Help with choosing offer (Post MBA) : MBB vs Long Only IM firm based in London
I have an offer from MBB (post MBA) and an offer from a long only public equities fund based, both based in London. I need help with choosing between the offers. I do not come from a finance background but they are recruiting me for my sector specific expertise (got contacted by a headhunter and thats why I interviewed with them).
The IM role pays 50% more than MBB and the bonus is also significantly higher (total comp will be around 150% higher than MBB). The money is REALLY good to ignore but I am not sure about building a career in finance.
- What are the exit points after spending some time (say 3-5 years) in IM? Will I be only attractive to other AM / HF Investment firms?
- My understanding is that I will gain significant experience in analysing a business and being able to evaluate business models, markets etc. Which will offer a better learning - MBB or IM?
- How does the compensation grow as you become more senior? I know how the compensation works at MBB but don't have much of an idea with the IM firm. (they have a partnership model)
- Long term career wise - what are the pros and cons for each?
Any help in concretely comparing the two options is greatly appreciated.
Bump? Any help is appreciated
The exit ops in IM are much, much narrower than you would have at MBB and yes, the skillset you gain is more or less only valuable for other buyside firms. That being said, it's usually something that people get into with the intention of staying for their entire career. I have quite a few friends / bschool classmates at top AM shops and they all, without exception, love their job. The lifestyle is also great, you do have to travel a bit, but then you meet management teams, tour companies and go to conferences so it's generally fun travel (and you get treated very well). The hours at all level, but especially at senior level, will be better than MBB. The work can be fairly slow paced though, you'll spend most of your time alone in your office reading / doing analysis. Comp will be ahead of MBB at all level with a much higher potential upside, although AM fees have been under a lot of pressure recently so don't know how that will hold up going forward.
MBB is different, the vast majority of people get in wanting to get good experience they can leverage knowing they will only stay a couple of years and only a tiny % will make it to partner. MBB knows this (and they know that they need to flush out a significant % of their employee due to up our out promotion system) so they can be very helpful in placing you once you decide you've had enough of consulting. The lifestyle can be a bit brutal depending on travel and projects and it doesn't get better as you move up the chain. Partners still spend a significant amount of time on the road. Most post MBA MBB exits are to operational roles at corporates
As for what will be a better learning, it really depends on what you want to do with that learning and what do you want for your career. If you want finance, go with AM, if you want to work in industry / management, go for MBB.
Thank you! This is very helpful - appreciate it.
Work at a large AM and can confirm all of that
Generally agree with the comments above from Mtm.
The skillset is fairly narrow. If you cover a specific industry, you might be able to enter it in either an investor relations role (easy transition) or doing something in corporate strategy or finance (more difficult). However, as Mtm said, most people don't leave an investment analyst role at a top firm since the comp and lifestyle is excellent. Turnover at my firm is MBB or IM? [/quote]
You will definitely learn more about markets at an IM firm. If you are a generalist, you would learn a lot about many different industries, which would help you compare business models across industries and the relative attractiveness of various industries.
In terms of learning more about any given industry, you would almost certainly learn more at a consulting firm. Keep in mind that as an investment analyst you are learning a lot about the broad trends in an industry and, more importantly, try ingto weigh the prospective investment returns of any given investment. You can only get so deep since you don't have access to non-public information.
At a consulting firm, you are learning more about the operations and day-to-day problems a company can face. You have access to non-public data and are working with the company to try to solve their problems. You are generally not trying to weigh investment merits and are not learning much about markets, so to speak.
The ultimate role in investment management is becoming a portfolio manager. Your comp there depends upon how much you manage. For PMs, the sky is the limit - look at what someone like Bill Gross makes. However, for most non superstar IM professionals your comp would cap out at $500k-1mn, especially if you're not on a PM track. It's possible this stagnates or even declines over time due to the secular pressures on the industry.
My impression is that IM comp is generally higher vs. management consulting at almost all stages post MBA / for experienced hires. The real comp upside for consultants comes when they leave consulting and become a senior executive or take a strategy role at a company.
IM pros: - high compensation - good lifestyle - generally a very interesting business
IM cons: - limited exit opportunities - structurally declining industry - can be very stressful especially if your recommendations underperform
Consulting pros: - many exit opportunities - usually an interesting case mix - well respected brand recognized across many industries
Consulting cons: - bad lifestyle - Generally an 'up or out' philosophy. Very unlikely you'll be at the firm after 5-7 years. - most firms have an aggressive culture due to the above - moving up requires you to become more sales oriented
This is super detailed and very helpful!! I really appreciate it - thank you!
Having done both I can offer my perspective here. Money and lifestyle aside, the single biggest difference between the two is autonomy/collaboration.
With MBB there will never be a situation where you're working in isolation. Everything you do will be part of a larger work stream and collaboration (upwards, downwards, with peers, and with clients) will be absolutely integral to your success in the industry. With IM, you're not being hired for your ability to work well with others, you're being hired to come with your individual perspective on a name which naturally lends itself to a lot of independent work. You will never have a "direct" manager or subordinate in IM, so structurally it is dramatically different from many other industries.
Me personally, I thought most of my MBB managers and clients weren't the brightest so IM was a far better personality fit. models and bottles already touched upon many of the other points, but I feel the most important long-term is your personality type and how you like to work. Frankly I've found a lot of the analytical tasks I've done to be similar between the two (creativity is a major bonus for both) but here I don't have the same pressure for deadlines and menial tasks that come with client services. On the flip side, my exits (which I don't plan on ever doing TBH) are far more limited than had I went back to MBB.
I hope this didn't come too late as I know offers need to be accepted around this time, but if you have more tailored questions about the two industries I'm more than willing to help.
May I ask how this decision panned out and if LO exits are typical in the UK from top MBA programmes? Have not heard much about LO post-MBA recruiting in the UK
Because it’s really non-existent here. A large majority of people i’d say start out from undergrad or a few transition from banks or ratings agencies. MBA pre-experience in my opinion won’t really help you
Thanks for responding. If someone is already working in PE now and would want to transition in a few years, would you then say that an MBA from LBS is useless? Would I be better pursuing one in the US?
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