ECM, the high finance brain drain

It could be argued that ECM is the high finance brain drain. While coverage bankers may see ECM as an incompetent group of want-to-be coverage bankers, sophomore interns, non-revenue-generating seniors, and ex-sorority/frat stars with <3.5 GPAs at semi-targets, they have a huge leg up.

While coverage bankers slave away on models, working group lists, S-1 drafting, ECM bankers are outputting boilerplate market pages and taking notes on TTW calls (easy, mindless, can't-fuck-up tasks).

Meanwhile, they work 75% of the hours, 50% of the weekends, and net 100% of your comp. 

But they don't have exits you say… why yes, they can't go to private equity, but they'll go A2A in 2 years and match your PE associate comp. While you're doing big private equity things like looking at shit industrial companies, doing in-house bitch deal work, and speaking during meetings, they're … you guessed it… outputting boilerplate market pages and taking notes on TTW calls. With new BB base and bonus raises, they'll hit your comp too. 

They might not be able to walk you through a DCF or a merger pay down, but they can damn sure tell you the largest institutional investors in YTD tech IPOs that they found during repeated cross-shareholder analyses, and that's where the real value is created in advisory and underwriting. 

You best hope that your modeling skills and "ability to burn the midnight oil" will translate well to outputting boilerplate market pages and taking notes on TTW calls, because ECM is the hidden gem of finance. 

Comments (86)

  • Analyst 1 in IB - Gen
Dec 23, 2021 - 1:30pm

Huge misconception that capital markets folks work 9-5... These teams consistently work ~7:30-11pm Mon - Thurs, 12 hrs on Friday, and the occasional weekend work. Hours are way more predictable than coverage, but having to be "on-go" at 7:30am consistently is not easy. Less ebb and flow than coverage, so you're usually tied to your desk for more of the day. Definitely not a walk in the park. COVID and SPAC craze for ECM teams was ridiculous. Same goes for DCM teams. 

  • Analyst 1 in IB - DCM
Dec 28, 2021 - 2:45pm

We def don't work 9-5, more like start time more like 7-7:30 and end more like 6:30-7:30. It's a markets desk though, and I have worked both ECM and DCM at European banks in NYC and can say that generally, when the market is closed, we're closed or close to it. Holidays and weekends are super safe, most weekend work comes in the form of DD calls and tying up pitch work that I chose not to do Friday in order to leave at 5 to socialize.

Comp is also benchmarked to the street at my bank, where DCM is under the IB umbrella, and I imagine it's like this at most places.

Way better bang for my buck, and I still find the work interesting, even in IG DCM. However, my group gets HY exposure, in addition to FIG and SSA mandates, so it keeps things a bit more interesting still when those pitches and deals pop up.

  • Analyst 1 in IB - Cov
Dec 23, 2021 - 12:13am

Probably less than analysts. There's not a ton of analytical work being done in ECM so outside of the analyst level I think you're just running processes (which can be difficult and crazy across a high number of deals) and managing up and down between seniors and analysts. 

  • Associate 1 in IB - ECM
Dec 23, 2021 - 4:05am

60-70 hours during busy times. 40-50 hours in relatively quiet periods.

  • Analyst 1 in IB - Cov
Dec 23, 2021 - 11:08am

That's very solid. What industry do you cover? I've heard tech and healthcare teams can get slammed and end up working banking hours. 
 

can you elaborate on work at the associate level? I've heard you get client exposure sooner, take on more responsibility, etc 

  • VP in IB - Gen
Dec 23, 2021 - 12:59am

At my bank, while they definitely work less hours, their bonuses are 80% of coverage as well.  It's a pretty sweet gig overall though - especially if you want to be a career banker.  I'd say DCM is probably a bit more mentally challenging but doesn't comp any better and comps worse on the govt/muni side I would assume.

  • Analyst 1 in IB - Cov
Dec 24, 2021 - 1:25pm

Wondering the same. I would think corporate DCM is mind numbingly boring. Feel like IG bonds are a homogenous asset class minus a few bps, you're not really selling story/positioning like an IPO you're just selling low interest fixed income instruments that are all the same 

  • Associate 3 in IB-M&A
Dec 23, 2021 - 12:58pm

Second the above comments that this is a solid opportunity to have a career in banking. The work can be a little boring, but the pay is very solid. Although if you get stuck with a sweaty coverage group, your hours can occasionally be pretty bad - they'll be hounding you at 3am and on weekends just like their analysts.

