I-Banking or PE for the summer
I am currently pursuing an MBA at a top ten school and have been presented with the following 2 options for the summer:
-Investment banking at CS Financial Sponsors Group
-Summer associate at a small private equity firm that has been around 5 years with 10 portfolio companies. While the full-time option has been mentioned, it is 50/50 at best given the current environment.
I have no banking background, and I worry about my ability to land a great PE job without a reputable bank/PE shop on the resume. I have also heard that CS FSG is fantastic; can anyone validate this...?
My ultimate goal would be PE at a top mid-market shop. Do you think I would be competitive for this next fall during full-time recruiting? If so, which track positions me better? Thanks in advance for your response.
CS sponsors is one of the top groups on the Street and one of the main feeders into PE.
how did you even get into PE without prior experience in pe/ibanking? If you were able to get into this firm without either of the two, this pe firm must not be that great. I'm still in university, maybe some of the other bankers could comment on this.
Did consulting and worked on the industry side for a bit closing a PE transaction. Leveraged that to get the PE job. This firm invests in the same space, so I bring somewhat of an industry background. Learned the LBO modeling at wharton undergrad, although I could benefit from a structured summer associate program at a bank. I guess the choice really comes down to decent PE vs. great banking group. Can anyone comment on which is better for getting into top mid-market PE? Also, note that this is at the associate level, so the banking job will be a little less technical than if it were analyst.
Thanks
he could have a solid connection.
Erherrma. CS's sponsors and levfin franchises have certainly had their share of successes over the last few years, including roles in the biggest deals. However, what I (and probably most others on this site) don't know is exactly how much of a hand CS's sponsors group specifically had in these deals. If CS Sponsors originated some of these deals then that would be very impressive (e.g. if someone from CS actually convinced someone at TXU, for example, that an LBO could be a good idea and then pitched the deal to a financial sponsor). This kind of story would say more about CS's sponsors coverage than if, for example, TXU was simply an existing client of a Utilities group MD and came to CS for advice by default (if I'm not mistake, TXU was, in fact, a CS client).
- CS had a buy side advisory role (along with about 6 other banks) in the First Data deal (KKR). Frankly, I'm more impressed that Morgan Stanley managed to land the role of sole advisor to First Data, but that's a different story.
- They had a sell side role in the TXU buyout (KKR, TPG and GS) along with Lazard. This deal points out one potential drawback for CS as a whole. CS offered something like a $40billion financing package to Blackstone in an effort to get them to bid. On the surface, this is pretty neat, but it makes me wonder just how much their business model depends on the firm's ability to put together enticing financing packages. CS was one of the most aggressive levfin providers, if I'm not mistaken. This is important to consider because this tactic is no longer feasible (example: Deutsche will struggle more than others to keep up in the M&A league tables when they can't win table credit through financing packages).
In your position, I would definitely join CS Sponsors for the summer. You'll get a ton of sell-side credibility out of it and become a way more attractive candidate for PE jobs in the future. You also have the benefit of not having to make a long term commitment to a sponsors group during this time period where the future of PE-related advisory work is very uncertain.
Justanotherbanker: Thank you for your perspective; I tend to be leaning in the CS direction too. I think another key selling point is that the sponsors group at CS does all the Lev Fin work--meaning it is not just coverage/relationship mgmt, which I hear is unique among sponsors groups. I can't really comment on CS' past roles in these LBOs, since I have no idea.
While justanotherbanker makes some good points, I guess I can answer some of the question he raises, as well.
CS sponsors is not a pitch-and-win-deals model. While it is no different than alot of FSG platforms on the street, the relationships of the senior bankers keep the group top of mind when it comes to the sponsors. So to answer your question regarding a situation like First Data - no, it is not very likely that KKR was pitched the idea by the sponsors group. Most everyone knows that buyside advisory roles to financial sponsors are ancillary prizes to being complacent when it comes to sponsor-asks in the leverage. Most sponsors don't need the advice.
Several things contributed to the success of the sponsors group at CS. First, CS was aggressive in their leveraged finance. Second, industry groups were constantly pitching for new business and getting in front of sponsor clients. Sponsor clients were/are a giant focus of the bank. Senior bankers in the sponsors group at CS maintained great relationships with sponsors, who came to their coverage officers first for financing terms. Whenever a deal came through, be it on the industry side or through FSG relationships, an FSG team was assembled alongside the industry team. As a summer associate, you'll get your hands on a lot of deals, you'll become proficient at LBO modeling (although CS bankers all use the LBO shell that dates back to DLJ - not that constructing an LBO model from scratch is that difficult, it's just not efficient). But justanotherbanker is correct - LevFin is basically dead in the water at this point and the sponsors group is not busy. The fund I am at has a great relationship with CS and we've seen a few CIMs lately with staples, but half of those come from the LA office.
Unfortunately, with all this lovely prose, I still can't tell you what is the better decision. I'm equally torn. I will forewarn you about the mentality you have going in, though. The sponsors group at CS is very liberal when it comes to allowing analysts to pursue PE positions. Associates, however, are expected to stay on the career track. Not to say associates do not leave for PE, but to address b's point above about being a great feeder - this is only applicable to analysts. Leaving for PE at the associate level does not occur at nearly the same frequency as at the analyst level. If you do end up going with CS, be careful not to exude too much eagerness to hop to the buyside...
Earum laudantium illo ut quo dolor corporis. Est assumenda quia quibusdam iste odio assumenda.
Qui ut consequuntur omnis voluptatem ut. Non enim vel non consequuntur. Est aliquam atque et eaque et ut itaque.
Iure perspiciatis suscipit perspiciatis. Quia sit repellendus et ipsam sint in non. A assumenda est sit libero. Nesciunt sequi nesciunt ut exercitationem. Omnis aspernatur voluptatum unde officia et quidem voluptas. Veritatis voluptas architecto facilis ut quo cupiditate inventore.
Et rerum asperiores aut suscipit. Aut eveniet nostrum ab delectus qui sequi. Similique minima et molestias sit. Sit sunt molestiae omnis ducimus quia. A sequi pariatur omnis. Harum voluptatum facere sed porro vero.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...