Investment Banking as a long term career?

Hey guys.

I'm heading into my undergrad soon and I'm hoping to land a job in IB at one of the Big 5 banks in Calgary as energy is what interests me the most. Anyways, as is the norm up here in the North, I'm not going to pursue exit opps and instead stay as a banker.

What I'm wondering is how good are the prospects of banking being a long term career. If you work hard and aren't bad at what you do, would it be possible to stay in IB to as far as retirement?

TL:DR: is being an energy/O&G banker in Calgary a potential long term job that you could stay on til retirement?

 

I know a guy who has been in it for 20 years, and he's an MD. So you can really work for as long as you want, and quit when you are done. When you do, just throw your money into a fund and let it do the work for you.

Array
 
Best Response

Many of the companies that IBers advise had humbler beginnings as family businesses.

Why would you want to go into IB with the dreadful lifestyle when you can take charge of this family business and take it to the next level? The task might very well be the type of challenge that you would enjoy and derive a lot of satisfaction from.

Perhaps you're convinced the IB is so glamorous and prestigious that it's worth it. Or perhaps you're trying to keep up with the Jones's I don't know.

I'll give you an excellent example... are you familiar with the restaurant Cipriani? It's a family owned restaurant with locations in NYC, Venice, London, Hong Kong etc. Anyways, the founders children are taking what has been a five star restaurant and completely rebuilding the brand. They're doing so by getting into real estate and merchandising etc. The family is about to complete one of its first residential real estate projects at 55 Wall St., and they're doing another development in Miami, FL. I think they're converting a hotel, something like that.

Anyways, so what if your family business might be scruffy and less glamorous. Who gives a shit. If you could use your business knowledge and help your family take their business to the next level, you'd probably have more satisfaction and a more fulfilling experience than you would if you worked like a dog on Wall Street.

Instead of being a banker you could hire bankers and get them to slave for you :-)

 

aadpepsi, that is very nice to hear the story about the Cipriani restaurant family. I have heard of them and have been to one of the establishments in NYC. I have seen many friends that have been extremely successful in the commercial real-estate development business and although our business is not related to commercial real-estate development, with the exception of warehouses, I'm very intrigued by this story of how the founder's grandchildren are getting into development of hotels.

Ideally I would like to figure out how to do both real-estate and the family business at the same time. Previously, I was under the impression that it would not be feasible, but I now understand that it is.

I guess the stories of the Wall Street titans shelling out $20 million on homes, buying multiple Ferrari 599s after getting their bonuses, doing private jet charters etc... got me dreaming about what IB can lead to.

We must understand that even on Wall Street only the top 1% can afford to do the things mentioned above.

 

I think you should try and get into IB. How do you expect to double this companies revenues; with your BS from a non top 50 school or with your good looks alone?

I know college kids who could make a 40 hour week out of simply managing their assets. A few of these kids have elected to do banking, basically "for fun." You will learn a ton, and when you finally take over, you will actually know something about the working world you can then bring and apply to your own business.

If the question is to enter LONG term, I would say of course not. But entry-level, you will learn lots you can apply to your own business.

 

DJIA5000, he alluded that he's from a non-target and he seems aware how challenging it might be to get into IB post undergrad. That's why he's laying out a plan of perhaps IB post-MBA.

The likelihood is that it'll still be better to work the family business for a few years, then do an MBA etc. A lot of moguls who run family businesses do as such.

Anyways, JambaMan, I did a quick search for you and I think you might enjoy this article which is fairly recent from March 2007: CIPRIANI

 

I completely agree with DJIA5000, no way are you going to be able to run a business, successfully at least, without having some prior working experience. Doing IB post MBA, as you mentioned, is pointless. You should be expanding the family business post MBA, not creating pitchbooks.

Get the hands on experience doing an IB analyst stint, get an MBA then take over the family business.