Most Helpful
  • Analyst 1 in IB - Gen
Dec 23, 2021 - 12:58pm

People shit on ecm because there are 0 exit opps but my associate 3 cleared 450k working 50-60 hours a week at a "tier 4" type bank. Not a bad gig if you want to be a career banker. Very little weekend work. Unless you get brought on at a deal last minute, you have a very predictable schedule. Job is mindless but money is money and I love making 10% less than my coverage partners while working 30% less and rarely cancelling weekend and evening plans.

  • Analyst 1 in IB - Cov
Dec 23, 2021 - 1:57pm

I worked in ECM and fully agree here. I think the few significant downsides people mention are 1) exits, and 2) mundane work
 

I think 1) is often overblown because people think that no PE = no exits when that's not the case. ECM people can exit, just to less sexy/desirable roles that aren't hyped. Great skill set to work in an investor relations role at public companies or buy side firms - not an analytical gig but good pay, very sales/people oriented. Many also do strategy or FP&A roles at startups or clients, although I think this is less important to mention because a) coverage counterparts are better candidates for the same roles, and b) you don't *need* an ECM skill set to land these roles. It's also the best place to be to lateral into coverage if you consider that an exit. 
 

I think point 2) is important though. You can argue that coverage is mundane work, but compared to ECM it's really not. In ECM, it really feels like every deal is the exact same. It's very process oriented and having in depth knowledge about clients or their industries is just not part of your job in ECM except at very senior levels. You are very siloed into the equity product and the investor landscape and you learn a lot about that very specific niche, but it's not super applicable outside of the role. The only upside to ECM work is the velocity, you have a super high quantum of deals on shorter timelines, so you can be so busy that it feels more exciting than the work actually is if that makes sense. 

Dec 23, 2021 - 5:07pm
sheldonxp, what's your opinion? Comment below:

The only upside to ECM work is the velocity, you have a super high quantum of deals on shorter timelines, so you can be so busy that it feels more exciting than the work actually is if that makes sense. 

This actually sounds like the dream job for my personally. I honestly prefer fast-paced busy work where I don't have to think too deeply.

I'm planning to pivot into banking through an MBA. I've heard that ECM/DCM groups don't hire too much from MBA programs in general. Do you know if this is true?

  • Analyst 1 in IB - Gen
Dec 24, 2021 - 7:41pm

Not into rankings but assume BB/EB/MM banks take tiers 1-3 in whatever order suits your preferences. Everything else I think you could  bucket together so think Cowen, RJ, Leerink, Lincoln, BMO, Stifel, Nomura, Mizuho, BNP type of bank.

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  • Analyst 1 in IB - Gen
Dec 24, 2021 - 7:46pm

Cowen, RJ, Leerink, Lincoln, BMO, Stifel, Nomura, Mizuho, BNP and everything else that doesn't fall under the EB/BB/MM umbrella or anywhere near the top on any of those "ranking" threads (that are based on pe exit ops)

Dec 23, 2021 - 2:06pm
high hopes, what's your opinion? Comment below:

Dont DCM/ECM guys have to be in at 8 AM or earlier?

never understood why…it's not like research where you're following pre market news

Dec 28, 2021 - 2:59pm
high hopes, what's your opinion? Comment below:

At least for DCM, we do follow premarket news. We keep in touch with clients frequently, and in the event we get mandated as a passive bookrunner or co manager, it may come in around 7:45-8:30, and we have to get the internal underwriting approval done by the time the deal prices that same day

Makes sense - thank you

Dec 23, 2021 - 5:09pm
chromium73, what's your opinion? Comment below:

ECM = glorified cold calling. Rinse and repeat the same templates from 2009. Pre Covid you could fly on PJs for IPO roadshows which I guess is cool

  • Analyst 1 in IB - Cov
Dec 23, 2021 - 7:00pm

You're not misreading. It's really just that. Should mention share count / share prices matrices for IPOs but that's also not terrible complicated (especially because they don't do the valuation). 
 

converts / equity-linked teams in ECM are more technical for sure (e.g. black scholes) and know way more about converts and convert math than coverage bankers, so it's a solid place to be in ECM. Caveat is usually more hours and still limited on exits (not super transferable outside of ECM). DCM will also have groups that do derivatives to hedge interest rate and fx risk which can be creative and more technical than vanilla corporate bond DCM

  • Associate 2 in IB - Gen
Dec 23, 2021 - 6:28pm

Any risk ECM jobs disappear? Seems like a relatively useless group?

