Going Back to Banking

I know this sounds like an insane question, but would anyone here go from private equity back to investment banking?

I know exactly what the implications are here from a lifestyle/compensation perspective, but I'm wondering what happens to the promising Associates/VPs who just don't have what it takes to cut it in PE. Not every post-MBA hire makes it to Partner/Principal. So, where do they go?

Also, how often do pre-MBA Associates go to an MBA program and then have trouble finding a post-MBA PE position?

This might be a random thread, but it was sparked by a recent conversation that I had with someone who claimed that some MBAs they know are choosing GS/MS as an IBD Associate over going to a MM or lower MM PE fund (let's say, sub $2B AUM).

Comments (103)

Mar 8, 2011

I did.

Mar 14, 2011
ByAWideMargin:

I did.

Would you mind elaborating as to why you did? What was your motivation and how do you feel about your decision now (glad you did it, kind of regret it) and maybe what you miss about the buyside?

I'm curious because I'm at a small PE fund and might look to go to an IB next just to gain the experience that is provided and to avoid the inevitable question of just how much experienced and knowledge I acquired at a small shop.

Regards

Mar 8, 2011
BananaStand:

I know this sounds like an insane question, but would anyone here go from private equity back to investment banking?

I know exactly what the implications are here from a lifestyle/compensation perspective, but I'm wondering what happens to the promising Associates/VPs who just don't have what it takes to cut it in PE. Not every post-MBA hire makes it to Partner/Principal. So, where do they go?

Also, how often do pre-MBA Associates go to an MBA program and then have trouble finding a post-MBA PE position?

This might be a random thread, but it was sparked by a recent conversation that I had with someone who claimed that some MBAs they know are choosing GS/MS as an IBD Associate over going to a MM or lower MM PE fund (let's say, sub $2B AUM).

I'm really not sure you understand the implications of anything in the scenario you are discussing. Despite what you may believe, PE is not the end-all, be-all, and going to work for Morgan Stanley IB instead of a MM or major PE fund does not mean they could not cut it in PE. It's altogether possible that they got to PE and just didn't like it all that much.

Mar 8, 2011

Seriously. PE is not for everyone. Some people actually enjoy the sales-y aspect of banking (and are MUCH better at it than originating deals and have a lot less responsibility in terms of deal track record, etc.). I've seen MDs go back to banking from PE. And yes, not all PE firms are created equal. Depending on your personality, you may thrive better at a BB than a small PE shop. Additionally, some PE shops don't even put you on a partner track; the highest level you may ever get to is an MD.

If you've been following some of the discussions on this board the past few weeks, many PE shops are having trouble with fundraising. No new capital = slow death of the firm.

Mar 8, 2011
HerSerendipity:

Seriously. PE is not for everyone. Some people actually enjoy the sales-y aspect of banking (and are MUCH better at it than originating deals and have a lot less responsibility in terms of deal track record, etc.). I've seen MDs go back to banking from PE. And yes, not all PE firms are created equal. Depending on your personality, you may thrive better at a BB than a small PE shop. Additionally, some PE shops don't even put you on a partner track; the highest level you may ever get to is an MD.

If you've been following some of the discussions on this board the past few weeks, many PE shops are having trouble with fundraising. No new capital = slow death of the firm.

What do you think is driving lack of new capital being raised.

Mar 9, 2011
DurbanDiMangus:
HerSerendipity:

Seriously. PE is not for everyone. Some people actually enjoy the sales-y aspect of banking (and are MUCH better at it than originating deals and have a lot less responsibility in terms of deal track record, etc.). I've seen MDs go back to banking from PE. And yes, not all PE firms are created equal. Depending on your personality, you may thrive better at a BB than a small PE shop. Additionally, some PE shops don't even put you on a partner track; the highest level you may ever get to is an MD.

If you've been following some of the discussions on this board the past few weeks, many PE shops are having trouble with fundraising. No new capital = slow death of the firm.

What do you think is driving lack of new capital being raised.

So em like, there was this whole like big recession thing and like some of the people like totally lost loads of money and like they still havent got it back and like its totally difficult to like get money when its totally not there, riiiiiiight.

    • 1
Mar 9, 2011

@DurbanDiMangus

really, dude?

Mar 8, 2011

im goin goin

back back

Mar 14, 2011
DurbanDiMangus:

im goin goin

back back

Would you mind sharing why you are?

Regards

Mar 8, 2011

There were two associates that moved back to banking after a one-year stint at a MM PE firm up in Boston. Common complaint was that it was just too slow. Doing 2-3 deals a year, and hanging out with guys that all had wives and children didn't exactly fit their cup of team. They seemed to enjoy the deal-junkie, fast-paced work of IBD execution more.