 

Again, he's aware he may not be able to get the IB analyst stint. For arguments sake, why do you guys assume that working in "industry" or anywhere else other than the family business is going to give him a leg up vs. the better training he could get apprenticing under senior family members in the family's business? I'm just being a devil's advocate.

e.g. Carlos Slim Helu, the 4th richest man in the world, studied engineering. Do you think he worked as an engineer in industry or for the family business? Check out:

Biography 1 and Biography 2

 
aadpepsi:
Again, he's aware he may not be able to get the IB analyst stint. For arguments sake, why do you guys assume that working in "industry" or anywhere else other than the family business is going to give him a leg up vs. the better training he could get apprenticing under senior family members in the family's business? I'm just being a devil's advocate.

e.g. Carlos Slim Helu, the 4th richest man in the world, studied engineering. Do you think he worked as an engineer in industry or for the family business? Check out:

Biography 1 and Biography 2

I guess im taking for granted that the "apprenticing" he would get from family will ALWAYS be available, and assuming that the training an IB analyst receives will not be readily available.

All in, in terms of running THIS business, of course the best way will be to learn from the current owners. But then, best case, he is just a carbon copy of them with very few fresh ideas.

Im sure that when he runs the business, pops will always be around to answer a question or two.

 

I'd take the family business or enter consulting. It doesn't make sense to enter IB, when you should be able to just hire bankers. Either that or take your undergraduate education seriously and study everything you can possibly read. You should not be considering IBanking at all, unless you want to take a prestigious job(100+H)to prove yourself. Many CEOs are former consultants at M/B/B.

I don't believe you necessarily need a MBA to be successful, as many entrepreneurs have done successfully w/out the MBA title.

 

Consulting might be a good bet. The hours are definitely better. I guess you are correct jeffshek, basically the only reason I wanted to enter banking was to do something prestigious and prove to myself that I had what it takes.

McKinsey might be a possibility, as I have a connection to a very senior executive (Rajat Gupta) who might be able to put in a word.

 

And with consulting .. you'll be used to jetlag =) Always a plus. I just think IB would be a waste of your time. While doing DCF/WACC mentally is always a trick to please the ladies, giving up two years of your life to learn about something that may not be completely applicable would be a waste.

I'm not saying Consulting is grandiose either. You will have times aligning PPTs and be frustrated, but there's certainly more you can learn from management consulting.

 

Hey, if you can get into McKinsey, do it!

The exposure you get and contacts you build up as a McKinsey alumni would be valuable if you return to the family business with the intent of taking it over :-)

 

Jambaman, I'm in a similar position as you. I graduated from a top 20 school and actually went into the family biz for a little while. After a few months, I recognized that while the appreticeship was good and I was learning a lot, there were things I could be learning at a mgmt. consultancy that could really stretch my mind and help me "prove" myself, while gaining practile business knowledge.

The reason I stumbled across this website in the 1st place was b/c I was looking at IB for the same reasons you are: the prestige, the challenge, etc. But when the opportunity for a M/B/B gig came up, it was much more practical for my long-term goals and it increased my chances for a top 5 b-school.

If I were you, I would at least try consulting or IB for a 2-3 year period, do the MBA if you like (and get into a better school for having "big company" branding on your resume) and then do great things with the fam. Given the high-income at a younger age...you will be earning and saving while others, even hi-fliers, are below your income level for, potentially, many years.

I also want to comment that, as you may also, I know plent of "small business" owners who work 40-50 hours a week and take home $MM's annually, while fully controlling their workstream, their workplace, and their lives. Given the opportunity, I imagine most bankers, even those quite senior, would sacrifice "only" making $1-2 mil a year if it meant they worked half as much and had control of their lives, could see their families, etc.

 

raider4ever thanks for your help. I have decided after reading these posts that it would be most beneficial for me to try and get into ibanking or management consulting for 2-3 years and use that corporate experience to get into a top 5-10 MBA program.

