I've perused the forums and a lot of folks have stated that "EBs have more interesting work than BBs." How different is the work and what in your opinion makes work at an EB more interesting than at a BB?
Background: I'm a incoming MBA student student who will be matriculating into a top 15 MBA program (darden/fuqua/stern) in the fall and I am considering banking as a post-MBA career option.
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Full disclosure, I haven't done banking at a BB, only at a EB, so this is a perspective that I've come too through conversations but not from my own experience.
1) Working on M&A/strategic advice only vs. Other products. Most people tend to think M&A is significantly more interesting than capital markets. Also the fact that you are never passing off your deals, you are both responsible for executing M&A and covering your industry, makes your work more varied on any specific deal from start to finish than many BB groups.
2) At an EB you generally get more exposure to all parts of the process earlier on. That means that you are less "stuck" in the mundane. You are more involved strategically and more involved wirh the clients from your first year post MBA. Obviously, a lot of the work is still mundane (as with any job), but it's degrees.
3) Less resources means less time to pitch and more time to execute. Obviously pitching is part of the job, but in my conversations I seem to do a lot less of it than most of my BB peers.
Everyone around here knows that I prefer the EB model, so I'm obviously somewhat biased. But you should be able to get your own sense of the different work people are doing through your recruiting conversations once you matriculate.
SBed. Thanks for the insightful response, AllDay_028.
My reply disappeared but here's another shot at it. I actually had some questions in regards to your experience at your EB:
Thanks!
I'll answer more generally, as to keep some semblance of anonymity.
1) Some EBs are generalist, some put you into groups right away, and some put you into groups within a time frame. For instance, Lazard has you join a group right away. Evercore and PWP have you pick groups within a year or two of generalist. PJT has people stay generalist. There are upsides and downsides to each of these models. But I think having some form of a generalist program is a net positive.
2) Organic growth is fine. It's a myth, IMO, that there isn't organic growth at EBs. You just have to give it the time to play out and many of these EBs are very young. Moelis is 10 years old and now has 30% of their MDs from internal promotions with that number constantly rising. Evercore is now doing more promoting from within than outside hiring. Pretty much all the successful EBs will follow this model. You hire externally and you promote from within. As your talent pool grows, you shift more towards promoting within. It's no different than the lifecycle of any other company.
3) I wasn't around during the recession. But the EB model is actually more resilient to a financial crisis because they don't depend on credit (which falls during a crisis) and they all do restructuring, which picks up during a crisis and levels out the losses from reduced M&A. Evercore, for instance, added headcount during the crisis as they were picking off bankers who were losing bonuses or getting laid off from BBs.
Very informative. EB work sounds so interesting and challenging. You're a lucky man!
I have worked in one of the best of both categories of firms.
Both have their advantages and disadvantages. When people tell you one model is better than the other, a smart listener thinks critically to dig in and assess why the person speaking is saying that. It's inherently subjective.
Exposure
I'm using this differently than prior posters did. I mean that a boutique will offer you fewer places to hide. If you are really confident in yourself and want to roll up your sleeves as quickly as possible, the boutique is the place to go. Know that this comes with a less forgiving environment. Any shortcomings you have will be highlighted more quickly, and likewise, any particular strengths will also surface.
Some people love this. Others find it surprising and struggle.
A very smart, hardworking girl I know (father very prominent in the industry, seriously like a front-page name ... had a 760 on her test) came out of a non-HSW MBA business schools">M7 school and took a boutique job. She really struggled to adjust to managing everything. She gained 35 lbs. and a lot of her friendships dried up (at least as another person told me).
Another guy I know came out of HBS and went into the legacy BX M&A group. He fucking loved it. He asked for more staffings, got them, managed them all well enough to the point he was still leaving before midnight (that group was not a facetime group at all), and stood out head and shoulders above the rest of the class for taking on more work and getting it done. Well, guess what. He did two years in upper middle market banking (think non-BB big balance sheet bank), then two in lower middle market private equity before school. He was just way more 'banking-savvy' than about any other summer associate could possibly be.
The bulge is going to have a way larger associate class. Every deal you get staffed on will be with different seniors. That's on purpose; the staffer is playing human 'sorting hat' and trying to give everyone a chance to date and figure out who they like to work with.
