Also pointing this here since I want to reach some people who currently work in Commercial Banking.
I work at an Upper MM PE fund and am in the second year of my Pre-MBA Associate stint. Prior to PE, I worked at an elite strategy consulting boutique (think LEK/Parthenon) doing PE DD work.
I'm thinking about leaving the PE industry for a few reasons:
* The job is much more about jockeying a process than high-level strategic thinking about investing. I feel like I got a lot more of that in my previous role than I do today. While this might get better by the time you're an MD, it seems like the VP role is even more about process than the Associate job is. I’d like to be in some sort of role where I’m working with teams and businesses in some sort of advisory capacity
* While PE might be better than banking in terms of hours, everyone still works a lot. My guess is that this is table-stakes for taking institutional money: I would be surprised if any partner at a serious PE firm (i.e., not a family office) works less than 60 hours a week on average. The VPs I work with are regularly working 60-80 hours a week. I think my goal is to be in a role where I’m working 35-55 hours a week. As long as I’m pulling down $200K at some point in my career, I think I could be comfortable. I’m not particularly motivated by money
* I’m much more excited about $5-10M EBITDA assets than $100M+ EBITDA assets. as I enjoy working with businesses that are “people-sized”
Strategy consulting seems like a better fit for me than PE for a variety of reasons, but I think work/life balance at the partner level in a consulting firm is still pretty brutal. A PE-investing role in a family office might also be a good fit, but I fear that I will continue to sit at a desk and run process all day.
Am I crazy to look at Commercial Banking or Community Banking instead? I think I would aim for some sort of sales role where I am advising and working with smaller-sized companies on securing loans. Full disclosure: I don’t know anyone who does Commercial Banking, and I don’t want to cold email for informational interviews if this is an obviously terrible idea. Really appreciate any thoughts or feedback
Hi PineappleExpression,
I am currently a 3rd year Credit Analyst within the Commercial Real Estate Lending group at a regional commercial bank, $38 billion in total assets. We focus exclusively in the U.S. and China markets. I've interned with the Private Equity Lending group at my current bank as well. Our private equity lending team lends out to some of the top funds out there. We're pretty under the radar. My team also works with Real Estate Private Equity funds too. $5-10M EBITDA is my bank's sweet spot for all lending deals.
Commercial Banking is definitely much less prestige compare to IB, PE, HF. It's one of those overlooked area in finance. Most people tend to look down on it. However, if you're looking for a good work-life balance (40-55 hours per week) while doing legitimate work and stay in finance., commercial banking will be a good place for you. Many MD's at my bank or other top commercial banks (First Republic, U.S. Bank, Union Bank, and etc.) all came from IB or PE backgrounds, but they all have families and they value that. In commercial banking is all about getting things done. No one wants to be here unless there are deals to work on.
As you have mentioned, you're looking for more of a sales role, in commercial banking, the roles are split between Relationship Manger and Portfolio Manager. Relationship Manager purely focuses on bringing in deals. You can get compensated very well if you can bring in big/good relationships because your bonus is based on the the volume of deals that you originate. In places like First Republic Bank (Top CRE lending) and Silicon Valley Bank (Top PE Lending), the relationship managers make a lot of money.
Given your background, you can definitely land a good gig within flagship group at a top commercial bank. At the end of the day, it's really depends on what you're looking for in life.
I would love to connect with you to learn more about your PE experience. I can share with you everything that I know about Commercial Banking or the work at a commercial bank. Look forward to connecting with you.
East West?
I am a SVP Commercial Market Manager at a Community Bank - in the $2B-$5B asset size.
Certainly the work-life balance is very nice. My comp is about $310M all-in - with the cash component being around $250M. I am also in a very low COL city (albeit nothing is too cheap in California) so my comp relative to my city puts me in like the top 1%.
It makes for a very cushy life. And because I am in a smaller market where there isn't a whole lot of growth potential - I am working 30-35 hours. Hardly even see 40 hours anymore. I also play golf a LOT with clients and prospects and am able to spend a lot of time with my family and kids (ages 3 and 4).
Those are all the pluses.
Negatives are it can get kind of boring. Especially if you are in a tier 4 city where deal flow is anemic. Spend a lot of time twiddling my thumbs - which I would rather be super busy.
Deals aren't sexy at all - although some can get way more complicated. Certainly more complicated than the IB folks will ever give us credit for - but you can see some fascinating stuff. Obviously I am not even close to Capital Markets being at a Community Bank. It is all pretty much senior secured 1st position debt.
At Community Banks - you may also have some exposure to having to do Retail/Operations stuff which absolutely sucks - but hey, it is what it is. They are paying me enough. I try to avoid any of that stuff like the plague and focus on my commercial activities.
Progression is either being moved to a larger market that has a bigger book and lending team as the Market Manager - or hit EVP status. Some go the Credit / PM path - but I prefer to be making deals, not criticizing the ones that are already brought in.