With the self-discpline and working knowledge of finance or management issues achieved through corporate experience along with a top 5-10 MBA, I should be in excellent shape to reach my long-term goals.

Yes, ibanking may not be totally applicable, but I will gain self-discpline, an understanding of finance, how the corporate world works and prestige for giving up 2 years of my early 20s. This could potentially lead to a top 5-10 MBA program.

Mgmt. consulting will obviously be more applicable, I will have a better quality of life (fewer hours but more jet-lag when compared to IB), even better chances of getting into a top 5-10 MBA program and experience dealing with issues that my company could easily face in the future. Mgmt. consulting seems like the choice for me raider4ever, for the same reasons it is the choice for you.

I have concluded and would be right in my assessment when I say that to live a similar lifestlye you would have to reach very senior posts in ibanking (would have to be MD or Group Head) and in any industry for that matter.

I'm willing to make the sacrifices of IBD or Mgmt Consulting (whichever I can get into) to help me get into a top MBA program and ultimately to better prepare myself to successfully expand the family business.

 

The mere fact that you're asking this question is a sign that you should reconsider whether you're fit to run a business. I have friends in a similar position as you and the smartest, most ambitious ones didn't hesitate one second in taking up the reins of their family business.

Oh yea and if you're truly smart and hard-working you don't need some bullshit IB or Consulting experience to make your family biz a success. Truly successful business people learn on the job, they don't have to be some corporate slave to pick up "work experience".

I met an Associate intern at the firm I interned at last summer whose family ran a business with about $20MM in revenues, and this idiot is 27 and trying to enter IB. Every MD he met asked him point blank what the fuck he was doing at an IB instead of growing his own company.

 

Well I'm in a very similar situation as the one you describe Seanc. We have roughly 50 employees, sales of over $10 million annually and we have our annual household income of $2-3 million per year. Last year which was a very good year we made $5 million and with the way the industry is evolving we will continue to make the latter amount or more in the coming years.

I disagree with you and believe outside corporate experience for a brief period of 2-3 years will give me a different approach to business solutions which I would not have gained by solely working in the family business. I will have better chances of getting into a top MBA program and thereby better chances of developing a great network which could be useful for my own business.

I have busted my ass in college with hopes of getting into ibanking or mgmt. consulting. I realize coming from University of Miami it will be very tough. I will do all that I can to ensure I can land one of those gigs.

Seanc I can bet that your friends who took over their family busineses did not double their annual income, much less expand in any major way.

This is my plan:

  1. do ibanking or mgmt. consulting for two years
  2. join the family business for 3 years in sales shadowing the owner and understanding the industry
  3. After the 5 years at the age of 27 go for a top notch MBA.
  4. Come back with a top MBA at the age of 29 armed with previous ibanking or mgmt. consulting experience, previous 3 years pre-MBA experience in the family business and a top 5-10 MBA along with an expanded network ready to take over as president/CEO within 3 years.
 

Every family situation is different so it's very hard to give advice.

Do you plan to stay in your family's industry for the next 4-5 decades, or are you going to sell their business, consolidate and then invest in other areas? Is your dad still very hands-on with the family business? If he is, maybe you'd get to learn more about life by doing a few years of ibanking, rather than going into your family business as a 'superior'. That was the exact same problem I faced 2 years ago when I tried to help out in the family business. I didn't like the feeling of assumming management responsibility right away as I didn't feel I had worked my way up to deserve it. Maybe it was just an ego thing.

In hindsight, working the hours of ibanking really changes your view of the world. So all-in-all, I don't regret not going into the family business right away. I don't think an analyst or consulting stint is going to help improve your or rather, my ability to manage our business. In the long run though, I know that my family business is the way to go and it seems you have a similar take on things.

A lot of ibankers (at least ones I could think of and probably including myself) are in similar situations to you. They have some form of family inheritance, perhaps in the form of passive investments, an active business or maybe a hybrid. Some choose IB because it's not the time to move into the family business yet (either because dad is still in charge, dad encourages them to go out for a bit, ego issues and whatnot, or maybe their family hasn't really raised the issue with them so they just go out looking for a job).

