Got an interview coming up with a corporate finance division that primarily does M&A work in the MM. What would be some good answers to this question in an interview?
Only interviewed with small places and a BB so far so haven't really thought this one out yet..
What is Middle Market Investment Banking?
"Middle Market" can refer to investment banks that specialize in "middle market" deals or are hired by "middle market" companies ie, not your household name, huge Fortune 500 companies, but the companies that make up the majority of the world's economy. The phrase "middle market" is often used to get across the point that the firm, investment bank, or deal is not from a bulge bracket. Sometimes the companies that do middle market deals are called "boutique" banks or "middle market" banks.
Why Do You Want to Work at a Middle Market Bank?
Please see below for some good reasons to include when crafting your interview answer for "Why Do You Want to Work at a Middle Market Bank?"
- Quality of deal experience (i.e. usually leaner deal teams vs. larger deals) / greater exposure to the full deal process
- Degree of client interaction
- Emotional component in advising owners on selling companies they built from the ground up
- Better opportunity to work on strategic elements vs. bn. $ companies that have large, in-house corporate development teams
- More exposure to senior management (flat culture)
- More responsibility put on analysts due to smaller deal teams
- A lot of MM banks are in great shape and growing fast, excited about future
Benefits to Working at a Middle Market Bank
Additionally, User @PatrickBateman" shared some additional thoughts on why it is personally beneficial to work at a middle market firm vs. a bulge bracket firm.
- Location, if you want to live in a particular city, maybe MM is the only option
- If you are starting your career you can come in as a generalist at some shops (this can be viewed as a good or bad thing, but I am a fan of the idea of coming in then finding the industry/product line which captivates you)
- Pay, on the avg it is lower, but there are some good MM shops that pay more than the bulge
- Travel, at good MM shops analysts get to travel and meet with clients much more so than at the BB
- Work with senior level bankers
- Get more involved in deals
- Work/life balance (this also really depends on the shop, some MM work you harder than BB)
- Deal flow is less likely to be tied to market conditions, which in turn means your bonus is also more predictable/consistent
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To add on to the above post:
-more exposure to senior management (flat culture) -more responsibility put on analysts due to smaller deal teams -a lot of MM banks are in great shape and growing fast, excited about future
better yet, "lack of ambition" ? :)). Kidding. MMs are great.
I mean, it's true
Smaller, middle-market firms are looking to build a culture and raise analysts to MD's (goes along with their shpeel about fostering strong business and community relationships, etc). Tell them you absolutely love banking and advising clients, that you never want to touch alternative investments, and they'll lap it up.
I mean sure, MM firms place into MM PE shops
but all in all, I've found that BB interviewers are very receptive to the "work hard, play hard, team work, challenging work, personal responsibility, corporate advisory, learn a tangible skillset" pitch. Haven't ever had to sell an interviewer on working long-term in banking (they understand the game)
haven't had a lot of experience with MM's, but the ones that I talked to drilled down on the my long-term interest in working for the firm, ad nauseum... and my response is always "no, I'm 21 I don't know if my interests will change in X years." Not that they'd stop analysts from leaving, but they're definitely interested in keeping strong candidates around (more so than BB's, who see hordes of top guys every year)
btw CompB did you work at Harris Williams haha?
I'll disagree with this. Many MMs kick you out more often than let you stay - Jefferies (yes, they're still by and large an MM), Cowen, Harris Williams. Overall I don't think MMs tend to keep you more than BBs; BB analysts have better exit opps, so they tend to self-select and leave.
I think MMs are receptive to very well-rounded candidates (b/c if you end at an industry group, you won't do that much modeling) who find it satisfying to work for smaller entrepreneurial clients (as opposed to multi-bil conglomerates), who like a flat structure / open door policy, who want more responsibility in the beginning, etc. If you can spin that MM deals are actually exciting (maybe a hot, but "stalled" tech company trying to sell for $100M or something, or an exciting healthcare company with a cool drug in dev but no revenues yet, etc.), you're money.