Mar 14, 2011
ibhopeful532:

There were two associates that moved back to banking after a one-year stint at a MM PE firm up in Boston. Common complaint was that it was just too slow. Doing 2-3 deals a year, and hanging out with guys that all had wives and children didn't exactly fit their cup of team. They seemed to enjoy the deal-junkie, fast-paced work of IBD execution more.

I will second this motion. The VC firm I interned at while I was in school hired a senior analyst right after I started, I stayed 2 semesters then left. I was heading to the beach one day and swung by the liquor store and ran into that senior analyst and commented about how he picked a great day to be off and his ended up telling me that he quit shortly after I left. I asked why and he said that it wasn't as interesting or exciting as IB was (he spent 3 years in IB before the VC gig) and didn't like sitting behind a desk all day and missed traveling, etc. He spent the next year starting a small business that sells urinal cake mats with field goal posts and soccer goals, etc on them that incorporated advertising for someone's business. Last I talked to him the business was running itself and he moved to Chicago and took an IB associate position. So it does seem to happen.

Regards

Mar 9, 2011

I didn't mean to sound critical of the decision to go back to banking, but it just surprised me, as I hadn't previously considered the outcome.

@TheKing, I absolutely understand the implications embedded in the decision. I was an IB Analyst and Associate before jumping to the buyside and now am considering whether I want to pursue an MBA. Long story, but let's just say the 2007-2008 crisis wasn't a good time for PE recruiting, so I stayed in IB longer than expected.

Part of the calculus is what I think the chances are of staying in PE post-MBA, which I do want to do because I personally enjoy PE more than investment banking. However, the market may not cooperate or I may not make a good impression when interviewing for a post-MBA PE position, so I was curious to hear what others have done.

Mar 9, 2011

OP - why do you have to worry about this? there's always money in the banana stand

Mar 9, 2011
HappyThanksgiving:

OP - why do you have to worry about this? there's always money in the banana stand

Haha. Great call. Sometimes I wonder how many people actually catch-on to the meaning of my screen name given the other possible relationships to wall street monkeys, silver bananas, etc.

Mar 9, 2011

An MD I know did IB Analyst -> PE Associate -> IB Associate. He said PE just wasn't for him, and that he was much happier being on the sales side of it.

Mar 9, 2011

Mezz,

I have a very similar story. I know a rockstar who went IB Analyst -> PE Associate -> IB Associate -> Quit. The reason quoted to me was that in PE, he was just hand-holding for a bunch of recent graduates rather than independent thought.

Mar 9, 2011
CompBanker:

Mezz,

I have a very similar story. I know a rockstar who went IB Analyst -> PE Associate -> IB Associate -> Quit. The reason quoted to me was that in PE, he was just hand-holding for a bunch of recent graduates rather than independent thought.

Agreed, he said something very similar. I think GengisKhan (MD) also posted a little while ago as to why he stuck it out in banking vs moving to PE, which was a pretty interesting perspective. He mentioned how he hated doing all the nitty gritty due dil (as you would at a PE shop) and preferred the faster paced environment that IB provided.

Mar 9, 2011

I know one associate who started out a top-ranked analyst in BB, went to a PE fund for 1.5 years, didn't like that, went to credit hedge fund for 6 months, didn't like that, and then came back to banking as an associate without even doing his MBA. The guy is super-smart, great to work with and has a strong network so essentially could have worked in any space (and did in fact try all of them). He just said he didn't like the buyside - a lot more stress and required a different investor mindset than banking. He said some of his friends at other PE shops were also considering coming back to banking after business school. While a lot of us analysts feel like PE is a "natural" transition from banking - it really is a completely different field.

Also - let's not forget that being an associate in banking is not nearly as bad as being an analyst in terms of hours and lifestyle (and a LOT better in terms of compensation - really? a first year associate makes 3x as much as I do for doing the same thing??) - I don't care what associates say. So make sure you factor that in as well.

Mar 9, 2011

a 1st year associate makes 3x as much as you? Are you saying all in or base?

Mar 9, 2011

I guess closer to 2x - all-in. Maybe I was exaggerating. But 1st year associates LITERALLY do the same thing that first year analysts do. They model, they make pages, they get supervised by senior associates. The differentiation and deal management doesn't really happen until late 1st year/2nd year.

Mar 9, 2011
HireUp212:

I guess closer to 2x - all-in. Maybe I was exaggerating. But 1st year associates LITERALLY do the same thing that first year analysts do. They model, they make pages, they get supervised by senior associates. The differentiation and deal management doesn't really happen until late 1st year/2nd year.

If you are referring to MBA associates then yes, but no associate promoted from A3 will do that. But for MBA associates it makes sense to do that since most of them dont have finance experience pre-MBA.

