How would you rate ECM/DCM as a long term career?

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Hey WSO, how do you view the Capital Markets side for a long term career? It's just a personal decision but I prefer staying with one firm for a long term, instead of switching around often. The concept of intertwining the banking side with the markets side appeals to me and I have a strong interest in this area.

My reasons, based on reading M&I and WSO.

1. HOURS - Hours in Capital Markets usually revolves around the markets (12 hours a day give and take depending on deal flow), with little to no weekend work making it on average a 60~70hr work week for 1st year analysts. The hours of course, gets lesser as one moves up the corporate ladder.

2. COMPENSATION - Based on what I've read, the compensation structure is very generous for capital markets, usually same in base, and a bit lower on the bonus side (as compared to IBD). Now this difference may be greater at the senior levels, but taking into account the hours(60~70 vs. 80~100), it seems very generous.

3. PROMOTION OPPS - the majority of bankers in ECM/DCM have good opportunities for direct promotion, negating the need for an MBA.

Now there are some cons:

1. CYCLICAL(ECM) - If the economy plunges, IPOs capital raising etc. plunge and ECM gets axed very quickly. DCM however, may remain more stable.

2. LITTLE EXIT OPPS - If one finds out capital markets isn't a match, then you pretty much are limited to two options: lateral within the bank, or go to B-school. Not a big factor for me since I'm in it for the long run.

I summarized it into these points (please do comment if you disagree with any of the points I made up there). Now back the questions: how would you rate ECM/DCM as a long term career?

PS. Two SBs to whoever correctly ranks the current leaders in ECM and DCM!

Comments (51)

 
May 4, 2013 - 1:23pm

I was in an ECM group for a SA stint at a large MM that currently occupies the old Goldman building. I can confirm everything above.

BUT you don't know how little the so called "real" bankers think of the ECM team. Direct quote: "They are clowns..." from a VP in one of the industry groups. They also laugh at how much bigger their bonuses are compared to ECM. At least at ___________ they don't consider ECM to even be bankers.

This seems to be attitude among big-shots at the top industry groups.

Whatever the real bankers think I'm pretty sure my MD head of ECM made at least a 500k to million a year.

 
May 4, 2013 - 1:45pm

anybankeratall:

I was in an ECM group for a SA stint at a large MM that currently occupies the old Goldman building. I can confirm everything above.

BUT you don't know how little the so called "real" bankers think of the ECM team. Direct quote: "They are clowns..." from a VP in one of the industry groups. They also laugh at how much bigger their bonuses are compared to ECM. At least at ___________ they don't consider ECM to even be bankers.

This seems to be attitude among big-shots at the top industry groups.

Whatever the real bankers think I'm pretty sure my MD head of ECM made at least a 500k to million a year.

hahaha, I'm not surprised that bankers view Capital Market groups this way. Definitely would be a problem to those with strong egos!

anybankeratall, I'm wondering if you have any info regarding the promotion/compensation structure of ECM and DCm, respectively?

 
May 4, 2013 - 1:40pm

You are a process monkey and you will learn nothing after your first 6 months.

Exit opps are very very limited because of the above.

Edit: Learning nothing after your first 6 months is slightly harsh but genuinely I know from talking to some of the guys on the ECM side that the job becomes very boring because youre either updating market updates for pitches or doing same ole' same ole' work during an execution

 
May 4, 2013 - 3:16pm

At the bank I was at DCM pretty much didn't exist. It was combined with LevFin and the entire group had 2 Analysts, 1 Associate, and 1 MD.

My MM didn't have a balance sheet to drive deals so yeah. I think they partnered with RBS on the balance sheet thing before RBS went down in flames so they got screwed from that too.

I don't know much about comps but honestly ECM (1 year) > Coverage group is extremely common. I think ECM is a lot better than DCM if you had a choice.

 
May 5, 2013 - 12:24am

If thinking of a long term career, DCM >>>> ECM. More pay, more job security but most likely a bit longer hours (unless you're in convertibles).

Of course banking >>> capital markets, but since you're set to enter an "inferior" career, then just giving my honest advice.

