MM IBD vs. BB ECM for FT

sphere7's picture
Rank: Senior Chimp | 17

Deciding between FT offers at a MM in IBD (think Cowen, Piper Jaffray, Jefferies) or ECM at a BB. After 2 years in ECM I'd have the option to move to a coverage group in IBD at the BB. Mostly interested in talking about exit opps.

So, better off after 2 years of IBD at MM or 2 years of ECM and 1 of IBD at BB?

Also, would it be worth it to try and lateral in IB from a MM to a BB or would that be harder than moving internally from ECM?

Thanks in advance

Exit options in equity capital markets vs investment banking

There are two things to consider when comparing equity capital markets at a bulge bracket to a middle market coverage group.Skills gained and brand name.

If career optionality is your goal you focus on a skillset that is more widely marketable.

Capital markets groups offer a more niche skill set. So the question becomes, does the brand name of the bulge bracket outway the skills gained in a coverage group?

Key Takeaways

  • Weigh the skills gained to the brand name. Which one is more likely to get you to you're mid to long term career goals?

from certified user @Whiskey5

I'd still recommend the MM offer over your ECM specific offer. I am a firm believer that at the beginning of one's career, "branding" is not nearly as important as developing the technical skills you need to advance. Branding, of course, is relative. If we're talking a two-man boutique vs a BB ECM offer, yes, I'd take the ECM. Clearly, this is not the case.

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Comments (22)

Oct 3, 2012

Take the BB. Easier to move around in the future.

Oct 3, 2012

How do you know you have the option to move to the coverage group?

Oct 3, 2012

ECM = IBD fyi and so is DCM/Lev Fin. I'd go with the BB.

Oct 3, 2012

I disagree with the above
ECM is very difficult to get out of due to the lack of modeling experience vs a product/coverage group

And in this hiring environment, it will be even more difficult to move. I'd take the traditional coverage/product IB at the MM shop and try to lateral if you really want to be at a "BB"

Congrats on your offers

Oct 16, 2012
Whiskey5:

I disagree with the above
ECM is very difficult to get out of due to the lack of modeling experience vs a product/coverage group

And in this hiring environment, it will be even more difficult to move. I'd take the traditional coverage/product IB at the MM shop and try to lateral if you really want to be at a "BB"

Congrats on your offers

This.

Oct 3, 2012

@humble_dude - this option was given to me and I have spoken to people who did this in the past

@Raptor.45 - ECM, like Whiskey5 says, is not the same as IBD when it comes to exit opps due to a completely different skill set and a lack of modeling/technical experience

@Whiskey5 - thanks for the congrats! from my experience this is true about ECM, which is why the move to banking would be necessary at some point if I take the offer at the BB. do you know anything about the actual exit opps to a MM firm? is it MM PE shops or is that a stretch? I don't know too much about post-banking and what the actual differences would be from 2 yrs ECM/1 IBD at BB vs. 2 IBD MM, just that BB generally offers "more options"

Oct 3, 2012

What city are these offers for? If you're talking about the BB I'm thinking of that commonly does the 2+1 thing with ECM to IBD, it might also be important to consider job security when weighing your options... Headcount reductions aside, the people I know who have gone that path had a tendency to become an associate within the same bank in IBD or ECM, depending on where there is need. My view is that doing ECM to IBD at a BB its a win win - the bank gets a versatile jr banker and you will have a marketable background for a broader range of jobs.

If you go to any of the MM banks you listed, your chances are slim of going to the buy-side after year 2. I've known people at all of those banks, and the few I know who went to the buy-side did it after year 3. If you decide you want to lateral to a BB group, there's also a good chance you will need to take a haircut in seniority.

If you go with the BB you'll have improved chances of landing a buy-side job after year 3. You'll also have more downside protection if the buy-side doesn't pan out because you'll be marketable as an associate either internally or trying to leverage getting a better deal at a smaller bank if you want a change of scenery.

Oct 3, 2012

@balls.mahoney - both offers are for NY. I keep going back and forth between exactly your and Whiskey5's opinions

Oct 3, 2012

I think the difference between my comment and whiskey's is whether or not your BB option implies that you're guaranteed to move from ECM to IBD internally after yr 2 of if you're speculating that its a move you'd like to try and make.

I was referring to a BB where the norm is to encourage the ECM analysts to rotate into a coverage group after 2 years for the sake of cultivating a well rounded junior banker and improving retention. I think this approach makes sense too because its not uncommon for ECM analysts to try and make a move into a coverage group, and encouraging that move helps to ensure they aren't losing analysts to another bank.

With what Whiskey said about the difficulty in moving from ECM to IBD if you're going it alone, I agree. Its not an impossible jump to make, but it will take a little more work and hustling to find the right opportunity if you're trying to make that transition without the blessing of people you've worked for.

