Moving from valuation analyst to investment banking

Has anyone had any success breaking into investment banking after working as a valuation analyst? How long should I stick with this job before looking for exit opps? Would I have a better shot trying to get into a top business school and then coming in as an associate than trying to break in as an analyst. I'm specifically targeting BB firms when I say breaking in. Also, I have a competitive GPA from the top university in my country (Canada)

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Comments (57)

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Dec 31, 1969

no

I have to return some video tapes.

Dec 31, 1969

What do you mean by no

Dec 31, 1969

This has been covered in depth do a search

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

Dec 31, 1969

Question related to this subject. How hard would it be to transition from valuation to investment management or portfolio management down the road?

'We're bigger than U.S. Steel"

Dec 31, 1969

CPA is for audit and other mindless accounting groups. CPA might give you credibility as a certification, but you'll never use it and will probably forget everything in a year .

Dec 31, 1969

I guess these responses may apply to BB etc, but I know a retarded amount of CPA's in MM IBD. Valuation is a great start if you can't go direct. Do a linked in search for investment banking CPA and you will find plenty.

If the glove don't fit, you must acquit!

Dec 31, 1969

I would say Big 4 valuation may be the best option for getting a second chance to break into front-office finance, other than top consulting. That said, people should be realistic-there are a LOT of people who end up stuck in the Big 4 or moving over to back and middle-office roles. You can build a fine career there and lots of middle-office roles at big PE firms are pretty cushy, but people should go into it with realistic expectations.

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

Dec 31, 1969

maybe S&T? I do a lot of asset valuation as well; however, my emphasis is more on deriving FMV and determining reasonableness of the assumptions used. I don't deal with the accounting side much... I guess I would like to get some insight into this as well

"Free Market Capitalism is the best path to Prosperity!" - The Larry Kudlow Creed

Dec 31, 1969

You aren't pigeon-holed completely, but it is only slightly easier to move into IB from valuation than it is from other more traditional accounting-based roles.

Dec 31, 1969

I'm also interested - would this be a path at all to ER?

Dec 31, 1969

What is your reasoning for not doing ER or IBD right away?

Dec 31, 1969

I am evaluating a couple of positions in valuation versus an associate role with a regional I-bank. The valuation roles are with more well-known companies but pretty narrowly focused. Banking opportunity gives me direct exposure to I-banking but the firm is less known with lower deal flow.
I want to understand the drawbacks of just doing pure-play valuation. In the long-run, Trading/Asset Management or ER appeal to me more than traditional I-Banking but I don't have an opportunity to move directly into one of those roles at this point. Thanks!

Dec 31, 1969

MM investment banking is more valuable than prestigious valuation work imo.

Dec 31, 1969

Appreciate the opinion.

Dec 31, 1969

i don't think you are ever pigeonholed. If you have your shit together you can weave a hell of a story out of that. I'd do it after 6 months, though, not 3 years.

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Dec 31, 1969

Is this for a shop such as Duff and Phelps?

Using D&P as an example, I think their Valuation Analyst offer this year was pretty standard at 70k base and ~5K (sign on seems to vary more) and according to a few current analysts hours can actually be in the 60-70 hours range and even higher. Also according to a few current analysts, they have seen people lateral to MM IBD, a rare jump to PE, and a handful of people go to F500 Corp Fin mainly because they realized they didn't enjoy the culture/hours of client services... all occurring around 1.5 - 3 years down the road.

Sure its not IBD or directly transferrable, but being in an client focused environment and working on multiple transactions/deals and gaining exposure to a variety of businesses and industries all while eating and breathing modeling and excel all day errrday are all things you would want to highlight while trying to lateral to IBD.

Dec 31, 1969

The lateral move happens quite often for those who network well. As the kid mentioned, hours aren't going to be 50 hours a week all the time. You'd probably average higher than that.

Dec 31, 1969

Thanks guys.

The Kid, yah a shop like D&P. I've heard it's difficult to make the lateral jump internally, but like you said, with routine networking from Day 1, I think you could position yourself for a lateral hire by June or whatever to an outside shop.

My name is Nicky, but you can call me Dre.

Dec 31, 1969

I'm at a shop like D&P ( a non-big 4 val shop) and can confirm the exits that i've seen are MM IB, small VC, start ups, corp M&A.

Edit: I am leaving for a MM IB.