 
May 5, 2013 - 5:45am

Thank you for your comments!

eula:

You are a process monkey and you will learn nothing after your first 6 months.

Exit opps are very very limited because of the above.

Edit: Learning nothing after your first 6 months is slightly harsh but genuinely I know from talking to some of the guys on the ECM side that the job becomes very boring because youre either updating market updates for pitches or doing same ole' same ole' work during an execution

I am aware that there will be some grunt work involved especially during the analyst years. could you specify whether the ECM guys were in BBs or at a boutique?

crucifix.:

If thinking of a long term career, DCM >>>> ECM. More pay, more job security but most likely a bit longer hours (unless you're in convertibles).

Of course banking >>> capital markets, but since you're set to enter an "inferior" career, then just giving my honest advice.

Could you expand on why you think DCM > ECM? On what basis are you assuming higher pay/ job security in the DCM side?

 
May 6, 2013 - 1:49pm

My opinion from working in capital markets is that if you enjoy the work it is a good long term career, but the reason I did not stay in capital markets, even though I enjoyed the lifestyle and work, is that there are not great exit options and the skill set is not as transferable as traditional IB careers. Also, I had this fear that if you lost my job after a number of years, it would be very difficult to find a capital markets job at another bank and your only options may be a treasury group at a F500 company (nothing wrong with that) or similar.

 
May 6, 2013 - 1:56pm

AnacotSteel11:

My opinion from working in capital markets is that if you enjoy the work it is a good long term career, but the reason I did not stay in capital markets, even though I enjoyed the lifestyle and work, is that there are not great exit options and the skill set is not as transferable as traditional IB careers. Also, I had this fear that if you lost my job after a number of years, it would be very difficult to find a capital markets job at another bank and your only options may be a treasury group at a F500 company (nothing wrong with that) or similar.

Thank you for your response, if you had to choose a long term career in one of these fields (ECM/DCM), which would you choose and why?

 
May 6, 2013 - 3:42pm

AnacotSteel11:

My opinion from working in capital markets is that if you enjoy the work it is a good long term career, but the reason I did not stay in capital markets, even though I enjoyed the lifestyle and work, is that there are not great exit options and the skill set is not as transferable as traditional IB careers. Also, I had this fear that if you lost my job after a number of years, it would be very difficult to find a capital markets job at another bank and your only options may be a treasury group at a F500 company (nothing wrong with that) or similar.

What was your exit?

 
May 6, 2013 - 4:34pm

futurebanker55:

AnacotSteel11:

My opinion from working in capital markets is that if you enjoy the work it is a good long term career, but the reason I did not stay in capital markets, even though I enjoyed the lifestyle and work, is that there are not great exit options and the skill set is not as transferable as traditional IB careers. Also, I had this fear that if you lost my job after a number of years, it would be very difficult to find a capital markets job at another bank and your only options may be a treasury group at a F500 company (nothing wrong with that) or similar.

What was your exit?

I was able to exit to a coverage group at a different bank through networking and some connections from an internship.

 
Best Response
May 6, 2013 - 2:08pm

Bankers shitting on ECM/DCM is pretty funny. You do this shit for the paycheck. The only reason banking>capital markets is because bankers perform tasks that can transfer to private equity. If you have no interest in that then capital markets offers you better hours and great pay.

You do DCM at a large bank and you can do treasury at a F500 company. Or if you have some elements of modeling you could go to a debt fund, corporate banking, be a relationship manager, etc. ECM probably has less exit opportunities, but it is all how you sell it.

Lastly, the best advice I can tell you or anyone is to really, truly, not give a shit what other people think. This isn't a life changing career. You're not inventing anything, making the world better or changing things for the better. You are a friction cost most of the time and sometimes you provide some value.

Personally, I'd go do DCM and have interests and a life outside of work. You'll make great money, be able to enjoy it and also be able to purse actual interests and hobbies. And whenever you encounter a banker who sneers at you just realize that they are being sneered at by PE guys who got out of the grist mill at the analyst level or venture dudes who are creating shit and spending a fraction of their lives in the office.

