IB Work Difficulty

How difficult is the work truly? It seems as if people say it is hard more because of the long hours and the expectation to produce under pressure.

Is the work itself very difficult, or is it just the volume that is difficult?

Comments (29)

 
Most Helpful
  • Analyst 1 in IB-M&A
Sep 23, 2020 - 4:52pm

Not to undermine your ambition or anything, the work is actually pretty straightforward. You'll start as an analyst and get what actions to execute (build a model, draft an IM etc).

The modelling is pretty straightforward (middle school/high school level arithmetic) and a very superficial grasp of TVM/CAPM should do.

As you progress you do less of the execution and more of managing the process/juniors etc. In those roles (SVP, Director, MD) you need to know legal structures, tax structures etc a bit more but quite frankly they come from experience i.e. having seen a lot of deals.

If you purely wish to ask about the cognitive challenges or intellectual stimulation... I personally feel that hypothetically if the "prestige/perception" element of the role gets taken away (i.e. people no longer see it as the best first job out of uni) much fewer people will want to do it. That is to say if the only genuine exit opps remain PE/HF, people may just work for corporates etc directly. Just my $0.02.

Btw, I am from a rigorous STEM background so everything I have said is relative to my background.

 
Sep 24, 2020 - 9:16am

I think this is true from a junior point of view, but I think the value of intelligence in the job is significantly understated, especially as you progress in the hierarchy.  We have had a number of hires that didn't pan out over the years, and while mostly because of nepotism, does show that not everyone can do it and some people do legitimately struggle.  The job does get harder as you get more senior; you will never come across an idiot MD. 

 
  • Analyst 1 in IB-M&A
Sep 24, 2020 - 7:42pm

Punchey

I think this is true from a junior point of view, but I think the value of intelligence in the job is significantly understated, especially as you progress in the hierarchy.  We have had a number of hires that didn't pan out over the years, and while mostly because of nepotism, does show that not everyone can do it and some people do legitimately struggle.  The job does get harder as you get more senior; you will never come across an idiot MD. 

Again, depends how you want to define intelligence... the impression I got from the OP was that they were after the usual quantitative kind of difficulty gauging. If you want to talk about the emotional quotient, sure - I don't think most of my STEM cohort could have done this in the same way even at (especially at?) junior levels. Let me explain.

When we talk about "attention to detail" in IB what we are really talking about is not dozing off when looking at mind-numbingly dull documents/tasks. The one who can remain awake in the face of morbidly mundane tasks, triumphs.

Re. your point about not everyone can do it - sure, happy to concede it. But honestly, don't think OP is after that either... in almost every job there are people who cannot "do it". Lol about the nepotism point (good old IB and meritocracy).

My opinion? I don't think it gets harder as you go up in the context OP seemed to be asking. You will be "managing" processes/people/clients etc but it won't become significantly more stimulating any more than it is in earlier years. Maybe you will have a few more minutes to understand and conceptualise the output of your analyst's merger model but that is it. 

Tangential point (only if the OP is interested):

Look, the fact is that the prestige bandwagon and the notion that "you can do anything after IB" is based on a perception. Yes, you can go to Microsoft and work as some sort of a strategy/ops guy after this sure but you won't be getting the gig because of direct relevance. You will be getting it because of the perception that smart people/driven people gravitate towards IB, you have "basic" business sense, some social skills and crazy work ethic. That's all. 

The supposed difficulty you are talking about when one gets senior is literally what I would call being experience in a field. Any field. There are no ways around this - just as a senior VP at Disney would know his industry, VP at Ford his, VP at Google his, just like that a senior M&A professional would know his industry as he/she has been in it for a while. You cannot read books on this or learn this in courses - just like you cannot learn the same about other roles mentioned. But this is called being a specialist.

In terms of M&A seniority and job skills what I mean is this, when you become a senior associate/VP and start to learn more about transaction structuring, legalese, anti-trust crap etc. bear in mind that you are now a specialist. You are no longer building upon the same "basic"/"general" transferable skillset that you'd already built as an analyst - that was already built. Your knowledge of CMA/anti-trust issues and tax implications in a carve-out are no longer relevant to general jobs than those of a senior trader's looking to move from some credit investing gig to business dev/ops/etc at Microsoft, or a marketing professional looking to move into the same role, or a pharma person looking to move to a CPG etc. Hopefully you get the point.

My only points are these: yes there are some useful transferable skills which are IB specific-ish (understanding statements, understanding loosely strategic motives, value-chains/sectors) and some general ones that you could get from most other decent corporate gigs (soft skills, presentation skills, basic revenue analysis, negotiation).

If you are doing IB for stimulating work or intellectually challenging work that will open doors due to it being technical, then um, nope. Your best hope (and mine) is that Google/GS and the likes don't automate enough of this snooze-fest soon enough. Helps pay the bills and allows me to pretend in front of my family of scientists that I actually am a big thing. My mum once saw me aligning logos at 2 am.... few weeks before she would shut up about how I wasted my education on a admin/receptionist level job.

 
Sep 25, 2020 - 10:49am

The job does get harder as you get more senior; you will never come across an idiot MD.

I've worked in IB, corp dev, and now corp fin. I've worked both on the IB side and the side hiring IBs. In IB, I had two razor sharp VPs. I've hired one IB where the director was probably one of the smartest people I have ever met. Other than that, the intelligence level of the senior bankers across top MMs, BBs, and EBs has generally been average to a bit disappointing. We don't hire IBs because we think the bankers are smart- we hire IBs so that we can blame someone if the deal goes south or a shareholder sues. The best MDs are generally very good project managers- that's all we really need.