That means that any small slip you make isn't done in front of the MD and VP who'll work with you on four of the six deals you're on; it's done in front of the MD and VP you're on just one deal with. While theoretically everyone should be forgiving of a new associate learning the ropes and getting the hang of things, unfortunately if someone has to see a lot of you, they may be human and fallible (shocker) and really let that speck of sand ruin their whole impression of you. The flip side of "absence makes the heart grow fonder" is "proximity makes the heart grow angrier".
A bulge will give you more room to hide, so to speak, where you can find seniors who (a) you naturally grok with well enough that you're happy having the majority of your staffings with after everyone sorts themselves by the one-year mark and (b) you have enough of a good track record with where there's no demerits on your scorecard that could affect your performance review or comp at the end of the year.
Variety
Some people prefer to see a lot of different things as a way to inform their opinion about where they want to specialize. Others feel that research alone is enough to inform an opinion, and practical experience isn't as necessary.
For the former, a bulge is a fantastic way to learn a lot about a lot. You'll get staffed on a wide range of things: M&A, equity capital raises, debt capital raises, startup financings, divestitures, activism defense, board of directors advisory, a crossborder acquisition with an immediate carve-up ...
For someone who has a concrete idea they want to do sector-focused M&A and that's it, a boutique is pretty attractive because you're going to get a lot of the one flavor you've decided you like.
Type
There's a stereotype that boutiques execute and bulges pitch. I find that to be a bit overblown. Yes, it's true overall. Bulges are a volume model, and to procure that volume, you have to shake the trees. It's not like you're 90% pitching and 10% executing relative to a boutique's 80% executing and 20% pitching. The two are more similar than you'd think.
I'd also argue that learning how to pitch well is incredibly important. Most people recruiting out of school fail to really drill into who exactly they'll be working for. I always encourage strong candidates who are facing multiple offers to leverage that to extract a group-specific offer for their summer internship, basing that group preference off of an extensive set of informational interviews after the offer was extended where they can learn how the seniors they'd work for think about winning business.
Breadth
Some of the bulges are really good about identifying which people have the necessary ingredients for senior firm management, then rolling them across various products, divisions, and geographies to get them a breadth of experience that will inform their perspective as an eventual Head of X or Global Head of Y.
Some people view that as a whole bunch of unnecessary politics and an unwelcome headache. That logic does hold some water. It's a real pain in the ass to move your wife and kids every three years to London to run EMEA Consumer then Hong Kong to run APAC M&A then back to New York to run Americas Banking. Even worse is when you make all those sacrifices only to lose the seat you'd been soft-promised over some political bullshit that someone managed to pull on you. I have friends who have both benefited and been absolutely screwed by that exact scenario.
///
Overall, I'm trying to illustrate that "interesting" is inherently subjective.
You can read my 'David vs. Goliath' post for some insight on why the boutique model has grown to be so dramatically favored over the bulge for the best candidates at the analyst level. I haven't written one for how they differ at the senior level (VP and up); I'll add that to my docket.
There are clear benefits to both. Which you pick ought to be based on how you grade yourself against a rubric comprising every dimension you can identify the two models differ on.
Great post.
Awesome post. I appreciate the great detail you went into. It would be awesome to get a perspective on the senior level and up.
I'm assuming you left associate out of the picture since it is still a pretty junior position.
I wrote this whole post from the perspective of a b-school student weighing summer internship options ...
Unless you're referring to the David and Goliath one, in which case yeah, I wrote about it from the analyst perspective. I omitted associate there because while it's not one of the senior ranks (MD and VP), it's senior-track and by and large the only people taking that job are doing it to see whether they want or are able to progress that far. So yes, I will work on getting a full-length front-page post out on the senior perspective in a boutique.
Appreciate your perspective, as always.
SBed.
This is a great summary of the differences. I mentioned some of those in my last comment but got a lot of MS.
I would emphasize that pitch is not a bad thing for post-MBA associates. How to sell/pitch is one of the most important skills I'm learning right now and people usually learn those by seeing how MD pitch/discuss with clients. The technical skills for M&A are very useful for analysts to interview with sponsors but less so for associates/above. I will be very curious to see how a mid-level bankers at boutique whose most experiences are around executing live deals starts to build their own client coverage.
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