 
May 7, 2013 - 5:55pm

TNA:

Bankers shitting on ECM/DCM is pretty funny. You do this shit for the paycheck. The only reason banking>capital markets is because bankers perform tasks that can transfer to private equity. If you have no interest in that then capital markets offers you better hours and great pay.

You do DCM at a large bank and you can do treasury at a F500 company. Or if you have some elements of modeling you could go to a debt fund, corporate banking, be a relationship manager, etc. ECM probably has less exit opportunities, but it is all how you sell it.

Lastly, the best advice I can tell you or anyone is to really, truly, not give a shit what other people think. This isn't a life changing career. You're not inventing anything, making the world better or changing things for the better. You are a friction cost most of the time and sometimes you provide some value.

Personally, I'd go do DCM and have interests and a life outside of work. You'll make great money, be able to enjoy it and also be able to purse actual interests and hobbies. And whenever you encounter a banker who sneers at you just realize that they are being sneered at by PE guys who got out of the grist mill at the analyst level or venture dudes who are creating shit and spending a fraction of their lives in the office.

This is basically exactly what I would say.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 
May 6, 2013 - 2:41pm

DaisukiDaYo:

My MD jokes about ECM/DCM (or any product guy for that matter) thinking that they're bankers. Just my two cents.

And I'm sure PE guys laugh at your MD when he's pitching deals to them for not having what it takes to make it to the buy side and being a glorified salesman or some other stupid shit. This thread isn't about the prestige of product groups it's about the pay and work/life balance of them as a long term career.

The MD I know in DCM/ECM at a BB is living it up. He makes at least 7 figures in his mid 30s (never needed an MBA) while working from like 8-6 most days. He's the most cheerful, upbeat, happy banker I know because unlike coverage MDs his life doesn't suck but he's still making a ton of money.

 
May 6, 2013 - 2:49pm

Raptor.45:

And I'm sure PE guys laugh at your MD when he's pitching deals to them for not having what it takes to make it to the buy side and being a glorified salesman or some other stupid shit. This thread isn't about the prestige of product groups it's about the pay and work/life balance of them as a long term career.

The MD I know in DCM/ECM at a BB is living it up. He makes at least 7 figures in his mid 30s (never needed an MBA) while working from like 8-6 most days. He's the most cheerful, upbeat, happy banker I know because unlike coverage MDs his life doesn't suck but he's still making a ton of money.

Calm down, I wasn't trying to sh*t on ECM/DCM, merely echoing what someone else said earlier.

You can make great money in any group, it depends what you want. Hours-wise, you'll have the occasional long day in ECM/DCM, but generally you'll stay for less time and travel less than the coverage people.

 
May 6, 2013 - 2:44pm

I think the vast majority of bankers don't give a shit. Many guys in ECM/DCM did time in banking. Maybe ECM gets more shit because they can really piggyback of M&A guys. I'd imagine DCM is more autonomous.

Really depends on the bank though. Some places lump LevFin into markets. That has transferable skills.

 
May 6, 2013 - 3:10pm

I worked in DCM and left because it's a pretty boring job at the analyst/associate level. That said, I would definitely consider moving back in as a VP because you get a lot more client coverage responsibilities early and the lifestyle is great (7-7pm as a VP+, no weekends aside from maybe a conference call or two). Associates in DCM probably have it the best, to be honest -- same hours as VPs with less accountability.

FWIW, we thought our coverage bankers were pretty fucking useless, too. So it works both ways.

 
May 6, 2013 - 3:39pm

mrb87:

I worked in DCM and left because it's a pretty boring job at the analyst/associate level. That said, I would definitely consider moving back in as a VP because you get a lot more client coverage responsibilities early and the lifestyle is great (7-7pm as a VP+, no weekends aside from maybe a conference call or two). Associates in DCM probably have it the best, to be honest -- same hours as VPs with less accountability.

FWIW, we thought our coverage bankers were pretty fucking useless, too. So it works both ways.

I agree with this. I have thought about getting back into DCM ever since I left as the lifestyle is great and I did enjoy working on deals, but not the constant pitching, and I like trading desk atmosphere as opposed to a cubical.

