How does ER stack up to IB in terms of prestige/exit opps?

giwook's picture
Rank: Monkey | 59

Hello, I have a quick question for everyone that I couldn't find a definitive/reliable answer to while searching the forums/Google, so thought I'd post here.

I am a college junior and have been attending some networking events at firms. On more than one occasion, I've mentioned to the banker I was speaking/networking with that in addition to IB, I am also interested in ER, and have received a surprised look and a "Really?" in response.

Is it really that surprising to see someone who is interested in IBD also be interested in ER? I realize the compensation and prestige are different, but is ER really that far off in terms of exit opps at a PE/HF/VC? Is there something about ER or IB that I'm not getting? Or am I just making a big deal over nothing?

Comments (11)

Nov 18, 2013

You searched everywhere but couldn't find anything on this particular topic? Really?

Do you know the basic differences between the two? If you actually knew anything about...anything...you would probably not expect to exit to VC/PE (or at least you wouldn't expect the exit to be comparable to IBD). Maybe the guy was surprised because you said you were interested in something you knew nothing about.

Nov 18, 2013

There's a huge difference from ER and PE/VC, and its a HUGE difference between regular IB corp fin.

You seriously need to go back and do some more research. I'd be shocked too as the banker

Nov 19, 2013

Common ER exit opps are HF (l/s equity), AM (long only equity) and investor relations/corp dev/corp strat at a covered company. It's possible to do PE/VC but usually you'll need some IB/transactional experience to get a look. ER will better position you for public investing roles than IB but given that a majority of ER associates want to make the jump, it is extremely competitive and most will never get the chance.

Nov 20, 2013

How common/easy is the move from ER to corp dev??

Nov 21, 2013

Very and hard/easy depending on the person.

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Nov 22, 2013

It's got nothing to do with prestige or exit ops. ER and IBD require very different skill sets and interests and they set you on very different career paths. When you make a statement like that it sounds like you either don't know what what you want, or you don't know what your'e talking about.

"It's not that I'm so smart, it's just that I stay with problems longer." - Albert Einstein

Nov 26, 2013

"I realize ... the prestige are different."

I can't believe people think/talk like this. If all you care about is prestige you must live an entirely boring and unenviable life. There is a lot more to life than worrying about the prestige of IB or ER.

My name is Nicky, but you can call me Dre.

Best Response
Nov 19, 2013

I'm going to argue the prestige thing, not because it's an ideal way of thinking, but because it it does exist and could impact future employment outcomes. Generally speaking, it benefits someone early in their career to get as much as much experience in highly sought after roles at "prestigious" firms because that will open more doors for them later on. As it pertains to exit opportunities, IB keeps more doors open than ER and working at GS/JPM/MS keep more doors open than a run of the mill MM or boutique. To dispute this is to be naive.

The OP is a junior in college. He doesn't really know what he's talking about or what he wants to do. So in his case, shooting for an IB job at a name brand firm is his best path. Just as Harvard or Princeton open more doors than any state school, GS IBD opens more doors than MM ER and it's important to be cognizant of that. Even if the OP decides at some point that he wants to do public equity investing, that will still hold true.

Edit to add that I currently work in MM ER. And I'm speaking from the perspective of someone who wishes he had gotten this advice years ago. I have several clients and friends at top HFs who came from 2 year BB IB stints. And quite frankly, it's maddening because their knowledge is generally lacking at first yet recruiters favor them time and again because their path was more "prestigious", selective or whatever you want to call it.

    • 4
Dec 19, 2013

At the junior level ER and IB do have a lot of similarities, especially in terms of general technical work. Their job functions are incredibly different in that in IB you are a strategic advisor to a company while in ER you are analyzing companies from an investors perspective. However, you will be making DCFs, comps, etc. in both jobs at the junior level and I think that may be what OP was referring to.

Can people talk in more detail as to why ER isn't as well regarded for VC/PE exit opps? Can anyone speak to B-school exit opps? Thanks!

Dec 20, 2013

For VC/PE it's quite simple - even though as you say at the junior level there is a lot of overlap between IB and ER guys, but IB guys still have 'deal exposure' and VC/PE is not only about valuation, but largely deal-making - something which you lack completely coming from an ER background, although it isn't unheard of to transition from ER to PE. It is simply rare because:

1) There aren't that many ER people in the first place
2) People who go to ER usually have a very clear path in the sense that they don't want to really play outside of public markets
3) The mentioned lack of deal experience and to a lesser extent even the lack of ability/proof of ability of grinding long hours (as you know ER guys have better hours than IB guys)

B-school exit opportunities - it's completely fine to go from ER and you're not disadvantaged at all.

    • 1
Dec 19, 2013
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