Houston Banks: MS vs. Citi vs. Jefferies

KKhasComeBack's picture
Rank: Chimp | 11

thoughts on these options? With what's going on in the markets rn I'd like to gtfo of energy (or at least go to an energy Megafund vs. a local energy PE firm). NYC isn't really an option given OCR at my school but may be for FT recruiting

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  • Analyst 1 in IB - Ind
May 7, 2020

Assuming this is for SA 2021, I think there is a similar thread on GS vs. EBs. Historically, GS/MS have been considered the easier Houston banks to get to NY from. Not because they are top Houston BB, but just the brand.

I would say it's hard to predict how summer 2021 or FT in 2022 will be. Historically, Jefferies has been considered the top Houston bank to learn O&G. But they have been downsizing recently, and it's unlikely that prowess would carry over to non-energy recruiting. I would consider Jefferies as having a higher "O&G" beta compared to the other options.

For Citi vs MS, I'm not knowledgeable about how their analysts have recruited to get a "right" answer. Would say Citi has been considered a top Energy BB in terms of deal flow, but is also a much larger analyst class than MS. While MS is smaller and has fewer deals, there is evidence that the brand carries some weight.

If you were die-hard O&G, you would historically rank as Jeff>Citi>MS. You could argue Post-COVID that Citi is a better bet due to the capital markets exposure.

If you wanted to exit O&G, I would rank MS>Citi>Jeff

Also, the issue with MF energy is that it is becoming a smaller and smaller space. For example, Carlyle shut down its Mezz group and Warburg has closed its Houston office and won't raise another energy fund. Hard thing to bet on in 2024.

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  • VP in PE - LBOs
May 7, 2020

One thing I'd add -- most of the energy megafunds feel like dead ends, but the brand name is valuable and a transition to regular PE after a stint at say, Blackstone or TPG, is doable (possibly after b school). Trouble is knowing if they'll even be around by 2024 as the poster above said. Between failed fundraises and negative returns they might just pare their losses and wind down.

  • Analyst 2 in IB-M&A
May 7, 2020

Agree with the poster above on MS giving you the best shot to recruit for opps outside of energy. Also, good points on Jefferies having a higher "energy-beta". In good times, they absolutely kill it (you will work more than pretty much anyone else in Houston) and you should learn a ton if you can stick it out for 2 years. And if you are looking to place in MF energy PE, all 3 of those banks should give you a pretty similar shot. I've seen analysts from all 3 of those firms end up at NYC Energy MF offices. Just looking at the last 2-4 years, there doesn't seem to be a distinct pipeline from a specific bank when it comes to NYC Energy MF placements -- all the top banks and even what some people on this forum consider "middle-tier" names have placed at least one associate. CS, Evercore, TPH, JPM, BMO are a few other examples off the top of my head. There used to be a bit of a pipeline effect going on for a few of the large Texas based shops along with First Reserve but I don't think it's as much as banking group dependent anymore as it is the candidate themselves.

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  • Prospect in Other
May 8, 2020

What about exits into non-energy NYC/other city ops?

  • Analyst 2 in IB-M&A
May 8, 2020

I'd say any of the well known "household" (amongst the finance community) IBs, whether BB or EB (including the 3 names specified on this thread), will get you on the radar for non-energy recruiting opportunities both in NYC and elsewhere. Again, from the list you provided, I'd lean towards MS getting you the most traction based on brand name alone, all else being equal. That being said, you will probably find that going from energy BB/EB to non-energy PE MF might be a bit of a long shot. It's been done before but I wouldn't count on it, especially if you are not based in NYC when on-cycle recruiting kicks off. You should get plenty of inbounds from recruiters for MM roles outside of energy if you are at a reputable bank. However, it will be up to you to deliver a good story and cogent rationale as to why you would make for a good candidate for those roles. This will ultimately determine how much traction you actually get with those hiring processes.

My sense is that if you are recruiting for a role where the hiring managers and staff/team are not acutely familiar with the banks in the energy space, or if it's a role only tangentially related to finance, that it would be more helpful to have a "blue-chip" name (based on those who are not privy to O&G IB) on your resume such as GS/MS/JPM/EVR vs. Jefferies/TPH.

  • Prospect in IB-M&A
May 8, 2020
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