankers at your firm. Bonus is dependent on the group. There is no norm. Top bucket in one group can be different than top bucket in another.

Exit opps: Coverage/M&A generally place better to PE. Go to the PE websites and you can see this yourself. Read the bios and see how many of the associates come from coverage/M&A versus DCM. You will find DCM is infrequent relative to coverage/M&A. Not improbable, but less frequent. HF placements tend to be better, especially the debt funds. For exit opps not PE/HF/high finance, I think being a coverage/M&A banker is more marketable.

Skillset: In most cases (not all!), the modeling (LBO included) is outsourced to the coverage/M&A groups. Yes, I would always expect a coverage/M&A banker to have better modeling/valuation skills than a DCM banker. However, I would expect the DCM banker to have a better understanding and feel for the past/current/future debt environment. Understand that being in a DCM group does not mean you can’t go work at a PE shop. It’s just fact that coverage/M&A bankers tend to take these spots more often than not. I think at any bank your analyst experience is going to be what you make it. I’ve seen DCM analysts run a deal model because they actively raised their hand and took initiative to own it versus the coverage analyst doing so. Although, this isn’t a common scenario.

Satisfaction: Completely subjective. Everyone will place a different value on the experience depending on what’s important to them.

Your background: Yes, you sound like most desiring students wanting to do IB. Very cookie-cutter background. Try to make your pitch unique in some way when you interview. It’s hard, but give it some thought.

Lateraling to Lev Fin from DCM: This question might be confusing to some because some banks have the LevFin group under the DCM umbrella. To be clear, I’m assuming you mean switching from an investment grade role to a BB+ and below role (referring to credit ratings). From a work perspective, there is lots of overlap and it’s a very transferable skillset. Looking at credit agreements, thinking about covenants and acceptable leverage is done in both groups. Main difference is that the lower grade clients. You’ll see more covenants here, more diligence, more complicated deals, etc. Therefore, from a skillset perspective it’s very possible to switch between the two groups. From a bank/cultural perspective, this will vary from bank to bank. Embracing internal mobility plays out differently at each firm.

Apologies for spelling and grammar. In the office and tired. Don’t care much about that at the moment. I think I got all your questions.

 

I invest: thank you so much it's really hard on the website to get someone who will actually answer your questions very clear and thoughtful for that I thank you so much.

Follow up question for you or anyone interested, how do you see the dcm environment and investment grade vs high yield issuances in the coming years ? Just curious what others opinions here are

Another follow up as for any type of modeling for an investment grade dcm analyst is this just typical pv of CFs, bond pricing, analyzing credit spreads, comps to other similar issuances ? Just looking for any type of context there

Thanks so much again !

 

no idea, just graduated so looking for opps. this was my first interview. I know that they are rapidly expanding and have great deal flow, but at the end of the day, it still is DCM and not M&A you know

 

Update -- So, after weeks and weeks of "following up" to see what my status was and if i was dinged, I finally got a response today. The interviewer said that he wanted to speak with me later today. What does this mean? He didnt answer any of my emails nor did the recruiter, so I thought i was dinged, but still emailed like once or twice a week to reach out. Today, the interviewer finally was like lets talk at this time, gimmi a number to reach you at. Does this mean anything? What would he want to talk about?

 
Crame:

Update -- So, after weeks and weeks of "following up" to see what my status was and if i was dinged, I finally got a response today. The interviewer said that he wanted to speak with me later today. What does this mean? He didnt answer any of my emails nor did the recruiter, so I thought i was dinged, but still emailed like once or twice a week to reach out. Today, the interviewer finally was like lets talk at this time, gimmi a number to reach you at. Does this mean anything? What would he want to talk about?

Have you thought about, I don't know, WAITING THE THREE HOURS TO FIND OUT?

 

Ill be an SA in DCM this summer...in the interview they told me that interns in the past have modeled derivative swaps, picthbooks, helped with debt origination...where are you interning at?

 

getting spreads from traders doing some analysis, but mostly market/macro analysis (not fundamental) keeping track of bond issuances doing pitchbooks, etc putting together relevant news, regarding your client list issuing notices to your clients about where you think their spreads are, based on your own comparative models

i was thinking about working in dcm; prob great if you think macro, and you can prob learn alot with respect to that mindset; if you think fundamental (like me), then not a great place to be

 

Thanks for the reply paradiesvogel.

I don't start until the summer so unfortunately don't readily have accces to that information. Any suggestions as to where I may be able to find it online?

PLW
 

Hey junior B, I'm the WSO Monkey Bot and I am sad to say, but this thread is lonely, so thought I'd post in here to try and help out. Some potential topics that might help:

More suggestions...

Fingers crossed that one of those helps you.