If you can tell us more about your situation, then it's easier to give an opinion.

 

Well this is the situation about my business. My dad is in his late 50s. He will be ready to retire from day to day activities, but will obviously still be owner in another roughly 7 years. He founded the company, and he is sole owner.

I have another family member that is my dad's right hand man when it comes to running things and if there is any gap of time when my dad decides to take a more passive role and I haven't joined yet he can assume slightly greater responsibility of thing.

There won't be a power struggle as my uncle has helped me already get some hands on experience dealing wit the industry and he has encouraged me to join and other employees have told me the same.

The business will always be there for me, but my dad has encouraged me to go out on my own for a few years after college if I can get a solid job. IB and Mgmt. Consulting would obviously fall in this category. However, I understand time is an issue considering in another 7 years my dad will be ready to take a less hands on approach so by joining immediately after college I could gain that experience that I might miss out on.

The way I see it, last year we made a lot f money and it was a very good year. The traveling is hectic but the regular hourly work week at the office is slightly over 40 hours. If I take over the company will be in my hands as my brother worked in the company for a year and decided he would like to pursue real-estate development instead

 

agreed each situation is different. When I entered the fam biz. straight out of school, I was already trying on every hat and taking on jobs from strategic planning and business development to, literally, loading 12 pallets on a canadian driver's truck at 9pm b/c he got stuck in a snow storm on the way down and our shipping guys were all gone. IB might be a bit more prestigious than that...

At the same time, pops was too young to give anything up and I recognized, in terms of terminology, technology, and credibility...I had to get out. While our biz is about 60 employees and Revenues of $25 mm, the industry is rocky at best, so I feared getting stuck somehow while also not being challenged since dad was still so hands-on.

Having made the switch to a top 2 consulting firm...I don't regret it at all. But, EVERYTHING is what you make it. I will do this 2-3 years, have 4 years work experience, then get an MBA in general management/strategy & entrepreneurship and come back and feel much more credible and confident when I return.

At the same time...I still keep an ambitious eye towards Wall St. and C-level fortune 500...there's that competetive twitch in my brain saying, "you can compete up there".

However, just b/c its family or small biz...it ain't all gravy train, but the hours are def. better than IB!

 

I agree with you completely raider4ever. If I enter immediately after college is done in another two years my dad will still have his daily responsibilities and I won't have the experience within or outside the company to really make a huge impact.

If I get an ibanking or mgmt. consulting job for 2 years it will give me outside experience I can rely upon. After the two years I will work in the family business for 2 years. Furthermore, I will be able to get into a very good MBA program with my grades and 4-5 years work experience. After the two year MBA is up I will be 28 or 29 and I will be fully capable of rejoining the business and assuming much greater responsibility given both my outside experience and experience within the company as well as a top MBA.

If I take over between the ages of 30 and 34 I will be in very good shape to really expand the company by the time I'm 40. If I was to go Wall St. route entirely that is about the time (slightly before) I would be promoted to MD. With the family business I would have reached the same level with only sacrificing maybe two years of my early 20s instead of all of my 20s and even half of my 30s if I was to go analyst, associate, vp, md track.

 

Well prestige doesn't matter to me at all. All I care about (to a great extent), and all that other people on this board care about is MONEY.

When people see ibanking they see six figures at 24 and if they excel millions later on.

With the whole money issue in mind, I realize ibanking can lead you to enormous wealth. However, everyone on this board must realize that the bankers that can afford $20 million houses, multiple Ferraris, private jets etc... are not even close to the norm of Wall Street.

We know Managing Director is a very senior post. Many of us on here aspire to one day be an MD. While as high ranking as the position is, there is no way you can go out and buy a $20 million house and your own jet making around $5 million per year. To do these things you need to be well above MD level, probably around global head of Investment Banking, which clearly means incredible success.