 
May 6, 2013 - 4:55pm

Once when I had to deliver a pitchbook from origination to an associate in tech (software) around 7:30pm (ECM is on a different floor to banking) and he was shocked and said he didn't know ECM even worked this late in a snarky way.

People will shit on you no matter what for one reason or another.

ECM I'm pretty sure made more money for my bank than tech did considering how they constantly pitch impossible deals they will never get since they're competing against Moelis/Lazard/Evercore. Yet the M&A and tech team still acts like they are the shit around everybody. So if you go by WSO logic if you're not M&A or a top coverage group you're not a "baller" whatever that means.

The ironic thing is that same associate got fired a week before bonuses in July and the two 3rd year ECM analysts I worked with got promoted to associates in the same week. The base pay IS THE SAME as the "ballers" and if ECM/DCM has a blow-out year the bonuses will be the same/better. Also no one in the ECM team at my bank was ever fired in 4 years while group go out the revolving door in the larger coverage groups. Turnover is like 30%

 
May 6, 2013 - 10:44pm

Wow I didn't expect to get this much good information here!

It seems that the general consensus is that ECM/DCM are both good as a long term career. I have some information regarding ECM and DCM that I'm wondering if current professionals who've interacted with either group could validate each point's authenticity:

1. Some people familiar with the Capital Markets group recommended ECM Convertibles / DCM > ECM origination as an analyst/associate. This is because convertibles are a complicated product and not many people have understanding of it, allowing the convertibles analysts to have a leg up in bonuses/promotion. This is in contrast to ECM Origination, where the majority of ECM analysts will be focused on the typical pitching (pitchbooks), market slide updates etc. Consequently, ECM Origination has less hours (7~8) whereas ECM convertibles / DCM have generally longer hours (7~10/12). The ones that M&A bankers look down on / make fun of are usually the ECM origination analysts. Are these points true / false?

2. Starting from associate and beyond, those in DCM generally have higher compensation than those in ECM. This is because, in general, DCM brings in more revenue than ECM (just by virtue of fixed income markets being much larger than the equities markets). True/False?

*I forgot the link, but I remember seeing a chart showing each bulge bracket banks revenue stream - about 40% was from fixed income S&T, 25% from equities S&T, 15% from DCM, 10% from ECM, and 10% from IBD advisory. Now this varied according to bank (ex. JPM/Barclays revenue came more from Fixed income whereas GS had more focus on equities) but in general, the DCM portion of revenue was consistently higher than the ECM portion.

Are these points right or wrong?

 
May 7, 2013 - 9:00am

x.:

Wow I didn't expect to get this much good information here!

It seems that the general consensus is that ECM/DCM are both good as a long term career. I have some information regarding ECM and DCM that I'm wondering if current professionals who've interacted with either group could validate each point's authenticity:

1. Some people familiar with the Capital Markets group recommended ECM Convertibles / DCM > ECM origination as an analyst/associate. This is because convertibles are a complicated product and not many people have understanding of it, allowing the convertibles analysts to have a leg up in bonuses/promotion. This is in contrast to ECM Origination, where the majority of ECM analysts will be focused on the typical pitching (pitchbooks), market slide updates etc. Consequently, ECM Origination has less hours (7~8) whereas ECM convertibles / DCM have generally longer hours (7~10/12). The ones that M&A bankers look down on / make fun of are usually the ECM origination analysts. Are these points true / false?

2. Starting from associate and beyond, those in DCM generally have higher compensation than those in ECM. This is because, in general, DCM brings in more revenue than ECM (just by virtue of fixed income markets being much larger than the equities markets). True/False?

*I forgot the link, but I remember seeing a chart showing each bulge bracket banks revenue stream - about 40% was from fixed income S&T, 25% from equities S&T, 15% from DCM, 10% from ECM, and 10% from IBD advisory. Now this varied according to bank (ex. JPM/Barclays revenue came more from Fixed income whereas GS had more focus on equities) but in general, the DCM portion of revenue was consistently higher than the ECM portion.

Are these points right or wrong?

1. Who cares what "M&A bankers" think
2. Depends on the year, the bank and the individual (at a higher level). You can't generalize
3. LOL at banks earning 40% from fixed income S&T these days

 
May 7, 2013 - 9:51am

x.:

Wow I didn't expect to get this much good information here!