Mar 9, 2011

first year associates pull $320 TOPS. not 3x an analyst.

a first-year analyst out of B school will pull 100 base, 100 bonus, 40 signing, 35 tuition reimbursement, 10 relocation and 35 add'l g'teed comp. 320 total. And its not like all of those items are recurring streams of income.

SOURCE: HBS class of 2010 IB associate survey done by HBS career center.

Mar 9, 2011

I was talking about first year banking analyst vs. 1st year banking associate...talking about how banking associate is a little better than banking analyst to the poster's point about going back to banking.

Mar 9, 2011

"Haha. Great call. Sometimes I wonder how many people actually catch-on to the meaning of my screen name given the other possible relationships to wall street monkeys, silver bananas, etc."

Haha If someone hears banana stand and thinks of wall street rather than the greatest TV comedy of the last 10 years just blue himself

Mar 10, 2011
HappyThanksgiving:

"Haha. Great call. Sometimes I wonder how many people actually catch-on to the meaning of my screen name given the other possible relationships to wall street monkeys, silver bananas, etc."

Haha If someone hears banana stand and thinks of wall street rather than the greatest TV comedy of the last 10 years just blue himself

still off topic - supposedly a movie is in the works.

If the glove don't fit, you must acquit!

Mar 10, 2011
BananaStand:

but I'm wondering what happens to the promising Associates/VPs who just don't have what it takes to cut it in PE. Not every post-MBA hire makes it to Partner/Principal. So, where do they go?

If you don't have what it takes to cut it in PE to make MD, doesn't it mean you probably don't have what it takes to make MD in banking either?

Just curious to hear some thoughts about this as I've thought the differences between the two aren't that big when it comes to the senior levels...

Mar 10, 2011
bigimot:
BananaStand:

but I'm wondering what happens to the promising Associates/VPs who just don't have what it takes to cut it in PE. Not every post-MBA hire makes it to Partner/Principal. So, where do they go?

If you don't have what it takes to cut it in PE to make MD, doesn't it mean you probably don't have what it takes to make MD in banking either?

Just curious to hear some thoughts about this as I've thought the differences between the two aren't that big when it comes to the senior levels...

OH SNAP!

Mar 10, 2011
bigimot:
BananaStand:

but I'm wondering what happens to the promising Associates/VPs who just don't have what it takes to cut it in PE. Not every post-MBA hire makes it to Partner/Principal. So, where do they go?

If you don't have what it takes to cut it in PE to make MD, doesn't it mean you probably don't have what it takes to make MD in banking either?

Just curious to hear some thoughts about this as I've thought the differences between the two aren't that big when it comes to the senior levels...

That's a question I've thought of a lot too. I feel like the top rainmaking MDs in my group could probably easily get MD jobs in PE - the dealmaking skills are certainly there. They probably genuinely prefer banking to PE - the client service, the faster pace, million things going on at the same time vs. pulling the trigger on 1-2 deals and then stressing about the outcome.

Then again...in an industry that people fundamentally go into to make money, why wouldn't an MD who probably makes $3mm/year TOPS (these guys cannot make more than that) not go into PE where he can make A LOT more than that with no real salary ceiling?? Maybe the fundamental skill-set is different.

Mar 10, 2011

Wasn't trying to insult him, just trying to figure out the difference...thought when it comes to making rain it requires about the same if not the same skills.

Mar 10, 2011

Is PE really that slow faced as people make it to be? After you make an investment there aren't still a lot of things to be doing? I mean it's not like the work is done. You keep looking for more investments and then acquisitions etc, don't you?

Mar 10, 2011

Sure, but your incentives as a banking MD are to generate as much fees as possible - which means you go out there every day and you pitch everything and the kitchen sink, do as many debt/equity deals as possible, show as many potential targets to your client as possible, etc. There's no ceiling to how many deals you can do.

In P/E, you are constrained by a limited fund size and you need to invest that into a select number of opportunities that will generate the highest returns. So it's slow in the sense that you spend much more time analyzing an individual opportunity vs. doing lots of deals. From my perspective, it's certainly more rewarding to work in-depth on one transaction and see it through from start to finish vs. whoring yourself out to any client that will hire you (or just reap your advice for free for years before actually doing anything) :)...but that's why I'm not trying to stay in banking.

Mar 10, 2011

By making as much deals as possible and making fees based on those deals, can you really say that they're making 3$mm/year? I mean, as you said - There is no ceiling.

Same as you I think I'll find much more rewarding to work in-depth on one transaction and see how it goes and progresses. I'd like to be in a fast pace environment and likely want my job to involve sales too but then again I want to learn how to invest and how to do it well, not to be just another salesman.