Not a bad life - just not super sexy and can be a tad bit boring.
Hi BZ, you mention In places like First Republic Bank (Top CRE lending) and Silicon Valley Bank (Top PE Lending), the relationship managers make a lot of money. What is a lot of money?
I ask because I am a SVP/SR RM for a National Commercial Bank in a medium size market in CA. My current comp is $320K. I have potential to increase that to maybe $350K over the next 12 months but then I am probably at my limit until I move into a RVP position/etc. I am a top producer and specialize in real estate financing. I am curious at comp level potential at say First Republic Bank for senior real estate bankers. I figure I am compensated well enough but not really sure how it compares.
It might not be as much of a match in terms of developing relationships with companies (as in, still pretty transaction/process driven) but maybe think about mezz / specialty lending / BDCs? Lifestyle would still be an improvement, solid comp, less bureaucracy, and you're not cross-selling treasury management etc.
I’m in a junior analyst role at one of the bigger banks. Commercial banking sounds like what you are looking for in a role if you are looking for a more relaxed work life balance. Our office works with companies that range from sales of $10MM - $1B. The average company is probably around $30MM in sales. The position you are probably most interested in would be a Relationship Manager or Business Development Officer. Both get paid on bringing in new business with the difference being the RM manages accounts and the BDO just brings in new prospects. I’ve never seen someone stay past 7.
Commercial Banking seems to be a good fit for you and you want to go down the RM (Relationship Manager) path. For JR RMs, you can expect to make $90-120k, RMs $120-180k, SR RMs $180-280k, SVP/RMs $280k-350k. Typically you need to go through 2 year analyst stint and formal credit training before your hired as a Jr RM but exceptions are made for talented people.
Work life balance is very good. Working 50-55 hours is a lot and most work 40-45 hours.
Thank you everyone for the really thoughtful advice. It sounds like this idea actually has legs and could be a good fit for me.
A few of you asked to speak more about my experience in Private Equity so I've sent PMs where relevant.
I began as a credit analyst at a $250MM bank and have worked at 2 of the 4 largest BBs and am currently a credit officer. Feel free to PM me with any specific questions.
[quote="PineappleExpression"]
I think my goal is to be in a role where I’m working 35-55 hours a week. As long as I’m pulling down $200K at some point in my career, I think I could be comfortable.
I got an online business and make about $200k to $250k a year now from an online business that prob takes no more than 2hrs a day.
It’s never enough. I know you say you’ll be comfortable but I got that plus I work a 9 to 5 and make about $110k a year from that.
I always wanted to get into banking but never managed to cut it. Maybe I’m greedy. I guess I am. But as you earn more tour tastes go up and now I want to buy a house (don’t own one) in the more expensive areas) and I struggle to earn enough for that.
Stick with PE you’re lucky and in a good place. But a the same time if you can be comfortable on that and you are sure I envy you.
What sort of online business and how did you get started with that?
Sounds like this is a mentality thing. Couple of links for you--take them or leave them:
)
Hope you find what you're looking for.
-PE
Private Equity to Commercial Banking? (Originally Posted: 03/01/2018)
I work at an Upper MM PE fund and am in the second year of my Pre-MBA Associate stint. Prior to PE, I worked at an elite strategy consulting boutique (think LEK/Parthenon) doing PE DD work.
I'm thinking about leaving the PE industry for a few reasons: * The job is much more about jockeying a process than high-level strategic thinking about investing. I feel like I got a lot more of that in my previous role than I do today. While this might get better by the time you're an MD, it seems like the VP role is even more about process than the Associate job is. I’d like to be in some sort of role where I’m working with teams and businesses in some sort of advisory capacity * While PE might be better than banking in terms of hours, everyone still works a lot. My guess is that this is table-stakes for taking institutional money: I would be surprised if any partner at a serious PE firm (i.e., not a family office) works less than 60 hours a week on average. The VPs I work with are regularly working 60-80 hours a week. I think my goal is to be in a role where I’m working 35-55 hours a week. As long as I’m pulling down $200K at some point in my career, I think I could be comfortable. I’m not particularly motivated by money * I’m much more excited about $5-10M EBITDA assets than $100M+ EBITDA assets. as I enjoy working with businesses that are “people-sized”
Strategy consulting seems like a better fit for me than PE for a variety of reasons, but I think work/life balance at the partner level in a consulting firm is still pretty brutal. A PE-investing role in a family office might also be a good fit, but I fear that I will continue to sit at a desk and run process all day.
Am I crazy to look at Commercial Banking or Community Banking instead? I think I would aim for some sort of sales role where I am advising and working with smaller-sized companies on securing loans. Full disclosure: I don’t know anyone who does Commercial Banking, and I don’t want to cold email for informational interviews if this is an obviously terrible idea. Really appreciate any thoughts or feedback
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