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Why did you Choose Middle Market I banking? (Originally Posted: 12/11/2007)
Folks who have accepted offers to the MM's. I just wanted hear you taughts y did u choose MM's over BB?
I m not asking which one is better or pays higher. Im asking brainstorming you did before you accepted MM offer. Any pros and cons please provide.
Closer to the deal. More interaction with senior bankers, directly, and on a more personal basis. MM bankers tend to be more down to earth. Most MM's have better hours than BB's, but who's choosing banking because of the lifestyle?
'choose' is the operative word here.
because you coulnd't get into a BB
I have not worked at a MM yet, but here are reasons that I (or anyone) would consider doing so.
location, if you want to live in a particular city, maybe MM is the only option
if you are starting your career you can come in as a generalist at some shops (this can be viewed as a good or bad thing, but I am a fan of the idea of coming in then finding the industry/product line which captivates you)
pay, on the avg it is lower, but there are some good MM shops that pay more than the bulge
travel, at good MM shops analysts get to travel and meet with clients much more so than at the BB
work with senior level bankers
get more involved in deals
work/life balance (this also really depends on the shop, some MM work you harder than BB)
your deal flow is less likely to be tied to market conditions, which in turn means your bonus is also more predictable/consistent
didn't get BB. It's that simple.
where would you rather work Lazard or DB?
Lazard over DB...but id choose CS over Lazard..
I would NOT choose CS over Lazard. The only BBs I would choose over Lazard are GS/MS and maybe a ML/Leh, depending on group placement.
The highly negative opinion that people have of MM banks does not exist outside of the BB-analyst world. Once you start working, you may realize that working for a BB and focusing 100% on your career sounds great but certainly only works for a select number of individuals. Comments such as "didn't get into a BB" are highly ignorant of the fact that not everyone has the same career goals and that extremely talented individuals never even apply to BBs because they simply aren't interested.
Well said. I am sure all the Evercore/Lazard analysts could have gotten BB if they wanted to. MM/Boutiques are a different expereience than your average BB.
[quote=PatrickBateman] - your deal flow is less likely to be tied to market conditions, which in turn means your bonus is also more predictable/consistent
This is also very important. While many BBs are having bad quarters, Lazard and esp. Greenhill are having tremendous years. If you look at Ghl's financials, they are doing outstanding, mainly because they've been able to "predict future market conditions" and adjust accordingly.
Most of the people who came in laterally (associates and higher) left the BB because they didn't enjoy it as much. Many BB Analysts I've spoken to have yet to close their first deal or have only completed 1 or 2. In the MM, Analysts can be in their double digits by the time they get promoted/b-school/etc.
Why MM over BB? (Originally Posted: 01/19/2012)
I have an interview with a MM firm next week. All of my ib interviews have been with BB. Any reasons I can give for the answer why a middle market firm over a BB?
unless it's a Laz/Evercore/GHL, it may require some BS'ing. Some reasons: 1. more client exposure very early on (even if that's not the case) 2. more responsibility (again, even if not the case) 3. work environment is very dynamic 4. you like the entrepreneurial feel of company and don't want to be considered a "cog in a machine"
Those are some reasons you could leverage. But if you're interviewing at Laz/Evercore/GHL, I don't think you really need to explain why you want to work there.
First of all, Laz/Evercore/GHL are not MM banks.
Secondly, it really depends on the MM. For example, lots of people I know chose a company like Jefferies & Company over BBs like UBS, BoA, Citi, and Barclays. And people who want to do restructuring (and don't get Blackstone, Lazard, or Moelis) choose Houlihan Lokey over BBs. So for above examples, not much bs'ing is needed. Just talk about the deals that these companies have done, leaner deal teams, and growth potential.
But if the MM you are interviewing with is a bank like Lincoln International, then you would have to bs quite a bit.
Why MM over BB (Originally Posted: 10/09/2013)
I know there is a post on this already, but anybody have any other reasons why they picked a MM over BB??