So feeling kinda confused here because I find fulfilling aspects from both jobs appealing, guess I'll have to try both (although might be extremely hard coming from where I live). Probably at some point I'll start my own thing which will be a combination of both in my own creative way.

Glad for you you're on track :)

Mar 10, 2011

just remember: its always better to be a buyer than a seller. sure, you may be an MD at an ibank, but at the end of the day, you're still busting your balls and kissing everyone's asses to sell. its gets really tiring and frankly its tiring just watching it. much better to be on the receiving end of the ass-kissing

Mar 12, 2011

Another reality is that PE today is a far cry from PE in the '80s or even the '90's. With literally hundreds of funds now saturating every niche and corner of the market, returns have been increasingly bid down to historically low levels by heightened competition. With the field inundated with so many players, all these deals are shopped around to multiple PE shops, so everybody is getting a look at the same deals and is getting access to the same financing, so its become very hard to have a discernable edge, get a great deal done on the cheap and make a solid return.

This trend is manifesting itself in that there just isnt as much money to be made in PE these days as there was 10, 20, 30 years ago. There was an article just the other day in the Journal that Kravis and Roberts made $20mm in carry last year. Granted, thats certainly nothing to scoff at, but these are guys who are at the absolute pinnacle of the PE game. The average principal at one of these shops isnt going to ever make anywhere close to that. In many situations, a great MD in a solid IBD group can make much more than his PE counterpart, and with MUCH lower stress and a better lifestyle. So while there certainly was a time when working in PE meant a chance to be truly rich, with the field now massively overcrowded with competition, for the most part those days of PE being the land of milk and honey may now be in the past.

Mar 12, 2011
prescient1:

In many situations, a great MD in a solid IBD group can make much more than his PE counterpart, and with MUCH lower stress and a better lifestyle. So while there certainly was a time when working in PE meant a chance to be truly rich, with the field now massively overcrowded with competition, for the most part those days of PE being the land of milk and honey may now be in the past.

How come? I mean don't you have as much stress (if not more) when working for a BB to bring deals all the time? Don't you around around the clock as well?

I also think that if someone is looking to become truly rich then he should start his own company instead of joining one (whether it's investment banking or private equity).

Mar 14, 2011
prescient1:

Another reality is that PE today is a far cry from PE in the '80s or even the '90's. With literally hundreds of funds now saturating every niche and corner of the market, returns have been increasingly bid down to historically low levels by heightened competition. With the field inundated with so many players, all these deals are shopped around to multiple PE shops, so everybody is getting a look at the same deals and is getting access to the same financing, so its become very hard to have a discernable edge, get a great deal done on the cheap and make a solid return.

This trend is manifesting itself in that there just isnt as much money to be made in PE these days as there was 10, 20, 30 years ago. There was an article just the other day in the Journal that Kravis and Roberts made $20mm in carry last year. Granted, thats certainly nothing to scoff at, but these are guys who are at the absolute pinnacle of the PE game. The average principal at one of these shops isnt going to ever make anywhere close to that. In many situations, a great MD in a solid IBD group can make much more than his PE counterpart, and with MUCH lower stress and a better lifestyle. So while there certainly was a time when working in PE meant a chance to be truly rich, with the field now massively overcrowded with competition, for the most part those days of PE being the land of milk and honey may now be in the past.

Appreciate the different perspective. +1.

Mar 14, 2011
prescient1:

a great MD in a solid IBD group can make much more than his PE counterpart, and with MUCH lower stress and a better lifestyle

What world are you in dude? Banking has the worst all-around lifestyle out of any of those finance careers. Sure, a PE MD can work around the clock when it comes time to close a deal, but then he sits back and enjoys the returns while looking for other investment opportunities (which he's not doing all night). Meanwhile, the banker MD is hustling around the clock, including at his home office after leaving work, to stay in front of clients and kiss his clients' asses. Yes, banker MD = 1000x better lifestyle than banker analyst, but I'll still take PE MD lifestyle over banker MD lifestyle any day. And while I agree with you that the PE MD might have more "stress" over his investment and his firm's own money on the line, that's also what makes the job exciting for him. Meanwhile, the banker has his own constant stress around sourcing new deals and retaining his clients what with every bank on the street constantly trying to undercut each other and steal business. It is always better to be on the buyside.

Mar 14, 2011
HireUp212:
prescient1:

a great MD in a solid IBD group can make much more than his PE counterpart, and with MUCH lower stress and a better lifestyle

What world are you in dude? Banking has the worst all-around lifestyle out of any of those finance careers. Sure, a PE MD can work around the clock when it comes time to close a deal, but then he sits back and enjoys the returns while looking for other investment opportunities (which he's not doing all night). Meanwhile, the banker MD is hustling around the clock, including at his home office after leaving work, to stay in front of clients and kiss his clients' asses. Yes, banker MD = 1000x better lifestyle than banker analyst, but I'll still take PE MD lifestyle over banker MD lifestyle any day. And while I agree with you that the PE MD might have more "stress" over his investment and his firm's own money on the line, that's also what makes the job exciting for him. Meanwhile, the banker has his own constant stress around sourcing new deals and retaining his clients what with every bank on the street constantly trying to undercut each other and steal business. It is always better to be on the buyside.

