IBD Goldman Sachs Leveraged Finance
hey hope everyone is well.
I just wanted to know as I embark upon recruiting time, what exactly the Investment Banking Division Leverage Finance Group Does at Goldman Sachs. If you can provide more information or direct me to a website that does have some in depth material on it that would be greatly appreciated
Thank You in Advance!
they provide pricing and terms when a client requests it. levfin varies from bank to bank. some levfin groups play more of a banker role, in sourcing the deal, running the model, the marketing materials, etc. others just provide pricing and terms for the piece of debt.
at goldman, it's mostly just pricing and terms. they may make tweeks to the model on occasion, but for the most part, industry groups will run the deal, and the levfin group will run internal credit committee memos and the logistics of the process, while the industry group will handle the more analytical parts. its more of a markets role at goldman than anythign else. keep in mind, goldman is known to have strong industry groups, not product groups.
also, the levfin group at goldman is split into different industry verticals. so you will do 2 years as a levfin analyst in a specific industry. each industry has 1 analyst. so be sure you are okay with various industries. there are some that aren't as sexy - paper and packaging or mining.
Goldman Leveraged Finance (Originally Posted: 05/09/2007)
One part of Goldman's website states that Leveraged Finance is a product group w/in the IBD. Another part states that LF is in the Financing Group which is outside of the IBD and lumped in with ECM + DCM + Muni Fin. Does anybody know which group it is in?
financing group is part of ibd
There is a group called the Bank Debt Portfolio Group within the finance division (outside of IBD) that basically assists IBD with running the books on lbo's.
"A sub-group within BDPG specializes in the execution of leveraged bank loan financings. This team's responsibilities include:
The execution portion of this group is interesting in that they never have to pitch a deal, but are simply concerned with the "execution" phase of lbo's. At the same time, I have to believe that there are a host of other tedious tasks that this group was created to take care of and to support their corresponding IBD group. The hours also tend to be banking hours.
Right. So the Lev Fin IBD product group is seperate from the Lev Fin Financing Group. I've always been interested in Lev Fin. Let's say 10 years down the line you're interested in opening your own lev fin practice/acquision fund, would liv fin be a good place to start?
Knowing the product would obviously be important, but from my outside POV the largest hurdle when attempting to start your own practice whether it be PE/HF/or any endeavour with a high barrier to entry is getting the funding to start that company. In the case of PE, getting that initial funding to use towards the cash portion of that first lbo acquisition. Usually, these figures that go start their own PE and HF's are well respected and have numerous wealthy contacts that are willing to initially invest in their practice. Therefore, I think that knowing the product is very important, but even more important is building up a good reputation that provides you with the credibility to raise funds for the start up. Obviously, this is just my humble without any experience whatsoever in pe start-ups.
Lev Fin is part of Financing group which is part of IBD. ECM DCM and munis are also part of that group
BDPG is part of Finance division.
Finance division does not equal financing group
Yeah, I think you're absoluetely right. I'm a junior right now and I'm kind of torn between S&T and IB. I'm pretty entrepreneurial, so I know I eventually want to get out there and start my own shop. I just can't figute out what exactly I want to do. LF seems very exciting. S&T has always drawn me because I like the markets. And IB has always turned me off becuase I can't see myself as the Trusted Advisor. Starting an acquisition shop is something I really would like to do someday. We'll see what the future has in store. Getting into IB is the first step.
financing group and BDPG both take SAs
BDPG definitely does take SA's, I heard that the Financing Group didn't but that may have changed or maybe specific sub-groups within that group don't take SA's.
GS lev fin (Originally Posted: 12/08/2010)
What does this group do exactly? Its in debt financing so it makes me think its not a real IBD group. Also I heard they don't model and all the industry groups do modeling instead.
What are exit ops like and hours?
THanks.
Most LevFin groups dont model. most industry groups dont model either. only M&A models and they only model to the extent they are like little computers (i.e. NOT a good thing). Modeling is overrated... do well in any group at any BB and you'll have opportunities.
But if you are in a lev fin group that models, you will be in one of the most modeling intensive groups, period.
You have absolutely no idea what you're talking about.
OP, you'd probably get better info from a cab driver.
The role and deal ownership of LevFin groups vary from one bank to the next. At GS, I'm not sure what the dynamic is but I would assume most of the modeling is done by the coverage teams (industry and/or sponsors).
Modeling is one of the foremost things you should be mastering while you're in your banking program. At an analyst level, its the first box you need to check.