Oct 3, 2012

I mean, unless you got a written guarantee that you will move to the IBD coverage group after x years, I wouldn't give a verbal promise that much weight. If you are talking about 2+1 (2 yrs ECM then move to IBD), you are talking about stuff that won't happen in at least 2 years, and a lot of things can happen in the 2 years time frame.

If your BB is known for internal mobility, like JPM, I guess you can go for it, but know that there is always a chance you might get stuck in ECM.

Oct 3, 2012

That is fair, nothing is guaranteed but at least precedent can give you a good sense of the probability. The value of having a BB on your resume early on can be immensely helpful though. Being an analyst at any of those MM banks isn't going to be completely prohibitive for going into PE, but I'd probably roll the dice and go with the BB if I thought there was a reasonable chance of transitioning into a coverage group.

That really is a tough risk/reward decision to make...

Oct 3, 2012

Happy to weigh a bit more into your situation.
Here's my take:

I've never heard of any banks encouraging analysts to move from one group to another in practice. Is the move doable? Yes of course, but it will be very difficult. Another difficulty you will face is when you are working on a deal, your interaction with coverage and/or product groups such as M&A/Sponsors will be very minimal and your work product will be difficult to judge due to the lack of modeling.

Doing two years in ECM plus another year as a senior analyst does not guarantee a move into another group. What is common, however, is doing the three years as an analyst and getting promoted to Associate. Associates at most banks do have the option/opportunity to explore different groups. In fact, I know several banks that have incoming Associates go through a rotation program. Keep in mind, this is not the case for analysts and from reading OP's posts, I don't think s/he have any desire to stay on as an Associate.

I don't know what MM shops you are talking about, and since both offers are in NYC, I'd still take the MM offer. You need to weigh in your abilities here and of course, some luck is involved. If you are the top analyst in your class, you will have no problem going over to the buy-side. And similarly, if you are the bottom of your class, regardless of what bank/group you are at, you will have trouble finding a buy-side firm.

As for branding, if we are talking MM firms like JEF HW, HL and the like, I wouldn't hesitate taking the offer. If your offer is with a firm like Stifel, you will have a bit of trouble placing if you are just an average analyst.

With all said and done, I'd still recommend the MM offer over your ECM specific offer. I am a firm believer that at the beginning of one's career, "branding" is not nearly as important as developing the technical skills you need to advance. Branding, of course, is relative. If we're talking a two-man boutique vs a BB ECM offer, yes, I'd take the ECM. Clearly, this is not the case.

Good luck to your decision and congrats again on your offer.

Oct 3, 2012

be careful here. ECM has no transferable skills to the buyside. depends on the MM IB, but plenty of MM IBs send analysts to very good PE firms.

Oct 3, 2012

Or you can do MM IBD and lateral to BB. I think reputable MM IBD --> BB IBD might be even easier than BB ECM --> BB IBD.

Oct 3, 2012

i hate it when people say (think Cowen, Piper Jaffray, Jefferies) all three of those firms some from three different tiers of MM.

In fact Jefferies in most cases isn't really a MM as they do mega deals and compete with the BBs. Shit I'd take Jeff over most BBs. This would be a no brainier.

Piper Jaffray is your typical MM and I would put it on the same tier as BMO, Stifel, or Oppenheimer. I say IBD (M&A) at PJC > BB ECM

Cowen is a joke compared to PJC or Jeff. They are pretty much all ECM. So if it was a firm like Cowen/Canaccord/FBR (capital markets focused that hardly do any M&A) and the like I would take BB ECM hands down.

Oct 15, 2012
OMS:

In fact Jefferies in most cases isn't really a MM as they do mega deals and compete with the BBs. Shit I'd take Jeff over most BBs. This would be a no brainier.

Jefferies even had an article in the Economist gushing over how well they've been doing. And I don't even know when the last time the Economist wrote a good article about a bank.

But back to your post OMS, it would be pretty cool if a couple of certified users could classify the middle market banks into what they view as reasonable tiers or based on their specialities (M&A, healthcare, ECM).

Oct 15, 2012

If Jefferies, then I'd take that. Otherwise take ECM at the BB, kill it and try to lateral to another group within the bank. Spots come up more often than you'd think and in the current environment you're actually going to be at an advantage -- many firms are on a no-outside-hires policy at the junior level.

Oct 16, 2012

ECM just gets hammered on these boards but this convo has been informative for someone (me) who wants to go into ECM?

Whiskey, Is DCM that much better for exit ops than ECM?

Here to learn and hopefully pass on some knowledge as well. SB if I helped.

Oct 16, 2012
That_Aston:

ECM just gets hammered on these boards but this convo has been informative for someone (me) who wants to go into ECM?

Whiskey, Is DCM that much better for exit ops than ECM?

For exit they are very similar. Again, no modeling experience.
If you want to make a career out of it though, DCM is great.

Oct 16, 2012
Comment

Here to learn and hopefully pass on some knowledge as well. SB if I helped.

Oct 16, 2012