  • Analyst 1 in IB - Cov
Dec 23, 2021 - 6:56pm

Wouldn't call them useless at all, it's just not sexy. If ECM juniors are working 80 hours a week and weekends just imagine all of that additional work tossed on to coverage teams …

Dec 23, 2021 - 7:04pm
punk, what's your opinion? Comment below:

What are they exactly so busy with pulling 80 hour weeks?? There's only so much "process management" work that you can do

On a serious note, I picked the wrong fucking group to join! Lateraling to ECM is the new 2022 goal

  • Analyst 1 in IB - Cov
Dec 23, 2021 - 7:08pm

They're so busy because they're working on *every* equity deal that goes through their industry vertical. Follow ons, block trades, live IPOs, IPO bake offs / RFPs, simultaneously for every client in your industry vertical. 
 

It's the opposite of coverage in this point. You work on 10x more deals at a time and they're 10x shorter than coverage staffings. 

  • Analyst 1 in IB - Gen
Dec 23, 2021 - 7:10pm

We go out for coffee and drinks and spend an hour eating lunch in the conference room. Have also gone shopping and sightseeing when very slow.

In all seriousness I'm staffed on every single ipo/fo/pipe/private in my sector so when they all come at once I'm slammed.

  • Prospect in RE - Comm
Dec 23, 2021 - 8:33pm

I heard ECM guys have been working 70-80 hours nowadays, no?

Dec 24, 2021 - 9:35am
falconeagle, what's your opinion? Comment below:

Great post OP. As an ex-IBer (now in PE) I always wondered why ECM guys got the same comp as the coverage teams. I mean the coverage guys are doing the models, working on the prospectus etc - I get that models aren't exactly rocket science  (especially in IB) but still between that and working with the lawyers on an S-1, there's a lot to easily fuck up if you don't stay on top of everything.

I'm probably biased because of the particular ECM guys in my bank, they basically were all really arrogant and thought they were amazing, whilst being unable to model and working half the hours for the same comp. Sure they managed the process and "knew the market" but that never struck me as a particularly hard job? Maybe at the MD level you know the market so well you're invaluable, but I struggled to see why ECM associates got the same pay as me. I dunno maybe I was just jealous lol.

Not shitting on any ECM guys here btw, as I said IB modelling isn't rocket science anyhow - and maybe I was just biased by the ECM team I worked with back in my banking days.

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  • Associate 2 in IB - Gen
Dec 24, 2021 - 10:55am

I've seen a lot of mid-level / MDs get sacked from BB ECM jobs and their careers basically never recover 

  • Analyst 1 in IB - Cov
Dec 24, 2021 - 9:52pm

Interesting. Poor performers or cuts during down market?

  • VP in IB - Cov
Dec 24, 2021 - 11:34am

Last 1.5 years have been great but IPOs are very cyclical - like now is not a good time. So the job hours / comps can evaporate. Also if you guys look closely, even at largest ECM banks there is one MD doing all of HC or Tech. The upward mobility starts stalling fast unlike in IB side. Idk about comp but I don't think they get paid equal. As people said, exits either to other finance things or even corporate isn't as common beyond IR. As an analyst you should be doing many other things than market update pages or pie charts of investor bases. I actually think most of that probably can be done out of India, if not already. 

Dec 24, 2021 - 5:16pm
AKvB, what's your opinion? Comment below:

Companies always need to issue debt, i.e. rolling matured bonds to new ones.

Dec 28, 2021 - 2:36pm
WS_Jerry, what's your opinion? Comment below:

DCM seemed pretty year round. It seemed like companies were issuing debt once a quarter. I think we had 2 AB, 1 PB, and a Co-man role for each of our first tier clients. Now this is industry dependent and may slow down due to the immense amount of debt issued in 2020 and 2021.

I think I did this right

  • Intern in PE - LBOs
Dec 24, 2021 - 5:47pm

Interned in M&A at BB, Interned in ECM at BB, Interned at PE.

I take ECM anyday. Sure work might not be so "challenging" / analytical but tbh who cares? Especially sell-side M&A is 10% modelling, 70% monkey work and 20% running a process (dont judge me by the numbers). Plus, if you like to be involved with the market, ECM is sweet. I enjoy reading about politics, macrofinance etc on a daily basis over micromanaging working capital or discussion the "other operating assets" position with a B4 on a FDD call. Just my two cents. Fully looking forward to join ECM.

Dec 24, 2021 - 5:54pm
Msummer2020, what's your opinion? Comment below:

In a similar vein, what would you say about Fundraising roles such as the PCA divisions of banks (Laz/EVR/CS)? The work seems just as mundane (if not more) and the comp is roughly in line with Coverage teams. Interested to see an opinion on this.