Disagree. Every bank on the street does not necessarily constantly try to undercut each other and steal business. There isn't hardcore price deflation, much like Pepsi and Coke don't get into price wars and every stupid McKinsey pricing case has the answer of avoiding price wars: it erodes margins, and there is something of a gentleman's agreement not to go down that path. Always? No. Is this classic economics where p=mc? No. But is it practical and observable? Yes

Also, the stress of "sourcing new deals and retaining clients" is multiplied in the case of a buyside professional. if a deal partner makes shitty investments, he loses his ass. I can quote countless stories my banking buddies tell of MDs who somehow stick around despite long cold streaks with nothing sourced.

It's not always better to be on the buyside. The risk is real, scary, and constant. And the economics of banking are fundamentally strong, so as some people on this thread have said, 'tis better to be a stellar banker than a mediocre investment professional.

Mar 14, 2011

everytime you're gonna have megafunds becoming more and more institutionalized it will translate into more and more people sharing roughly the same pie. KKR has around 140 investment professionals (400 employees in total). that's a lot of mouths to feed. Caryle the same, even worse than KKR. The sweet spot for making real money in PE is middle-upper market $5-10bn LBO funds that have no more than 20-30 people in total and out of that 3-5 partners. It has got to be a lean and clean fund. Probably the leanest PE fund i've seen is Leonard Green & Partners. These guys have ~$10bn AUM and there are 16 investment professionals - not counting the 5 associates or so because everyone knows associates are extremely cheap. And then you have funds with 05.x/2x AUM that of LGP, which have hundreds of people on payroll. it doesn't make any sense. Personally, I see MF experience as a step towards something else (opening your own shop/moving to a more leaner MM fund) but not an end in itself (real money is not made there)...similar to banking which is a step towards PE. the only advantage that MF have is that at the junior level you get paid a bit more, involved in more bigger/complex transactions and just learning from the pros. But in terms of long-term compensation, I would choose a fund like LGP,H&F over KKR/Carlyle/TPG any day of the week.

Aug 26, 2015

Ah It's old comment. But where do you get all above information?

Mar 14, 2011

You're missing the point. I'm not talking about a bad PE professional, or good PE professional, I'm making a point about the industry as a whole being a much more mature one than many perceive it to be. Accordingly, the returns are also not what they used to be; ergo, pay relative to other professions is also not what it used to be.

Sure everyone would rather be Henry Kravis than 99% of bankers on the Street or any other profession for that matter. The reality is that Kravis, Schwartzman, etc. all made the bulk of their money in the '80's and '90's when the PE landscape was markedly different. If you ever take a look at the returns by vintage for KKR, BX, etc. you'll see returns now are half of what they were for the 1980's vintage funds. Back then, private equity wasn't even a phrase yet and there were only a handful of firms competing for these deals. Prices were low, returns were high and there was an incredible amount of wealth to be had. They were visionaries and innovators and the economics that enured to them were true first mover riches. Back then, if you were working in private equity, there was a very good chance you were going to be "rich".

The field has markedly changed now, and there are literally hundreds of PE firms saturating every nook and cranny of the space. Companies today get shopped to dozens of PE firms and there is much less inefficiency in the market to be taken advantage of. The size of the pie has not changed, but the number of people at the table has gone up exponentially.

The point is that the normalized earnings power of a PE professional is quite simply not what it used to be. There is far too much competition now to reel in the outsized profits that many people think still exist in PE. Just look at the carry that Kravis and Roberts made last year. Nothing to scoff at, but there are plenty of bankers and people in other fields out there who made more than that last year. Just look at the stats for what an average banker makes vs. an average PE professional, depending on who's counting, it's basically the same on average. Is PE still a greener pasture than banking? Maybe. However, it's a well documented fact that there is much less money to be made in PE now than there was 10, 20 or 30 years ago when these captains of industry made it big, and a lot of people on this board who are looking in from the outside don't realize that yet.

I'll leave the stress point alone as well, as that has been touched on above by a few other posters, but just ask any PE professional whose life is more stressful, and they will most assuredly tell you theirs ten times over. Not that one lifestyle is necessarily better than the other, just take it for what it is.

Aug 26, 2015

alumni

Aug 26, 2015

Should I get in touch with alumni in the region? When would be the best time to do that?