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Hi. I work in DCM in Europe, so things are a bit different than in the States. As an analyst i normally put anywhere between 70 and 80h a week, when things get really busy it can get up to 100, but it is rather rare. Your hours differ as well depending on the client base you cover. As such if you deal with companies in the Middle East you can kiss your free Sundays good-bye. In general more ppls tend to stick to DCM throughout their career compared to M&A, due to high job satisfaction. The pace is fast, markets change quickly, you lear every single day and in all honesty it is an exciting career. Exit opportunities are vast:i have seen ppls move to HF, to consulting, to coverage banker position. financial modelling is sometimes outsourced to M&A, but can be done by DCM as well. More along the lines of difference ratio forecasts and capital analysis (I do FI DCM). Salary for analysts same as M&A, bonus policy depends on the company.

Think given your profile you got all the chances! Good luck.

 

You should obviously kill yourself. DCM is worse than working at a gas station. I mean where are you going to be in 10 years because of this. Most likely living in a shelter and missing all of your teeth.

 

Let me temper my little bitch fest in saying you might actually like DCM and want to stay in it. I think too many people get wrapped up in the whole banking or nothing mindset and get bummed out when they get into this side fields. Remember, people care about exit ops so much because banking sucks. I wouldn't be too bummed out man.

 
Anthony .:
I think too many people get wrapped up in the whole banking or nothing mindset and get bummed out when they get into this side fields. Remember, people care about exit ops so much because banking sucks. I wouldn't be too bummed out man.
Agreed. In addition, there are lots of different products within the DCM realm, so it's tough to say what the learning experience would be. And there are more exit opps out there than you think. There's more than one way to a hedge fund gig.
 

What's the difference between LevFin and DCM? I was under the impression that LevFin = non-investment grade DCM? If so, isn't LevFin one of the better groups to make the transition to PE from?

 

Step 1: Enjoy the fact that you have your weekends off and make the most of it Step 2: Work your ass off and be a great analyst for the team Step 3: If after a year you find yourself enjoying said job, congrats! You're in a good place. If not, look to lateral internally into a coverage group. It's not impossible - I know many people who went from ECM/DCM/SLF/Credit to coverage after a year, especially if you're a good analyst with proven work ethic. But keep Step 1 in mind when deciding lol.

But you might like it. Being in a product group has its pros - you learn a lot more about the markets (I assume that might be more interesting for you if you want to do grad econ) and, at my bank, the people in product groups tend to stay and rise up more readily than in coverage groups. And as a product person, you start running the deals / interacting with the client much earlier than in coverage.

  • For the record, I'm not in a product group, but I interned in one and then switched to coverage for FT, so I have some sense of both sides.
 

DCM is not "in with IBD", but rather the line of business 'sits between S&T and IBD'. DCM is responsible for raising funds for companies & institutions in the credit markets.

The work is similar to IBD at the analyst level (i.e. creating pitch books, running credit analyses, etc...), but it's much less quantitative than IBD--not as much financial modeling.

Hours are marginally less than IBD. Typical day = 9am – 10pm or so. Bonus is slightly less than IBD as well, not sure on actual figures now though…

 
ANT:
Well now everyone has the right to call me an idiot, just saying I'm not looking for something searchable.

And trust me, number or bananas isn't always a good indicator of knowing what's up...

I take offense to that
If I had asked people what they wanted, they would have said faster horses - Henry Ford
 

hours are much longer than s&t but not quite as bad as banking...you may have to come in the occasional weekend, but again, not as often as bankers. BOnus is inline with banking and s&t for first year. dont know much beyond that

 
runtothehills:
Yup, DCM hours are long but no where near as bad as IBD. You're looking at maybe 80 hours a week. Some places will have you in at the weekend, others wont.

Bonus wise, MM gets about 200k after 4 - 5 years when times are "Decent"

so does that mean that second tier banks would require more hours?

 

Like do they do LBOs, so are they the team who is coordinating between leveraged finance and the syndicate desk? Also what else do they do other than LBO's, just regular debt issuances?

 

I've never come across a team that sits between LevFin and Syndications. They both usually sit under the DCM umbrella - alternatively, in some banks, they can sit say under Fixed Income Capital Markets. It varies from bank to bank. High Yield will often sit under DCM as well as more standard bond/debt departments.

 

As the old threads in the archives will tell you, it really depends which group within DCM. There are lots of products that fall under Debt Capital Markets; sometimes even leveraged finance.

_______________________________________ http://www.drmarkklein.blogspot.com/
 

do you guys know any DCM orgination desks in Chicago?

is it true that you only want to do DCM at a major bank with large balance sheet, top 7 ibanks? would it be interesting to work in DCM at let's say KBW FIG?

 

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