Dec 25, 2021 - 7:32am
ohmylife, what's your opinion? Comment below:

Currently an associate and work in ECM.

Tbh I have been having this debate in my mind since I joined ECM on day 1 on whether ECM or coverage/industry group is "better".

My 2 cents are below:

Hours: ECM is considerably better than coverage/industry, at least in my bank. If hours were the same, I would have chosen coverage/industry

Work itself: ECM is more "boring" than coverage/industry undoubtedly, but coverage/industry is also "boring". As I discussed with my friends, I can say 90 out of 100 tasks of ECM are boring, but I would also say 70 of the 100 tasks of coverage/industry are also boring. The bank Im at mostly do IPOs and seldom do M&A. Ie I can see coverage/industry mostly do execution work on IPO which can be very boring too. They build some models but thats not the focus of their job

Exits: agree ECM only has "edge" to go to IR, maybe some ECM coordination role in long-only/hedge funds. Obviously ECM can also have other exits, but they just dont have the "edge" to do so vs industry/coverage peers

Skills: again, ECM people develop skills that are for ECM jobs. They don't gain modelling skills on the job as thats done by industry team.

Job security: ECM tasks are "easier" and hours are better, so turnover is lower and people can or choose to stick around a bit longer. Most of my batch mates in coverage/sector are gone. So I think it is easier to get up the ladder in ECM in a bank vs in coverage/industry.

However, if you are fired from your ECM job, I'm not sure how easy it is to get a new job (no matter ECM or none ECM), given you have less skills?….

Above are facts, but even until today I'm still not sure which group is better. I do appreciate ECM has lots of cons, but I try to "mitigate" these downsides by doing below:

Work itself is boring / skills => I try to develop interest outside of work to make my life more fruitful instead of trying to get fun put of my job. For work itself, I try to read research reports / models myself to understand industries and companies better when I'm free. I also try to read some investment books myself

Exits: This very hard to mitigate. If you want to go to PE, don't go ECM

Job security: again I think staying within ECM is safe. But once fired, you options are less than your peers given limited skills set.

Overall I think ECM is a good job, boring but good pay and better hours. And the more senior you get, it seems to me all the jobs / groups / tasks are kinda boring anyways…

But one thing I'm most worried about as a ECM guy is that if you are fired, your options are less. So I'm trying to "gain more skills" myself when I'm free (ie read research understand models companies myself). I'm not sure if I'm wasting time doing this (as I assume industry/coverage people have more resources to naturally gain these skills, while I have to try harder to gain the same skills).

Not sure what your take is on this. Welcome any thoughts!!!

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Dec 25, 2021 - 3:00pm
McDog, what's your opinion? Comment below:

ECM bankers (associates and up) are in quite low supply in my region, so should one want to find a new job this is very easy, provided that it wasn't a severe f*ck up that the whole street knows about.

Senior ECM bankers here have typically been promoted to more senior internal roles, exited to investment roles at family offices or played musical chairs across banks.

  • Analyst 1 in IB - Gen
Dec 25, 2021 - 1:17pm

The derivatives/risk management group is similar to this as well. Hours are much less than coverage, but pay is in line (at least at the analyst level). I work in this group at my bank, and our hours are pretty rigid (7-7). Very rarely have I seen work need to be done outside of these hours or on weekends.

Additionally, many of the VPs and MDs in my group don't start work until 7:45ish and are done and off by 6:30 (unless something is going on and they need to finish some more stuff up)

  • Analyst 1 in IB - Gen
Dec 25, 2021 - 2:08pm

It's housed under the investment bank as a product group at my bank and a lot of others (called Corporate Derivatives at GS, Risk Solutions Group at Barclays, etc…), but I know some have it under sales & trading. Since it's under the investment bank, salaries are the same as all other IB groups.

We are split into 2 groups within our group (Rates and FX). I sit under the rates umbrella, so I can talk more about that than FX. Essentially, we help clients manage their interest rate risk with swaps and options.

I work closely with people out of coverage and lev fin, since a lot of corporate clients will want to issue debt, and then we step in and help them immediately swap it to fixed (or floating) if that's something they want to do. We also do cross currency swaps for clients who want to take advantage of low interest rates in other currencies (most common we see right now is swapping USD to EUR, but it all changes based on interest rate environments).

