Investment Banking to Equity Research

Has anyone on here made the move from investment banking to equity research, specifically within BB? Why did you make the move and was it the right move? What was the process like?

Comments (32)

Dec 11, 2015

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Dec 11, 2015
undefined:

I don't think anybody in their right mind would lateral from IB to ER.... I've seen people do it from ER to IB though

May I ask why? I'm surprised that you're surprised that somebody would want to move from IBD to ER. That's pretty common to be honest. Possible reason - people want to have some control over their lives.

Dec 11, 2015

you might be right.

Jan 3, 2016

Can you share a bit on how to leverage experience in ER to enter IBD? I know it sounds stupid but people always said that it'll be hard to make such a move.

Jan 14, 2016

It's hard, but possible. Either network internally if you are at a BB/MM or reach out to bankers at other companies and directly state your interests in lateraling/ask if they have time to chat. The skillsets required for the two positions don't completely overlap, so you would have to spend adequate time preparing for interviews/job.

Jan 1, 2016

I moved from IB to ER at a BB. Reasons were: hours, skill development, client exposure

Jan 14, 2016

Bump. Thoughts guys?

Jan 14, 2016

Curious - do you just send ER as a better fit for yourself? How confidant are you in that?

It's wide consensus that IBD has the best exit. I'd say go for IBD, re-evaluate in 2 years (maybe you don't want to do ER at that point), and then you can go into PE/AM/HF/ER or whatever the hell you want hahaha.

"If you have a difficult task, give it to a lazy person; they will find an easier way to do it." - Hlade's Law

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Jan 3, 2016

Why would you want to leave IB?

Jan 14, 2016

I personally wouldn't make the switch. Lots of IBD kids from those banks go the HF route. You can make the switch once in ER to a HF, but it's harder and you need to prepare to give it several years. I used to work on a sales desk at MS/GS/JPM so I 1) know that all the ER ppl who left for the buyside were either a senior associate (4-6yrs exp) or a senior analyst that was 35-45, and 2) I had a bunch of ex IBD Analysts as my clients. fyi they were usually were in coverage groups and then covered that sector on the buyside.

Jan 14, 2016

I started in ER and switched to IB

I didn't switch internally but from my observations it's definitely possible. The only problem is there are a limited number of research associate positions so you will have to time it well and it's very possible there are no positions available.

As for the hours, I wouldn't say they are much better but they are a little better. The big downside, for me at least, was the early mornings (I was getting in around 6:30am). During earnings season the hours can be just a bad as banking but in between earnings seasons the hours can be significantly less.

Keep in mind there will still be a lot of bitch work in ER as an associate. I actually found ER work significantly more boring then IB analyst work and am happy with the switch. Though I did enjoy how much more modeling work there was in ER

Jan 14, 2016

From an ER perspective, you need to come up with some better reasons than less bitch work and better hours. ER is unique and if you think you want to do it for those reasons, it probably won't end well for you or for your analyst. There can be a lot of bitch work and the hours can suck, especially during earnings. 6AM-2AM and back at 6:30 the next morning is bad, and it's a lot worse when you're going two or three weeks straight with early mornings and late nights.

  1. This is just a guess, but I would think you have to wait until after your first year to get any HR support for a switch.
  2. A year in IB and 2 or so in ER would probably make you a good buy side candidate. Long only I would say would be more likely to take ER people, and hedge funds more likely to look at IB people.
  3. Depends on your team. Analyst your work for, size of team, and size of coverage universe. You can work for a reasonable analyst but if you cover 30 companies and you are the only associate it is going to suck. You can also be on a team with three associates and 10 companies under coverage. Those two teams will be very different in terms of number of hours worked.

Advice: make sure you are prepared to write. A lot. I assume you are ok with modeling because you are in IB. Some analysts prefer to do most or all of the writing themselves because it is "their voice", while others will have their associates write (and model) almost everything. You don't want to be in a position where you are writing 70%/modeling 30% and realize you don't like writing.

Feel free to PM if you have more questions.

Jan 14, 2016

Can anyone comment also on the culture difference between IB and ER? Seems like ER is much more academic and that is something I am definitely looking for

Jan 14, 2016
Green Monkey:

Can anyone comment also on the culture difference between IB and ER? Seems like ER is much more academic and that is something I am definitely looking for

Yes definitely. I interned in IB and work in ER and there are times in the day (during market hours if call volume is limited) when you can hear a pin drop. You have to have the right personality, but it's also much more fast paced. There's very rarely times when I don't have anything to work on (actually cannot think of one if I include longer term projects). As you get more senior (even just a year) you spend more time on the phone and/or travelling too so you do get opportunities to mix it up. I much prefer ER though I think that's more a result of the type of work than the environment.

