Financial Due Diligence Career Advice
Hey guys,
I'm interested in the Financial Due Diligence (FDD) field at PwC. Anyone familiar with the work? What do you they do?
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The work is basically audit/public accounting, but for transactions and with a little more "what-if" analysis. If consulting is your jam, just apply for that; FDD is a bit more IBD-like (but also completely not IBD).
I'll sum it up having worked for a short period in a big 4 FDD group and having worked with them once on the other side (working for a portfolio company in a sales process). Large PE / strategic buyers hire them basically to tie out the financials and the financial model that is being used and make sure everything that flows through the actual model is also showing up on the accounting side (i.e. the assumptions are real and are matching with accounting somewhat) - they also throw a presentation together that suggests NWC changes and they attempt to 'normalize' EBITDA.
In reality, they spend so little time on each deal, they don't have a good grasp on what exactly is going on and the buy-side guys hire them so they can throw a report in front of their investment committee that has a PwC / Deloitte stamp on it and say all the accounting is good.
If you're at Big 4 trying to break into banking, its a good place to be. I wouldn't have to be a 30+ year old non-partner in that group just dragging along trying to make partner. The work is very much the same for each deal and at the end of the day it's a bunch of BS b/c you're recommending purchase price adjustments and trying to get involved in the deal when in reality the target company doesn't want to deal with you b/c it's an annoyance to have to teach a bunch of accountants a financial model and help them tie a bunch of stuff out and the buy-side doesn't value your input that much b/c by the time you're brought in they have already decided what they are going to do and you're just there to provide 'audit' services with a little more ba-zang.
Financial Due Diligence (Originally Posted: 07/18/2013)
Hey, I've just finished a grad role at PwC in audit and am looking to move on to something. I interviewed and got a job at a consulting firm in FDD dealing primarily with PE firms which is just starting out this division (although is pretty established in the USA) but am conflicted.
I think I can get into a BB IB but not sure whether the work would be much different and I am sure the hours would be worst. Pay wise, this is pretty competitive to IB.
End goal is potentially PE so FDD from what I have gathered is a pretty good area to be in.
My other question is - does anyone know where to find (or can suggest) a rankings list of the top FDD firms. I am trying to get an idea of benefits, pay and competition (atleast within the UK/EU).
Thanks for the help in advance.
Also Interested in this
First off, what makes you think you can get a job at BB IBD, particularly in Europe? Auditors are a dime a dozen and 1/2 of them want out after a year or two.
Secondly, I can't say with certainty for Europe, but in the U.S. there is no way in hell you are going to make the same amount doing due diligence work as you would at a BB in the IBD, ceteris paribus. The hours are worse because you get paid more.
Third, the work is much different. Due diligence for PE is about ensuring quality of earnings, reviewing adjustments and building pro forma. You aren't learning assumptions, projections, sources & uses, leverage or modelling. PE firms use their own analysts and associates for that. IB groups perform those analyses to create valuation expectations for their clients and negotiate offer values/terms.
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