It seems that the general consensus is that ECM/DCM are both good as a long term career. I have some information regarding ECM and DCM that I'm wondering if current professionals who've interacted with either group could validate each point's authenticity:

1. Some people familiar with the Capital Markets group recommended ECM Convertibles / DCM > ECM origination as an analyst/associate. This is because convertibles are a complicated product and not many people have understanding of it, allowing the convertibles analysts to have a leg up in bonuses/promotion. This is in contrast to ECM Origination, where the majority of ECM analysts will be focused on the typical pitching (pitchbooks), market slide updates etc. Consequently, ECM Origination has less hours (7~8) whereas ECM convertibles / DCM have generally longer hours (7~10/12). The ones that M&A bankers look down on / make fun of are usually the ECM origination analysts. Are these points true / false?

2. Starting from associate and beyond, those in DCM generally have higher compensation than those in ECM. This is because, in general, DCM brings in more revenue than ECM (just by virtue of fixed income markets being much larger than the equities markets). True/False?

*I forgot the link, but I remember seeing a chart showing each bulge bracket banks revenue stream - about 40% was from fixed income S&T, 25% from equities S&T, 15% from DCM, 10% from ECM, and 10% from IBD advisory. Now this varied according to bank (ex. JPM/Barclays revenue came more from Fixed income whereas GS had more focus on equities) but in general, the DCM portion of revenue was consistently higher than the ECM portion.

Are these points right or wrong?

Please don't base your choice of what other "bankers" think. I'm in M&A myself I don't have any reason to look down on ECM/DCM or any other profession at all. Everyone should be doing what he is enjoying the most and not what other people view as hip, cool, or whatever.

I don't know a single investment banker who would make fun of the ECM guys, why should they? Those people making fun of them are usually college kids who think they are ballers once they work 24/7 or are a few idiots who think they are Gordon Gekko (the MD example above). But you know what, I bet the PE guys make fun of this MD for presenting one bullshit idea after another to them.

Just do what you like and what you are interested in and please don't give a shit on the opinions of "real bankers".

 
May 7, 2013 - 9:52am

above_and_beyond:

x.:

Wow I didn't expect to get this much good information here!

It seems that the general consensus is that ECM/DCM are both good as a long term career. I have some information regarding ECM and DCM that I'm wondering if current professionals who've interacted with either group could validate each point's authenticity:

1. Some people familiar with the Capital Markets group recommended ECM Convertibles / DCM > ECM origination as an analyst/associate. This is because convertibles are a complicated product and not many people have understanding of it, allowing the convertibles analysts to have a leg up in bonuses/promotion. This is in contrast to ECM Origination, where the majority of ECM analysts will be focused on the typical pitching (pitchbooks), market slide updates etc. Consequently, ECM Origination has less hours (7~8) whereas ECM convertibles / DCM have generally longer hours (7~10/12). The ones that M&A bankers look down on / make fun of are usually the ECM origination analysts. Are these points true / false?

2. Starting from associate and beyond, those in DCM generally have higher compensation than those in ECM. This is because, in general, DCM brings in more revenue than ECM (just by virtue of fixed income markets being much larger than the equities markets). True/False?

*I forgot the link, but I remember seeing a chart showing each bulge bracket banks revenue stream - about 40% was from fixed income S&T, 25% from equities S&T, 15% from DCM, 10% from ECM, and 10% from IBD advisory. Now this varied according to bank (ex. JPM/Barclays revenue came more from Fixed income whereas GS had more focus on equities) but in general, the DCM portion of revenue was consistently higher than the ECM portion.

Are these points right or wrong?

Please don't base your choice of what other "bankers" think. I'm in M&A myself I don't have any reason to look down on ECM/DCM or any other profession at all. Everyone should be doing what he is enjoying the most and not what other people view as hip, cool, or whatever.

I don't know a single investment banker who would make fun of the ECM guys, why should they? Those people making fun of them are usually college kids who think they are ballers once they work 24/7 are a few idiots who think they are Gordon Gekko (the MD example above). But you know what, I bet the PE guys make fun of this MD for presenting one bullshit idea after another to them.

