DCM Path

gangstabanka's picture
Rank: Orangutan | 299

I'm interested in going into DCM. Yes, I understand that it usually comes with a sacrifice in regards to exit opps.

Any insight on whether or not the "path" of going into DCM is any different than it would be for M&A? Tips on internships, target schools, competition, etc. would be helpful....

More generally, which BBs and boutiques have good DCM groups? Is DCM big in any other cities --- like Houston, SF, Chicago, Boston, Atlanta?

Comments (34)

Dec 7, 2017

I would also like to hear a response to this. Also (don't mean to hijack your thread), for someone who doesn't at all care about exit ops, is there anything bad about DCM compared to M&A?

Dec 7, 2017

Based on other threads on here, the learning curve isn't as steep. As a result, some find the actual work in DCM to be more "mundane."

Array

    • 1
Dec 12, 2017

Mundane - "lacking interest or excitement; dull:"

Sell-side M&A analyst here and about 85% of my day is spent doing mundane tasks.

    • 3
Dec 8, 2017

delete

    • 1
Dec 8, 2017

Path wise, I don't think it is going to be too big of a deal for students. The only major difference I can think of is probably technical questions. Having gone through the recruiting process myself, I find M&A groups usually have more difficult questions.

BBs usually all have pretty decent DCM groups because of their distribution capacity. Not so sure about boutiques though...

Dec 8, 2017

Could you elaborate on DCM not being "too big of a deal for students"? Is that implying that there's generally less competition?

Array

Dec 11, 2017

My impression is that at least for many BBs, M&A group is a bit more difficult to get in compared to DCM. With that being said, most interviewers are not expecting a candidate to know too much in-depth knowledge, especially if you have limited relevant experience.

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Dec 12, 2017

Just to confirm, when you say DCM are you referring specifically to high grade and not including Levfin?

    • 1
Dec 12, 2017

Yes. At least in the original post, my questions were more directed towards investment grade. If you have any insight on Levfin, however, I would love to hear about it.

Array

Best Response
Dec 12, 2017
gangstabanka:

I'm interested in going into DCM. Yes, I understand that it usually comes with a sacrifice in regards to exit opps.

Any insight on whether or not the "path" of going into DCM is any different than it would be for M&A? Tips on internships, target schools, competition, etc. would be helpful....

More generally, which BBs and boutiques have good DCM groups? Is DCM big in any other cities --- like Houston, SF, Chicago, Boston, Atlanta?

(Caveat: What I say below applies strictly to investment grade DCM.)

In terms of "the path": You have to interview with a lot of people at all levels, have them all like you and have good grades. Is it less selective than your typical M&A or coverage group? I don't know for sure, but I doubt it is much less selective if at all. Most DCM groups are far smaller than a bank's combined M&A+coverage groups (although larger than any one of those), and they are recruiting the same 3.5+ GPA kids from the same Ivies, etc... Now again, the odds are the M&A group is harder to get into simply because of supply and demand, but it's not like DCM group are letting kids with <3.0 GPAs from Yale, or 4.0s from Middle Tennessee University in. The credentials required are more or less the same; just the M&A group will get their pick of the litter

The banks with the best DCM groups are those with the biggest balance sheets. DCM is very balance sheet driven; i.e. the guys who act either as lenders to the issuers and/or have the ability to trade large volumes of their paper. To be big in DCM, you need to have a pulse on the credit market and the ability to sell new issues, and to have a pulse on the market and sell new issues you need to have a big credit trading operation. Few boutiques have this because they don't have the capital needed to do so.

Given DCM relies so heavily on trading, and vice versa, most banks have the bulk of their DCM groups located in NYC. You might find the odd energy-focused group in Houston/Dallas, and small regionals may have their DCM groups located in their home bases, but really New York is the only place you want to be in the U.S. if you are doing DCM.

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Dec 12, 2017

That definitely makes sense as to why they could be more selective. Thanks for the rundown.

So if one wants to head into DCM, he should be prepared to stay in NYC for a good while?

Array

Dec 13, 2017

If you're interested in going to EMEA, HSBC is the lead in DCM in almost every other market; as stated before, yes it has a lot to do with their balance sheet. why work at a small boutique M&A shop with limited dealflow to say you were in M&A when you could be working on financings for some of the biggest M&A transactions of the year and have actual deal experience

Dec 13, 2017

I disagree with DCM being mundane. All jobs at an analyst level is mundane to begin with. Having said that, I think DCM's pathway allows you to handle the deal on your own quicker + you get to have client exposure earlier. DCM deals tend to be higher frequency and they close faster, so you see a lot more deals compared to M&A deals that take >6 months to sometimes even 1 year + before closing.

I think the skill sets would be different but not necessary lacking in terms of exit opportunities. DCM is sort of a hybrid between investment banking + markets, so if you like the markets, you probably enjoy DCM more than M&A, which is more financial statement/accounting based. For example, if you wanted to go into corporates later on in your career, do corporates more often do mergers and acquisitions, launch IPOs or do bonds for capital raising? You can always go into bond syndication later on and you have more exposure to the sales and trading side as you will probably sit near the trading desk (although there will be a chinese wall between you as you will have the interest of the originator in mind, whereas they have the interest of the investors). Also, bonds are the most traded asset class in the markets.

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Dec 13, 2017

Just to add to that, you can also see which teams (DCM, M&A, ECM) are in the top of any league table in which region by going into dealogic. Best of luck.

Dec 13, 2017

How is the work-life balance in DCM?

Dec 13, 2017

If you're curious about working in DCM (or rather who to work for) just go on EDGAR and find prospectus supplements for the major issuers. The dealers are listed at the bottom and you can easily find out who the big dogs are (bookrunner and leads). Best of luck!

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Jan 7, 2018

Thanks for the tip!

Any advice on how to Navigate EDGAR? Never used it before and I've been trying to network this way for a couple weeks

Jan 7, 2018

Just go into the site and type a company you're interested in into the search ball. The world is your oyster at that point. You can see all of the public filings. For DCM try and find the codes used for prospectus filings to find them quicker for the company of interest.

Jan 7, 2018

Do DCM groups even hire MBAs with no experience anymore?

Separately, I assume English is not your first language and it shows. If you talk the way you write you will likely find it difficult to break into DCM (or any other heavily client-facing front office roles, for that matter).

Jan 7, 2018

Thanks for your comment.

You are right, I am an immigrant from Singapore.

My English is definitely something I am constantly striving to improve.

Aside from my career question, may I ask what specific weaknesses in my English thay particularly stand out to you? (i.e., grammar, sentence construction, awkward expression, etc.)

Jan 7, 2018

Bump. Any help would be appreciated.

Jan 7, 2018

Bump

Jan 7, 2018

In my opinion, the corporate treasury role would be better.

Jan 7, 2018

what type of credit analyst ?

speed boost blaze

Jan 7, 2018

If the credit analyst position is supporting a DCM team (eg working in the Credit/Risk Management team, facing the IB division's DCM team), then you're going to build a network with the DCM team, you can demonstrate skills and business understanding etc - that should facilitate getting into the DCM team.

Jan 7, 2018

Treasury analyst role, no question. Unless the credit analyst role is providing desk analysis on the buy/sell side, but then why would you want to move to DCM?

Jan 7, 2018

Sounds like the Treasury analyst role is my best bet. Thanks guys.

As for the credit analyst role, I should find out more about the role the job posting was very vague and the information I got from the interview wasn't much better. I will reach out to them and try to get some more background information.

Any more opinions are appreciated

Jan 7, 2018
Comment
Jan 7, 2018