Advice: Lev.FIn vs M&A

Recently received an offer from BAML for summer 2016 and top 2 group choices are Lev. Fin and M&A. Interested in both but Lev.Fin was initially top choice as I know more people there. Given the condition of the credit market, I was wondering if opting for m&a would be the better option? I'm interested in PE long term.

This is all assuming I get picked by the groups, both are very competitive.

Thanks.

 

Similarities: M&A and Lev Fin, are two groups that are typically more analytically intensive. Differences: M&A does exactly what it suggests: M&A. Lev Fin is a subset of DCM (some banks have it as 2 seperate groups and some have it as one) and deal with different forms of debt/financing. Side note: Financial Sponsor Groups cover private equity firms so being in a Sponsors group will likely get you some direct exposure to PE firms, which MAY help your job search later on.

 

Different product groups, but can overlap in the case of an LBO or debt-intensive acquisition. some lev fin groups on the street divided by high yield, loan syndications and leveraged acquisition finance before market dynamics changed (LBOs blew up). acq. lev fin work involving sponsors is much closer to m&a than leveraged capital raises.

 

I would lean towards M&A in terms of marketability assuming apples to apples. Apples to apples in this case means both groups are top of their class rankings wise for each of the groups and gets outstanding deal flow in both groups. However, considering many banks are ranked higher (in terms of peer banks, not within a bank) in one group or another, I would lean towards the group ranked higher (if there is a solid difference). If Bank X is seen as a top player in Lev fin, but generally a supporter (rarely Lead) in M&A, I would probably go with Lev Fin simply because the deal flow and opportunities will probably be much better and provide more interesting and marketable experiences.

Personally, as I said before, I would go with M&A assuming the groups are both pretty solid in the particular bank.

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Financial sponsors group is very specific... majority of the analysts bounce to PE. M&A is much broader (esp. if generalist) and people jump to all sorts of places be it multinationals (future CEOs/Execs), consulting, PE, HFs, etcetc. Only been in M&A so can't say much about LevFin hours.

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SonnyZH:

Financial sponsors group is very specific... majority of the analysts bounce to PE. M&A is much broader (esp. if generalist) and people jump to all sorts of places be it multinationals (future CEOs/Execs), consulting, PE, HFs, etcetc. Only been in M&A so can't say much about LevFin hours.

There's a difference between sponsors and LevFin...

 

Good question. In answering your question, the single most important thing in group selection as a new analyst is group's level of deal flow. Both M&A and Lev Fin product groups analysts have highly sought after backgrounds. So given the choice between the two, go with whichever is cranking a ton of deals. If they're close, I would, personally, take an M&A opportunity (granted I'm biased).

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equity-interview-prep-questions
 
Stringer Bell:

Good question. In answering your question, the single most important thing in group selection as a new analyst is group's level of deal flow. Both M&A and Lev Fin product groups analysts have highly sought after backgrounds. So given the choice between the two, go with whichever is cranking a ton of deals. If they're close, I would, personally, take an M&A opportunity (granted I'm biased).

I assume this applies to the associate level as well.

 
swgator13:
Stringer Bell:

Good question. In answering your question, the single most important thing in group selection as a new analyst is group's level of deal flow. Both M&A and Lev Fin product groups analysts have highly sought after backgrounds. So given the choice between the two, go with whichever is cranking a ton of deals. If they're close, I would, personally, take an M&A opportunity (granted I'm biased).

I assume this applies to the associate level as well.

It applies to any level unless you are the one bringing in deal flow.

 
Best Response
swgator13:
Stringer Bell:

Good question. In answering your question, the single most important thing in group selection as a new analyst is group's level of deal flow. Both M&A and Lev Fin product groups analysts have highly sought after backgrounds. So given the choice between the two, go with whichever is cranking a ton of deals. If they're close, I would, personally, take an M&A opportunity (granted I'm biased).

I assume this applies to the associate level as well.

It does. If you're doing the associate route, I'd further posit that M&A is better. In the event you decide you don't want to be a career banker anymore, it will give you a little more flexibility trying to find other options.

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equity-interview-prep-questions
 

Stop stressing over which choice will enhance your resume. At this point you have completed a summer internship and you are more than 50% there with respect to being in the game full time once you graduate.

I STRONGLY recommend that you consider which area interests you more...and capitalize on having the ability to choose. If you like LevFin...stick with it!

I spent several years in levfin and recently decided to try something different...and moved to the coverage side. I HATE IT...and am already positioning to move back to LevFin as soon as possible.

LevFin and M&A are very different specializations... if you aren't completely convinced that you'll enjoy M&A...I'd stick with LevFin.

 

Basically I had a desire to be on the coverage side. I wanted to get exposure to the equity capital markets, M&A, as felt there would be some value in gaining industry expertise.

But since my decision I have concluded that I'll always love the markets more than any one sector or company...I'll always love the execution mentality as opposed to...'let's brainstorm for six months and see if we can ponder up an original financing solution for XYZ.'

 

It's for only for 10 weeks. You can see the pros & cons between both groups, and decide where you want to go in the analyst program. I think at your stage it's better to have a wider skillset rather than a refined one.

EDIT: Also there will be some skills (namely credit/modeling) that you can use form your LFG internship to help you out this summer. And if you decide you like LFG, valuation skills you learned from M&A will be helpful in LFG.

 

thanks for the advice - what are some of the skills that I'd learn in M&A (over 10 weeks) that I couldn't learn from a valuation / corporate finance course though?

I initially was thinking along the same lines (develop a wider skill set), but then I basically reasoned that I'd learn more in lev fin that I wouldn't be able to learn in the classroom.

 
circa1369:
thanks for the advice - what are some of the skills that I'd learn in M&A (over 10 weeks) that I couldn't learn from a valuation / corporate finance course though?

I initially was thinking along the same lines (develop a wider skill set), but then I basically reasoned that I'd learn more in lev fin that I wouldn't be able to learn in the classroom.

I don't know exactly the skillset you would learn from M&A, me being a LFG guy, but I'm sure the hands-on valuation / strategic knowledge is much different than anything in the classroom or a book.

I'm not sure if you'll necessarily learn more from another 10 weeks. You know from a high level what LFG does and you have already went over the steepest part of the learning curve. I just don't think another 10 weeks is enough time to refine your LevFin skillset further to the point that it would be helpful.

 

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