Jan 14, 2016

I am wondering the same, is it reasonable to go to ER from IB?

"One should recognize reality even when one doesn't like it, indeed, especially when one doesn't like it." - Charlie Munger

Jan 14, 2016

I'd say take it

its one way or the other: hate me or admire.

Jan 14, 2016

It's a solid job if you're not getting other opps

Jan 14, 2016

You said it yourself. If you don't know what you want to do, then definitely go for it.

Jan 14, 2016

Curious on this as well

Jan 14, 2016

Made that switch a year and half ago. It's without a doubt a trade off between hours work and comp. The work is more interesting in ways but you also have much less of the comradery that comes with banking. I'm mostly happy with my decision but there are days where I'm less sure. PM me if interested in hearing more.

Jan 14, 2016

I don't have any first hand experience, but I'll try to offer what I've gleaned from here...

IBD -> Research is a fairly common transition. I think you would start at the associate level (note: associates support analysts).

Hours are highly dependent on your group. It can range from 50-80+ hrs/week. Earnings season will predictably be a lot of hours.

As far as a good idea, that depends on your goals. Exit opportunities after ER are definitely more restricted than after IBD. Either move to the buy side or work for a company in the sector you covered.

Jan 14, 2016

What the above poster said is right on the nose. Just a few quick comments..

With 3yrs of experience in banking, you should focus on certain areas within research that can play to your background/strengths.

For example, if a lot of your experience has been on high yield / investment grade offerings, focus on fixed income research instead of equity.

Other than industry coverage, research covers a lot of other ground - Equity / Credit Strategy, Product Coverage (CDS, ETF, etc.). Take a look at some of these groups if you've had M&A or restructuring exposure.

You can also look beyond the bulge bracket reserach groups to more research focused brokerages that really don't participate in any investment banking activities.

There's also the rating agencies and other 3rd party research providers such as CreditSights.

I'm making it up as I go along.

Jan 14, 2016

As others have said, IBD analyst to ER is a relatively common path. You'll probably come in as support to a lead analyst and depending on your sector and amount of yrs you worked in IBD you could expect to take main responsibility for a few of the smaller companies directly within a relatively short time. Base pay will be the same pretty much, with bonuses less than IBD but still decent and is what you trade off for having a more predictable life and in most cases a way more reasonable work life balance.

It's definitely an option to consider if you enjoy your sector and want to stay in finance without going down the PE route or the even less attractive proposition of becoming a career banker...

Jan 14, 2016

Fairly common path that I went down. So, I started out as a banker, did some PE work, and I'm now in ER. With a little over three years of experience, I came in as an "associate." Basically, I support an analyst and an MD and do all of the generic bottom of the totem pole items. The work is basically like being a 3rd year analyst, you are trusted to do stuff and not mess it up with little to know supervision. I don't have anyone working for me, so its not like when I was an associate and had little monkeys to boss around. That being said, the bitch work that you put on 1st years, for the most part, doesn't exist in ER. As to titles, some BBs have started to go with the normal titles (and only call senior people analysts on their reports). Other firms, especially ER focused firms do the research assistant, research associate, senior associate, analyst, senior analyst, MD thing. Make sure to be clear on what title you are getting before you start.

As was said by people above, I liked the space I was covering and moved over to ER in that space.

-Base pay is pretty much comparable. So, coming in with ~3 years you can expect salary to be between 3rd year analyst and associate pay. Keep in mind that your title will be more junior than it was, hence the cut.
-Bonus tends to be lower at the junior level. Classically 25-50% or salary at the "associate" level.
-For people straight out of college, salary tends to be less than an IB counterpart and bonus much less.
-Hours are better, what that means depends on the group. Basically, you don't pitch and you don't have deals, this means you have better hours. During earnings, or if a big piece of news comes out you may work IB hours. How much you get killed depends on the analyst you work for, so make sure you know as much about their work style as possible.
-Hours tend to be much more predictable, you know when earnings is and you are more likely to be able to take vacations.
-Exit options are more limited, but ER is a much more sustainable role.

To get an idea if you would like ER, read some of my posts and some of the stuff on here.

--There are stupid questions, so think first.

Jan 14, 2016

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Jan 14, 2016

--There are stupid questions, so think first.