Good article on boutiques/mm vs. bb yesteray Dealbook http://dealbook.nytimes.com/2013/10/07/a-new-investment-bank-kimberlite…
that picture...i thought one guy was fondling the other guy for a second.
The only reason to pick an MM (besides location needs) is because you didn't get a BB. Note, there is a BIG difference between an MM and an Elite Boutique. So these articles about boutiques/mms are ridiculous because an elite boutique shits on any MM and most BBs.
who gave this guy fingers to type? fuck outta here
Everything about this post is dumb.
Interesting...
MM analysts are probably butt-hurt about this, but 99% of the time you're at an MM because you weren't good enough to get a BB offer.
You should probably caveat this by saying "At the entry level..."
For those of us already in the industry, this isn't really the case. Of the BBs, I can think of only 4 (maybe 5) BBs I would ever consider as a next step and even then it's entirely group specific at those banks. The idea that all BBs are universally preferable to all MMs is a ludicrous concept. Give me my own fucking office, a larger bonus and a faster promotion track at Blair Chicago over a prison sentence at that bottom BB half any day of the week.
(For what it's worth, my bank is neither a BB or an MM, so I am impartial-ish here.)
While I don’t necessarily disagree with this (even as a MM analyst), let’s get something clear: the difference between getting a BB offer or not can be as simple as being in the right fraternity or how crushed your interviewers have been getting at work the past few days/weeks. I went to a target and the people that went BB were not that different from the people that went MM (especially on the intelligence front).
You get a much broader skill set at a MM, while you get much better at modeling at a BB. That's the easiest way to distill it down. And depending on your goals post-analyst stint a strong MM can be just as good as a BB, but having the brand name of a BB will generally give you a wider variety of exit opportunities. Also certain areas of PE ($5B+) are largely unattainable from a MM firm.
This is coming from the perspective of someone at a "top tier" MM who has been through the PE recruiting process.
Not sure if I agree with the broader skill portion. I worked at an elite boutique (so may be different) and my peers arguably got less exposure and than comparable kids at a BB. The issue is at a BB, there are just so many deals, both M&A and financing, flying around that many senior members will step back and have the junior members take care of the process. At a smaller firm, teams are more focused on each deal since there are less of them, so you get less leeway to just "run with it".
At our firm, the MD would pretty much be the main point of contact on deals, while the BB would have the VP/Director serve as the point of contact. As a result, the junior members often get pushed into the execution/modeling side. And at a BB, you do the same things- modeling, making presentations, working on pitches and deals. Finally, forget megafund, even if you want to work at a good MM PE fund after banking, look at the profiles of the top MMs (say PEI 150) - overwhelmingly BBs.
My comment about broader skill set was partially in reference to client / buyer interaction (e.g. working directly and independently with c-level management), something that I've heard is extremely rare for analysts at BBs. As it related to PE recruiting, one thing to consider is that BBs churn out many more analysts than the top MMs do.
And at my firm the MDs do very little outside of sourcing and closing deals.
The main reason I could see would be location. I would take Lincoln/RWB/Blair over a few of the BBs if I knew I wanted to be in Chicago, where many of the BBs have much weaker platforms. Also, a lot of those places are much more conducive to becoming a career banker, so if someone was dead set on that from the start, then that could be a reason as well.
lol what the fuck is this non-sense going around? if you are dead set on MM PE, its more than fair to target only MM IB shops.
Look at every single good MM (Berkshire, Golden Gate, New Mountain, GTCR, MDP, American Securities, Kelso, Lindsay goldberg, etc. etc.) and you'll see that not only is it mostly BBs, but usually very good groups at GS/MS/JPM or elite boutiques. Good PE firms have lots of competition, and brand matters for better or worse. Unless by MM PE you're excluding the larger firms and mean firms with $1 billion total AUM, BB or top boutique is almost universally a better option EVEN if you're only targeting MM PE
I don't give a sh*t whether I work at a megafund or boutique - I'll take the highest base w/ the highest bonus potential any day.
Well put
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