What are the pros and cons between investment banking and business valuation (think Duff and Phelps)? I am looking at both for full time recruiting. At the end of the day they seem to be very similar so I was wondering what sorts of things I should be thinking about when trying to decipher which route to go down.
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Valuation is not as analytical as investment banking, but more technical. You will learn a lot about valuation methodologies, minus the LBO. Investment bankers don't place that much emphasis on the technicals, however, I feel like it useful for buy-side analysis. Other big factor is bankers get paid way more.
I just made the transition from valuation to ib.
Thanks XSX82. Can you explain what you mean by not being as analytical? Also, how did you spin your transition during your interview process?
Paper, PM me
Hi-- I have an offer for Senior Consultant at Deloitte Securitization Transaction and Senior Associate at DP Complex Asset Solutions (Alternative Asset Valuation). I want to go to an IB after or PE. The MD at DF say some people from his team ended up going to a PE firm. Consultants from other EY Securitization Transaction have moved to IB.
I would appreciate any advice
Thanks,
I have been interning at a valuation firm for about 5 months now, and I want to be in banking so badly. The pros of being in valuation is that you learn your technical ins and outs. You will use DCF, comparable comps, and transaction daily. The con is that you will always be the last guy in to render a value. I dont know about you, but I would rather be the first guy to look at a project. For example, I have worked on two purchase price allocation, and the bankers/PE closed the deal, and now they want me to allocate the purchase price to tangible and intangible assets/goodwill. This shit gets old real quick. Some of you might argue that bankers do the same repetitive things, but at least you get to sell or pitch an idea.
The most exciting thing in valuation is getting into a debate with one of the big4 over the discount rate lol
Old bump but I could not agree more haha. The DLOM arguments were always the best in my eyes though
Valuation is one of the techniques used in banking to aid in doing your job; Valuation at a firm like Duff & phelps IS your job.
Hello, These both terms are different from each other. Business valuation is much more difficult and technical then Banking Investment. Business valuation requires more skills and strategies. And it takes more time as well.
Thanks....
LOL @ being more difficult.
People laugh about pitch decks that get tweaked and customized, but nothing is worse than BV reports. 90% is literally the same thing, canned bullshit. The remainder is made-up theory.
Difference Between a Job in IB and Valuation? (Originally Posted: 06/05/2011)
Would anyone care to shed some light on the different between a position in ibanking and a position in valuation?
I have the opportunity to work for a company's valuation department and I'm wondering how exactly the work will differ from that of banking. Will it be straight excel crunching? What types of projects would you think I would be working on?
As a follow up, would working in a valuation department position me to lateral into ibanking after, say, a year or two as a valuation analyst? Would my best chance be to try to leverage that experience into an analyst role in ib? Or would you try to apply as an ibank associate after two years of valuation analysis?
Thanks all, been curious for a while
lol at 'analysis' in investment banking.... more like 'just get the number the MD tell you to get' ;)
Having explored valuation and IB roles, I think the difference between the two is best explained via an analogy. Say you are selling your house. You have a real estate agent who is working for you to maximize the value of your house to the market. You also might have a third party appraiser who works to find the exact value of your house that other parties (legal, bank lending, etc) can use. What the appraiser says is the final conclusion regarding your house's true value.
Same thing goes for IB and valuation. It's the job of the investment banker to sell a company to the entity that will pay the highest. It is the job of the valuation group to provide a supported, well documented opinion of the actual value of a company (or intangible asset, business line, etc). So in IB you are working on deals where the range of value can be wide; whereas in valuation you work on projects to provide an exact valuation.
Having said that, you can definitely leverage valuation experience to lateral into IB. In fact, the pure technical skills you develop in valuation groups will exceed those you learn in IB.
Due to the more technical nature of the job, would you be able to move into buyside roles after a few years in a valuation group? Or would that move be more likely if you lateraled into IB?
Very understandable analogy, thanks for the response!
At the analyst level, you don't do any M&A models if you work in valuation. At a valuation shop, your job is to, well, arrive at a valuation for the company/asset. You won't be analyzing the PF impact on the acquiror and other transaction effects.
Edited
I'm currently working in valuation and as previously noted, the work is mostly post-merger and SEC compliance valuations. I have learned lots about modeling different types of derivatives/securities, but the work isn't exciting by any means. There is a lot of number crunching and report writing. For the most part, the things that you do will simply be put into files in case the SEC or IRC audit them. Very little of what you do influences client decisions. I recommend it to further your learning, but personally, I don't find the work to be my cup of tea. PM me for more details if you want.
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Et quasi et vero modi. Optio rem quis perferendis eveniet.
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