Go to LevFin or stay in M&A?
I have an opportunity to go from a top coverage group to a top LevFin group (within the same bank) in the upcoming months. Wondering if I should do this or stick it out in the coverage group (the coverage group handles all M&A internally and that's what most of our deals are - with say 10% being financing transactions), which is the best in the industry it covers. At the LevFin group I'll be covering the same industry, but working on just levfin deals. The levfin team tops its league tables as well - so from a deal flow perspective both groups are the best.
I'll be doing this mainly for the exits from the levfin team which are better in my opinion. Both are very sweaty and both pay at the top end of the market. The levfin team holds the pen on all the models and so the reps will be very good - except with a very steep learning curve. Slightly lean more towards M&A but think that it'll be interesting to learn a new product and expand my knowledge.
Mainly worried about the interest rate hikes, a potential recession and how that might affect the levfin deal flow, and potential layoffs. Although, this levfin team is pretty understaffed so i don't see any cuts taking place.
Thoughts and opinions? Mainly regarding how levfin would be affected by a potential recession/rate hikes vs. my current gig.
You don't say what you want to do so it's sort of tough to provide advice. Do you want to go into private credit? If so then levfin would be ideal. If you want to do PE then you will have to look at past exits for each group, and also if you stay in the coverage group then your recruiting will be much stronger for sponsors focused in your group's coverage area.
If there's a recession then deal flow will slow down for both levfin and M&A so I don't think there's much to consider there aside from maybe whether your current group is overstaffed.
An additional consideration is that you already have a ton of credibility you've hopefully developed with your current group, and going to a new group you'll have to prove yourself again.
So it really depends on what you know about both groups and where you want to go. We can't offer too much advice because we don't know the groups.
I am looking at either PE (my first preference) or Corp. Dev. (for which i recognize that M&A might be a better background). My LevFin opp. is NOT generalist. It'll be the same industry as the coverage group (so say the coverage group is RE, the levfin will be only for RE).
I do believe that the current group is relatively overstaffed (when compared to the levfin group).
The new group interacts with the current group a lot (technically housed under the same umbrella group of, for the continuity of the example, RE) so there should be some transfer of credibility.
Mentioned it below but its one of (CS/BofA/JEF/RBC/JPM) if that helps. Does that change your thoughts?
bump
If this is CS or BofA id go. If its JP id go only if you are ok with less modeling. Otherwise I wouldnt do it
Agree - would add Jefferies and RBC to this list and cap it off there. Maybe BMO, but you mentioned "top of the league tables" so don't think that's the suitor.
It is one of those groups (CS/BofA/JEF/RBC/JPM) but one that holds the pen on the model - so i don't think any less of modelling. Thoughts?
There really isn't much in the way of complicate modeling in levfin whether you're in the group that holds the pen or not, it's a fairly simple debt paydown model. you won't be building operating models like you do in M&A with detailed revenue builds - that's the sponsors job.
That being said, i would remove JPM from that list completely. It's a very weak LF group from a learning / experience perspective since coverage runs the process there.
For CS, BofA, JEF, maybe RBC, I would say it really depends on what you want to do. If you want to stay in banking your earnings potential is MUCH higher in coverage. You aren't seeing LevFin bankers make $5m+, it just doesn't really happen. You have to split fees so many which ways in LF including capital markets team, loan / bond sales team, sponsor coverage, industry coverage, underwriting team, etc. On the coverage side you might not even be splitting with M&A if that's run internally so all that's left is sponsors. More $ / head to go around.
At the end of the day though, it depends on what you want to do. your lifestyle will most likely improve in LevFin vs M&A.
EDIT: For the person that MS'd me, i work at a top levfin group.
It is one of those groups (CS/BofA/JEF/RBC/JPM) but one that holds the pen on the model - so i don't think any less of modelling. Thoughts?
Architecto aut cupiditate in quia nemo corporis. Nihil dignissimos consequuntur et nostrum. Dolore ut accusamus modi dolorum adipisci vitae.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...