Dec 31, 1969

Any evidence / strategies for MBA folks at senior analyst positions looking to exit valuations? Think it is way easier for an analyst rather than for someone with an MBA. Any thoughts will be appreciated.

Dec 31, 1969

Hi lynnventures,

Clarify what you mean by valuation consulting. Are you referring to the likes of Huron, FTI etc.?

Dec 31, 1969

Hey Lynnventures,

If you're coming out of college and don't have any options, than take it, but I found valuation consulting to be extremely boring. The engagements were very drawn out sometimes taking over 2 years (litigation work), and you'll spend too much time on the minor details of the analyses. Along with that the overall comp is not that competitive. Much of the work right now in valuation consulting is post transaction (ie. acquisition) purchase price allocation work, where you already have a value for a company and you model to reach that value. Given that, I have heard that many banks like people from this industry because of their comprehensive understanding of accounting principles and their modeling abilities. In summary, if you can start at a bank than do it, but if you can't you should not have a problem making the lateral movement.

Dec 31, 1969

aadpepsi - Sorry about being unclear. I am working at a shop that strictly do valuations for private businesses (most are small...about 2 to 10MM in revenue). Some of the work involved are:

1) Business valuation - capital structure, intangible assets etc.
2) M&A advisory - Purchase Price Allocation (post transaction), Goodwill Impairment testing etc.
3) Business Transactions - buying or selling a business, owner buy-in/buy-out etc.
3) Estate and Succession Planning - structuring an estate plan, buy-sell agreements etc.
4) Tax Planning - FLPs, gifting stock, valuing an Employee Stock Ownership Plan
5) Business Disputes - litigation support

I have been working for 3 months and found that the modeling skills are very transferrable to IBD (like the DCF, finding comps & calculating multiples etc.). I guess my real question is, in your opinion, what else should I learn in order to lateral successfully?

brcrs02 - Thanks so much for your insights, and you're right about everything about the job haha. It's great to hear. So I take it that you lateraled successfully? What did you focus on when competing with other candidates who already have some experience in IBD?

Dec 31, 1969

Lynnventures,

Perhaps you could pm me and let me know what firm you are working for. Sounds like the tasks are very similar to what I was working on. BTW..I left after 8 months. I think if your looking for a lateral transition into an analyst position (which I did), you can leverage your modeling experience, but I don't think that there will be any specific points to focus on. For the analyst spot, they will appreciate your real world experience with accounting principles. If you throw some knowledge of capital structure and FAS 141/142 into the mix, you might impress some people, but be sure you can elaborate, or you might dig yourself a hole. Hope I can give you some more info via PM.

Dec 31, 1969

Hi brcrs02,

I'm in the processing of applying to Huron for their open position of Economics Analyst though I am interested in their valuation group the DC branch (which I am restricted to for personal reasons) does not currently have a valuation position open.

Do you know how easy or difficult it is in organization such as Huron to switch areas within the organization?

Also, did you get any advanced analyst standing for your 8 months experience?

Dec 31, 1969

Mohae,

My former employer had a few different divisions, but I am not familiar with the roles of an Economics Analyst at a consulting agency. If your responsibilities and involvment on the engagements is similar to that of an analyst within valuations, I don't see it being a problem. Unfortunately, I am not sure how lateral movements work within companies like Huron.

As for the advanced analyst standing, I did not receive any advanced placement when I made the switch to IB. I think that if I had completed the whole year, I might have been recruited as an experienced hire. Looking back, it makes me wish I had waited the extra 4 months.

Dec 31, 1969

What do you do in your valuations role?

Dec 31, 1969

Shoot me a PM

There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.

Dec 31, 1969

MBB or bust

Dec 31, 1969

Interested as well..

Money Never Sleeps? More like Money Never SUCKS amirite?!?!?!?

Dec 31, 1969

Many accountants get into investment banking by spending time in their own business valuations divisions and jumping ship. Same logic should apply here.

"The power of accurate observation is commonly called cynicism by those who have not got it." - George Bernard Shaw

Dec 31, 1969

its gonna be tough stocks and blondes in this environment my friend in the country.

Dec 31, 1969

Big4 BVal --> MM IB --> BB IB

Pretty much the same story as you - laid off about 1.5 yrs into the bval job, spent 8 months looking. I didn't have too many problems getting interviews at MM banks - make sure you spin your resume heavily toward IB work. DCF's, comps, financials, BEV's, etc. Know how bankers talk and refer to things and use those terms.

