So I'm researching Debt Equity Markets as I have an upcoming interview for a Middle Market bank coming up. The title has Investment Banking in it but the research I have came across gives me mixed reviews on whether DCM and ECM are part of investment banking. Can someone elaborate? What type of knowledge should I have for the DCM interview?
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How much does it really matter? Some people will argue that only M&A is investment banking. Some banks include capital markets and even corporate/commercial banking roles within their investment banking arm. Look up whether you would actually enjoy the job and see if you could make a long term career out of it. I really don't think it matters if it counts as investment banking or not.
Short answer is yes, unless you're talking to a complete douche. You won't get the typical exit opps to PE though (you can, but it's tough).
M&A or bust, baby
lol ok intern
From my experience in a DCM interview for a MM bank, you really should know about bond yields, zero rates, interest rates, etc. As long as you show a good understanding of the fixed income market you should be ok. Also, you should know what the main responsibilities are in the DCM division.
As for your other point, I agree with the guy above. I've always considered DCM and ECM to be part of the IBD. But even if it's not, does it matter? If you're interested in the work then you shouldn't care whether people consider DCM to be Investment Banking or not.
Do you know if they'll be asking anything about M&A?
Nah, I really don't think so.
Yes DCM and ECM is investment banking. People consider DCM and ECM part of IBD. IBD has typically consisted of three divisions: 1. Sales & Trading. 2. DCM & ECM, and 3. M&A/Restructurings.
Experience in any of these divisions is considered investment banking experience. (Yes S&T is a totally different.
If anything, DCM and ECM are closer to what IB originally was (raising capital from investors through issuance of securities) before M&A became such a huge business.
Sales and Trading is not IB.
IB is split between industry groups (Energy, Healthcare, Consumer, etc.) and product groups (M&A, DCM, ECM, LevFin, Restructuring). These groups speak with each other depending on the task at hand. S&T will never speak to these people unless a banker is looking for market color (i.e. why is x trading so badly, who is buying the stock on our desk, etc..). Think about it like this, IB is the private side of the wall which holds material non-public information until a transaction is publicly announced.
How is S&T IBD? S&T is under "Markets" of an Investment Bank, which is different from "IBD" within an Investment Bank IBD (ie Investment Banking Division) of an Investment Bank consists of industry groups and product groups (including DCM and ECM which are under product groups) M&A and RX are under product groups as well Hope that helps
I was just saying its a division of an investment bank. Gd
Yes it is.
IBD (M&A, ECM, DCM, Restructuring) Markets (Sales, Trading, Structuring and Research)
Short answer, yes.
Reason for confusion is that I think some banks' official org charts will separate ECM and DCM from Advisory/IB. Why they do this, I don't know and you shouldn't care.
Capital Markets has a reputation of being generally a bit less intense and bit less heavy on modeling. Its more public-facing processes, which limits the depth a bit because only so much is going to be said publicly. So a typical M&A assignment might be putting together a model and deck for a client CEO, which means a ton of detail because he wants every thought the bank has . . its only for his team's eyes anyway, so no concern about over-sharing. Whereas a DCM assignment might be putting together an investor presentation for a bond offering . . still no easy task but more likely 5-10 pages than 50 pages and more high level math than highly detailed math. Large public audience means don't get too heavy on the info or details.
This reduces the exit pool somewhat; PE shops for example will be more interested in hiring M&A bankers than Capital Markets bankers.
But big picture, yes its still IBD and your interview questions will generally be IBD type questions with more sensitivity to getting the debt stuff right (yields, rates etc).
Would be more concerned about all-in comp. It is not the same as regular IB.
At the Junior Level I've heard it's essentially the same (5-10k differences after tax is peanuts). At more senior levels DCM bankers work like 7:30 to 5/6 and pull 600-1mm.
If you don't have a hard-on for private equity and enjoy working with raising Debt (shocker - some people do) or want to lateral into any non-distressed debt role, then DCM is a great job, especially at banks with strong balance sheets (BAML, Citi, JPM, Wells Fargo.. think banks that have an IB and a Commercial Bank). You can always move to trading/selling the Debt in S&T (within the same scope of debt issuance - IG credit, Muni, sovereign, etc.). Could always move to an asset-manager that buys the deals you're selling. While you may not have the "modeling experience" those in credit research might, you have experience pricing many, many, many deals and add value to the team since you know how to think like a sell-side banker pricing new issue deals.
DCM is always part of IBD. It's a product group like ECM, Levfin and M&A.
However, DCM has a different standing at each bank. Irrespective of bulge bracket or not, if the bank has a big balance sheet then DCM is closer to S&T/commercial banking than actual IBD advisory and is more of a "flow" business. Think of the likes like HSBC/BNP/Wells Fargo - DCM is like their crown juwel, but you don't really see them on big ticket M&A deals.
If your bank is big on advisory and has a small balance sheet (even if BB), then DCM is way more integrated with the IBD teams. Think of GS/MS/CS. The culture in these places is also far different than DCM at a flow bank.
The best is obviously if you can combine the two (JPM/BAML/Citi) although I think of Citi more as a commercial banks than true IB.
Funnily enough, the pay is always similar vs. IB groups (although gap widens with seniority) - the strategic/advisory banks pay their DCMs well and more than the flow/commercial banks pay their respective DCM teams, but the pay for IB groups (and IBD in general) at flow/commercial banks tends to be below the street.
Fyi, spent some time in DCM (both at a commercial bank as well as a BB IB), went to Levfin and then to the buyside so hit me up if you have questions.
I always have a hard time understanding the exact difference between corporate and investment banking. Aren't they similar in the sense that they both do debt financing for companies?
any knowledge on super regional banks DCM/capital markets groups (Key, PNC, etc.)
bump
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