Just do what you like and what you are interested in and please don't give a shit on the opinions of "real bankers" (jesus..).

I agree. The posters on this site worry too much about what group/bank is best and making it to top tier PE or HF. Bottom line is ECM/DCM is a good place to start your career and have a long career if you enjoy it. Also, once your foot is in the door at a bank, you will get to see what other groups are really like, build relationships with colleagues and see if ECM/DCM is for you or not and take it from there.

 
May 7, 2013 - 10:39am

^ Sorry for the misunderstanding, I'm in no way basing my answer based on what M&A bankers think - I was just trying to make the point that the analysts/associates in ECM Orig have lesser hours (as compared to Convertibles/DCM), which is the root to the "stories" of regular M&A bankers looking down on ECM.

I'm pretty much dead set on Capital Markets, I'm just having a hard time choosing between ECM and DCM, which are both fundamentally different (equities vs. fixed income) despite being both under Capital Markets. I understand majority of the responses being "do whichever side interests me most" and although I agree with this to a certain extent, it's crucial that I weigh the job security/promotion opportunities in both sides, especially since I am aiming this field for a long term career. Just to show an example, let's say there is a student who is passionately in love with cash equities trading but has no programming skills - it would not be wise for him to enter equities S&T over fixed income S&T in this environment due to the rise in automated equities trading. This is the area I'm wondering if you guys have more information on - which side has better job security DCM or ECM?

From what I've heard, when the markets head south, ECM gets cut to a much larger extent than DCM? Is this true?

 
May 7, 2013 - 10:44am

x.:

^ Sorry for the misunderstanding, I'm in no way basing my answer based on what M&A bankers think - I was just trying to make the point that the analysts/associates in ECM Orig have lesser hours (as compared to Convertibles/DCM), which is the root to the "stories" of regular M&A bankers looking down on ECM.

I'm pretty much dead set on Capital Markets, I'm just having a hard time choosing between ECM and DCM, which are both fundamentally different (equities vs. fixed income) despite being both under Capital Markets. I understand majority of the responses being "do whichever side interests me most" and although I agree with this to a certain extent, it's crucial that I weigh the job security/promotion opportunities in both sides, especially since I am aiming this field for a long term career. Just to show an example, let's say there is a student who is passionately in love with cash equities trading but has no programming skills - it would not be wise for him to enter equities S&T over fixed income S&T in this environment due to the rise in automated equities trading. This is the area I'm wondering if you guys have more information on - which side has better job security DCM or ECM?

From what I've heard, when the markets head south, ECM gets cut to a much larger extent than DCM? Is this true?

I think it depends more on risk appetite, if you're more willing to take risk, aka in a growing market, you'll see a lot more secondary equity issuances/IPOs e.g. China. However, once that crap dies down and people realize your IPO'd companies are going bankrupt, you'll see risk decline and people move towards debt.

However, my view is that there'll always be both issuances, just debt is a lot hotter due to Co's always needing to refi, etc.

 
May 7, 2013 - 11:00am

^ Now that you phrase it like that, it does seem like ECM is going to be more fruitful in emerging markets (ex. china) rather than the developed ones in US. PWC also released a report titled "Capital Markets in 2025 : The Future of Equity Capital Markets" and it states the same thing - that majority of ECM deal flow will be shifting towards the emerging markets (asia/india/brazil) although as of now, US (and to a lesser extent, London) still dominates the ECM space.

However, I could not find much information on DCM - it does logically make sense that because banks/financial institutions/companies will always have a need for debt, and therefore DCM remains relatively inelastic to a bear market, whereas ECM is highly dependent on the state of the markets. Does this logic apply to real life?

 
May 7, 2013 - 11:20am

x.:

^ Now that you phrase it like that, it does seem like ECM is going to be more fruitful in emerging markets (ex. china) rather than the developed ones in US. PWC also released a report titled "Capital Markets in 2025 : The Future of Equity Capital Markets" and it states the same thing - that majority of ECM deal flow will be shifting towards the emerging markets (asia/india/brazil) although as of now, US (and to a lesser extent, London) still dominates the ECM space.