Most LevFin groups dont model. -- JPM LevFin models pretty heavily, so does CIBC... even if the LevFin team isn't "running" the model, they're still pretty deeply involved from the snadpoint of
most industry groups dont model either -- so the industry team doesn't model, levfin teams dont model? if there's a recap deal being done, the M&A team is running the deal? if there's an oil and gas deal, the M&A team is building the operating model and building assumptions and sensitivities around it? FIG deal? healthcare deal? consumer/retail deal? real estate deal? Why do banks even have industry teams? or any team other than an M&A team?
only M&A models -- apparently the only product in banking is M&A? There are no carve outs, spin-offs, LBOs, dividend re-caps, straight re-capitalizations, IPOs/follow-ons, debt offerings, private placement/PIPEs, structured transactions?
they only model to the extent they are like little computers (i.e. NOT a good thing) -- what does that mean exactly? thats what a model does, it calculates things, its not like a little computer, it is essentially a program you're creating in a spreadsheet ON A COMPUTER.
Modeling is overrated... -- overrated as compared to what? creating presentations in powerpoint? copy/pasting CIM's out of management presentations? At a junior level, checking the box in modeling is not a cherry on top, it is the standard. If you're not a very strong in modeling, you will consistently be at the bottom of your class. Its not just knowing how excel functions, its accounting, financing, knowing how to or more likely intuitively figuring out how to deal with odd ball, exotic deals, structures, businesses, situations, etc... there's nothing inherently "hard" about modeling an earnout, but understanding and taking into account how it impacts everything else and being able to create a flexible model that is capable of running a variety of different situations quickly and ACCURATELY is the ONLY reason they need you. If you're not doing that, then you're essentially making company profiles, formatting pitch books, creating working group lists and spreading comps for 2 years. Whats more is you'll seldom have anything valuable to contribute to a conversation about a deal other than maybe trading levels in the industry.
do well in any group at any BB and you'll have opportunities. -- what kind of opportunities? getting a job as a school teacher? How do you do well in an analyst role when you're not getting any analytical experience? And even if you're planning on switching to a say consulting, how is any competitive position going to view someone who came out of a banking program and hasn't mastered financial modeling and analysis?
Well GS doesn't have an industry group so I wanted to know GS specific how good their LevFin is with hours and exit ops and whether they go to buyside after.
oh and hey boutique bank, finally figure out that your deal flow at yoru boutique ain't hot at all? trying to break into lev fin at a BB? nice try.
LevFin is about syndicating loans and bonds.
So if you have a client that needs $1bn in financing, instead of putting all of it on your balance sheet, you get lots of banks together to put up a share of the $1bn. There isn't too much modeling involved in this - you build comps models to show what other clients are paying for syndicates and you build funds flow models to show who is putting up what $ amounts.
It's more of a market group / product group so hours are lighter (8am-1am M-F and rarely work on weekends).
Okay... apparently you don't know how LevFin works. and i have NO idea how you have your own website or whatever you're trying to do with it.
first off, yes there are debt comps as those are used to find the relevant pricing for the loans/notes, but comps are a common theme across all groups in banking.
second, your above statement about getting banks together to syndicate is true, given that the deal is not a committed deal. however, even if it's not a committed deal, the group still needs to do a cash flow waterfall analysis to be able to project how the company's going to pay down debt.
third, if it IS a committed deal, there needs to be a lot of analysis done on the company to run and stress various scenarios to make sure that this Company isn't going to default because you're putting up the bank's money. at this point, it's almost as if you're a debt investor.
it's not just doing comps and finding pricing, although this is part of the job description. you will be structuring and modeling different capital structures to understand how the cashflow pays down debt and how the company delevers over time.
^doesn't sound like M&A or important modeling after all. sounds gay to be honest. You sound insecure. My boutique M&A modeling is definitely better.
yup very gay. very very gay. boutique M&A surpasses all! Just keeping setting up those data sites...
Which part of my statement is wrong?
LevFin at the bigger banks is a pure execution group. BofAML and JPM lives off corporate drive by issuances - not committed financings. For every committed financing deal, they need to tree up a team of analysts, associates, and VP's for every sponsor. Only one of those sponsors will win. Conversely, corporate issuances (junk bonds) leveraged loans, those get completed 90% of the time. There is NO analysis involved in the issuances of corporates/levloans - at the very most you build a cash flow waterfall to project debt amortization.
Similarly, this varies depending on the bank - but there are a lot of analysts in many groups that cannot "model", Banking is ultimately a sell-side business. You model as much as you need to to market the deal - you obviously ill do nowhere close to the financial modeling as a principal investor. But as you may know, PE firms test your modelling skill during interviews - but this is not the end all be all. They're not looking for a modeling monkey (well, maybe pre-MBA they are), but ultimately, in either industry, it is your analytical and people capabilities that will carry you.
I can atleast answer BoutiqueBank4 lifes question and that is that at GS the LevFin team handles most of the pricing and they have more of a syndicate role. The real modeling is done by the industry groups so the exit opps are not the best as well. But still the GS name never hurts.
Thanks manu thats what I was looking for. So would a BB industry group (like barcap) that does modeling be better for PE exits than Gslevfin?