 
  • Analyst 1 in IB - Ind
Sep 23, 2020 - 5:18pm

Nothing is really hard once you get a grasp of what you're doing. The first time doing something is obviously going to be a big challenging and you'll probably panic when getting asked to do something but once you learn it once, you can do it with half a brain (other half usually watches Netflix)

 
  • Analyst 2 in IB - Ind
Sep 23, 2020 - 9:30pm

As others have said, IB work isn't difficult. The first time you do things, it might be a bit confusing because there's no book / guide on exactly how to do it, whereas in school you can just open to the relevant chapter to solve something. However, the difficult part of the job is managing to finish the quantum of work you're assigned under the time constraints you're given while not making any mistakes or missing anything. Usually you're fairly sleep deprived, have to manage multiple priorities and what to do nothing more than log off so this is harder than it seems.  

 
Funniest
  • Analyst 3+ in IB-M&A
Sep 24, 2020 - 12:19am

I've never seen anyone who has left banking because the work was too technically difficult/intellectually challenging. Although I've heard fun stories of some 2nd/3rd year analysts who cannot even build a three statement model, I have never encountered such person in my career, at least not from my bank. For most, it's the sheer volume of work + the enormous sacrifices you have to make in your personal life during your junior years leading up to VP/D. Cancelling on your date or dinner with friends at the last minute will become the norm. I've given up long time ago meeting old friends or going out on a date. Any personal time I find myself with, I'm spending on either masturbating/sleeping at home or playing catch up with my health at the gym. Not a big fan of Wolf-of-Wall-Street-type movies, but cocaine and Pornhub turned out to be very helpful for keeping me sane over the years. 

 
Sep 24, 2020 - 8:52am

Just to echo what everyone else has said it's not that technically hard. I really do think it's the time crunch that gets people. That being said my experience is at a LMM boutique so the clients we had were less sophisticated than at larger firms. I will say though that for me one of the hardest things to grasp was how everything connects (e.g., how assumptions in a model affect the outputs). I think it's easy to know / memorize a definition etc., but learning how and by how much pulling different levers affects an end result and being able to articulate that quickly when questioned on the fly can be difficult for someone fresh out of school who only really knows how to cram information into their brain and spit it out for a test. 

Also, I wanted to note that for me my positions in corporate finance / corporate development were a lot more technical / intellectually demanding than in IB. Less demanding hours wise, but more demanding intellectually. I think it comes from me in IB just being an excel / ppt monkey pushing along the grunt work vs. developing and executing new ideas / strategies in later positions. 

 
Sep 24, 2020 - 5:37pm

I do agree with the most helpful comment on this post. Couple other things to add. I think its less about intelligence and more about skills. Skills that are critical to advance and grow in banking include communication (this can be debated), ability to learn quickly, long-term focus (working late hours) and attention to detail. As you move up, understanding structure becomes more important. Also, depending on the division you are in, intelligence requirements may vary. For example, in RX, it would likely require a different level of aptitude versus debt financings. 

I worked in RX/Distress and did not find it difficult to grasp the concepts. I lacked the uber attention to detail required in IB and did not see it as a long-term career fit. The transactional nature of the role though was exhilarating. It gets really fun when you are responsible for client communication and no longer need to slog through the diligence and data as much.

 

-XSX

 
  • Analyst 1 in IB-M&A
Sep 24, 2020 - 7:57pm

XSX82

I do agree with the most helpful comment on this post. Couple other things to add. I think its less about intelligence and more about skills. Skills that are critical to advance and grow in banking include communication (this can be debated), ability to learn quickly, long-term focus (working late hours) and attention to detail. As you move up, understanding structure becomes more important. Also, depending on the division you are in, intelligence requirements may vary. For example, in RX, it would likely require a different level of aptitude versus debt financings. 

I worked in RX/Distress and did not find it difficult to grasp the concepts. I lacked the uber attention to detail required in IB and did not see it as a long-term career fit. The transactional nature of the role though was exhilarating. It gets really fun when you are responsible for client communication and no longer need to slog through the diligence and data as much.

 

-XSX

I am the helpful comment person (well at least until it gets displaced). Interesting to hear about your feedback on RX... my colleagues in RX used to keep saying M&A is not half as intellectually stimulating etc. Nearly caved in and went there until I realised switching groups to more intensive ones (which had been towing the same intellectual BS storyline) to find that it's the usual chutzpah. I am surprised to read about the "attention to detail" thing about IB... would have thought poring over credit agreements to decipher seniorities would have been equally sleep inducing, no?

 
Sep 25, 2020 - 2:31pm

I had the opportunity to work on some M&A deals and would agree with that statement. My enthusiasm for an M&A deal would typically start decreasing as we start distributing the CIM and from there it just turned into a process management exercise. However, with RX/distress, the transaction and investor responses were not as cookie cutter so it helped keep you stimulated throughout the process.

I always found going through the credit agreements to be a bit of fun. Not all credit agreements for companies in distress are the same and it was a good opportunity to learn more about structure. Also, as you gain more experience, you eventually know where to find exactly what you want in a credit agreement relatively quickly.

Ultimately, I think the grind just dulls everything out in IB and you eventually lose the enthusiasm you first started with. You lose that life and social balance that made you human (e.g., dates, friends, drinks, R&R, etc.). When you hit that point, it really becomes more about the money/prestige than the job itself.

 
Sep 24, 2020 - 5:59pm

As everyone above said, the work wasn't difficult as a general theme. There are some VP's who try to differentiate themselves by being uber arcanely technical. In that case it's not a matter of the modleing being difficult but more of a pain in the ass in terms of the numbers of iterations the work has to go through whic brings you to the volume of work once more, not the actual difficulty

 

 

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