MM IBD Advice - From a guy working in it now

Study abroad (part of a business school program); it was the recession.

QUESTION

Is a transition from corp. dev to MM IBD common, somewhat easy, etc?

ANSWER

Nobody from my shop has done it (since I've been here). Most of the analysts are PE / BDC / FoF focused....as they should be given the limited # of easy entry points into those domains. From my conversations with the corp. dev. folks, I imagine that they are more focused on sector knowledge than any PE shop would ever be at a junior level (where they are more concerned about your lev-fin'ish type skill-set). Lets face it, when you work for a 1b+ revenue company, they are less concerned about your ability to model one-off complex LBO capital structures. (this post probably falls under the "my advice might be shit caveat" in my original post).

With that said, I imagine corp dev is less competitive......not sure if that translates to "easier"....probably.

1)

QUESTION

1) Did you choose MM over BB in particular? I interned in the MM space prior to my BB gig and in my opinion, you are much more "intimate" with your clients (this is true at the analyst level at least, but shop dependent of course).

2) Do you find this true at the Associate level when you compare your responsibilities to your peers at BB banks?

3) BB associates usually rotate through a few groups before being placed, did you have this option as well?

ANSWER

1) I did not choose MM or BB in particular. Given the fact that I was a career switcher (among other things), I didn't have 5 offers to choose from. From conversations with buddies I have, you are MUCH more intimate with clients in a MM shop. If you step back and think about it logically, this makes complete sense.

When you're selling a business (and performing the massive amount of work / getting up the learning curve required) you HAVE to be intimately involved with management. What are their strategies? How are they going to grow? Where is the weak spots on their team? How are you going to position XYZ. When I say intimate, I often send text messages to the CEO's of the Companies I sell when I'm drinking coffee in the morning (depends on how cool they are). "Hey ______, received XYZ today from your CFO, can I call you at 3 to discuss"....that type of thing. Part of this intimacy is purely driven by the nature of sell-side work (and private company work). Regardless of company size, I can't see you performing a good job on an M&A deal without a pretty high level of interaction with company management. Yes I do think "more" in a MM shop. Its a function of staffing (less people up the chain of command), the size of the Company (less people to go through to get to the CEO....they actually "work" a decent amount themselves...and other things

2) I think I answered #2 tangentially in #1

3) I don't think so......but this is bank specific. Almost ALL of my friends (BB and MM) were placed in a group. Most are still in that group. If you're new to IBD, don't stress to much about the group. Think about the breadth of work you'll be doing. Domain experience takes YEARS to develop....and if banking is a stepping stone to something else, which it is for most people, you should be MUCH more concerned about a breadth/depth balance of work. Do you really give a shit if you're in a industrials v. transportation group? They both have suppliers, distributors, retailers.....certain similarities / industry characteristics. Maybe you do care (for whatever personal reason....). What I would care about, is what type of work you'll be doing. My group does mostly sell-side and buy-side advisory. I could effectively contribute to an IPO or bond deal to save my life....... Wouldn't even know how to start. Thats o.k. with me (don't like that stuff). I have friends in the Industrials group at a BB bank. They've only worked on high-yield deals and IPO (in a left-manageed lead capacity). They would have no idea how to effectively sell a private-equity-owned $500 mm Company (although the leap from financings to sell-side is probably easier..........its all just marketing in the end).

BicBicBicBoi:

1. How is easy is it to lateral from a MM to a BB? Let's say one interns at a MM junior summer, what are the chances for FT BB?

2. What is the MM landscape like? In your opinion, who are the top players?

3. As an associate, does working at a MM set you up for promotions better than a BB ( smaller, less competitive pool to compete with)

ANSWER

1). Probably pretty easy. You're an intern. You a) don't know anything and b) were chosen by someone else (validation). You just need to get "in" the interview process

2) Can't comment...don't really pay attention to this type of thing. Doesn't really matter in my opinion. They all focus / compete in different areas. I work in M&A. I could walk into any other MM shop and talk about (and work on) a M&A deal...and they would immediately recognized that I know what I'm doing. I could not talk about financings or restructurings.... In my humble opinion, those that are trying to find an entry point in this business focus way to much on firm rankings. Group dynamics drive deal flow. I know that a certain healthcare team at a top MM shop (to remain nameless) gets terrible dealflow. My group has great dealflow.

3) Yes. Faster promotions. Less competition, less # of promotions. (but the work doesn't really change with the promotion...thats all just optics) (might be wrong on this one for other banks)