JP and BAML lev fin do their own modeling. Citi Lev fin on the other hand which is 3rd in the league tables does not do its own modeling. DB Lev Fin and Barclays Lev Fin also have a very strong reputation on the street. Thats why no one speaks about MS Lev Fin because their division Leverage and Acquisition Finance is all syndicate and market facing comparable to GS. I would say the lev fin team in a strong industry group at Barclays like Natural Resources or TMT will have better exit opps.
Still doesn't answer the OP's question exactly: What does LevFin at GS do? Interested to know too
1) debt comps 2) figure out pricing 3) figure out structure by reading OM's & CA's 4) feed all info to industry teams.
GS Leveraged Finance (Originally Posted: 03/22/2007)
Any information on this group?
did all the new GS SA's get their group assignments today?
Assignments were given out a couple of days ago.
ahh it all makes sense now...all the questions about GS FIG etc.
GS LevFin Help (Originally Posted: 03/04/2010)
Does LevFin do any of the modeling or is that done via the industry groups? If the modeling is done by the industry groups, what exactly does this group do? Can someone who has worked in or with this group provide some insight into the overall experience. Solid training? Thanks
bump
No idea, but it's still GS and LevFin, maybe some industry groups might give you better modeling experience but I have seen GS Levfin on very solid PE firms' bios.
Bump
bump
I have done some searches on here and it looks like GS Lev Fin is more of a DCM type group where they assist with pricing, structure, etc. and less modelling intensive as that is done in the industry and M&A groups - If this is wrong, please correct me.
That being said, I was wondering if anyone had any insight on the culture of the group, hours, type of work, etc. at the associate/VP level?
Thanks
GS Lev Fin London (Originally Posted: 04/28/2010)
Any thoughts? Im still considering the offer...
up against what other offers...?
as an associate?? GS not the best LevFin place around, would push for M&A. They also totally destroyed the place over the crisis.
As a first year analyst. The only alternative is M&A at BNP in Paris (Im french).
Thanks for the input.
BNP France M&A > GS Lev Fin London
No one would know of Fabulous Fab' if he had stayed at a French bank un France... Go for GS!
Factually incorrect... Do you remember Jerome Kerviel @ Soc. Gen.? Exactly...
I'd say BNP M&A Paris, much more deal flow
How could I forget about Kerviel!..
More seriously, I think there is a huge difference in cultures between the two places. If you want to stay in France and like the blue blooded HEC/Centrale/Essec kind of bullshit you should be happy at BNP.
Thanks Bob. I was an intern at both BNP and GS, loved both, but Im more M&A than Lev Fin. I just wanted to make sure that turning my back on GS was not the stupidiest thing to do.
I also happen to be from ESSEC...
Thanks again
lol A french guy with offers at GS and BNP M&A, I would have bet you were HEC/Essec/Escp anyway. The people I know who have worked/work at BNP in M&A all liked it, but if you interned there you know what your getting into.
Best of luck and have fun there
Another thing is that you'll have a much much better life in BNP, and in Paris! And probably never worry about getting fired.
Leveraged Finance at GS (Originally Posted: 10/25/2007)
anyone know anything about this group?
basically, exit opps, lifestyle, type of work. do they get paid the same as the other IBD bankers?
...It's not really considered a traditional banking group at GS like it is at other banks. More of a special product group. (like ECM, DCM...) Alot of the lev fin is actually sourced and executed out of the industry groups. (Each industry group has their own lev fin subgroup)
lev fin supports for the main industry groups(Industrials, TMT, FIG....) in their deals. It's not like at UBS or CS where lev fin sources and executes their own deals as well as supporting the industry groups. Almost everything at GS is done out of the industry groups(They are not really your traditional industry groups because they execute M&A, IPO's, Restructuring, Lev Fin.....). They ask lev fin for alot of advice and product expertise.
You will learn this if you go to GS. The industry groups are king. Which in terms of the analysts, is why their analysts are the first to be interviewed by PE/HF's (Even within the industry groups there is inequality as TMT analysts pretty much hog the entire first wave of PE offers...)
Honestly, I think UBS's lev fin group actually does better than GS's lev fin group in terms of placement. I know CS lev fin definitely does better.
That said, lev fin is still a good group at GS(I think it's an interesting product).
so, basically it's a bad opportunity? would anyone take it over MBB?
some more input would be great guys..
Don't give up MBB, just apply again and go into a better group after B-school.
From what Ive heard JPM followed by CS are head and shoulders above the rest of the LevFin world. Don't quote me though..
i've heard the same. but is lev fin a "bad" group at GS. i mean, if i want to go into PE will the "name" and experience be enough/better than MBB?
"You will learn this if you go to GS. The industry groups are king. Which in terms of the analysts, is why their analysts are the first to be interviewed by PE/HF's (Even within the industry groups there is inequality as TMT analysts pretty much hog the entire first wave of PE offers...)"
Why are the industry groups at GS "king" and is it the same way at banks across the street generally when it comes to exit ops, etc? Is industry experience at a BB more valuable than product experience? The only explanation I can think of is the fact that product experience would be narrower...am I right?
Thanks!
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