Overall, it's a great group to make a career if you want to, and the hours are not bad at all. Like ECM/DCM, exit opps are likely pretty limited due to the niche nature of the role. For that reason and a few others, I think I'll try to pivot into our Lev Fin group after my 2nd year (lev fin is just more interesting to me, and it's a strong group at my bank that would open more doors up to me if I decide to leave banking).

Dec 25, 2021 - 9:39pm
ohmylife, what's your opinion? Comment below:

would be interested to know too. In my opinion, ECM roles at hedge funds are more about coordination. They don't really directly make investment decisions. Would be good to know what is their value add / day to day work, and how much they got paid..

  • 1
Dec 26, 2021 - 1:05pm
Get_Yield, what's your opinion? Comment below:

As a client, the ECM guys are some of the few bankers we really want to hear from. Industry coverage guys almost never have: a) an original idea; b) better info than company management on what's happening in the industry / market; and c) the slightest bit of creativity. 
 

ECM guys bring us information that we can't get ourselves. I'll happily skip meetings with banks who've come to pitch dogshit M&A ideas but rarely skip ones where I can get color on market receptivity to recent deals, TTWs or NDRs. 
 

Just my $0.02. 

"Anything less than the best is a felony"
  • 8
Dec 28, 2021 - 10:48am
HowlerMonkey, what's your opinion? Comment below:

You forgot my favorite thing about senior ECM bankers: their tendency to lecture junior coverage bankers about inconsequential mistakes in slides/analysis whose *footnotes* are more complicated and analytical than 99.9% of every ECM "wedge" ever produced in human history. 

Yeah, sorry my 10 page analysis of the highly leveraged, cross-border, RMT spin was missing the word "Inc." in one spot, but we aren't all smart enough to pull a list of last week's IPOs and chart their aftermarket performance.

Dec 28, 2021 - 3:10pm
ohmylife, what's your opinion? Comment below:

In my bank senior ecm bankers also love to give minor comments that aren't value add to show presence. But I think this is also true for any senior bankers who are seniors enough and want to show presence.

Going back to your point on the analysis that is done by coverage team - how difficult is it? Am just thinking if ECM bankers spend enough time to read through and understand it (which likely they wont tho), they can still do it. But I'm not super concerned on how technical a task you do is vs the one in ECM.

Unless you are telling me by doing these technical analyses you have gained more skills and have better exits or can make more money in the same bank. The latter seems to be less true but the former is likely.

anyone in IB who passed the senior analysts / junior associates level have "no" or "limited" exits anyways.

So my feeling is, usually coverage analysts will look down on ECM analysts as they have better skills or exits by doing more complicated tasks which matter as they want to move.

Coverage associates usually "dont look down on" ECM associates as both have limited exits anyways. I have never seen any coverage associates bragging about how technical of a task they are doing is as after a few years "everything is the same" and they care less about getting excitement from doing a task but more on hours / money.

In my bank some coverage VP/D/MD actually "envy" ECM counterparts for being able to work less hours with same pay.

Any thoughts welcome

  • 3
Dec 28, 2021 - 7:17pm
high hopes, what's your opinion? Comment below:
whoamiwso111

In my bank senior ecm bankers also love to give minor comments that aren't value add to show presence. But I think this is also true for any senior bankers who are seniors enough and want to show presence.

Going back to your point on the analysis that is done by coverage team - how difficult is it? Am just thinking if ECM bankers spend enough time to read through and understand it (which likely they wont tho), they can still do it. But I'm not super concerned on how technical a task you do is vs the one in ECM.

Unless you are telling me by doing these technical analyses you have gained more skills and have better exits or can make more money in the same bank. The latter seems to be less true but the former is likely.

anyone in IB who passed the senior analysts / junior associates level have "no" or "limited" exits anyways.

So my feeling is, usually coverage analysts will look down on ECM analysts as they have better skills or exits by doing more complicated tasks which matter as they want to move.

Coverage associates usually "dont look down on" ECM associates as both have limited exits anyways. I have never seen any coverage associates bragging about how technical of a task they are doing is as after a few years "everything is the same" and they care less about getting excitement from doing a task but more on hours / money.

In my bank some coverage VP/D/MD actually "envy" ECM counterparts for being able to work less hours with same pay.

Any thoughts welcome

I really doubt anybody envies ECM/DCM guys. First to get cut in a downturn - they don't own the relationships and have the least value add for product teams

Dec 28, 2021 - 2:25pm
TheLondonDude, what's your opinion? Comment below:

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Jan 7, 2022 - 4:37pm
breezy443, what's your opinion? Comment below:

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