Aug 26, 2015

you could reach out the team where you did your internship and see how they respond - they most likely have filled the position you initially were offered for; you may be in luck if some dude just doesn't want to work there anymore and you can fill his spot (especially if you left a really good impression at this place)

otherwise, you can just apply during the apps season in the latter part of next year... the thing is whether you will still be able to find time to go for interviews in a MC role.

Aug 26, 2015

Thanks guys - very helpful.

Mar 15, 2011

theres a huge difference between being an investor and a salesman. sure, a PE partner/MD may say his life is more stressful, but they wouldnt want to have it any other way. id rather be stressed and worried about MY decisions and MY investments, than run around and scramble and kiss ass to sell companies. its not even close.

Aug 26, 2015

*talk

Aug 26, 2015

This looks to me as the ultimate "the grass is greener" post. My short answer would be "hell no". Slightly longer:
A. If you feel you are not getting an important component of professional development required for future roles (deal exposure, modelling etc.), raise this with your supervisor/mentor before starting to think about changing companies
B. For networking - many more people will want to network with a guy from top buyside / Carlyle rather than top sell-side / GS. Simply because buyside controls the capital, and you are a potential (future) client for all the bankers, lawyers etc. and a potential (future) investor for companies. As a banker, you are just another guy chasing the capital holders. Long story short, you are in a better position for networking now than
C. You are saying your end goal is investment, i.e. buyside. You are already on the buyside at one of the top funds. Going to IB takes you further from your goal, not closer to it.

Aug 26, 2015

And on modelling specifically - it doesn't matter how detailed it is. Think about buyside vs. sell-side modelling purpose:
1. Buyside - to evaluate whether an investment makes sense and at what price - of capital your fund directly controls, and returns on which will directly impact your bosses' (and potentially your) carry in the long run
2. Sell-side - to come up with a reasonable approach to justify whatever number your MD has in mind to have the deal done

Now which of these two modelling approaches do you think will teach you to be a better investor?

Aug 26, 2015

Thanks for all comments - very helpful. To explain my situation more clearly, MD of our fund is an ex-trader who likes to see concise analysis (usually that means complex models with lots of assumptions are not very appreciated) . Not saying this is not good. In fact he is a great investor. But I am just thinking about if I will miss part of skill-set required in larger / more complex transactions / analysis, which I might want to do in the future. For modelling, I don't know if I am good enough to be very honest. I didn't do banking but I don't find it to be too hard from the very beginning but meanwhile everyone is talking about sharpening modelling skill. That's why I feel that I might not understand modelling the best. To ask a more addressable question: for those lbo models that we could find from online resources - are they good enough to test if my modeling skill is sufficient?

Aug 26, 2015

It comes down to what you want to do. Could you give us more clarity regarding your situation as I don't see why you'd want to leave in the first place if your goal is to be on the buyside, especially to go to a bank. Is there no way to move up as the team is small? Is there absolutely no growth within the team/team size? Did you bring this up with you senior?

This being said. I used to work in the transaction service at a big four firm and I can tell you building a large model takes more time than skills. If you are working those hours, then you shouldn't have any issue picking up on those skills.

To answer your question. WSO pe prep pack is excellent to pick up the LBO modelling skills. BIWS might be a bit more detailed. Wall street training definitely goes in depth so maybe take a look at this one.

In terms of execution skills. When I transferred to a BB as an associate the DD part of the job remained pretty limited and I believe your understanding of the key issues will develop itself as you grow into the job.

If you would like to hear more feel free to pm me.

Good luck.

Sep 18, 2012

So then if the well is running dry for PE and IBD, what's the next finance field that'll move up to rockstar status? in other words, where are the pioneers looking to now since M&A is dead and PE is crowded

Sep 18, 2012
Fundamentally Undervalued:

So then if the well is running dry for PE and IBD, what's the next finance field that'll move up to rockstar status? in other words, where are the pioneers looking to now since M&A is dead and PE is crowded

Send me a PM when you figure it out - I'd like to get in early as well.

Sep 26, 2012
Fundamentally Undervalued:

So then if the well is running dry for PE and IBD, what's the next finance field that'll move up to rockstar status? in other words, where are the pioneers looking to now since M&A is dead and PE is crowded

Goodfuckinggod would I love to know the answer to this question!

Aug 26, 2015

Not commenting on the above since I don't know - to be honest, but I have definitely seen PE people go back to IBD, even at higher levels. They may not have been good at sourcing, or excelled in execution and "doing deals" rather than investing (a number of senior guys have pointed out specific cases to me, actually). More often than not, I have seen PE post MBAs go to FoFs or LPs or on Co-investment/secondary teams since the hours are usually better than banking.