Since I know the odds of reaching MD are very low, the odds of reaching group head even lower and head of investment banking is a shot in the dark, I think the family business presents an excellent opportunity.

 

JambaMan, I certainly think at least from what you've posted here that you have a fairly good head on your shoulders. It sounds like you've been very thoughtful about what you should do and no doubt everything will work out wonderfully. I think the plan you have laid out of working for 5 years, doing the MBA and then returning to the family business is very practical.

 

Why would anyone even think about leaving a growing multi-million dollar family business (45hrs/wk min.), where you'd most likely get to do what you want as long as you take care of business, to go work in banking(60+ hrs/wk min.), where you'd be worked to death and be treated like crap?

Personally, I'd take care of my family's business because it not only benefits you, it benefits your entire family and family name. (Also, I'm assuming it's a secure and sure thing, and not gonna flop in a few years.)

On the other hand, If you hate what you're doing at the family business, and think you're going to be miserable, then go for the I-Banking path.

Also, if you REALLY like banking, then why not just manage your family businesses money, instead of managing someone else's, who you can give a rat's ass about.

;)

I'm not an I-Banker, but that's just my two cents.. Good Luck!

(Wish I had a family business.. hehe..)

 

Well I don't think I will hate doing the family business. I see my dad and I see his passion for the industry and his constant ability to out think his competition. I'm sure once I figure out what is going on and can start making great money for myself I will feel the same way.

The business is secure and definitely a sure thing. If a business where the owner can make $5 million a year flops in a few years it means someone fucked up big time. That will not happen. Even if it isn't $5 million a year every single year it is still in the $2-3 million range and the lifestyle is still the same.

Allergic what are you opinions of my plan to aim for banking or mgmt. consulting for 2 years maximum and then 2-3 years working in the family business after the corporate America stint. Use that 4-5 years of experience to get into a top MBA at the age of 26 or 27 and finish the MBA at 28 or 29 and rejoin the family business with much more responsiblity and potential to take over the reigns by the time I'm in my early 30s?

 

Honestly, going into banking for 2 years max, then going back to your family's business is a good idea. It can help you see how the whole corporate world works. From this experience you can also gain valuable knowledge, work ethic, and certain characteristics that can help you build and grow your family's business.

Now, one thing that you should know is that you aren't necessarily leaving your family business to get your MBA, most people work WHILE they get their MBA. So you don't have to leave and then rejoin the business, you can achieve it at the same time. Your choice then would be to get your MBA while in banking, which is probably impossible, or get it while learning the ropes at your company.

All in all, I think you'll do fine. Life's short, live it up!

 

Wow, I didn't know that most people work WHILE getting their MBAs at the same time. I thought the traditional 2 year MBA program was most common (where people are full-time students), but apparently not.

That sounds like a great idea to get my MBA while continuing to work in the family business at the same time.

I appreciate your help Allergic to Broke.

 

Jamba, I may be wrong but I get the feeling deep down you want to do Banking or Consulting less for the "experience" and more for the social aspect, i.e. being around kids your own age for a few more years, instead of handling the pressure of running your family business alone at the age of 22. It seems like you want to put off that responsibility for a few more years.

I'm not sure if you described your family business in any of your posts but I'm curious as to how you're gonna ensure you learn about that particular field when you work for a Bank or Consulting firm. Chances are you won't even deal with companies the size of your family business let alone be placed in a related group.

 

No problem.

Ofcourse, there are those that will advise otherwise because it's going to be a lot harder to get better grades while doing both, but if you've got the determination and drive, then go for it.

Many people work to pay for the schooling expenses, but in your situation, money isn't an option, so it couldn't hurt to leave, get your MBA then go back. If it were up to me, I'd get my MBA while working, but that's the kind of person I am, I'm a "go getta" lol

 

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