However, I could not find much information on DCM - it does logically make sense that because banks/financial institutions/companies will always have a need for debt, and therefore DCM remains relatively inelastic to a bear market, whereas ECM is highly dependent on the state of the markets. Does this logic apply to real life?

In a down market, there will be cuts across the board, but I would say there will be more cuts in ECM than DCM, but high yield DCM as opposed to investment grade will also have significant cuts if the credit markets seize up like a few years ago. Also, from what I have seen/heard, banks ranked in 7-12 of the DCM league tables tend to run leaner staff, so less fat to cut.

 
May 7, 2013 - 11:15am

I think DCM is a more interesting area, though I'm biased having worked in it. You get more exposure to different products (you'll work with the converts team, structured finance, tax-efficient strategies, project finance if in Energy DCM, all kinds of cool deals if in Financial DCM) and you'll generally have more execution because, as has already been mentioned, companies always need to do debt deals.

That said, the downside would be less exposure to equity-based valuations and theory, and when the IPO market is hot, it's undoubtedly the "sexier" product.

 
May 7, 2013 - 1:23pm

For a long term career, DCM >>> ECM. When the markets and heading south, if you're a mid-level banker you are pretty much guaranteed to be laid off (unless you are exceptional), whereas DCM rarely gets cut. Much more technical in DCM (hence better job security) and GENERALLY all things constant, DCM bankers have higher compensation compared to ECM.

Can't go wrong with either though to be honest, but since you stressed job security so much, DCM >> ECM in terms of that. Perhaps ECM Convertibles may be an exception to that (since it's a niche skill) but I don't know too much about it (not even sure why convertibles is under ECM than DCM since is mainly deals with debt) - perhaps other WSOers can chime in on that.

 
May 7, 2013 - 6:12pm

Here's what everything in this thread boils down to:

1) Some people working CM, some people are coverage bankers, others work in M&A
2) Due to the insane amount of experience bias, everyone tends to think that their career path is the best / the one that everyone should choose
3) In reality, starting a career in coverage banking or CM is an epistemologically transformative life event. Once your career progresses in one of those directions, every aspect of your life and experience is affected. Your career path will affect your schedule, interests, reading, values, goals, travel, lifestyle; it will affect whom you befriend, where you live, whether you go to grad school, where you go to grad school - everything. That makes it incredibly difficult to know, in advance, whether you will thrive and equally difficult to say, afterwards, how your life would have been had you taken a different path.

Bottom line: No M&A banker / PE Associate knows what it's like to be a VP in ECM / DCM. Conversely, no ECM Associate knows what it's like to be an M&A Banker or a PE Associate. They both have a pretty good idea of what kinds of tasks are involved, what the day-to-day might be like - and chances are that they both have a strong preference for their own job (hence, they took that job instead). But that doesn't mean anything. I work in M&A. Do I know what my MD does on a day-to-day basis? Generally, yes. Do I know what it's like - what it's really like - to be an MD? Absolutely not. Just because an MD in banking answers the phone to a PE Associate doesn't mean that he is inferior; they are different careers, different people and they shouldn't be compared.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 
May 8, 2013 - 4:58pm

ECM does get cut more than DCM in market cycles but it depends on the bank. ECM is equity. Equity is always more risky than debt.

In my bank ECM was hellva a lot bigger than DCM but in the 2008/2009 crash ECM shrank from 25 people to 13. But DCM only had 4 people to begin with for a bare-bones operation with LevFin so nothing.

If your bank has a small balance sheet or an non-existent one you don't want to be in DCM at that bank. You can't drive deals and your deal-flow will suck. Because of that ECM at __________ is a ton better than the DCM group that doesn't go anywhere.

 
May 8, 2013 - 4:59pm

Career Information: DCM (Originally Posted: 10/05/2015)

Hey guys, will be going into DCM next year and was wondering if anyone had more information about Capital Markets careers, culture, exit opps, and other information. Did a search and it seems a lot of people think that DCM does not provide that many exit opps, but is a great place to be a lifer in. What do analysts in these groups do daily that is so different from traditional IBD??

 
May 8, 2013 - 5:03pm
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