If you want to keep investing you could always try to get into an HF...

Good Luck

Aug 26, 2015

To echo the above, have seen a good number of PE guys go to the FoF side. At the upper levels FoF is pretty good in terms of work/life and comp.

Sep 18, 2012

i always thought reinsurance was underrated....

Aug 26, 2015

I know someone who left and came back after a stint in distressed investing. I believe you always have a leg up on those trying to break in because you understand the day-to-day, the lifestyle and yet you 're still choosing to get involved again.

Aug 26, 2015

Had somewhat of a similar path: worked in ER for ~2 years, then worked for another 2 years in international development. I recently pivoted back into finance.

While it is certainly doable, it is not easy...heavy networking is required and you need to have a solid and convincing story as to why you decided to leave finance and, more importantly, why you decided to come back.

Aug 26, 2015

I did a few years of banking, left for operations strategy, was pretty easily able to land banking interviews when I was applying for banking jobs in another city (due to personal reasons). When asked why I left banking, I said I was "tired of getting on conference calls with exec's & pretending like I knew about the inner workings of businesses and how they make operational decisions... I always felt out-gunned". One VP laughed and said he still feels like everything coming out of his mouth is nonsense.

Got offers, ended up opting for corp fin.

Sep 27, 2012

what I never get with the whole sales argument is, if you like sales then go work at a fkin sales desk of a bank.

make equal if not better comp, work less, dont fuck bout wasting time with meaningless ppts and spend more time with clients.

unless your not that good at sales of course, but rather just a workaholic.

Aug 26, 2015

Having a job that pays $75K and gives you ample free time sounds like heaven.

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Aug 26, 2015
newfirstyear:

I quit banking because it was miserable. I found it boring and really had no interest in it. My new gig is great, I work with great people, have great hours and love my lifestyle. The only problem is the money, I just wish I was paid more. The gig isn't bad, I make around $75K a year but I still reminisce of the days of Banking making much more.

Has anyone gone back purely for the money?

Are you entry level?

Aug 26, 2015

What kind of industry are you in now?

Aug 26, 2015
helpmepleasethx:

What kind of industry are you in now?

In tech now.

And yes, I guess you could say entry level.

Aug 26, 2015
newfirstyear:

I quit banking because it was miserable. I found it boring and really had no interest in it. My new gig is great, I work with great people, have great hours and love my lifestyle. The only problem is the money, I just wish I was paid more. The gig isn't bad, I make around $75K a year but I still reminisce of the days of Banking making much more.

Has anyone gone back purely for the money?

What's your income trajectory potential look like going forward? I say roughly if you can double that within 10 yrs, enjoy it. Nothing will pay quite as well as banking but then nothing sucks quite as much as banking (i did 3 yrs).

if you like it then you shoulda put a banana on it

Aug 26, 2015

In the situation you described, you don't really skip out too much grunt. You said people that did IB for a few years (let's assume 2-3 years as analyst where the hours are longest) and then go back as associate (second year associate still has pretty long hours). It's not common for people to choose to go into corporate strategy and go back (since they usually leave because of lifestyle) or go back from PE (since hours and pay are usually better), but I have seen it happen.

If your goal is to just skip the grunt years (which may be good or bad for your future), just do consulting or corporate strategy for a few years, get an MBA, and start as associate.

Aug 26, 2015

if you got into PE couldn't you just stay in PE?

Aug 26, 2015

it seems that PE shops seem to kick guys out after a few years to go to b-school. Part of my argument is that some people don't want to go to b-school, maybe its the cost, maybe the fact that they might not be able to get into a reputable school because of their undergrad transcript. Not to mention, alot of people on this board seem to think that an MBA is the solution to everything, and that getting into H/W/S is a piece of cake.

Aug 26, 2015

what about those who didn't want to do pe any more? just one search on the search function, and you'll see what i mean

Aug 26, 2015

It's also fairly common to do ER and transition to IBD as an associate or VP. There's a lot of relationship building in ER, even for more junior guys.

Aug 26, 2015

If it was that terrible for you, I would not get back in. The experience may have "saved your ass," but you've already got the experience. If you are going to be miserable, I say go with the other experience. If it was just that particular BB, and you are still interested in banking, go with banking.

Regarding B school, why are you considering it...what would you use B school to break into?

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Aug 26, 2015

I agree, go with the other option. If it was terrible the first time around, it will be as terrible or worse this time around.

If you didn't like it the first time, why would you go back for seconds?

Aug 26, 2015

thanks for the comments guys

if i went back, it would be because of the almighty allure of exit opps. seductive siren she is

corpdev does tend to end much flexibility in your career. eventually, i would like to get back on the buyside

Aug 26, 2015

Take the "other" option doing the corporate development. It will add to a somewhat, presumably, impressive resume you have made with the BB background. It would seem that this new experience could make you a better candidate for B school, which would also provide you with the aforementioned ex opps. Not to mention you let the BB for a reason. Good luck.

