Hey so there’s lot of talk about how IB is more prestigious and has better exit opps than Equity Research. But I don’t get why.
I mean, I understand that in IB you’re directly creating revenue for the bank, which is why their bonuses and salaries are usually higher than ER.
But why would it have better exit opps? Exit opps matter mostly to analysts, and analysts in ER are given a lot more responsibility and do much more critical thinking than analysts in IB. In ER you actually get to talk with the big names in companies and get a lot of face to face time with Hedge Funds, you become an expert in the industry. In IB you’re more of an expert in Power Point, with little to no contact with clients.
So why does banking have more prestige and better exit opps than ER?
The reason is deal exposure (investment banking, yes; equity research, no).
Mostly - access to deal based buyside exit opps and a preference for running deals/processes over covering names.
The actual technical work is pretty similar otherwise and the other exits: CorpDev, IR, CorpFi, HFs, CorpStrat, AM etc are pretty similar.
I asked an MD at a hedge fund this same question and he said, "Honestly, people doing ER are probably better for us than bankers, but we still recruit bankers anyway. That's just how it is."
I recently met a very senior dealmaker who went from ER to IB earlier in his career and he summed it up like this: “Research analysts these days are glorified fiancial journalists because while in previous years, regulations and Chinese wall were more lax, they could work with bankers closely and actually understand the numbers in the real context of the situation a company was in. Today, they can’t or at least they have to pretend not to”.
It was definitely quite something to hear put so candidly.
GS ER or DB IB (Originally Posted: 02/28/2007)
Will like to ultimately do IB, which is the wiser choice?
If you want IB, do IB. Why is this even a consideration?
GS has a brand name that makes it hard to brush off. Was thinking of slogging it out for a yr in GS ER and transfering to GS IB or move to MS/ML IB.
DB does not seems to be particulary strong in IB. Even in IB, they are stronger in IPO/DCM/markets rather than M&A.
That is not a legitimate comparison to choose between. A more appropriate comparison would have been a specific group within IB within the same company or the same group across two companies.
ER in GS does not beat IB at DB. It's still IB. Forget name chasing in this particular case.
I have a friend who did ER last summer in GS and he now has a job in GS IB. He told me that it wasn't hard at all to switch divisions as long as you do a good job with your ER stint.
You think its not possible to do an internal transfer from GS ER to GS IB or move out to MS IB at the end of one year?
For clarification, mine is not a summer intern position. Its a full time offer.
Summer is very different than full time. DB IB will help you eventually get into GS IB if that is your goal. At least that way you'll have highly transferrable skillsets.
You should do GS ER. I'd rather do GS Asset Management than do DB IB. DB IB... HAHAHAHAHAHAHA
DB may be one of the weaker players but they are still a major bank. It's still an easier sell going from IB -> IB than ER -> IB. And you won't take a discount.
any more thoughts?
Till now, its a tussle between brand name and directly transferable experience. I am hung up on brand name because i believe it could lead me to the CF department of an equally "branded" bank. Please wake me up if I have gotten the wrong idea.
I am also concerned that DB is stronger in derivatives and IPO/markets rather than M&A, which is my main interest. How transferable are skills between IPO/markets and M&A?
Ok, allow me to wake you up.
This should not even be a question. This thread is completely pointless. You need to stop worrying about brand name. You obviously want to do Investment Banking, so why would you turn down an investment banking offer?
As one person stated, it would be different if this were a summer position. But because it is full time, it will be easier to lateral from DB IB to GS IB is that is your goal.
As far as your last concern. I'm pretty sure DB does M&A deals although they may not be "strong" in that area. Also, there is still a lot of valuation done in IPOs which will be transferrable to M&A. Plus at the end of the day as an analyst, banking is banking. I'm pretty sure the your pibbing and formatting skills will be transferrable as well.
Those are 2 different things!
Most people here will tell you IB because it is IbankingOasis not EquityResarchingoasis.
He said "will ultimately want to do IB."
...then good luck...
otherwise, look at the exit ops too...infact, im in sort of a similar condition...anyone care to enlighten?
Why aren't you heeding advice to do GS ER? DB is nearly a boutique if not for Europe.
Let me tell you. If I were in GS (which I'm not) and I were interviewing you 2 yrs down the track, I'd know why you're at DB IB. You think I'm stupid or something? I will know that you couldn't get into a real IB like JPM, Citi, ML etc... let alone MS and GS. There's no way you can bullshit your way out of that.
In contrast, if you went into GS ER, at least you could say you were genuinely interested in ER at the time and you took the best ER spot there was. Your story would flow along the lines of how you changed you mind and decided to get more involved in the execution of a deal. Not to mention ER sometimes crosses the wall to assist IB. You could potentially be assisting the GS IB team, which would give you leverage in the interview. Also you'll be able to justify why you suddenly had a change of heart (and it's because you got the exposure and realised it's what you like), and also help you to build contacts.
I'm sick of typing... it's such a simple question and the answer is so obvious!!! Go to DB IB if you think no one's going to realise you couldn't get into any other IB.
cafe_apple would have been totally right if the rankings of the banks reflect how good you are .. that is the case in a perfect world
however, we live in a world with frictions... in this world banks take people they like and fit with the culture.. not the best people
i know people with tremendous experience, top school, top degrees but 'lost' because a graduate from a crappy school with crap gpa was chosen just because the bankers liked him more..
join DB ibd and you will do fine don't botter with people who think you are crap, the banks's ranking does not reflect how good you are..
cafe_apple: I agree with some of your views but what you said about ER helping IB.....what about chinese walls? i'm always reminded at work that the invisible wall b/w ER and IB should not be scaled?! what do you mean by "ER sometimes crosses the wall to assist IB. You could potentially be assisting the GS IB team"
how is this acceptable or legal under any circumstance? wouldnt the interviewer like to know?
I completely disagree with cafe_apple. I have no idea what his beef is with DB, but nobody that I work with is that hung up on league tables and bank prestige. Banking is banking, no matter where you do it. DB still gets some decent deals, especially if you land in the right group. You can always lateral or pursue business school then try for GS/MS as an associate.
Very often, GS will hire 3rd year analyst laterals with the understanding that they will most likely be promoted to associates. These laterals come from places like JPM, UBS, CS, and yes, DB - without discount.
After two years of doing ER, you won't have the requisite skillsets to be an associate or senior analyst at GS. Assuming you're able to get an interview (remember, it's touchy if you're at GS ER because if you're decent, they will want to keep you in ER), they'll most likely make you start as a 1Y analyst. You're right cafe_apple, the answer is obvious.
To add onto GameTheory's post, one of the associates at GS that interviewed me was a DB analyst-direct promote that lateralled.
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