McGladrey/Grant Thornton Valuation better than Big 4 Audit?

Hey guys,

I'm currently planning to start my career in Big 4 audit (PwC), but hope to eventually end up in investment banking. I've read numerous posts saying the best way to do that is to transfer into TS/TAS and move from there (whether it's jumping straight to a bank to into a Top MBA).

From what I've read, it looks like jumping from audit into TS/TAS can be pretty difficult as well. If I can't make that jump within a year or so, should I consider trying to jump to the Transaction/Valuation team at a middle market firm like McGladrey or Grant Thornton? Or would it be better to stay Big 4 and do audit until MBA?

 

If you are considering a career change to investment banking, then it seems that it is always better to do it as early as possible. Go out of your way to find ways to jump straight to banking from audit; it's definitely possible.

But to answer your question, here is what I think. In terms of skills sets you'll be earning, doing middle market valuation will give you more relevant skills for banking than big 4 audit (but carefully research on what you'd actually be doing in those groups, because they don't do fairness opinions like Houlihan FAS does). So if you can't make a transition to big 4 TS/TAS, consider doing middle market TS/Valuation. Staying in audit and going on to MBA is a decent option, but think about how competitive it will be for you to break into banking then for associate positions.

 

Is it better? Yes.

Should you switch to it if you're goal is IBD? No. Too roundabout. I know b4 auditors who have gotten into booth/kellog/sloan etc after 5 or so years in audit. If your application is strong otherwise, you can get into a great bschool, which will give you the opportunity to have recruiting from BBs.

 

No. If you really want to do banking, just jump straight from Big 4 Audit as soon as possible. Or take the MBA out from Big 4 Audit and save yourself 2/3 years of analyst years.

  1. It's perfectly possible to go from Big 4 Audit to IB as an analyst. You won't get into GS/MS/JPM/EB ("Elite Boutiques"), but you'll certainly have a shot at MM and regional boutiques. Just make sure you know your technicals down right cold and have a story as to why you want to do IB. This sounds incredibly obvious, but you'd be surprised how many candidates think they're prepared when they're really not.

Lateraling from Big 4 Audit is more about persistence than anything. You'll be lateraling for off cycle positions. That means they are fewer available, and you never know when something will come up. Although early spring and late summer tends to have more activity because it's after bonus season, it's much more random. You'll have to be constantly networking so you're on top of people's minds, as well as check job listings on a daily/weekly basis (check Indeed.com). Remember, it's not that BIg 4 to banking is impossible, it just takes time.

2a. Don't waste a career jump to a McGladry or GT, unless it was their corporate finance team (their IB). Even then, I believe you have just as good of a chance of getting into a recognizable MM or boutique bank that's not "tainted" by the accounting name (especially a lower tier firm) and won't be seen as a downgrade in firm name. Public Accounting ("PA") isn't like IB where there are very respected MM firms. It's Big 4, then everyone else. Don't let the other lower tiered PA firms kid you otherwise. You'll have a better shot a top MBA coming from Big 4, even if it's Audit, than GT/McGladry in their valuations group.

2b. If you go to McGladry/GT TS/TAS, at some point you'll have to explain to someone in IB why 1) you didn't go straight into IB from audit and/or 2) why couldn't you get into Big 4's TS/TAS group. If you stay in Big 4 Audit and recruit for IB directly, you won't be exposed to those conversations above.

  1. You should also look into the Big 4's corporate finance teams. This isn't their TS/TAS group, it's their middle market IB. It's less pay than traditional IB, but also less hours. It does require a couple years of experience, but so does TS/TAS, so cast our net wide. There's also a difference between the qualifications required for Big 4 Valuation and Big 4 Financial Due Diligence. I've heard of people going from Big 4 to Valuations with only 1 year of audit experience, but more required for FDD.

  2. Also consider a MSF. You can easily recruit out of MSF for an Analyst position.

Ultimately it comes down to how do you prioritize your time. If IB is what you want to do, make that your number one priority and secondarily focus on TS/TAS/CF in your current Big 4. It's not good to jump firms (or even positions internally) too much because it's just another thing you'll have to explain away. Banking and PE firms tend to like traditional candidates. The "messier" their resumes are, the more employers will gravitate away (not to say nontraditional applicants don't get hired).

Lastly, depending on how recruiting goes, I would think about coming into IB as an Analyst vs Associate. If you've been in Audit for 2 or 3 years, it may be better for you to go get your MBA and then join as an Associate.

Edit: Apologies for the poor spelling/grammar. Too lazy to care.

 
Best Response
needtodecide:
2a. Don't waste a career jump to a McGladry or GT, unless it was their corporate finance team (their IB). Even then, I believe you have just as good of a chance of getting into a recognizable MM or boutique bank that's not "tainted" by the accounting name (especially a lower tier firm) and won't be seen as a downgrade in firm name. Public Accounting ("PA") isn't like IB where there are very respected MM firms. It's Big 4, then everyone else. Don't let the other lower tiered PA firms kid you otherwise. You'll have a better shot a top MBA coming from Big 4, even if it's Audit, than GT/McGladry in their valuations group.

Though I generally agree, I thought I would add a little color to this post.

1) I don't think McG/GT have meaningful broker-dealer subsidiaries--unless someone has experience with them?

2) Middle Market investment bankers do not meaningfully distinguish between Big4val and these two firms' valuation practice; the "public accounting prestige" is not important here.

 

Don't know who threw MS, but perhaps I should amend, for the sake of WSO's accuracy.

McG and GT (and BDO) each have some excellent people, many of whom are well respected in industry. However, the barriers to entry for these firms can be very low in many cases.

Same goes for Big4 sometimes, but the big4 on your resume lends at least some credibility to your resume, whereas with the second tier firms, you have to clearly demonstrate that you are a star in order to get looks for top 10-15 bschool, reputable mm ibanks, etc.

 

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