Regards

Aug 26, 2015

When people say banking has a lot of transferable skills, it really doesn't. The only skills you can transfer is back to banking.

Aug 26, 2015

wallstreetmoney i dont believe that is true. I took my investment banking skills and landed a job as a world class samurai.

Aug 26, 2015

Dayaam, forgive my foolishness. I will now slice my guts open for I have dishonored the investment banking business.

Aug 26, 2015

What was so terrible about your particular experience? The hours? The group? Both?

Aug 26, 2015

Once you've left it's always tempting to go back for the money or the name. But provided you found another job like the corporate job that remunerates well, don't be tempted. If you didn't enjoy the lifestyle the first time, you're going to kick yourself for falling for it again.

To above poster: you won't know the life until you try it. But it's a good exp that makes you very employable. Just not a long term career

Aug 26, 2015

Thanks in advance for your thoughts - much appreciated

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Aug 26, 2015

Do you mind me asking why you want to go back? I would assume the pay is decent, and lifestyle is helluva lot better at the f500?

Aug 26, 2015

I mean, I don't think there is any reason you wouldnt be able to make it back in with a good network. But there probably isn't much anyone here anyone can tell you as it's a very non-traditional path. My guess is that you'll just need a good story for why you left the first time and be able to explain why it's no indicative of an inability to live the lifestyle.

Aug 26, 2015

Thanks for the replies - Asianmonky the reason I'm looking to eventually transition back are multiple but let me first give you an outline of what I'm currently doing

1. I'm outside the US working for a conglomerate in Asia

2. I'm in an accelerated management trainee program that after a 1 year training (similar to how graduate analysts rotate from desk to desk) places you in a department and then "encourages" you to spend no more than 24 to 30 months at the first role - the idea is to rotate from role to role every 24 to 30 months across businesses and functions in order to have a rounded skill set - the end goal being to produce CXO level management for the smaller group companies by the time the candidates are in their late 30's with the average entry age of the candidates being 26 to 28 years

4. Things change a lot and nothing about my career has really gone to plan - so experience says the plan will NOT materialize - additionally I'm in a BRIC so the environment / business needs change so fast who knows what line of work I'll be in, in 2 years

5. But to answer your questions - the pay is not bad - I chose to leave my role in IB after about a year and my base is close to what a 3rd year Analyst at my former employer would make - however, bonus potential is severely diminished

6. Corp Strat is a great learning environment - there's no pressure to build books, bind books, and no one is going to rip you apart if you use Arial 8 instead of 9 etc etc. My boss is a great guy to learn from (his background is infra and project financing) and the focus with most projects has always been to understand how the business operates, what are the value drivers, speak to group companies who operate in similar lines of work so we can learn how to call b/s on estimates / projections that we see in the pitch books brought to us - so from that perspective it's fantastic

7. However, the issue remains that in my group we're more of an advisor than an agent executing deals. More-over when your client list is limited to group businesses / companies the total deal flow you see will be much lighter than what you'll see as an external advisor (IB) - so at the end of 3 years I'll probably know the key value drivers of several industries, how to model them etc - but if our CEO's decide to not do M&A that's it my deal experience will be squat - the only advantage is since we advise on more than just M&A and our tasks include benchmarking group company performance when things are slow there's always something to do....

I guess it's always nice knowing I'll have the option. Another option I'm considering is joining the treasury teams of one of the group companies - these guys have structured and issued a lot of bonds both domestic and international, hybrid and vanilla, and high yield - I know the route from treasury to DCM is a lot easier than I'm suggesting. The lifestyle is great get in to work by 10am and wrap up by 7 or 8 pm with the occassional night stretching to 11 or 12 at night - I do not miss the all night binding sessions or updating books because some idiot used an old logo. I know that I'll never be able to go back as an Analyst or even Associate if I were to ever go back it would have to be as a VP or higher.

I'm just trying to get your thoughts on the transition potential

Aug 26, 2015

edit: Just saw your note about wanting to go back to IB down the road at a VP or higher. Don't have much insight for you on in that case. If you were trying to go back as a 2nd or 3rd year analyst (depending on how long you previously spent in IB and how much credit they give your corp dev experience), don't think that would be an issue for you though.

Aug 26, 2015

A few ideas, with no clue if they are applicable:

1. If you left on good terms, leverage your network from your banking job.
2. Leverage bankers that you have worked with on deals that your current company was involved in.
3. Reach out to industry specific M&A boutiques for which you have gained some specialized knowledge in your current role.

Aug 26, 2015
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