Gonna be blunt, two things set you back. 1) the CPA thing might have pigeonholed you. I'd let Valuation be about half your resume, even though it's not the most recent. 2) you're old.

But I think with good spin, you can make your experience sound a lot better. You dedicated yourself to poker, made top 1%, and decided that the lifestyle wasn't for you and you wanted to get back into the working world yadda yadda

Dec 31, 1969

-I'll definitely brush up on my vocab - though I don't anticipate that being a major issue

-not pigeonholed as i dont have a CPA (im in the process of pursuing my ASA accred.)

-my resume is 2 valuation FT gigs, internships: boutique advisory, big4 audit, F50 corp acquisitions so i don't think i run the risk of making it too actg-centric.

-i have a hurdle being "old" but I dont think im too old (25) to put in a couple years as analyst (though if you care to share insight to the contrary i am all ears)

-poker constantly gets bad press and bankers will probably look at it in a negative light (at least during the interview process) It's unfortunate I can't discuss that aspect of my background because successfully playing the game for a living requires intense focus, dedication, performance in high-pressure situations, and keeping a sound mind through hard times. That's actually why I asked the last question in my OP about career paths that I can leverage those skills to help in my search.

Dec 31, 1969

Possible? Yes. Happen often? Not so much. The most important thing to keep in mind in trying to make a switch like this (or from a comparable lateral switch coming from ER, Big 4, etc) is to network and make sure people at IBs have your resume and know of your interest in making the jump. I know of several guys who were 'lucky enough' (their words) to make the switch, and they all had friends and former colleagues who were analysts / associates backing them and pushing for the bank to bring them on board. Again, as relevant as you think your acquired valuation skills might be, they won't be enough alone for you to make the switch. Banks usually take laterals from lesser banks before looking outside of IB. Hope this helps.

Dec 31, 1969

Thanks I appreciate your insights. That is pretty much what I figured as well. If i were still interested in making that jump to banking, would you recommend starting to network right now or after gaining some work experience? I still have a lot of contacts from my full time recruiting experience and guess I could reach out to them when the time is right. Do you think it would be possible as someone who will have some valuation experience to enter as not a lateral, but a 1st yr analyst and interviewing with undergrads and whatnot, or is that not standard protocol generally. Thanks again for your feedback.

Dec 31, 1969

I'm not familiar enough with the process to know when is the right time to reach out. Maybe someone on this board who lateraled could answer that question.

Even if you entered as a lateral (experienced hire), you would almost definitely enter as 1st year analyst. Even guys with a year of ER experience usually enter as 1st year analysts.

Dec 31, 1969

Best way to jump from valuation to banking is do 2-3 years valuation, then go to top 15 b school, then go to banking. associate and vp ranks in bb's are filled mostly with ex accountants.

Dec 31, 1969
DCHockey1:

associate and vp ranks in bb's are filled mostly with ex accountants.

If you don't know what you are talking about, keeping quiet is always a viable option.

Dec 31, 1969

I actually did the jump. I graduated last year may 07 and went to a small valuation shop. as soon as I got the job I started to network and email friends at BBs and MMs. However, in the end it was through an online application that landed me my current job. I stayed at the valuation firm half a year and am now a first year analyst at a MM that had specific hiring needs - hence, i am not on a regular analyst's june - june years. but i guess my process is very unusual..but hopefully it shows you that its not impossible.

Dec 31, 1969

Milkshake, if you disagree, why don't you state why instead of trying to start an argument. This board is supposed to help people out, not be a forum for you to lash out and release all that aggression that builds up inside you because you're gay.

Dec 31, 1969

As nystateofmind said, networking will be key. And with the current market environment it's going to be even tougher to make the switch.

My recommendation: go for boutiques and MMs and ignore bulge brackets for now. Just too tough and too competitive for those outside banking trying to break in.

Believe me, although the work you do may be somewhat similar to banking, no banker is going to see it that way... in their minds, there's banking and then there are private equity and hedge funds which are somewhat closely related... and then there are venture capital and corporate development, which are further off but still sort of related.

And then there is accounting/transaction services, which is even less closely related.

I'd suggest starting to reach out ASAP, as smaller firms do tend to recruit year-round.

Dec 31, 1969

Yes, pm me for more details -

Dec 31, 1969

if you ultimately want to be a career banker, then you should accept your banking offer. Is the offer with a group you would like to be in?

Dec 31, 1969

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Dec 31, 1969
Dec 31, 1969